## Facts

- Julie Ann Mouiller Granger and Carl Douglas Granger, Jr. married on June 8, 1984.
- Julie filed for divorce on April 23, 1991, and the divorce was granted on February 25, 1992.
- After the divorce, Julie filed a petition to partition the former community, listing assets and obligations that included the couple’s brick family residence and certain alleged community debts.
- The residence was purchased during the marriage using funds paid from a joint checking account held by the spouses.
- Carl introduced evidence that most of the money deposited into the joint checking account came from an inheritance he received from his mother’s estate, which Louisiana law classifies as separate property.
- The amount of community money deposited into that joint account was small when compared to Carl’s inherited funds.
- Carl asserted the residence and improvements were his separate property because the purchase price was paid with his identifiable inherited funds, even though those funds passed through the joint account.
- The trial court classified the residence and improvements as Carl’s separate property.
- The trial court also treated a debt owed to the Fertility Institute of New Orleans as a community obligation, but granted Carl a $1,100 credit against his one-half share.
- Finally, the trial court reduced Julie’s share of community assets by amounts of community funds it found she had already taken or retained at the termination of the community (including funds on deposit at American Security Bank).
- Julie appealed, challenging (1) the separate-property classification of the residence, (2) the $1,100 credit, and (3) the reduction of her distributive share based on funds she already possessed.

## Issues

1. Whether the family residence purchased during the marriage through a joint checking account should be classified as community property because of commingling, or as Carl’s separate property because the purchase funds were identifiable inherited funds.
2. Whether the trial court erred in granting Carl a $1,100 credit against his half of a community obligation owed to the Fertility Institute of New Orleans.
3. Whether the trial court erred in reducing Julie’s share of the community by charging her with community funds the court found she had already withdrawn or retained when the community terminated.

## Decision

- The Court of Appeal of Louisiana, Third Circuit affirmed the partition judgment in full.
- The court upheld the classification of the residence and improvements as Carl’s separate property because Carl proved the funds used for the purchase were identifiable inherited funds, and depositing them into a joint account did not, by itself, convert them into community property.
- The court upheld the $1,100 credit on the Fertility Institute debt, finding evidentiary support for the trial court’s allocation in the partition.
- The court upheld the reduction of Julie’s distributive share, approving the trial court’s use of offsets to account for community funds Julie had already received or retained before the final equalizing distribution.

## Legal Principles

- In Louisiana, property acquired by inheritance is separate property.
- Placing separate funds into a joint bank account does not automatically change the character of those funds or assets purchased with them.
- Commingling causes an account (and resulting purchases) to be treated as community only when separate and community funds are mixed so indiscriminately that the separate funds cannot be identified or differentiated; if separate funds remain traceable, their character is preserved.
- Classification of property and related accounting determinations in a community partition are factual matters reviewed on appeal under the manifest error/clearly wrong standard.
- In a partition, a court may award credits to account for unequal payment of community obligations and may offset a spouse’s distributive share by community assets that spouse already possesses at termination.

## Conclusion

Granger v. Granger affirmed a community-property partition judgment that treated the marital residence and improvements as the husband’s separate property because he traced the purchase funds to his inheritance despite their deposit into a joint account, and it also affirmed the trial court’s credit on a community debt and its offset reducing the wife’s share by community funds she had already withdrawn or retained.


Granger v. Granger, 722 So. 2d 107 (1998)