MORE PROOF THAT CUTTING CORNERS DOES NOT PAY

March 8, 2011 § 1 Comment

Tangela Berry and Ricky Banks were guardians of their son Ryheim Banks.  In June, 2004, they filed suit in circuit court against several medical defendants alleging negligence.

They reached a settlement with one of the defendants, Laura Carpenter, for $25,000, to be apportioned 1/3 each to Berry, Banks and Ryheim, after deduction of a $10,000 attorney’s fee.

When the settlement was presented to the chancellor, the guardians’ attorney did not call any witnesses.  Instead, he made an announcement to the court that Carpenter’s involvement was “negligible,” and that the settlement was “appropriate.”  He did, apparently, question Berry and Banks about whether they understood they were releasing their claims against the defendant, which they did, and whether the were following the advice of their attorneys in settling Ryheim’s claim, which they also did.  There was no testimony regarding the nature or extent of the injuries, or the substance of the claims, or the damages incurred.  The chancellor signed a judgment approving the settlement on August 5, 2005, including the language that the settlement was a “fair and reasonable settlement of a doubtful claim and it is in the best interest of the minor and all others.”

In July 2008, the guardians again appeared in court with new counsel asking the chancellor to set aside the prior settlement because the former attorney had not prosecuted the claim and had done no discovery.  They said that they had learned that Carpenter had a $1,000,000 insurance policy that would have afforded coverage that was not disclosed to them at the time of the settlement.  Their motion was brought under MRCP 60(b).

The chancellor did set aside the 2005 judgment pursuant to MRCP 60(b), finding that there was insufficient evidence at the 2005 hearing to establish that the settlement was fair and reasonable and in the best interest of the minor.

Carpenter appealed, charging that the trial court erred:  in not including specific findings of fact and conclusions of law in his order; and that it was an abuse of discretion to set aside a judgment under MRCP 60 after three years had elapsed from the date of the judgment.

In the case of Carpenter v. Berry, et al., decided February 10, 2011, the Mississippi Supreme Court upheld the chancellor’s ruling.

As for the claim that the conclusions were unsupported, the appellate court found that the chancellor’s findings were sufficient, considering that the matter was not complex.

With respect to the abuse of discretion claim, the court noted that the chancellor did not specify that part of MRCP 60 under which he proceeded.  The court found MRCP 60(b)(5) applicable since that rule allows a judgment to be set aside where “it is no longer equitable that the judgment have prospective application.”

The court also found MRCP 60(b)(6) applicable, since it provides that the chancellor may grant relief “for any other reason justifying relief from the judgment.”  MRCP 60(b)(6) “is reserved for extraordinary circumstances,” and is “a grand reservoir of equitable power to do justice in a particular case.  Briney v. USF & G, 714 So.2d 962, 966 (Miss. 1998).

The Supreme Court noted that the trial judge must consider several factors in determining whether to grant 60(b)(6) relief:

  1. That final judgments should not lightly be disturbed;
  2. That a 60(b)(6) motion is not to be used as a substitute for an appeal;
  3. That the rule should be liberally construed so as to achieve substantial justice;
  4. Whether the motion was made within a reasonable time;
  5. Whether the movant had been afforded a fair opportunity to present claims or defenses, if the judgment was rendered after a trial on the merits;
  6. Whether there are any intervening equities that would make it inequitable to grant relief; and
  7. Any other factors relevant to the justice of the judgment under attack.

[Note:  one factor relating solely to dafault judgments was omitted by the court, with a reference]  M.A.S. v. Miss. Department of Human Services, 842 So.2d 527, 530 (Miss. 2003).

In this particular case, the Supreme Court found that this was no ordinary 60(b) case because it involved the rights of a minor under a guardianship.  The court said:

“It is the inescapable duty of [chancery] court and or the chancellor to act with constant care and solicitude towards the preservation and protection of the rights of infants and persons non compos mentis.  The court will take nothing as confessed against them; will make for them every valuable election; will rescue them from faithless guardians, designing strangers and even unnatrual parents, and in general will and must take all necessary steps to conserve and protect the best interest of these wards of the court.  The court will not and can not permit the rights of an infant to be prejudiced by a waiver, or omission or neglect or design of a guardian, or of any other person, so far as within the to prevent or correct.  Griffin, Chancery Practice, §§ 45, 360, 530, 533.  All persons who deal with guardians or with courts in respect to the rights of infants are charged with the knowledge of the above principles, and to act contrary thereof at their peril.”

The court also noted that the procedures prescribed for settling a minor’s claims as set out in MCA § 93-13-59 and UCCR 6.10 had not been followed in the original proceeding before the court.

The timeliness claim was disposed of by finding that timeliness under 60(b)(6) depends on the facts of the case, and that the chancellor did not abuse his diecretion in this one.

Finally the Supreme Court at ¶ 22 held that “The chancellor properly exercised the discretion afforded by Rule 60(b)(6) by finding that the need to fairly protect the ward’s interests outweighed the need for finality.”

Moral of the story:  Don’t take shortcuts; faithfully follow the rules and the statutes.  It only takes a little more effort and time to do it right.  If a proper record had been made originally, that order might have been a lot more difficult to attack.  You can find an outline for how to handle a minor’s settlement here.

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§ One Response to MORE PROOF THAT CUTTING CORNERS DOES NOT PAY

  • […] Another source of confusion over who represents whom arises in minor’s settlements. Insurance companies often hire attorneys to file the petition and have it approved by the court. Too often, though, that petition does not specify whom the attorney represents. It would seem to be a simple matter for some language like that set out above to be included in the petition and even in the judgment approving the settlement. Leaving the point ambiguous would seem to be an invitation to a fly-specking attorney to try later to get the settlement set aside. If you would like to read about how and why that might happen, check out Carpenter v. Berry, et al. […]

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