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.
February 4, 2014 § Leave a comment
When it comes to dividing retirement accounts in divorce, the case law and arguments of counsel can be all over the ballpark. Do you divide the accounts as you would cash money, by percentages or assigned sums? Or do you order a division of the stream of income as you would alimony?
How and whether a military retirement account should be divided was the issue in the COA case of King v. King, decided January 14, 2014. I believe Judge Fair’s specially concurring opinion sets out the proper approach that chancellors should use in determining the nature of, and how to divide, retirement accounts. Here it is verbatim:
¶12. The issue dividing the majority and dissent is whether there was a Hemsley-Ferguson-Armstrong compliant treatment of military retirement benefits belonging to Joseph. Those benefits were being paid to him monthly, having matured from a dormant asset into a stream of income. For that reason I concur with the majority in recognizing that the treatment of such benefits by the chancellor was in accord with the intent of those three cases and their progeny.
¶13. The Supreme Court of Mississippi handed down Hemsley and Ferguson in July 1994, providing factors for consideration by chancellors in establishing and equitably dividing marital assets. In 1993, Armstrong had set out similar factor guidance for determining alimony. Later rulings have emphasized that these three cases govern financial relations – past, present, and future – of divorcing spouses, and should be considered together, with one receding in effect when another increases.
¶14. The first case recognizing the interdependency of those three “factor discussion” cases was handed down five months after Hemsley and Ferguson. In Johnson v. Johnson, 650 So.2d 1281 (Miss. 1994), the supreme court introduced the concept of remedying, through alimony, a “deficit” in income and lifestyles between parties after equitable division of their marital property and evaluation of their separate property, if any. A chancellor is required to first determine income from employment and from marital property and separate property. Then, if a deficit results, then the chancellor should award alimony in one or more of its three common forms (lump sum, rehabilitative, and periodic) to address the deficit. Overall fairness, equity, and especially finality undergird such treatment, with an emphasis in recent cases placed on avoidance, if at all possible, of continuing financial relationships between spouses (other than child support).
¶15. The Uniformed Services Former Spouses’ Protection Act (USFSPA), cited in both the majority and the dissent, has been compared on occasion by the supreme court to the 1986 COBRA provisions under which a chancellor may divide marital ERISA qualified retirement plans (Tamra’s 401(k), for instance) without tax consequence. However, Joseph’s military retirement, like Tamra’s PERS retirement, and all other government retirement programs, are exempt from the COBRA Act and its “Qualified Domestic Relations Orders” (QDRO). Military retirement has its own requirements for benefit distribution in divorce cases.
¶16. USFSPA allows only income streams from military retirement benefits to be awarded, prohibiting lump sum apportionment and limiting the total of all alimony and child support to 50% of the service member’s regular retirement income stream. Thus, the maximum benefit possible for Tamra under those restrictions is $267 monthly, which is half of Joseph’s $1,144 less $305 in agreed child support. Apportioning that amount to Tamra as payment, in installments, for her share of a property interest in Joseph’s retirement would raise her gross $4,100 per month to $4,367 and reduce Joseph’s to $1,330, further increasing the deficit that favors an award of alimony to Joseph.
¶17. We should formally recognize the difference between an ERISA plan and military retirement plans, and perhaps all retirement accounts actively paying monthly benefits which cannot be altered. For example, PERS contributions on early termination of employment, and 401(k) and IRA contributions at any time, may be withdrawn by a spouse at the time of divorce and are therefore still divisible, some through a QDRO without loss of tax-deferred status. On the other hand, a vested income stream that has commenced in a government plan is not, as the majority recognizes, divisible or payable in lump sum, and should be considered under the Armstrong alimony prong only.
¶18. Such treatment of an existing retirement income stream would be in accord with the view our supreme court takes of “good will” in business valuations, likewise not a divisible asset readily convertible to cash but rather a source of monthly income to be considered in alimony determination only.
In other words, when the retirement account is not divisible by law, and has been converted to a stream of income, it should be treated as income, and not as a divisible asset convertible to cash.
Annuities also come to mind when enumerating the types of assets that such an approach would cover.
I think Judge Fair is right on target with this.
January 28, 2014 § 1 Comment
What does it take to trigger relief from fraud on the court?
That’s the question I posed in a previous post dealing with the COA’s October 2, 2012, decision in the case of Rosemary Finch v. Stewart Finch.
The answer based on the COA decision was that one need merely suggest that a fraud on the court was committed, and the chancellor can take it from there. So that settles that, right? Well, not exactly. The MSSC granted cert and took another look.
In Finch v. Finch, handed down January 16, 2014, the high court affirmed the COA’s decision on the chancellor’s handling of the fraud-on-the-court issue, but remanded for further findings of fact by the trial court on other issues.
The MSSC decison, penned by Justice Pierce, is worth your time to read, because it sheds further light on the dimensions of fraud on the court, how it affects judgments, how the trial court should address it, and how you should deal with it.
What is most strking to me about this opinion, however, is how the court divided on the decision:
LAMAR, KITCHENS AND CHANDLER, JJ., CONCUR. RANDOLPH, P.J., CONCURS IN PART AND IN RESULT WITHOUT SEPARATE WRITTEN OPINION. DICKINSON, P.J., CONCURS IN PART AND DISSENTS IN PART WITH SEPARATE WRITTEN OPINION JOINED BY WALLER, C.J., KING AND COLEMAN, JJ.; CHANDLER, J., JOINS IN PART.
Four justices joined entirely in the opinion: Pierce, Lamar, Kitchens, and Chandler. Randolph added a fifth concurrence “in part and in result.” The dissent garnered five votes also: Dickinson, Waller, King, and Coleman. Chandler added a fifth vote, “in part.” Neither Justice Randolph nor Justice Chandler wrote an opinion explaining their concurrence or dissent in part, so we do not know enough to understand their rationales. Apparently, under the MSSC internal procedures, a tie vote goes in favor of the justice who wrote the original opinion. In his dissent, Justice Dickinson referred to this as a “plurality opinion.”
I found Justice Dickinson’s dissent to be forceful and persuasive. He questioned whether due process had been violated, and he found the proof of actual fraud lacking. He was not successful, though, in selling his opinion to a majority. So the law of Mississippi in cases involving fraud on the court remains as I described it in that previous post:
… all that was necessary in this case was to give the chancellor a suggestion that there may have been a fraud on the court, and she picked it up and ran with it. The chancellor has broad, equitable power when it comes to relief under MRCP 60(b), which the court can exercise on its own motion. In this particular case the problem was fraud, but 60(b) vests the court with the same equitable powers to address mistake, “or any other reason justifying relief from judgment …”
January 13, 2014 § Leave a comment
The case of Gardner v. Gardner, decided by the COA back on September 24, 2013, is not a landmark case, by any means, but it highlights the point that I have made here often that the values of assets that you put into the record just might be the ones your client gets saddles with, for better or worse. Here’s what Judge Lee’s opinion said about it:
¶19. “[F]indings on valuation do not require expert testimony and may be accomplished by adopting the values cited in the parties’ [Uniform Chancery Court Rule] 8.05 financial disclosures, in the testimony, or in other evidence.” Horn v. Horn, 909 So. 2d 1151, 1165 (¶49) (Miss. Ct. App. 2005) (citations omitted). The chancellor did the best he could with the evidence presented to him, and we decline to find error in his conclusions.
A couple of thoughts:
- It often happens that both parties present the court with outlandish values. He values everything he wants her to have at phenomenally high values, and values the items he is to get at pitifully small values. She does likewise. That leaves the court with the alternatives: (a) to find that all the values have no credibility, and to order valuation by an expert; or (b) to average the values, or pick and choose among them to arrive at an adjudication of values; or (c) to order everything to be sold and the proceeds divided according to the formula for equitable division.
- If your client contests some of the other party’s values, be sure to have him or her testify why. For instance, “I disagree that the dresser in the bedroom is worth $3,000 because we bought it at a yard sale for only $50 nearly 35 years ago, and it has a drawer missing, the mirror is broken, and my husband spilled a bottle of brandy on it, causing the varnish to be scarred and bubbly on the top.”
- In Gardner, the wife was unhappy with the low value that the chancellor placed on husband’s tools and implements. Those kinds of items may actually merit valuation by someone with some pertinent experience, such as a credible mechanic, or the like. I once represented a man in the car painting business who had rescued some clogged painting nozzles from work that were discarded by his boss because it was cheaper to throw them away than to clean them. He took them home, painstakingly cleaned them, and used them for his hobby and side work. His wife valued the nozzles at $300-600 apiece. My client valued them at $25 each. The chancellor elected the wife’s value, and we had nothing in the record other than the parties’ testimony on which to base a contrary result. Ouch. Mrs. Gardner had a similarly unhappy outcome for the same reason.
- Consider using discovery, and RFA’s in particular, to establish values.
As I have said here before, when you save or make your clients money, they love you. When you cost them money, they hate you. A little attention to values can go a long way on the positive side.
January 7, 2014 § Leave a comment
Mississippi law provides, essentially, two avenues by which parties who share joint interests in real property may effect a partition of their interests: (1) the property interests may be divided by decree of a chancery court per MCA 11-21-3; or (2) the parties may reach a signed agreement, per MCA 11-21-1.
In 2009, the Mississippi legislature amended MCA 11-21-1, the voluntary agreement provision, to add the following language:
(2) Homestead property exempted from execution that is owned by spouses shall be subject to partition pursuant to the provisions of this section only, and not otherwise.
I think most practitioners read that language to mean that, unless the spouses agreed, there could be no partition of homestead property by partition action between them. Whether that interpretation is correct was the subject of a recent MSSC decision.
Elise Noone filed a complaint for divorce charging her husband, Frank, with habitual cruel and inhuman treatment. The chancellor denied the divorce in 2011. The parties were joint tenants with right of survivorship in some 67 acres of land in Copiah County, upon which they claimed homstead. Since the divorce was denied, the property remained in joint ownership.
Elise then filed an action for declaratory judgment to determine whether the chancellor had the power to partition the property, or, at least, to the extent that the value of the property exceeded the $75,000 maximum amount of the homestead exemption, and, if so, asking the court to make a partition of the property. She then filed a motion for summary judgment arguing that the language “exempted from execution” in MCA 11-21-1(2) limited application of the statute to the value of the property exempt from execution only. Frank countered that the language is not limiting, but intends that any homsetead property can be subject to partition only by agreement, and not otherwise.
The chancellor agreed with Frank, and Elise appealed.
The MSSC handed down its decision on December 12, 2013, in Noone v. Noone, Justice Coleman writing, for a unanimous court, explained:
¶7. Elise maintains that, by using the phrase “homestead property exempted from execution,” the Legislature meant specifically to incorporate Section 85-3-21, the homestead exemption statute. Section 85-3-21 allows one to hold up to $75,000 worth of his or her homestead property exempt from execution by creditors. Miss. Code Ann. § 85-3-21 (Rev. 2011). Creditors can access the value of homestead exempted property that exceeds $75,000. Id. Elise’s primary argument is that Section 11-21-1(2) applies only to the extent that the property is actually exempt from execution. In other words, she contends that the law applies the same way to spouses seeking to partition land by decree as to creditors – the law creates a limit on homestead property exempt from execution, and that limit is applicable in all situations where homestead property is invoked. If she were correct, because the Noones’ property is valued at more than $600,000, Elise would still be able to partition the large majority of the property.
¶8. The issue, in the narrowest sense, is the interpretation of the phrase “homestead property exempted from execution.” Miss. Code Ann. § 11-21-1(2) (Supp. 2013). When the meaning of a statute is plain and unambiguous, “the court should simply apply the statute according to its plain meaning and should not use principles of statutory construction.” City of Natchez, Miss. v. Sullivan, 612 So. 2d 1087, 1089 (Miss. 1992) (citations omitted). The potential meanings of “homestead property exempted from execution” are two: (1) the phrase could mean that the entire homestead property is under the ambit of Section 11-21-1, and therefore partition must be by written agreement of the owners; or (2) the phrase could mean that Section 11-21-1 applies only to the $75,000 that is exempt from execution by creditors under Section 85-3-21.
¶9. If the interpretation of that phrase were a true matter of first impression for the Court, then the latter reading might be plausible. However, in similar contexts, the Court has restricted the meaning of “homestead property exempted from execution” to the former. See Hendry v. Hendry, 300 So. 2d 147, 148 (Miss. 1974) (“Homestead value is relevant only in considering the claims of creditors in relation to the homestead upon which exemption is claimed.”); accord Stockett v. Stockett, 337 So. 2d 1237, 1240 (Miss. 1976). Hendry and Stockett have foreclosed any ambiguity. Therefore, in the instant case, the Court is tasked with nothing more than applying the logic underlying Hendry and Stockett.
¶10. In Hendry v. Hendry, a husband sold homestead property without obtaining his wife’s approval. Hendry, 300 So. 2d at 148. Pursuant to Mississippi Code Section 89-1-29 (Rev. 2011), a conveyance so made cannot be upheld. Section 89-1-29 provides, generally, that a conveyance of a “homestead exempted from execution” is not valid or binding unless signed by the owner’s spouse. Id. The Hendry Court held the value limitation on homestead property relevant only to creditors. Hendry, 300 So. 2d at 149. Therefore, the law voided the entire conveyance – not just the portion subject to exemption from creditors. Id.
¶11. The Stockett Court discussed the issue even more explicitly. Stockett, 337 So. 2d at 1239-41. In Stockett, the decedent left all of his property equally to his wife and son. Id. at 1238. The son tried to partition the homestead property of the widow (formerly owned by the decedent) but was denied because of Mississippi Code Section 91-1-23, which limits a devisee’s right to partition a decedent’s “exempt property” occupied by the widow of the deceased. Id. The decedent’s son argued that Section 91-1-23 protected the property only to the extent the value equaled the amount exempt from execution. Stockett, 337 So. 2d at 1239. The Court disagreed, holding that the limit found in Section 85-3-21 protects creditors, while Section 91-1-23 protects widows. Id. at 1240-41; see Miss. Code Ann. §91-1-23 (Rev. 2013). The Stockett Court wrote:
We have not varied in this interpretation of these statutes since 1905 when we said, in Moody v. Moody, 86 Miss. 323, 38 So. 322[, 323 (1905)]: “The limit of value placed by law on the amount of land which can be held as exempt is solely for the protection and benefit of creditors-to prevent unreasonable amounts from being held exempt from execution to the prejudice of those to whom just debts might be due. But the question of value has no place in a consideration of the rights of the surviving widow to the use and occupancy of the homestead. . . .”
Stockett, 337 So. 2d at 1240.
¶12. Both Section 91-1-23 and Section 11-21-1 invoke the exemption from creditors found in Section 85-3-21. However, the reasoning employed by the Stockett Court applies to the case sub judice. Just as Section 91-1-23 protects widows from involuntary partition, Section 11-21-1 protects spouses from involuntary partition. Neither statute protects creditors. The phrase “homestead property exempt from execution” serves as a descriptive phrase identifying the property that one (or, in the instant case, a married couple) inhabits. As shown above, we repeatedly have held that the Legislature’s decision to use the phrase “homestead property exempt from execution” in other statutes identifies the specific type of property that the Legislature wants to protect. The phrase is not, as Elise argues, intended to bring the specific limitations on creditors’ rights to other, unrelated statutes.
That’s a pretty definitive decision. The statute is to be read as protective of spouses, and any interpretation that conflicts with that intent will be rejected.
December 31, 2013 § 1 Comment
Yesterday we visited the subject of temporary hearings in cases where ID is the sole ground. The practice across the state is, well, varied.
What about the manner in which temporaries are conducted?
In this district, we schedule all temporary hearings on a R81 return day. Many are negotiated to a settlement. The ones that do no settle are taken up for hearing in order from oldest filed to most recently filed. Each side is allowed one hour, total, for the presentation of all witnesses and other evidence. One hour is by consensus among bench and bar an adequate time to develop the pertinent proof. We had a chancellor once who limited proof to ten minutes per side, which produced a lot of groaning among the lawyers. I set an expiration date of six months on my orders in hope of promoting movement toward finality.
In other districts, I experienced a broad range of ways to approach temporary matters. In some districts, a temporary hearing can consume an entire day. I often wondered in those cases what the difference was between that ordeal and the final hearing. I also wondered where the chancellor found the time.
In many districts, the proof is limited:
- One chancellor, now retired, would call the parties and attorneys to the bench, where all stood in reverent silence while the judge examined the parties’ 8.05′s. He seldom had any questions. He would simply say something like, “Okay, the wife will have custody and the husband will pay $250 a month child support. Next case.”
- Another judge called the parties to the bench and based his temporary order on a colloquy with the clients with limited input from the attorneys.
- In one district the judge allowed only the parties to take the stand. He would interrupt and ask his own questions until he was satisfied that he had a clear picture, then would say he had heard enough, and would direct one of the attorneys to draft an order.
Your experiences, I am sure, will vary. I would welcome your comments about how temporary hearings are handled in your area.
December 30, 2013 § 4 Comments
A reader of this blog in N. Mississippi emailed me with an interesting question week before last. He asked whether the following is a common practice in other areas of the state:
I have recently been on the receiving end of opposite counsel filing for divorce on sole ground of Irreconcilable Differences, asking for temporary relief-custody, support, use of home, setting for hearing. I have objected by 12b failure to make a claim for which relief can be granted. We have worked around the 2 cases without necessity of a ruling.
Before proceeding further, I can say that in this district it is a longstanding practice not to allow temporary hearings in cases where the sole ground for divorce is irreconcilable differences. Our thinking is that an ID divorce requires an agreement, either a PSA or a consent, for the court to act, and that absent that agreement no relief is possible. Please note that I am talking only about a complaint on the sole ground of irreconcilable differences, and not: (1) a complaint in which ID is an alternative ground; or (2) where there is a separate count for, say, custody.
The authority of a chancellor in such cases is MCA 93-5-17, which states that “The chancellor in vacation [and presumably during a term] may, upon reasonable notice, hear complaints for temporary alimony, temporary custody of children and temporary child support and may make all proper orders and judgments thereon.”
As far as I can discover, there is no case law on point. Temporary orders are not appealable, so the dearth of decisions is no surprise.
I polled some chancellors to see what the practice is in their districts, and, as one might suspect, the answers are all over the ballpark. Now, before someone opines that “we need to come up with a uniform practice” for temporaries, keep in mind that the statute specifically says that the chancellor “may” grant temporary relief. It has long been the practice that it is discretionary with chancellors whether to allow a temporary hearing at all, and, if so, the form of that hearing (more on that point in Part II). Here is what the various chancellors who responded said:
- “If they allege and show ‘urgent and necessitous circumstances’ I would allow a temporary.”
- “Assuming you are talking about temporary relief relative to custody and support and use of marital home incident thetero, yes we do allow temporary hearings.”
- “I do not allow temporary hearings in ID divorces. The statutory premise for ID is agreement on all issues. I do not think you can expand on what the statute allows. I am sure that someone will opine that it could be done statutorily by ‘consent’ but I would counter that with, the issues tried by consent can be appealed, a temporary cannot. As an aside, it seems when you do a temporary in an ID the court may be tipping the scales one way or the other in the negotiations.”
- “I have never conducted an actual hearing but I have signed agreed temporary orders incorporating the PSA.”
- “[In this district] temp order[s] setting support and custody (at least) are issued in ID divorce cases all the time … to say this is a common practice in our district would be an understatement.”
- “I do not allow temporary hearings on ID only complaints. I would sign [an order adopting] a stipulation between the parties …”
- “No. Never. No justiciable issue.”
That’s about 20% of the chancellors.
If you wind up with a temporary hearing in an unfamiliar district, you would do well to contact a lawyer there who practices in that court and can let you know what to expect.
December 16, 2013 § Leave a comment
It would seem to be self-evident that the door to equitable division of the marital estate is not open unless and until the trial court has a viable claim for divorce before it.
Yet, in the case of Brown v. Brown, decided by the COA on December 3, 2013, Kimberlye Brown argued that the chancellor erred when she denied Kimberlye’s prayer for equitable distribution after the chancellor had denied both parties a divorce, and, in addition, denied Kimberlye’s claim for separate maintenance. Kimberlye appealed. Judge Lee addressed the issue for the COA majority:
¶19. Kim contends that the chancellor erred in refusing to divide the marital estate. A chancellor has the authority to divide the marital estate after a divorce has been granted. Ferguson v. Ferguson, 639 So. 2d 921, 927 (Miss. 1994). In cases where only separate maintenance has been granted, however, a chancellor does not have the power to award either party a portion of the marital estate. In Daigle v. Daigle, 626 So. 2d 140, 146 (Miss. 1993), the supreme court stated that separate maintenance “is not a dissolution of a marriage and dividing of marital assets . . . .” And the court found that the chancellor erred by dividing the marital assets. Id.
¶20. Furthermore, in Thompson v. Thompson, 527 So. 2d 617, 622-23 (Miss. 1988), the court stated:
The legal duty of the husband to support his wife does not require that he convey any property to her. During cohabitation the wife has the legal right to live in the husband’s home, but he is under no legal duty to convey it to her. And after separation her legal rights are no greater than before. . . . [T]he court should not, under the guise of enforcing that contractual duty, deprive him of his lands or other specific property, where not necessary for the enforcement of that duty.
¶21. By asking the chancellor to divide the marital assets in the absence of a divorce decree, Kim is asking for her legal rights to be greater than they were before the separation. The chancellor did not have the authority to divide the marital assets, because the claims for divorce had been denied. This issue is without merit.
Some of the toughest swivets I ever sweated out as a lawyer were the ones where I argued something I considered so elementary that I did not even bother to gather some authority to take with me, yet I discovered to my chagrin that the chancellor was blithely unaware of the law on the point. A senior chancellor once threatened to throw out my client’s contest of a modification petition filed against him because I had not filed an answer. To compound matters, the lawyer on the other side argued that an answer was absolutely required. Neither found the express language of R81 very persuasive. Ouch.
So you might want to tuck away the above language from the Brown case in that special place where you store your legal survival gear. It just might come in handy after you have successfully defeated your opponent’s claims for divorce and separate maintenance, and opposing counsel rises and says, ” … and now, your honor, about our prayer for equitable distribution …”
December 10, 2013 § Leave a comment
Brenda Reeves left her husband Howard in February, 2008, and, soon after, Howard sued her for separate maintenance. Brenda responded with a motion to dismiss, and, after a hearing, the chancellor found that Howard’s abuse of alcohol, and his physical and emotional abuse of Brenda, were the proximate causes of her departure. He dismissed Howard’s complaint for separate maintenance following the trial, in February, 2010.
In March, 2010, Howard filed a Complaint for Divorce on the ground of desertion, which he shortly after dismissed.
In April, 2011, Howard filed another Complaint for Divorce on the ground of desertion. Brenda again filed a motion to dismiss, which the court denied. At trial in February, 2012, Brenda argued that Howard’s complaint should be dismissed because, under Mississippi law, if the plaintiff had previously filed an unsuccessful separate maintenance action, he must prove that he made a good-faith offer to reconcile with his spouse at least one year prior to filing the divorce complaint. The chancellor ruled that Howard had not submitted adequate proof to meet his burden, and he dismissed Howard’s complaint. Not at all happy with the outcome, Howard appealed.
In the COA case of Reeves v. Reeves, decided December 3, 2013, the COA affirmed the trial judge’s ruling. This is case law of which you need to be aware. Here is how the COA, by Judge Ishee for a unanimous court, addressed it:
¶8. Howard asserts the chancery court erred in finding that he failed to meet the one-year requirement for seeking a divorce on the ground of desertion. As such, Howard also asserts that the chancery court erred in failing to grant him a desertion-based divorce. The supreme court has addressed divorce cases such as the instant case wherein a separate maintenance action has been adjudicated prior to the filing for divorce on the ground of desertion. See Day v. Day, 501 So. 2d 353, 354 (Miss. 1987). In Day, the supreme court summarized desertion as follows:
If either party, by reason of such conduct on the part of the other as would reasonably render the continuance of the marital relationship unendurable, or dangerous to life, health[,] or safety, is compelled to leave the home and seek safety, peace[,] and protection elsewhere, then the innocent one will ordinarily be justified in severing the marital relation and leaving the domicile of the other, so long as such conditions shall continue, and in such case the one so leaving will be not guilty of desertion. The one whose conduct caused the separation will be guilty of constructive desertion[,] and if the condition is persisted in for a period of one year, the other party will be entitled to a divorce.
Id. at 356 (citation omitted).
¶9. However, the determination of whether desertion exists is viewed differently in light of an adjudicated separate-maintenance order. Id. (citation omitted). The supreme court noted that if a plaintiff seeking divorce can show that, “since the judgment for separate maintenance in favor of the defendant, the conditions have changed and the plaintiff has made efforts of reconciliation with the defendant with no avail, [then] the defendant is now a deserter and the plaintiff is entitled to a divorce for desertion.” Id. (citation omitted). The proof must show that the plaintiff was “honest in his intention to remedy his fault, and that his offers of reconciliation and request to return were made in good faith, with honest intention to abide thereby, and that the defendant deliberately refused his offers.” Id. at 357 (quoting Rylee v. Rylee, 142 Miss. 832, 840-14, 108 So. 161, 163 (1926)).
¶10. The evidence before us fails to prove that Howard made a good-faith reconciliation offer at least one year prior to April 11, 2011, as required by Day and Rylee. Howard testified at trial that he called Brenda once a month asking to reconcile. Brenda disputes this fact and further asserts that Howard’s occasional generic request to reconcile did not include a promise that he would seek rehabilitation for his alcohol abuse, nor did his requests include repentance for his prior abusive actions toward Brenda or promises that the abuse would not occur again. The evidence shows that the only good-faith reconciliation offer acknowledged by both parties was made on or about June 7, 2011 — approximately two months after Howard filed his complaint for divorce on the ground of desertion.
¶11. This was reflected in the chancellor’s following comments made during his ruling:
It seems to me that after a separate[-]maintenance proceeding, in order for the time to start ticking under Day, it is incumbent upon Mr. Reeves to make a good[-]faith offer. . . . I don’t have proof that I think rises to a preponderance of the evidence to show that Mr. Reeves made an offer for Mrs. Reeves to return home, satisfying whatever concerns she may have had, that would have started the one year running as contemplated by Day. I’m going to decline to talk about the reasonableness or unreasonableness of these post[-]filing offers that have transpired between Mr. and Mrs. Reeves . . . .
We agree with the chancellor. The law is clear that, under these circumstances, Howard was required to make a good-faith reconciliation offer at least one year prior to filing a complaint for divorce on the ground of desertion. The evidence simply does not show that he did so. As such, the chancellor did not err in his determination that Howard failed to meet the one year requirement at issue. This issue is dispositive of Howard’s second claim on appeal that the chancery court erred in failing to grant him a divorce on the ground of desertion. These issues are meritless.
- Notice in ¶10 that the COA finds from the record that Howard had neither (1) undergone rehabilitation for his alcohol abuse, nor (2) repented for his prior conduct. This is language that you can use when you have a separate maintenance case in which the payer claims to have had his offers to reconcile rejected. It seems that what the COA is saying is that the offeror must prove measures to reform, and must make amends with the offended party. “Generic” offers to return home won’t cut it.
- Cases of this type were more common before irreconcilable differences divorces by consent became available. Every now and again one runs into a pleading and procedural scenario like the Reeves case presented, and you have to be prepared to meet it. Remember that it takes more to prove desertion than mere separation without fault for a year or more. Since a good-faith offer of reconciliation within the one-year period will stop its running, the offended party must prove that she or he would have been willing to reconcile within that first year if a bona fide offer to do so had been made, but none was made.
December 2, 2013 § Leave a comment
Gail Williams received more than $50,000 from Dow Chemical in settlement of a defective breast implant suit she had filed. She deposited the money in an account separate from her husband, Phillp, and spent some of it. When the couple went through a divorce, Phillip argued that the remaining $25,000 was acquired during the marriage, and that it should be subject to equitable distribution. He pointed out that the breast implants had been paid for with $8,000 of marital funds; ergo, the proceeds from them should be marital property. The chancellor treated the account as Gail’s separate property, not subject to division, and Phillip appealed.
The COA affirmed on November 5, 2013, in Williams v. Williams. Judge Fair’s opinion includes a nifty recitation of the applicable law. Here it is:
¶15. As recognized by the chancellor, in an equitable division of property brought into or acquired during a marriage, the property must first be subjected to a Hemsley analysis, the determination of whether assets are marital or separate and assignment of a value to each item or groups of items. Property acquired during marriage is presumed marital. In this case Gail had received a money settlement based on defective breast implants made by Dow Chemical Company during the marriage. She kept it, however, in a separate account in her name only. The sum in the account was alternatively stated in the record as $25,097, $25,075, or “about $25,000.”
¶16. The Supreme Court of Mississippi had wrestled with determination of the status of personal injury settlements as marital or separate property long before it handed down the Hemsley and Ferguson cases on July 7, 1994. In fact, in Hemsley it noted specifically the case of Regan v. Regan, 507 So. 2d 54 (Miss. 1987), as a harbinger of things to come. In Regan, using language adopted in Hemsley some seven years later, the supreme court had held that:
Incident to a divorce the Chancery Court certainly has the power to look behind the formal state of title to property and decree an equitable division of jointly accumulated property, the division to be made by reference to the economic (though not necessarily monetarily economic) contributions made by each to the acquisition and maintenance of the property. Pickle v. Pickle, 476 So. 2d 32, 34 (Miss. 1985); Spearman v. Spearman, 471 So. 2d 1204, 1205-06 (Miss. 1985); Watts v. Watts, 466 So. 2d 889, 890-91 (Miss. 1985); cf. Pickens v. Pickens, 490 S o.2d 872, 875-76 (Miss. 1986). Here, however, the evidence is overwhelming that these monies derived in substantial part, if not in whole, from Lloyd’s personal injury claim. The Chancery Court in its opinion notes:
It is undisputed that the origin of the money was a 1981 settlement of a personal injury/loss of consortium claim arising from defendant’s [Lloyd’s] injuries.
While it is true that the evidence suggests that a good bit of the settlement proceeds have been expended for the mutual benefit of the parties, there is no evidence that Lloyd ever made any gift of one-half or any other part of the proceeds to Jeanette. See May v. Summers, 328 So. 2d 345, 347-48 (Miss. 1976); Tucker v. Tucker, 252 Miss. 344, 358, 173 So. 2d 405, 411 (1965). To the extent that the funds reflected by the certificate of deposit were in fact derived from the Lloyd’s maritime personal injury claim, they are his property and may not be ordered shared with his wife as a part of a property division incident to divorce proceedings. See Amato v. Amato, 180 N.J. Super. 210, 434 A.2d 639, 641-44 (1981).
The Chancery Court erred when it ordered the certificate of deposit divided equally between the parties. Rather, the property division should have reflected, pro-rata, the extent to which the settlement proceeds were fairly attributable to the respective claims of Lloyd and Jeanette. On this appeal Lloyd strongly urges that Jeanette had no claim and, accordingly, that he should receive the entire certificate of deposit. There is enough in the record, however, to suggest to us that this may well not be the case. Under the circumstances we remand to the Chancery Court and direct that court to determine the amount of the $225,000.00 settlement attributable to the claims of Lloyd and the amount of that settlement attributable to the claims of Jeanette. The proportions can then easily be calculated from which it will follow that the certificate of deposit will be divided in those proportions.
Regan v. Regan, 507 So. 2d 54, 56-57 (Miss. 1987).
¶17. Regan was recognized twelve years later by this Court in decisions, later affirmed by the supreme court, holding that funds acquired in a personal injury case are not automatically separate property. Justice Mills began the supreme court’s opinion by noting:
We granted certiorari to address the division of personal injury settlements between spouses in divorce proceedings. The Court of Appeals found that the law has broadened in favor of the non-injured spouse since we last squarely addressed the issue in Regan v. Regan, 507 So. 2d 54 (Miss. 1987). The Court of Appeals reversed and remanded to the Chancery Court of Panola County for further proceedings. Tramel v. Tramel, *** So.2d ***, 1998 WL 536861 (Miss. Ct. App. Aug. 18, 1998). Finding the decision of the Court of Appeals to be correct, we affirm.
Tramel v. Tramel, 740 So. 2d 286, 286 (¶1) (Miss. 1999). Revisiting the subject addressed in Regan was found appropriate because:
In 1994, this Court completely transformed the law of property division in divorce proceedings in Hemsley v. Hemsley, 639 So. 2d 909 (Miss. 1994), and Ferguson v. Ferguson, 639 So. 2d 921, 930 (Miss. 1994). In Hemsley, we held:
We define marital property for the purpose of divorce as being any and all property acquired or accumulated during the marriage. Assets so acquired or accumulated during the course of the marriage are marital assets and are subject to an equitable distribution by the chancellor. We assume for divorce purposes that the contributions and efforts of the marital partners, whether economic, domestic or otherwise are of equal value.
Tramel, 740 So. 2d at 288 (¶9).
¶18. In their Tramel opinions, both of our appellate courts described the three approaches being taken by other states in classification of personal injury settlements in equitable division cases. They drew from the comprehensive discussion in the South Carolina Supreme Court Case of Marsh v. Marsh, 437 S.E.2d 34 (S.C. 1993), which set out the three methods of classification then in use: (1) award to the injured spouse; (2) the analytic approach in which compensation for pain and suffering is personal, compensation for loss of wages during the marriage is marital, but future economic compensation non-marital; and (3) a mechanistic finding the settlement, since acquired during marriage, is wholly marital property. Declining, however, to leave the choice of approaches to the trial court as did the South Carolina court, our courts adopted the reasoning in Georgia and North Carolina cases, rejecting the first and third mechanistic approaches and adopting the analytical approach. Our supreme court expressly overruled any provisions of Regan contrary to its adoption of the analytic approach and held that the lines “a chancellor must draw, as difficult as they may be, are these:
1) that portion of the proceeds allocable to compensation to the initially injured spouse for pain, suffering, and disfigurement should be awarded in its entirety to the injured spouse;
2) that portion of the proceeds allocable to lost wages, lost earnings capacity, and medical and hospital expenses, to the extent those apply to the time period of the marriage, are marital assets and are to be divided according to equitable distribution principles; and,
3) that portion of the proceeds allocable to loss of consortium should be awarded in its entirety to the spouse who suffered that loss.
Tramel, 740 So. 2d at 291 (¶18).
¶19. In her opinion in this case, the chancellor found:
After a careful consideration of the proof presented in this matter and the application of the above summarized guidelines, the Court finds all of the real property and personal property addressed in these proceedings is marital property subject to equitable distribution, with the exception of the personal injury settlement proceeds received by Gail. Those funds are contained in the Woodman of the World account #973 in Gail’s name, in the approximate amount of $25,097. See Exhibits 17, 18 and 32. These funds were obtained by Gail as a result of a settlement with Dow concerning defective breast implants. Pursuant to the principles set forth in Tramel v. Tramel, 740 So. 2d 286, 291 (Miss. 1999), the Court finds those personal injury proceeds were for Gail’s pain and suffering and disfigurement. Further, insufficient proof was presented to establish those funds had been co-mingled with marital assets.
(Emphasis added). The account records show the principal amount deposited and withdrawal of interest, as testified to by Gail, on that money, which she said was commingled with marital funds. Gail testified that her full settlement was for $45,000, and she was additionally awarded $5,000 for medical expenses for corrective surgery. She paid $20,000 for a new car, a marital asset, and placed the remaining $25,000 in a separate account. She related that she and Phillip discussed why she wanted it in her name at the time. “It was for pain and suffering,” she said three times in her testimony, adding that the additional $5,000 was for medical expenses. She concluded by saying that there were also accounts in Phillip’s name only and that she wanted to have that account in hers only. It was established that the cost of the implant surgery, which occurred fifteen years before trial, was paid from the marital checking account. The amount paid is not in the record on appeal, although Phillip claims it is, and that it is $8,000. The chancellor found Gail’s testimony that the amount left in the account is for pain and suffering to be credible, and not directly contradicted by Phillip’s testimony.
¶20. We affirm the chancellor’s finding the settlement proceeds were separate property as well within her discretion.
Not much more needs to be said except that what you have there is the body of a brief if you’re ever called upon to recite the law on the issue of equitable distribution of personal injury settlement proceeds.