Equity Delayed is Equity Denied

August 26, 2015 § 1 Comment

If your trial judge in a bench trial takes a case under advisement and fails to render a decision within a reasonable time, MRAP 15 provides the remedy:

(a) When a trial judge in a civil case takes under advisement a motion or request for relief which would be dispositive of any substantive issues and has held such motion or request under advisement for sixty (60) days, the plaintiffs and the defendants shall each within fourteen (14) days thereafter submit a proposed order or judgment to the trial judge and shall forward to the Administrative Office of Courts, the trial court clerk and the opposing parties true copies thereof with a statement setting forth the style and number of the case, the names and addresses of the judge and of all parties and the date on which such motion or request was taken under advisement. On receipt of such proposed orders and notices, the Administrative Office of Courts shall calendar them and notify the trial judge and the trial court clerk of the filing. At any time thereafter that an order or judgment is entered on the motion or request for relief, the plaintiffs and the defendants shall, in writing, promptly notify the Administrative Office of Courts and the opposing parties of the date of entry of the decision; copies of such notification shall be sent to the judge and the trial court clerk. If no written notice of a decision is received by the Administrative Office of Courts within six(6) months from the date the case was taken under advisement, the Administrative Office of Courts shall confirm with the trial court clerk that no order or judgment has been entered and notify the Supreme Court. The Administrative Office of Courts will forward copies of its notification to the trial judge and parties and shall advise the judge and counsel that they are to respond to the notice within a specified period. The Supreme Court shall treat such notification as the filing of an application for a writ of mandamus by all the parties to the action and shall proceed accordingly. The notice of the Administrative Office of Courts of the time within which to respond shall satisfy the requirements of M.R.A.P. 21(d).

(b) The trial judge, not later than thirty (30) days prior to the expiration of the six (6) months from the date the case was taken under advisement, for just cause shown, may apply in writing to the Supreme Court for additional time beyond said six (6) months in which to enter a decision. Concurrently, the judge shall provide a copy of such application to each of the parties.

No one wants to tick off a chancellor who holds the fate of the client in his or her hands, but sometimes you just gotta do what you gotta do.

I mention this with the COA’s decision in Chipley v. Chipley, decided August 11, 2015, in mind. In that case, the Special Chancellor granted a divorce between Wanda and Kenneth Chipley on January 25, 2011, and directed the attorneys to provide, in effect, proposed findings of fact and conclusions of law on Ferguson factors within ten days. Thereafter, the case sat dead in the water for two years, until the MSSC ordered the chancellor to adjudicate the property division, which he did on February 15, 2013. After some post-trial-motion maneuvering that ate up the remainder of the year, Wanda filed an appeal on December 17, 2013, which the COA determined to be timely.

In its August 11, 2015, opinion (that’s four years and nearly eight months after the divorce), the case was reversed and remanded because the Special Chancellor failed to include a Ferguson analysis in his final ruling. It’s axiomatic that the judge’s decision must be supported by findings of fact and conclusions of law on Ferguson. Dickerson v. Dickerson, 34 So.3d 637, 644 (¶24) (Miss. App. 2010). It’s not enough merely to mention the factors. Lee v. Lee, 78 So.3d 326, 329 (¶10) (Miss. 2012). No analysis = reversal and remand. Reed v. Reed, 141 So.3d 450, 455 (¶18) (Miss. App. 2014).

Still to be dealt with are a motion for rehearing and possible cert petition before a mandate is issued, chewing up some more time in the Chipleys’ lives. After all that, they will return to where they started, still without a determination of their property interests. It will take some time to appoint a replacement Special Chancellor, since the original one has died, and the remand hearing will need to be scheduled to accommodate the lawyers, judge, and the parties, which likely will mean more delay and a trial either in the first quarter of 2016, if no further appellate proceedings are had, or much later if the case tarries in the higher courts. I wonder whether those assets that they are fighting over will still even exist after all that time.

Demarcation Date on Remand

August 24, 2015 § Leave a comment

The date on which the marital assets are assigned a value can make a drastic difference in the ultimate outcome of the equitable distribution. It’s a concept that we’ve touched on here before. In Lowery v. Lowery, 25 So.3d 274, 285-286 (Miss. 2009), the court said:

¶ 27. For purposes of determination of equitable division … the date for determination would be either the date of separation (at the earliest) or the date of divorce (at the latest). “Cases appear to hold that, as a matter of law, property acquired during separation is marital unless a support order has been entered…. However, a few cases suggest that the issue is a question of fact for the chancellor to decide….” Bell on Mississippi Family Law at § 6.02[3][b] n. 58 (citing Stone v. Stone, 824 So.2d 645, 647–48 (Miss.Ct.App.2002); Aron v. Aron, 832 So.2d 1257, 1258–59 (Miss.Ct.App.2002)).

Other cases have suggested that the valuation date can vary according to the assets. In other words, one asset could have one valuation date, and another a different valuation date.

So, is the rule any different when the case is remanded to the trial court for a do-over? Things can change in the lengthy time it takes to complete the appeal process, after all.

That’s what happened in Lewis v. Pagel, handed down by the MSSC on August 13, 2015. Following a trip through the COA, and from there to the MSSC, Drake Lewis and Tonia Pagel (formerly Lewis), found themselves back before the chancellor for a do-over on equitable distribution. The case was remanded for the chancellor to treat certain real properties as non-marital, to re-value a business, and to re-analyze equitable distribution. The chancellor followed the appellate courts’ instructions, using the asset values as of the date of the divorce.

Drake appealed, complaining that the chancellor’s approach skewed the ultimate outcome because values had changed in the time it took to complete the appeal cycle. Justice Chandler addressed his argument this way:

¶27. It is well-established that “an equitable division of property does not necessarily mean an equal division of property.” Chamblee v. Chamblee, 637 So. 2d 850, 863-64 (Miss. 1994). “[F]airness is the prevailing guideline in marital division.” Lowery v. Lowery, 25 So. 3d 274, 285 (Miss. 2009) (quoting Ferguson, 639 So. 2d at 929). Here, the chancellor’s division of the property was approximately equal. Drake’s argument that he received substantially less than Tonia relies on circumstances that occurred after the divorce judgment. However, the date for determination of equitable distribution is, at the earliest, the date of separation, or, at the latest, the date of divorce. Lowery, 25 So. 3d at 285. Additionally, an order of equitable division is a nonmodifiable judgment. East v. East, 493 So. 2d 927, 931 (Miss. 1986). Therefore, when the Court of Appeals remanded for the chancellor to revisit the equitable distribution, the chancellor properly redetermined the equitable distribution as of the divorce.

When you read the entire Lewis opinion (as I am sure you will), note that the chancellor did consider a post-appeal change in value that favored Drake. Legacy Holdings, LLC, a family business, was valued at the time of the divorce at $1,148,270, but the chancellor found that it had no value at the time of the remand hearing.

Here is a post about a case in which the chancellor’s use of the divorce trial date on remand was affirmed.

It would be a nifty skill for a lawyer to be able to tell the future. None of us in real life, however, has a crystal ball. Still, it’s a good idea to impress on your client that a side effect of an appeal could be that you can win the battle and lose the war. By the time the case descends from the lofty, rarified atmosphere of the appellate courts to ground level, things may have changed drastically in the meantime, resulting in a bounce that does not favor your client. In Lewis, the appeal on the equitable distribution saved Drake some rehabilitative alimony, but cost him $100,000 in lump-sum alimony. That’s going to leave a mark.

Double Dipping in Equitable Distribution

August 18, 2015 § 3 Comments

When Michael and Rosie Jackson went through their divorce, the chancellor awarded the former marital residence to Rosie and ordered that she pay the mortgage debt on it. The parties agreed that the value of the home was $78,000, and that its mortgage debt was $50,103, resulting in equity of $27,897.

When the chancellor toted up the assets, he assigned the equity to Rosie. Her share of the marital assets amounted to $31,928, and Michael’s share came to $120,310.64. The difference in favor of Michael was $88,382.64.

Then the chancellor allocated the marital debts between the parties. Michael was assigned $4,950 in credit card debt, reducing Michael’s asset value to $115,360. Rosie was assigned the mortgage debt, which the chancellor found to have reduced Rosie’s asset value to minus $18, 175. In order to equalize the estates based on that arithmetic, the chancellor awarded Rosie lump-sum alimony $57,680.32.

Before going any further, take a moment and ask yourself whether there is any flaw in that arrangement.

In Jackson v. Jackson, handed down by the MSSC on August 13, 2015, the court reversed in part and remanded because the chancellor counted the mortgage debt twice: once by subtracting it from the total value of the property; and a second time by including it in the debts assigned to Rosie. The result was that Rosie’s share of the marital estate was undervalued by $50,103, which in turn affected the amount of lump-sum alimony awarded. The case was sent back to the trial court for a re-do on that issue. All other issues were affirmed.

The COA had affirmed this decision and brushed aside Michael’s complaint about the calculation, noting that our law requires only that the division of the marital estate be equitable, not necessarily equal. The COA’s decision was the subject of a prior post here dealing with homosexual behavior as habitual cruel and inhuman treatment.

Judges do make mistakes when it comes to juggling those numbers in equitable distribution cases. Always check behind the judge for errors in handling debt such as was done here. While you’re at it, check arithmetic and make sure that the figures used match up with the evidence. File a timely R59 motion if you catch an error. Better to let the judge fix it, if she will, than to have to go to the expense of an appeal.

Love and the Family Jewels

August 17, 2015 § 3 Comments

Love, as they say, conquers all, including good judgment in some cases.

Most of us have seen this scenario more than once: Boyfriend, hopelessly in love with girlfriend, proposes marriage; Girlfriend, eyelids batting furiously, says “yes”; Boyfriend slips a rather expensive engagement ring on Girlfriend’s finger; wedding ensues, converting Boyfriend and Girlfriend to Husband and Wife; marital bliss soon gives way to combat; Husband retains attorney; Wife does the same. You represent Husband. Here is the conversation in your office:

H:  Oh, and not only do I not want her to get anything, but I want that engagement ring back.

You:  Under our law an engagement ring is a gift; the judge will not give it back to you.

H:  Oh yes he will because it belonged to my mother. It’s been in the family for 175 years. It was given to my great (etc., etc.) grandmother by Napoleon just after his victory at Austerlitz.

So let’s pause right there while you catch your breath. So it’s an heirloom. And a valuable antique, to boot. What to do?

Well, first off, you were right to point out that if it meets the elements of a valid gift, the judge is not going to take the ring away from her. Those elements are: (1) that the donor was competent to make a gift; (2) that the donation was a voluntary act and the donor had donative intent; (3) that the gift must be complete and not conditional; (4) that delivery was made; and (5) that the gift was irrevocable. In re Estate of Ladner, 909 So.2d 1051, 1053 (Miss. 2004). Those are fact issues, and the burden of proof is clear and convincing.

In a recent case the COA addressed a similar situation (not involving Napoleon). Here’s how Judge Barnes’ opinion laid out the dispute in Lomax v. Lomax, decided August 11, 2015:

¶11. The main point of contention in the divorce and the determination of marital property concerned the chancery court’s award of the engagement ring to Tara. The chancellor concluded that Tara was entitled to keep the ring, which had previously belonged to Max’s mother, since Max had given the ring to Tara as an inter vivos gift prior to the marriage. Max argues that the parties had an oral agreement that if the marriage did not work out, the ring would be returned to his mother. At the hearing, Max testified that his mother’s ring was given to Tara under the condition that once Max could afford another stone for the ring setting they had purchased, she would return the ring.

¶12. Tara, however, emphatically denied that there was an actual agreement that the ring would be returned, but she acknowledged that after the couple separated, she told her mother-in-law she wanted to be “fair” and return the stone. But she explained at the hearing that when she made that comment to Max’s mother, she “didn’t realize that [Max] intentionally wanted to cost [her] $20,000” to obtain the divorce.

The chancellor awarded Tara the ring. Judge Barnes addressed Max’s claim that the chancellor was in error by letting Tara keep the family jewels:

¶13. In Neville v. Neville, 734 So. 2d 352, 357 (¶19) (Miss. Ct. App. 1999), this Court held that since an engagement ring was a gift that predated the marriage of the parties, it “was not a marital asset subject to equitable division.” “It was, therefore, beyond the chancellor’s authority to order [the wife] to return possession of that item to [the husband] and [the chancellor’s] refusal to do so cannot constitute reversible error on appeal.” Id. Accordingly, we find no error in the chancellor’s decision to award the engagement ring to Tara.

In the Neville case, incidentally, Mr. Neville claimed that the ring was a family heirloom.

A few observations:

  • The ring does not just disappear from the marital equation. It is considered Tara’s separate property, and its value will be considered, along with her share of the equitable distribution, in determining whether she has a “deficit” that would justify alimony.
  • The fact that it was a family heirloom does not enter into the picture. If the giving of the ring meets all the requirements of a gift under Mississippi law, it belongs to the donee.
  • Max might have wanted to memorialize his version of the transaction with a pre-nup that provided that Tara would return the ring in the event of a marital dissolution, particularly if it had monumental value like the Napoleon ring mentioned above.
  • I think the outcome would have been different had Tara admitted on the witness stand that the ring was not a gift, but was hers temporarily only until Max could replace the valuable stone in it. The judge believed Tara that the ring was an unconditional gift, and that did in Max’s position. The chancellor is the ultimate determiner of whom to believe.
  • Would the outcome before the COA have been different if it were not only a family heirloom, but also a priceless antique with a provenance linked to one of the great figures in world history? We’ll have to wait until our appellate courts are confronted with such a fact situation. Until then, I think it’s safe to conclude that if the ring is gifted, it’s the property of the one to whom the gift is given — divorce or none.

 

The Unanswered Divorce Complaint

July 21, 2015 § 14 Comments

You have filed a divorce complaint for your client and had the defendant personally served per MRCP 4. Intelligence from your client leads you to believe that the defendant will not participate, so you put the file away and let the thirty days tick down.

On the twenty-ninth day, you receive a handwritten letter from the defendant neither admitting nor denying the allegations of the complaint. The defendant filed a copy of the letter in the case with the Chancery Clerk. You set the case for trial and, exercising prudence, give notice to the defendant of the day and time. You are still convinced that there will be no opposition since no bona fide answer or counterclaim has been filed, and, as your client indicated, the defendant is not likely to participate. You think it best to forego the trouble and expense of discovery.

On the day appointed for trial, you appear with your client and a single corroborating witness. The defendant, however, is there waiting for you, accompanied by competent counsel and a dozen or so supportive witnesses. The defendant is insisting on going forward with a trial right then and there. What to do?

  • Can the defendant present evidence contra the grounds for divorce, even though he did not file an answer? Yes, according Rawson v. Buta, 609 So.2d 426, 430-431 (Miss. 1992). The lack of an answer does not confess the allegations of the complaint per MRA 93-5-7. Because the allegations of the complaint are not taken as confessed, they always require adequate proof to sustain them, and the defendant may offer proof to rebut the plaintiff’s proof. The defendant may not, however, go outside the scope of the complaint, and may not put on proof supporting any affirmative relief.
  • You should ask for a continuance — on the record — and explain to the judge in detail why you need one and what were the presumptions on which you based your lack of discovery and other preparations for a trial. Bring to the attention of the court your lack of notice that the defendant would be represented, and what effect that had on your readiness for trial.
  • Don’t assume if you get your continuance that the 90 days for discovery per UCCR 1.10 has been extended. Ask for additional time and get a court order to that effect.
  • Was it ethical for that other lawyer to sandbag you like he did? I don’t see a specific ethical provision that was expressly violated, but it just seems to violate the spirit of RPC 3.4, as well as the preamble to the RPC. That kind of conduct does not pass the smell test, and would more than likely tip the scales in your favor for a continuance. In my experience, it’s the kind of conduct that causes hard feelings among attorneys in small communities and should be avoided. Defendant’s lawyer should have notified you when he was retained, or at least he should have filed an entry of appearance in the case and served it on you.
  • [Added after publication] As a last resort, you could just move to dismiss your client’s complaint per MRCP 41(a). That would stop this unpleasantness, but your client would have to start over, and there is an off-chance that she could be assessed some expenses of the defendant for showing up.

Where do we go from Here?

June 29, 2015 § 1 Comment

SCOTUS has spoken in Obergefell v. Hodges, handed down last Friday, making it unlawful for any state to refuse to issue licenses for same-sex marriage (SSM) to persons applying within the state, and making it unlawful for any state to refuse to recognize SSM that was performed legally in another jurisdiction. That pretty well wipes out Mississippi’s position on the issue.

There is a hiccup in Mississippi, however, in that the AG takes the position that, until the 5th Circuit lifts the stay imposed by US Dist. Judge Carlton Reeves in the litigation challenging Mississippi’s law that is on appeal in New Orleans, Mississippi may not issue marriage licenses for SSM.

After that is resolved, however, what impact will Obergefell have on family law in Mississippi? Here are a few of my own opinions:

  • Ferguson will still govern equitable distribution, Albright will still govern child custody, the statutes and Huseth will still govern child support, and so on and so on. For the life of me, I do not see any substantive issues that will not be resolved by the familiar substantive rules that are already in place.
  • Likewise, our procedures remain the same. Only the gender of the parties is different.
  • I heard some lawyers Friday opining that chancery courts need to brace for a flood of divorces from SSM. I don’t get that logic. Oh, I am sure there will be some, but there have to be the marriages first, and my impression is that most gays in Mississippi have been awaiting this development rather than going to other states for SSM, since that other-state marriage would not be recognized under our law anyway.

I think this decision will have the same kind of aftermath as Roe v. Wade. That 1973 case (that’s 42 years ago, for the math-challenged) spawned legislation and litigation that continue to this day as opponents try to probe for a way around it or to ascertain its limits, and proponents try to enforce it. Both Obergefell and Roe v. Wade are substantive due process cases, and those just take longer people to accept, if they ever do.

As with Roe v. Wade, this latest case involves issues that sound in morality and religious teaching, rendering compromise and accommodation much less likely. the role of SCOTUS is to interpret the Constitution, not the Bible. We all know that, and I, for one, prefer for SCOTUS and the other two branches of government to stay out of the Bible-interpretation business. Still, when cases like this fall in that overlap area, they spawn a lot of consternation among the citizenry.

Oh, and as a chancellor, it is my role to apply the law as I am presented with it. That I will do. I have read the majority opinion and the dissents, so I know what is required of me.

As lawyers, you will represent your clients. Those who benefit from the decision whom you take on as clients, as well as those who challenge it.

I have to confess that I was a little surprised at the scope of the decision. I thought the court would say that states must recognize the legal marriages of other states, but that the rules of marriage would be left to the states. That proves, among other things, that I am no constitutional-law scholar.

So, these are my preliminary thoughts. It will be interesting to look back at this 42 years hence — in the unlikely event that I’m still around.

Does a Custody Decision Have to Pass Through Joint Custody?

June 22, 2015 § 2 Comments

We’ve talked here before about the principle that, where the parties have consented to allow the chancellor to adjudicate custody, the chancellor may award either party custody, and may award joint custody. That was decided by the MSSC in Crider v. Crider in 2012, and has been elaborated on in cases applying it since.

Does Crider, then, require the chancellor to consider whether joint custody should be awarded before awarding either party sole custody? That was the issue confronting the COA in the case of White v. White, decided June 16, 2015.

Maegan White and Christopher White consented to an irreconcilable differences divorce, with custody of their children, Garrett and Harley, as a contested issue. The chancellor accepted the recommendation of the GAL and awarded sole custody to Christopher, and her opinion made no mention of the possibility or consideration of joint custody. Meagan appealed, arguing that the chancellor’s failure to consider joint custody was error. She contended that Crider and Clark v. Clark, 126 So.3d 122 (Miss. App. 2013) required the judge to consider whether joint custody was in the best interest of the children.

Judge Roberts addressed her argument for the COA:

¶19. Maegan’s interpretation of both Clark and Crider is faulty. In Clark, this Court reversed and remanded a chancellor’s decision to award sole physical custody to the mother, requiring the court to consider the propriety of joint custody on remand. Both parents had requested sole physical custody of their child and submitted the issue to the court for determination. After hearing testimony of the parties, the chancellor had noted: “[In these] kinds of cases . . . it’s hard . . . to give the child to one or the other because everything here would support that. . . . [H]ow can you choose one over the other, but [this court] has to.” Clark, 126 So. 3d at 124-25 (¶10). In reversing the chancery court’s judgment, this Court noted, “Based on our reading of the transcript, it appears that the chancery court may have concluded . . . that it was required to order custody to one parent regardless of whether joint physical custody was in the best interest of [the child].” Id. at 125 (¶12). Noting our concern that the chancery court had incorrectly concluded it was not authorized to consider joint custody, as neither party had requested it, we reversed and remanded for further consideration.

¶20. Similarly, in Crider, parents in an irreconcilable-differences divorce each requested sole custody of their child. The parents submitted the issue of custody to the court for determination. After considering testimony presented and conducting an Albright analysis, the chancellor found that, even though neither parent requested joint custody, it was in the child’s best interest. Thus, she awarded joint custody to the parents for a two-year period. The mother appealed, noting that Mississippi Code Annotated section 93-5-24(2) (Rev. 2013) [footnote omitted] prohibited a chancellor from awarding joint custody unless specifically requested by the parties. This Court agreed and reversed the chancellor’s judgment, prompting the father to petition for certiorari with the supreme court. After a thorough analysis of the statute and its meaning, the supreme court stated:

It is logical and reasonable that “application of both parties” exists when both parties consent to allowing the court to determine custody. The fact that the parties request that the court determine which parent is to receive “primary custody” does not alter this. The parties are allowing the court to determine what form of custody is in the best interest of the child. If joint custody is determined to be in the best interest of the child using court-specified factors, i.e., the Albright factors, the parties should not be able to prohibit this by the wording of the consent.

Crider, 904 So. 2d at 147 (¶12). The supreme court further noted that the chancellor is in the best position to evaluate the “credibility, sincerity, capabilities and intentions of the parties,” and that it is “incumbent upon a chancellor not to award joint custody” unless in the best interest of the child. Id. at (¶13). The court ultimately held that “when parties consent in writing to the court’s determination of custody, they are consenting and agreeing to that determination and this meets the statutory directive of ‘joint application’ in [section] 93-5-24(2).” Id. at 148 (¶15). Finally, the court affirmed the chancellor’s judgment and noted that a “chancellor may award joint custody in an [irreconcilable-differences] divorce, when the parties request the court to determine custody.” Id. at 148-49 (¶17) (emphasis added).

¶21. Maegan incorrectly interprets both Clark and Crider to require a chancellor to consider joint custody when faced with an irreconcilable-differences divorce. The chancellor “is bound to consider the child’s best interest above all else.” Riley v. Doerner, 677 So. 2d 740, 744 (Miss. 1996). In both Clark and Crider, the chancellors found joint custody to be in the child’s best interest. In Clark, the chancellor incorrectly awarded sole custody to one parent despite the finding that joint custody was the child’s best interest; in Crider, the chancellor awarded joint custody because that was in the child’s best interest, and the supreme court affirmed that award. Crider and its progeny allow—not require—a chancellor to award joint custody when in the best interest of the child. In the present case, the chancellor found that it was in Garrett and Harley’s best interest to give custody to [Christopher]. Though the chancellor’s order makes no mention of joint custody, he is not required to do so. The chancellor’s primary duty is to consider the best interests of the children and make a determination of custody based on that concern. There is no evidence that the chancellor disregarded the children’s best interests when determining custody. The chancellor’s custody award to [Christopher] was not error.

Not much to add to that, except to cite you to this post on Easley v. Easley, and this one with some random thoughts on joint custody, which might make your collection of authorities on this point complete.

 

Semper Pactiones Quod Non

June 16, 2015 § Leave a comment

If the title of this post is not a legitimate Latin legal maxim, it should be, because it captures the essence of an important principle of extra-judicial modification. The above can be translated as “You don’t always get what you bargained for.”

That most certainly was true in the case of Patrick and Lesa Deckard, who were divorced from each other in 2003. The divorce judgment required Patrick to pay Lesa $1,200 per month as support for their two children.

Soon after the divorce one of the children went to live with the paternal grandparents. Patrick contended that he and Lesa agreed between them that the child support would be reduced to $800 a month, and then later to $600 a month. Yet another, later, agreement had Patrick paying child support of $700 a month, the amount of private school tuition. Lesa took the position that Patrick dictated what he would pay by claiming it was all he could afford; she pointed out also that Patrick never paid the amounts in question, anyway. Patrick did not produce any evidence of any extra-judicial agreements.

The chancellor found Patrick in contempt and awarded Lesa judgments totaling around $114,000 for unpaid child support, unpaid medical expenses of the children, and attorney’s fees. The judge also ordered Patrick to pay $800 in child support from that point on. Patrick appealed.

In the case of Deckard v. Deckard, decided June 2, 2015, the COA affirmed, Judge Ishee’s opinion laid out the rationale:

¶6. In the judgment of divorce issued by the chancery court on December 18, 2003, Patrick was ordered to pay child support in the amount of $1,200 per month. In the order dated March 6, 2014, Patrick was found to be in contempt for his failure to pay $107,013 in child support from 2005–2014. Patrick argues that the amount claimed is too high because their oldest son, Taylor, moved in with his paternal grandparents soon after the divorce.

¶7. Patrick asserts that allowing Lesa to collect child support from Patrick for Taylor’s benefit would be unjust enrichment because “for all practical intents and purposes he had never been in Lesa Deckard’s home and she never expended any monies for child support for his use and benefit.” However, the chancellor disagreed and found that Patrick owed the amount ordered by the original agreement to Lesa in unpaid child support. In doing so, the chancellor quoted the following from Smith v. Smith, 20 So. 3d 670, 674 (¶¶13-14) (Miss. 2009) (citations omitted):

The law remains firm that court-ordered child-support payments vest in the child as they accrue and may not thereafter be modified or forgiven, only paid. But this does not mean that equity may not at times suggest ex post facto approval of extra judicial adjustments in the manner and form in which support payments have been made. The noncustodial parent may be entitled to credit for any additional support which he/she has evinced by satisfactory proof to the trial court.

. . . .

In a contempt action concerning past-due child support, when the custodial parent introduces evidence that the noncustodial parent who is required to pay the support has failed to do so, a prima facie case of contempt has been made. At this point, the burden falls on the defending party, to avoid a finding of contempt, to prove that there was payment or other defense, and this proof must be “clear and convincing and rise above a state of doubtfulness.”

¶8. The chancellor found that while Taylor was living with Patrick’s parents, Patrick did not contribute any money or financial assistance in any manner to his parents for Taylor’s benefit. Accordingly, the chancellor found that there was not any evidence before the court that would allow Patrick to receive a credit for any child-support payments.

¶9. Although Patrick cites the case of Brewer v. Holliday, 135 So. 3d 117 (Miss. 2014), to support his position, the facts in this case are distinguishable from the facts in Brewer. In Brewer, the Mississippi Supreme Court reversed the chancellor’s finding that a man was not entitled to a credit for the amount of child support he had paid to his ex-wife for the period of time in which their son did not live with her. Brewer, 135 So. 3d at 121 (¶16). However, the chancellor only agreed to the credit because the son had been living with his father while his father was still paying the mother child support for him. Id.

¶10. In the instant case, Taylor was living with Patrick’s parents, and Patrick admits that there is no evidence that he contributed any money to his parents for Taylor’s expenses. “Whether or not a non-custodial parent should be given credit against his/her child support obligation[] is a matter left to the sound discretion of the chancellor.” Strack v. Sticklin, 959 So. 2d 1, 5 (¶14) (Miss. Ct. App. 2006). As such, we agree with the chancery court that Patrick is in contempt for his failure to pay $107,013 in child support.

Oh, and Patrick overlooked the fact that when child support is global (i.e., one amount for all children, as opposed to a specified amount per child), the fact that one child is no longer entitled to support (e.g., due to emancipation), it does not necessarily result in a reduction in the total amount of child support.

And on the issue of the enforceability of the extra-judicial agreements, the COA first pointed out that the evidence was in dispute as to whether there were ever any such agreements, and then made this observation:

¶13. “No party obligated by a judicial decree to provide support for minor children may resort to self help and modify his or her obligation with impunity.” Crow v. Crow, 622 So.2d 1226, 1231 (Miss. 1993) (citation omitted). “A party making an extra-judicial modification does so at his own peril.” Id. (citation omitted). Because there is no evidence of an extrajudicial agreement, we affirm the chancery court’s findings that Patrick is in contempt for $107,013 for unpaid child support.

An especially good lawyer will sit down with her client in the aftermath of a divorce, or custody, or child-support case and carefully explain that people quite often will try to reach all kinds of handshake agreements later — whether out of a desire to avoid more bloodshed and hard feelings, or to avoid the pain of more attorney’s fees, or from exhaustion — and those kinds of agreement are fraught with peril. Better to get some legal advice and a court order before changing what the court ordered.

 

 

Who’s to Blame?

June 2, 2015 § Leave a comment

This is from a PSA entered into between Joe Bryant and his then-wife, Adella Jones:

[Adella] will receive as property settlement[] fifty percent (50%) of [Joe’s] disposable retirement from the Unites States Marine Corps/Army National Guard and fifty percent [50%] of [Joe’s] disposable retirement from the Veterans Administration which will be paid directly to [Adella] by the United States Marine Corps/Army National Guard and the Veterans Administration.

Joe retired from the VA on November 1, 2008, and from the military on June 30, 2010, and began receiving 100% of his retirement from both. He never paid any of the amounts received to Adella.

In October, 2010, Adella submitted her application for her retirement benefits, unaware whether Joe had retired, and she began receiving her one-half in January, 2011.

After Joe had filed a futile modification action, and she learned that he had begun receiving 100% of his retirement benefits for a time before she received any, Adella filed a contempt action against Joe.

Following a trial, the chancellor ruled that it was the military, and not Joe, that was required to make the payments, and, therefore, that he was not in contempt. The judge did award Adella a judgment against Joe for one-half of the retirement he had received in the interim in the amount of $46,433. Adella appealed.

On April 7, 2015, the COA affirmed in Jones v. Bryant. Judge Carlton’s for a unanimous court explained:

¶15. In the July 2, 2013 order granting Adella’s motion to dismiss [Joe’s pleading for modification], the chancellor found that “after reviewing the property settlement agreement, . . . the provisions regarding military retirement are clear and unambiguous and should not be modified.” The chancellor later entered a final judgment on August 8, 2013, further holding that “the property settlement agreement requires Adella’s portion of the retirement to be paid by the United States Marine Corps/Army National Guard and the Veterans Administration rather than by Joe,” and as a result, “Joe is not in willful and contumacious contempt of the agreement.” We find Adella presented no evidence to support her claims that Joe willfully or intentionally violated any court order. The record reflects that the plain language of the property-settlement agreement in this case provides that Adella’s portion of Joe’s military retirement pay would be paid directly to her by the Marine Corps/Army National Guard and Veterans Administration.

¶16. The Uniformed Services Former Spouses’ Protection Act (USFSPA) provides former spouses, who are awarded a portion of military retirement pay in a divorce, with “a mechanism to enforce retired pay as property award by direct payments from the member’s retired pay.” See Defense Finance and Accounting Service, Frequently Asked Questions, http://www.dfas.mil/garnishment/usfspa/faqs.html; 10 U.S.C. § 1408 (2012). [Footnote omitted] The former spouse must complete and provide the required applications, relevant court order, and supporting documentation, as required by statute and regulations, to the designated Defense Finance and Accounting Service, and the language in the property award must also comply. [Footnote omitted]

¶17. After our review of the record, we find substantial evidence exists in the record to support the chancellor’s final judgment determining Joe was not in willful and contumacious contempt of the property-settlement agreement or any other court order. Accordingly, we also find no error in the chancellor’s denial of attorney’s fees to Adella. See Henderson v. Henderson, 952 So. 2d 273, 280 (¶23) (Miss. Ct. App. 2006).

How can you avoid a similar result for your client?

  • Any duty that you want to be enforceable later in favor of your client needs to spelled out. Here, it would have been simple to spell out that Joe had the duty to notify Adella in writing within a specified time of his retirement. For example, he could have been required to send her a copy of his application for benefits simultaneously with its submission to the agency.
  • Whenever a contract requires third-party payments on behalf of A, specify that A will be responsible to make the agreed payments himself to B until the third party begins making them. For instance, “Joe will pay one-half of any retirement benefits received by him directly to Adella until such time as the [agency] begins withholding her 50% portion” or words to that effect.
  • You might want to read that Department of Defense material and incorporate some of it verbatim in your PSA. Agencies understand their own jargon better than yours or the court’s.
  • Is it in your client’s interest to spell out whether the retirement is being paid as property division on the one hand, or as alimony on the other? It might be; you need to consider it.
  • Know and understand how the retirement system works. Read the interpretive material. Study the website. Draft your PSA from a position of knowledge, not guesswork.

 

Valuation Date Makes all the Difference

May 13, 2015 § 3 Comments

Two things are true when it comes to valuation of the marital estate in equitable distribution: (1) The date selected for valuation can be critical; and (2) Selection of the date of valuation is in the discretion of the chancellor.

The recent COA decision in McKissack v. McKissack, handed down May 5, 2015, illustrated both points.

Billy Stephen McKissack and Terri McKissack had consented to a divorce on the sole ground of irreconcilable differences, and left equitable distribution up to the chancellor. The judge entered a divorce judgment in November, 2008, ruling that some $542,000 in CD’s in Billy Stephen’s name were marital property. Billy Stephen appealed, and the COA reversed and remanded on October 12, 2010, holding that the CD’s were separate property. The chancellor was charged to reconfigure the equitable distribution based on the COA ruling.

On remand, the chancellor did adjust the equitable distribution to accommodate the COA ruling. He found that the financial disparity created by the half-million-dollar separate estate could not be made up by allocating assets, and so ordered Billy Stephen to pay Terri lump-sum alimony to make up the difference. He also left the original asset allocation for the most part intact. In making his ruling, the chancellor used the date of the original divorce judgment as the valuation date, and he relied on his previous ruling to Billy Stephen again appealed, complaining that the chancellor used the original divorce-hearing date for valuation, instead of a post-appeal, later date.

The reason Billy Stephen urged the later date is that he had acquired new debt since the date of the original divorce, the largest of which was a debt he had co-signed with his paramour for an apartment complex that had subsequently been destroyed in a fire.

In the case of McKissack v. McKissack, decided May 5, 2015, the COA affirmed. Here’s how Judge Maxwell, writing for the majority, addressed Billy Stephen’s arguments:

¶9. As Steve sees it, the chancellor’s distribution of marital assets was “unfair” because he gave too little weight to Steve’s newly acquired debt from the apartment fire. He also insists the chancellor should have conducted a Ferguson analysis anew on remand and improperly skimped on the Cheatham factors. After review, we find no error in the chancellor’s methodology.

I. Equitable Distribution After Remand

¶10. There are three general tasks required of a chancellor’s division of marital assets in divorce cases. The chancellor must “(1) classify the parties’ assets as marital or separate, (2) determine the value of those assets, and (3) divide the marital estate equitably based upon the factors set forth in Ferguson.” Rhodes v. Rhodes, 52 So. 3d 430, 436 (¶18) (Miss. Ct. App. 2011) (citation omitted) (citing Ferguson v. Ferguson, 639 So. 2d 921, 928-29 (Miss. 1994)) [Footnote omitted]. We review a chancellor’s equitable division under the familiar manifest-error standard of review. Vaughn v. Vaughn, 56 So. 3d 1283, 1288 (¶17) (Miss. Ct. App. 2011).

A. Newly Acquired Debt

¶11. To Steve, his losses from the apartment fire were reason enough to not have to pay additional lump-sum alimony. And he argues it was wrong for the chancellor not to have re-valued the marital estate, giving more weight to his newly acquired, non-marital debt from the apartment fire.

¶12. But on remand, the chancellor opted to use the property values already “in evidence at the trial on the merits”—rightly noting that the “date of valuation is discretionary with the court.” Because he had already valued the property as of the divorce hearing date when making his findings, he found “any accumulation of additional assets or the appreciation of awarded assets should be classified as separate property[.]” Steve urges it was wrong for the chancellor to use the divorce hearing date as the “point of demarcation for valuation.”

B. Valuation Date

¶13. Steve’s argument is blunted by the fact that chancellors are given deference in setting the valuation date for equitable distribution of marital property. Holdeman v. Holdeman, 34 So. 3d 650, 654 (¶13) (Miss. Ct. App. 2010). Often chancellors deem the date of the divorce hearing or judgment as the line of demarcation. See Wheat v. Wheat, 37 So. 3d 632, 637 (¶15) (Miss. 2010). The date of entry of a separate maintenance order or temporary support order may also serve as the valuation date. Id. (citing Godwin v. Godwin, 758 So. 2d 384, 386 (¶7) (Miss. 1999)). But this deference is measured against the general notion that “assets should be valued as close to the trial date as feasible.” Debbie Bell, Mississippi Family Law § 6.07[3] (2005).

¶14. The trial-date approach is the route the chancellor took here. He made a common-sense decision that the date of the divorce hearing would be the cut-off point. He held any later-accumulated assets or appreciation of already-awarded assets would be separate property. See Henderson v. Henderson, 757 So. 2d 285, 293 (¶37) (Miss. 2000) (On remand, the supreme court held a husband’s one-half interest in the marital home should be valued from the divorce date—not several years after the case had been appealed and retried, during which time the wife had been paying the mortgage on an appreciating asset). The chancellor was, however, aware of authority that post-divorce passive appreciation of asset values could be included [Footnote omitted]. But he found no proof of passive appreciation here.

¶15. What Steve largely overlooks is that his preferred valuation date cuts both ways. It is true the chancellor gave little weight to Steve’s newly acquired debt for valuation purposes. But he also refrained from tampering with Steve’s possibly new assets—though he perceived Steve’s income was greater and his expenses lower than when the couple divorced. Also, the chancellor highlighted that the resulting debt from the apartment fire was not from Terri’s wrongdoing or fault. The apartment was Steve’s separate property. And it was Steve who chose to sign as guarantor for his claimed paramour Millie’s debt in the complex. For these reasons, and those we explain below, we cannot say the chancellor erred in relying more on his initial valuations than Steve’s new debt.

The court went on to uphold the chancellor’s decision to rely on his original Ferguson analysis.

One thing that Billy Stephen apparently did was to put on proof of his preferred valuation date and the reasons supporting it. I have held forth here before about that failure of many attorneys in equitable distribution cases to put on any proof whatsoever in trials of the client’s position on what valuation date is selected. When you do that you are: (a) leaving it entirely in the judge’s unfettered discretion; and (b) depriving your client of a basis in the record to complain about it on appeal.

Every calculation involved in equitable distribution revolves around the valuation date. Remember that.

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