Krielow v. Krielow

In 1974, Carl Krielow (plaintiff) started Krielow Brothers, Inc. (KBI), a family-owned corporation, with his two brothers. Each brother owned one-third of KBI’s corporate stock. In 1980, Carl married Lynn Krielow (defendant). During the marriage, Carl worked full-time for KBI as its director and primary manager. Before Carl started working for KBI full-time, KBI had no revenue or income, and its assets had never increased in value. However, during Carl’s tenure, KBI flourished and increased in value substantially. Carl did not earn a salary for his work with KBI; instead, Carl was allowed to draw on KBI’s corporate accounts to cover his living expenses. In 1988, Carl filed for divorce and moved for a partition of community property. At trial, Lynn presented evidence and expert testimony establishing that KBI increased in value from approximately $12,000 in 1980 to $960,000 in 1988 and that the community was undercompensated by approximately $177,000 for Carl’s work with KBI. Based on that, Lynn argued that she was entitled to a community-property share of KBI’s increase in value. Carl countered, arguing that Lynn failed to prove that (1) Carl was undercompensated as compared to what he could have earned on the open market and that (2) the increase in KBI’s value was due to Carl’s efforts rather than other factors. The trial court ruled for Carl, holding that Lynn had failed to meet her burden of proof. On appeal, the appellate court affirmed. Lynn appealed to the Louisiana Supreme Court.