The Bite of Draftsmanship

September 15, 2014 § Leave a comment

How you draft your legal instruments can have a huge impact on your clients’ future.

Take, for instance, the parties’ property settlement agreement (PSA) in the case of Aaron v. Aaron, a COA case handed down September 9, 2014. George and Annie Aaron were divorced in 2002 on the ground of irreconcilable differences. At the time, George was employed with the Amory Police Department, and was a participant in PERS. We don’t know from the court’s opinion the exact language of the parties’ agreement, but we know this much from ¶ 1:

As part of the divorce, George agreed to pay Annie one-half of his retirement funds acquired during the marriage. The judgment stated the funds would be transferred through a Qualified Domestic Relations Order (QDRO). At the time the judgment was entered, George was not receiving any retirement benefits. The judgment did not state which party was responsible for entering the QDRO.

We also can divine from the opinion that: the language of the PSA did not specify whether Annie was to receive 1/2 of the retirement accumulated during the marriage, or 1/2 of all George’s retirement, a significant portion of which would be earned after the divorce; it did not spell out what consideration would be given to future pay increases on George’s ultimate obligation to Annie; it also did not settle the question whether the payments were intended to be paid out in a lump sum as property settlement or whether they were intended to be paid monthly as benefits were paid out to George, in the nature of alimony.

The legal considerations that remained unaddressed in the parties’ agreement were, at least, the following:

  • PERS takes the position that federal ERISA and Mississippi law do not allow division of PERS benefits by QDRO. The agreement should have provided that it would be divided by payment, unless George left PERS employment and withdrew his account, at which time it would be divided by specified percentages between them.  No mention should have been made of a QDRO vis a vis the PERS benefits. Also, whose responsibility it was to trigger the payment of benefits should have been specified in the agreement.
  • Final calculation of the PERS benefit is based on the highest four years of earnings. Since George was not a retirement age at the time of the divorce (he did not retire until 2011), the parties should have negotiated and included in their agreement how Annie’s 1/2 benefit would be calculated, taking into account the probability of George’s future pay increases.
  • PERS benefits can not be paid out in a lump sum unless the employee leaves PERS employment. As mentioned above, this obvious point should have been addressed in the parties’ agreement. In essence, these parties had no choice but to have Annie’s share paid out over time. That is what the chancellor in Pruitt v. Pruitt tried to do, but was reversed by the COA. The problem, based on Pruitt, seems easy to address in a rational way, but is in reality deceptively difficult to resolve.

Every one of the foregoing deficiencies came back to bite these parties in the proverbial nether regions. Annie brought a contempt action against George because he did not initiate a QDRO, and for her unpaid benefits. George countered that he owed nothing, since PERS could not be divided by QDRO. The chancellor calculated what she concluded was Annie’s portion, and ordered that Annie receive that from George’s retirement payments as paid, and she awarded Annie a judgment with modest interest for the benefits that he had received and not shared with Annie. She died not find George in contempt.

George appealed, raising all of the points above. The COA affirmed.

It would have saved everyone involved a lot of legal fees, costs, aggravation, anxiety, and time if only some more attention and effort had been put into the drafting of the PSA in the first place. Yes, it would have required more time for negotiation and drafting, but it would have settled the issue as early as 2011 without the need for further litigation. It’s called draftsmanship.

 

A Primer on the Law of Pre-Nups

August 18, 2014 § Leave a comment

Only a couple of weeks ago I posted some random thoughts on pre-nuptial agreements that I thought you might find useful.

Then, last week, as if on cue, the COA handed down its decision in McLeod v. McLeod on August 12, 2014, a case involving a pre-nuptial agreement. Judge Griffis’s opinion is a concise statement of the law that you would need in a case involving one of these agreements. Here it is, extracted for your use:

¶11. The Mississippi Supreme Court has held that prenuptial agreements must be fair in the execution, and a duty of disclosure shall be imposed. Smith v. Smith, 656 So. 2d 1143, 1147 (Miss. 1995) (citing Hensley v. Hensley, 524 So. 2d 325, 327 (Miss. 1988)).

¶12. Prenuptial agreements are enforced like contracts: the first rule of interpretation of contracts is to follow the intent of the parties. Long v. Long, 928 So. 2d 1001, 1003 (¶14) (Miss. Ct. App. 2006). This intent was recognized initially by the prenuptial agreement, which provided:

Each of the parties shall retain all rights in his or her own separate property, as hereinafter defined, whether now owned at the time of the marriage of the parties or acquired thereafter, and each of them shall have the absolute and unrestricted right to dispose of such property during his or her lifetime and upon his or death, free from any claim which may be made by the other by reason of their marriage, and with the same effect as if no marriage had occurred between them, and such separate property shall not be subject to any division between the parties . . . as marital property subject to equitable distribution or division under the laws of Mississippi . . . .

¶13. “A contract may be either procedurally or substantively unconscionable.” West v. West, 891 So. 2d 203, 213 (¶26) (Miss. 2004). Procedural unconscionability deals with the formation of the contract. Id. (citing East Ford, Inc. v. Taylor, 826 So. 2d 709, 714 (Miss. 2002)). Substantive unconscionability is apparent “when the terms of the agreement are so one-sided that no one in his right mind would agree to its terms.” Id. (citing In re Last Will & Testament of Johnson, 351 So. 2d 1339, 1341 (Miss. 1977)).

*   *   *

¶15. Each party must enter a prenuptial agreement voluntarily. Deborah H. Bell, Bell on Mississippi Family Law § 23.02[2] (2nd ed. 2011). In In re Last Will & Testament of Cooper, 75 So. 3d 1104, 1108 (¶11) (Miss. Ct. App. 2011), this Court affirmed the chancellor’s judgment and found that there was no evidence to support a claim of involuntariness, because neither party was “forced in any way to sign” the prenuptial agreement.

¶16. This Court has held that “it is well established that ‘a person is under an obligation to read a contract before signing it, and will not as a general rule be heard to complain of an oral misrepresentation the error of which would have been disclosed by reading the contract.’” Ware v. Ware, 7 So. 3d 271, 277 (¶20) (Miss. Ct. App. 2008) (quoting Oaks v. Sellers, 953 So. 2d 1077, 1082 (¶17) (Miss. 2007)). And, as this Court has stated, “it is not now and never has been the function of this Court to relieve a party to a freely negotiated contract of the burdens of a provision which becomes more onerous than had originally been anticipated.” In re Cooper, 75 So. 3d at 1107 (¶9).

*   *   *

¶21. … While disclosure is of “paramount importance,” this Court has found that a prenuptial agreement can still be valid even if a financial disclosure is not attached. Mabus v. Mabus, 890 So. 2d 806, 819-21 (¶¶53, 59, 64) (Miss. 2003).

¶22. Here, the agreement stated that a full disclosure was made. Specifically, it provided:

[Willie] hereby states: that he has been fully informed regarding the property and estate of [Jeanell] and has examined the statement of her assets set forth in Exhibit “A” annexed hereto prior to signing this Agreement . . . .

[Jeanell] hereby states: that she has been fully informed regarding the property and estate of [Willie] and has examine the statement of his assets set forth in Exhibit “B” annexed hereto prior to signing this agreement.

*   *   *

¶24. Prenuptial agreements “must be fair ‘in the execution’ or procedurally fair.” Bell, at § 23.02[5] (citing Mabus, 890 So. 2d at 821; Smith, 656 So. 2d at 1147). Fairness in the execution can be affected by the presence of individual counsel, whether the parties had time to review the agreement, education of the parties, and whether the agreement was explained. Id.

*   *   *

¶26. This Court in Ware, 7 So. 3d at 277 (¶20), found that there was no evidence to suggest that one of the parties was forced to sign the prenuptial agreement, although one party admitted that she did not read the contract nor take it to an attorney to review it before she signed it. This Court held that “it is well established that ‘a person is under an obligation to read a contract before signing it, and will not as a general rule be heard to complain of an oral misrepresentation the error of which would have been disclosed by reading the contract.’” Id. (quoting Oaks, 953 So. 2d at 1082 (¶17)). Additionally, “independent counsel is not required to fairly execute a prenuptial agreement.” Id. (quoting Mabus, 890 So. 2d at 821 (¶63)).

*   *   *

¶29. Substantive unconscionability is apparent “when the terms of the agreement are so one-sided that no one in his right mind would agree to its terms.” West, 891 So. 2d at 213 (¶26) (citing In re Johnson, 351 So. 2d at 1341). The Mississippi Supreme Court has defined an unconscionable contract as “one such as no man in his senses and not under a delusion would make on the one hand, and as no honest and fair man would accept on the other.” In re Johnson, 351 So. 2d at 1341 (quoting Terre Haute Cooperage, Inc. v. Branscome, 203 Miss. 493, 503, 35 So. 2d 537, 541 (1948)).

¶30. Two clauses were included in the agreement that provided what would happen if one of the parties died:

Upon the death of either party during their marriage, with the other Party surviving, the Parties agree that all property which is joint tenancy with right of survivorship property or survivorship marital property shall pass to the surviving party by right of survivorship.

Both parties agree that a Will of the estates and properties will be executed at a later date that will outline estates, beneficiaries, survivorship, and or any other grounds not covered by this agreement.

¶31. In his order, the chancellor stated:

Under the prenuptial agreement, Jeanell was entitled to only that which Willie promised he would leave her in his Last Will and Testament, whenever he decided to have that document prepared. No specifics regarding what he intended to leave her in order to provide for her as she had requested were provided and are purely speculative. As written, this provision is inequitable and unenforceable and does nothing to provide for Jeanell at the time of a divorce or at the time of his death. On the other hand, under the laws in Mississippi, without a prenuptial Jeanell would be entitled to an equitable share of the marital estate at the time of divorce.

. . . As such the court finds that the prenuptial agreement “ . . . was such an agreement that no wife in her senses and not under a delusion would agree to and no fair-minded husband would propose.”

¶32. In Crisler v. Crisler, 963 So. 2d 1248, 1252-53 (¶9) (Miss. Ct. App. 2007), this Court stated:

[P]arties are bound by what they promise in writing. But, we are not bound to adopt a construction not compelled by the instrument in which we would have to believe no man in his right mind would have agreed to. A construction leading to an absurd, harsh or unreasonable result in a contract should be avoided, unless the terms are express and free of doubt.

(Citing Frazier v. Ne. Miss. Shopping Ctr., 458 So. 2d 1051, 1054 (Miss. 1984)). Further, in Hensley, the court stated: “[I]t is not now and never has been the function of this Court to relieve a party to a freely negotiated contract of the burdens of a provision which becomes more onerous than had originally been anticipated.” Hensley, 524 So. 2d at 328.

The COA reversed the chancellor’s ruling that this particular agreement was unenforceable. I recommend you read the opinion to see how the COA reached its conclusion. You will find it instructive as to how the court views these contracts.

I stand by my previous recommendations, however. You should be careful to see that every i is dotted and every t crossed. Even though every desirable formality was not observed in McLeod, there was adequate language in the agreement to overcome Ms. McLeod’s objections to it on appeal, and the facts were found by the COA to be in favor of enforcement. Sloppy drafting and unfavorable facts would probably have produced a different outcome.

Checklists, Checklists, Checklists

August 12, 2014 § 8 Comments

You can skip over this post if you’ve been paying attention to this blog for any appreciable length of time.

For you newcomers and oblivious long-timers, you need to know and appreciate that proving many kinds of cases in chancery court is a matter of proving certain factors mandated from on high by our appellate courts. I’ve referred to it as “trial by checklist.” 

If you don’t put on proof to support findings of fact by the chancellor, your case will fail, and you will have wasted your time, the court’s time, your client’s money. You will have lost your client’s case and embarrassed yourself personally, professionally, and, perhaps, financially.

I suggest you copy these checklists and have them handy at trial. Build your outline of the case around them. In your trial preparation design your discovery to make sure that you will have proof at trial to support findings on the factors applicable in your case. Subpoena the witnesses who will provide the proof you need. Present the evidence at trial that will support the judge’s findings.

If the judge fails to address the applicable factors in his or her findings of fact, file a timely R59 motion asking the judge to do that. But remember — and this is critically important — if you did not put the proof in the record at trial to support those findings, all the R59 motions in the world will not cure that defect.

Here is an updated list of links to the checklists I’ve posted:

Attorney’s fees.

Attorney’s fees in an estate.

Adverse possession.

Child custody.

Child Support.

Grandparent visitation.

Equitable distribution.

Income tax dependency exemption.

Modification of child support.

Periodic and rehabilitative alimony.

Lump sum alimony.

Separate maintenance.

And here are two checklists that will help you in probate matters:

Closing an estate.

Doing an accounting in a probate matter.

What has to be Re-addressed in an Equitable Distribution Remand?

August 11, 2014 § Leave a comment

When equitable distribution is reversed and remanded for a do-over, alimony has to be redone also, because the two are inextricably intertwined; as equitable distribution expands, alimony contracts, and vice versa.

But what about child support?

The COA’s decision in Rodrigue v. Rodrigue, handed down July 29, 2014, reminds us that child support and attorney’s fees have to be revisited, as well:

¶47. Deidi argues that the chancellor committed error in the computation of child support and by not awarding her attorney’s fees. As set forth above, in Lauro [v. Lauro, 847 So.2d 843, 850 (¶17) (Miss. 2003)], the Mississippi Supreme Court determined that since the case was remanded for further consideration of equitable division, the chancellor should be instructed “to revisit the awards of alimony and child support after he has properly classified and divided the marital assets.” Lauro, 847 So.2d at 850 (¶17). Thus, since this case has been remanded for further consideration of equitable division of assets and alimony, on remand, the chancellor will have all the tools of marital dissolution available: equitable division, lump-sum alimony, and periodic alimony. Likewise, the chancellor may revisit the awards of child support and attorney’s fees.

I was aware of the language in Lauro that requires the remand court to look not only at equitable distribution, but also at alimony and any child support. I was unaware that the remand also embraced attorney’s fees. It is logical, though, that the judge on remand, after completing a re-analysis of the division of the marital estate, and after the award of alimony and child support, could arrive at a different conclusion about ability to pay attorney’s fees.

An interesting feature of this case is that the chancellor did not treat a private-school debt, apparently for tuition, as a marital debt. It’s pure speculation on my part, but I will bet that stems from the chancellor’s confusion over how exactly to treat private school expenses. It’s a confused area, with cases going every which way. If we need some bright line guidance in an area, private school expenses is one.

Fixing Your No-Show

July 2, 2014 § 5 Comments

It can happen to the most diligent lawyer. Date of the trial is mis-calendered, or failed to get calendered, or you get busy doing something else and — oops — you are a no-show when the trial is scheduled to go.

A no-show is what happened in the case of Reed v. Reed, handed down by the COA June 24, 2014.

Jimmy Reed and his lawyer did not appear at the time appointed for Jimmy’s divorce trial. Jimmy’s lawyer believed that the case would not proceed as scheduled because, at the time, the chancellor was gravely ill. The lawyer even approached the district’s other chancellor and asked him to sign a continuance order in the belief that the case had been reassigned to him. The other chancellor demurred, however, and advised the lawyer to await appointment of a special judge by the MSSC.

The ill chancellor, however, did appear on the day set for the trial, as did Jimmy’s estranged wife and her attorney. The chancellor tried unsuccessfully for an hour to contact Jimmy’s lawyer, delaying the start of the trial. When he could not make contact the judge let Mrs. Reed proceed, and he rendered a judgment granting her a divorce on terms not very favorable to Jimmy.

Jimmy’s counsel learned what had transpired the next day when he received a fax from counsel opposite. He filed a timely R59 motion, explaining the reason for the failure to appear, and attacking the judgment as inequitable. The chancellor overruled the motion, and Jimmy appealed.

Citing Lee v. Lee, 78 So.3d 326, 328 (Miss. 2012), the court noted that ” … [a] divorce judgment entered when a party fails to appear is a special kind of default judgment. And to obtain relief from such judgments, absent parties are required to raise the issues in post-trial motions …” Since Jimmy had done exactly that, the COA accepted the case and reversed the chancellor’s ruling because he ” … failed to support his [equitable distribution] findings with any analysis, discussion, or mention of the Ferguson factors or the evidence before him …”

A few points to take away from this case:

  • If you find yourself in a no-show predicament, timely file a R59 motion and ask for rehearing. Don’t stop at explaining your unattendance; attack in the motion every aspect of the judgment. If you don’t, you will probably be barred from raising any claims of error that you did not mention in your motion.
  • The ASS-U-ME principle was at work here (ask somebody; they can explain). If I were Jimmy’s lawyer, I would have prepared for trial and shown up unless I had an agreed, signed, filed order of continuance in hand. I admit that I can be obsessive-compulsive about these things, but by assuming that the case was off, Jimmy was jeopardized unnecessarily. It all turned out okay, but it took an appeal to get Jimmy back to the starting line.
  • When the other side is a no-show, make sure that you put enough proof into the record (and do make a record) to support the judge’s findings. Then insist that the judge address and analyze all of the factors that apply in your particular case. Jimmy’s appeal would have been for naught had the chancellor simply analyzed the proof through the filter of the Ferguson factors.
  • I think most judges give an ordinarily diligent lawyer the benefit of the doubt in these cases. Everyone can screw up occasionally. On the other hand, lawyers who are chronically late or don’t attend to their business, or who make it a habit not to show up don’t get that favorable treatment. I have no idea why the chancellor in this particular case rejected the explanation for Jimmy’s non-appearance, so I can’t say whether the benefit-of-the-doubt principle was in play.

One nice subtlety in this case is Judge Ishee’s description of Jimmy’s post-trial motion as one for “rehearing,” as opposed to “reconsideration,” as is the common term for it. You can read another post on rehearing vs. reconsideration here.

Three Cases of Note

June 30, 2014 § Leave a comment

The MSSC handed down three decisions in the past year or so that will significantly change your practice. You need to take note of each of them and study how you can use them to your client’s advantage or defend against their operation in cases you are handling.

The first case is Collins v. Collins, handed down May 9, 2013. This is the case that said, once and for all, that the demarcation line for valuation of assets in a divorce is to be determined by the chancellor, based on the facts in the case.

Why is this case significant? Because it expressly overrules the COA decision in Pittman v. Pittman that laid down the rule that entry of the temporary judgment was a bright line where accumulation of marital asset value ceased.

How can you use this case to your client’s advantage? Look at values and find the date to your client’s advantage, and then have your client testify why the judge should select the preferred date. For example, if your client’s 401(k) has greatly appreciated in value over the course of the litigation, pick an early point and develop proof about why that is the most equitable date. And vice versa for the other side.

A previous post about Collins is here.

The second case is Sanford v. Sanford, decided October 31, 2013. Sanford  finally puts an end to the practice of dictating into the record consents to divorce and property settlement agreements in irreconcilable differences divorces. MCA 93-5-2 specifically requires written agreement, and a verbal acquiescence, even on the record, will not do the job.

Why is this case significant? It marks the demise of Bougarde v. Bougarde, the lone case in which the practice had been okayed. Bougarde gave rise to uncertainty among many judges and lawyers as to whether and when a settlement announcement might pass muster as a final agreement.

How can you use this case to your client’s advantage? Bring a laptop computer to court with you and be ready to capture a settlement in the form of a written agreemment. You get to do the drafting, which means that you get to choose the language. You will have the advantage over the dinosaurs who still don’t know what a laptop (computer) is.

A previous post about Sanford is here.

The third case is Huseth v. Huseth, rendered April 10, 2014. In this case, the MSSC returned to the principle that the child support statutory guidelines are just that — guidelines — and that it is up to the chancellor to set child support after first addressing the factors set out in Gillespie v. Gillespie, 594 So.2d 620, 622 (Miss. 1992).

Why is this case significant? In a long line of cases since 1992, our appellate courts have applied the child support statute as mandatory, and cases that deviated without the proper finding of basis for deviation were reversed. Huseth says that before looking to the statute the chancellor must first consider and address the Gillespie factors. The statute then supplies a guideline for the judge to apply his or her discretion. As a practical matter, I think most judges will follow the guidelines. But that’s not a sure thing post-Huseth.

How can you use this case to your client’s advantage? Be sure to put on proof of the Gillespie factors. Make sure your client’s 8.05 is credible, because it’s unlikely that chancellors are going to take it at face value that your client really is going $800 in the hole every month so that he can’t afford to support his children. You might hear the judge advise your client to quit smoking and drinking, sell his truck, and cut off his cable and internet service so that he can pay child support.

A previous post about Huseth is here.

A Helpful Primer on HCIT

June 9, 2014 § 2 Comments

Judge Maxwell of the COA often includes lucid, concise explanations of the law in his opinions. I find his statements of the law to be a helpful guide in resolving issues that come before me.

One of the most confusing areas of domestic law is how to define what is and is not habitual cruel and inhuman (not “inhumane”) treatment (HCIT), per MCA 93-5-1. In the case of Harmon v. Harmon, handed down June 3, 2014, the COA affirmed the chancellor’s award of a divorce in favor of Linda Harmon against Courtney Harmon on the ground of HCIT. Judge Maxwell, for the unanimous court, set out this helpful exposition on what constitutes HCIT under our law:

¶14. Courtney first argues the chancellor wrongly granted Linda a divorce based on habitual cruelty. See Miss. Code Ann. § 93-5-1 (Rev. 2013). To prove cruelty, a party mustshow conduct that either:

(1) endangers life, limb, or health, or creates a reasonable apprehension of such danger, rendering the relationship unsafe for the party seeking relief, or (2) is so unnatural and infamous as to make the marriage revolting to the non[]offending spouse and render it impossible for that spouse to discharge the duties of marriage, thus destroying the basis for its continuance.

Smith, 90 So. 3d at 1262 (¶10) (quoting Richard v. Richard, 711 So. 2d 884, 889 (¶22) (Miss.1998)). “The conduct must consist of something more than unkindness or rudeness[.]” Jackson v. Jackson, 922 So. 2d 53, 56 (¶4) (Miss. Ct. App. 2006) (quoting Horn v. Horn, 909So. 2d 1151, 1155 (¶7) (Miss. Ct. App. 2005)). Want of affection or incompatibility is not enough. Id. The complaining party must prove one of these two prongs by a preponderanceof the credible evidence. Smith, 90 So. 3d at 1262-63 (¶10).

¶15. Generally, habitually cruel conduct must be “routine and continuous.” Jackson, 922So. 2d at 56 (¶4) (citing Moore v. Moore, 757 So. 2d 1043, 1047 (¶16) (Miss. Ct. App.2000)). However, a pattern is not always required. Sometimes, a single act of physical violence is sufficient. Smith, 90 So. 3d at 1263 (¶13) (citing Curtis v. Curtis, 796 So. 2d1044, 1047 (¶8) (Miss. Ct. App. 2001)). But in cases like this where there is no physical violence, we consider the frequency and severity of the conduct, and the impact on the offended spouse. Id. “[V]erbal abuse, neglect, and the like,” considered independently, willnot amount to cruelty. Id. (quoting Jackson, 922 So. 2d at 57 (¶8)). But if these combinedacts manifest a course of revolting conduct, they may give rise to cruelty.Id.

¶16. In reviewing a cruelty-based divorce, “there is a dual focus on the conduct of the offending spouse and the impact of that conduct on the offended spouse.” Id. at 1263 (¶11)(quoting Bodne v. King, 835 So. 2d 52, 59 (¶24) (Miss. 2003)). This specific inquiry is subjective. Id. (citing Faries v. Faries, 607 So. 2d 1204, 1209 (Miss. 1992)). Instead of using an ordinary, reasonable-person standard, we concentrate on the conduct’s effect on the particular offended spouse. Id. (citing Faries, 607 So. 2d at 1209). Though a party alleging cruelty must generally corroborate his or her testimony, an exception is made “where corroboration is not reasonably possible because of the nature of the accusation.” Id. at(¶12).

On that last point — corroboration — Judge Maxwell adds this helpful footnote: “For example, corroboration may be unnecessary in unusual cases, such as isolation. Jones v. Jones, 43 So. 3d 465, 478 (¶30) (Miss. Ct. App. 2009). Further, “‘the corroborating evidence need not be sufficient in itself to establish the ground,’ but rather ‘need only provide enough supporting facts for a court to conclude that the plaintiff’s testimony is true.’” Id. (quoting Deborah H. Bell, Bell on Mississippi Family Law § 4.02[8][d] at 74(2005)).

That is essentially a hornbook on HCIT, complete with supporting authority, that you can use to your client’s benefit next time you have an HCIT case. 

 

A Rule 54(b) Dismissal With a Twist

June 3, 2014 § Leave a comment

We’ve talked here numerous times about the unappealability of a judgment that disposes than fewer than all of the issues pending before the court. If you type “54(b)” in that search box over there it will take you to the many posts on the subject.

The COA case of Newson v. Newson, handed down May 13, 2014, presents a scenario that just might apply in one of your cases, so you should take notice.

In May, 2011, the chancellor entered a judgment granting Lori Newson a divorce from her husband, Anthony, on the ground of adultery. On that day, Anthony’s attorney advised the court that his client had filed for bankruptcy, so the judge reserved ruling on alimony and equitable distribution until the status of the bankruptcy was clarified. 

In March, 2012, the chancellor gave the parties the go-ahead to proceed. In August, 2012, the parties submitted a partial agreement, and the court made a partial ruling. The court stated that “the responsibility of the indebtedness of the respective parties, spousal support/alimony, attorney’s fees and/or costs owed by the parties would be reserved for a final hearing. Apparently there was another hearing, because in October, 2012, the court entered an order styled or referred to as a final order, granting Lori periodic alimony, and finding that Anthony was in arrears in the sum of more than $64,000 in alimony, for which he was in contempt. The judge left the record open for Lori’s attorney to present a statement of services rendered so that he could adjudicate attorney’s fees. Anthony filed a motion asking the court to reconsider (R59, I guess, since there is no such thing as a motion for reconsideration), which the court overruled. Anthony appealed.

The COA predictably ruled that, since the chancellor had left the record open without finally adjudicating the issue of attorney’s fees, and without certifying the case, the COA was without jurisdiction and dismissed the appeal.

Now, here’s the twist …

Quite often lawyers ask the court to combine into the final hearing the contempt issues that accrue during the pendency of a divorce. It’s not unusual for the court in such a situation to adjudicate finally all of the divorce issues — grounds, custody, child support, equitable distribution, alimony, attorney’s fees on the divorce — and then to treat the contempt issues. In addressing the contempt issues, the court many times will order that the contemnor do certain things to purge himself of contempt, and for the matter to be reviewed at a later date. Sometimes there is a second or even a third review hearing. In such a case, you are stuck with an unappealable divorce judgment until the trial judge finally adjudicates everything.

Unless …

  • You file a R59 motion (within ten days of the original judgment) asking the court to add the “express determination that there is no just reason for delay,” per R 54(b), and directing entry of a final judgment on the issues of divorce, custody, equitable distribution, alimony, attorney’s fees on the divorce, leaving the contempt issues to take their own, separate course. Or …
  • You could make a motion at the conclusion of your case that the issues be severed, and that the court make the R54(b) certification to be included in the final judgment.

Of course, you could ask the court not to combine the contempt issues in with the final divorce hearing in the first place, but most clients want the hourly billing and the courtroom time to end, so it’s usually more efficient from a time and law-weariness standpoint to get it all over with in one hearing.    

This is one of those situations where you need to pay attention to where you are and how you got there. Once you realize you are faced with a judgment that may not be appealable for quite some time, you need to take steps to extricate your client from that bind.

The Cost of Side Income

April 21, 2014 § 2 Comments

It often happens that one of the parties in a divorce has side income. By “side income” I am referring to extra income, usually in cash, received for services separate and apart from one’s primary employment.

Some examples could include cash that a party: receives for doing weekend painting; is paid as a part-time, fill-in clerk at a country store; earns for child care or sitting; takes in for yard work. The list is endless.

There is no question that when the proof shows that there is that additional income, it should be taken into consideration in calculating alimony or child support. The hard part is how exactly is the court supposed to quantify it? It’s the hard part because the proof usually ranges on from almost entirely lacking to at best vague and inconclusive. After all, it’s cash with no evidence trail.

That was the problem facing the chancellor in Burnham v. Burnham, decided April 8, 2014, by the COA.

The chancellor found that Matthew Burnham was earning some side income from farming, which was in addition to adjusted gross income from his primary employment at Jones County Community College in the count of $2,618.04. The judge ordered child support in the amount of $600 a month, which he explained was guideline support for the two children, plus an additional sum to account for the farming income.

Matthew appealed, complaining that the support, by guideline, should have been no more than $523.61, a difference of $76.39 a month.

Judge James, for the COA, found the chancellor in error:

¶18. The record indicates that Matthew’s adjusted gross income from Jones County Junior College is $2,618.04 per month. The trial court found that Matthew receives additional income from farming operations. However, there is no documentation that provides for the amount per month he receives from farming. It is also unclear whether Matthew still receives this supplemental income from farming.

¶19. Matthew argues that the appropriate amount for his child-support obligation for the two minor children is $523.61; which is twenty percent of his net income. The trial court ordered Matthew to pay $600 per month. The trial court based the child-support award on the net income Matthew receives from Jones County Junior College and cash received from the farming operation. However, there is nothing in the record to establish the amount of income received from the farming operation. The trial court imputed an undetermined amount of income to Matthew.

¶20. Matthew argues that a deviation from the child-support guidelines requires a written finding on the record explaining the need for such deviation. Miss. Code Ann. § 3-19-101 (Supp. 2013). The criteria for finding an appropriate deviation are as follows:

(a) Extraordinary medical, psychological, educational or dental expenses.

(b) Independent income of the child.

(c) The payment of both child support and spousal support to the obligee.

(d) Seasonal variations in one or both parents’ incomes or expenses.

(e) The age of the child, taking into account the greater needs of older children.

(f) Special needs that have traditionally been met within the family budget even though the fulfilling of those needs will cause the support to exceed the proposed guidelines.

(g) The particular shared parental arrangement, such as where the noncustodial parent spends a great deal of time with the children thereby reducing the financial expenditures incurred by the custodial parent, or the refusal of the noncustodial parent to become involved in the activities of the child, or giving due consideration to the custodial parent’s homemaking services.

(h) Total available assets of the obligee, obligor and the child.

(i) Payment by the obligee of child care expenses in order that the obligee may seek or retain employment, or because of the disability of the obligee.

(j) Any other adjustment which is needed to achieve an equitable result which may include, but not be limited to, a reasonable and necessary existing expense or debt.

Miss. Code Ann. § 43-19-103 (Supp. 2013).

¶21. “The child support award guidelines are ‘ rebuttable presumption in all judicial or administrative proceedings regarding the awarding or modifying of child support awards in this state.’” Grove v. Agnew, 14 So. 3d 790, 793 (¶7) (Miss. Ct. App. 2009) (quoting Miss. Code Ann. § 43-19-103 (Rev. 2004)). Thus, “[i]n the absence of specific findings of fact to support a deviation from the child support guidelines, the chancellor’s award is not entitled to the presumption of correctness under the statute.” Osborn v. Osborn, 724 So. 2d 1121, 1125 (¶20) (Miss. Ct. App. 1998).

¶22. After careful review of the record, we find no specific finding of fact to support deviation. Instead there is merely an order for Matthew to pay a seemingly arbitrary amount of $600. The ordered amount of support is almost twenty-three percent of his net income. There is no mention of any extraordinary circumstances that would warrant a departure from the child-support guidelines. Although the children attend private school, the maternal grandparents agreed to pay the tuition. Accordingly, we find that the trial court erred in deviating from the child-support guidelines without specific on-the-record findings.

I can’t quibble with the conclusion here that specific, on-the-record findings are necessary to support a deviation from the guidelines. Under this case, it appears that those findings would necessarily include not only why and how one or more deviation factors applies, but also what are the specific findings of the court as to how the additional sum is calculated.

I do have a minor quibble with the bold language above. If there is proof in the record that Matthew receives some farming income, even if it is unclear, doesn’t the chancellor’s finding that it exists resolve that issue? It is the judge’s job to make that call based on what he finds to be the credible evidence.

When you have a case such as this where the chancellor has not fleshed out his findings, file a R59 motion and ask the judge to support his findings in the record. Post-trial motions were filed in this case, but it is not clear whether that particular request was made.        

Also, if you represent the party trying to benefit from the side income, always make sure you put some proof in the record to quantify it. Ask questions on cross examination to get a number or a range. Look at tax returns and get them into the record; sometimes people report at least part of side income to avoid IRS problems. Get youor client to testify to her experience (e.g., “When we lived together he would give me hundred dollar bills a couple of times a month for groceries, and he would peel them off of a thick wad of hundreds that he carried around.”)

Subjecting One’s Self to the Jurisdiction of the Court

March 12, 2014 § 1 Comment

The MSSC case of Pierce v. Pierce, handed down February 20, 2014, includes a couple of pretty important points of law that you should be aware of in your chancery practice.

Martin and Star Pierce were married in 2000, and lived in Harrison County, Mississippi. They separated, and Martin filed for divorce in the State of Washington in 2007. Since the Washington court had no personal jurisdiction over Star, it granted a divorce only.

Martin later filed an action in Harrison County seeking partition of the parties’ jointly-owned home and settlement of the parties’ financial obligations incurred during the marriage. Star counterclaimed for equitable distribution, alimony, and attorney’s fees.

The chancellor equitably divided the marital estate, including Martin’s military retirement, and awarded Star alimony and attorrney’s fees.

Martin appealed, complaining (1) that the Washington judgment was res judicata as to Star’s claims for equitable distribution and alimony, and (2) that, since he had only requested partition, he had not consensually submitted himself to Mississippi jurisdiction for division of his military retirement.

As for the issue of res judicata, the MSSC said, at ¶ 19, that although the Washington court properly had subject matter jurisdiction over Martin’s divorce action, it lacked personal jurisdiction over Star. A court with personal jurisdiction over only one of the parties in a divorce may not divide the parties’ assets. Therefore, the issues of property division and alimony were not res judicata by virtue of the Washington judgment, and the Mississippi Chancery Court had jurisdiction over those issues.

Note: It happens from time to time that a party, unhappy with a Mississippi temporary order or separate maintenance order, or with the slow progress of his case, or lacking viable grounds, moves to another state or jurisdiction and obtains a divorce. That does not deprive Mississippi of jurisdiction to adjudicate all of the other issues within its territorial jurisdiction that are pendant to a divorce, such as equitable distribution, alimony, child custody, child support, and so on, if the court obtains personal jurisdiction. In this case, Martin submitted himself to the personal jurisdiction of the court, and thus opened the door to the court’s adjudication of all those pendant issues.

A previous post on exactly what constitutes res judicata is at this link.

With respect to Martin’s assertion that his partition suit did not open him to other relief via counterclaim, the MSSC disagreed at ¶ 23: “It is well-established ‘that by filing suit a plaintiff automatically waives any objections he might otherwise have on grounds of personal jurisdiction to counterclaims presented against him in the suit'” [Citations omitted]

Note: Not a whole lot needs to be said about this particular point. When you invoke the jurisdiction of the court, you open yourself to any and all claims and actions that the other party has against you, both arising out of the same subject matter as the original suit (MRCP 13(a)), as well as any not arising out of the subject matter of the original suit (MRCP 13(b)).

You should read the court’s opinion. Its rationale and the authority are both something you can use in your library of helpful authority.

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