July | 2011 | The Better Chancery Practice Blog

DICTA

July 15, 2011 § 2 Comments

Starbucks and bankruptcy were made for each other. Coffee drinkers need their fix(es) each and every day, and Starbucks offers a pretty dang good coffee product that makes you want more and more and more. At about $4 a cup, though, it doesn’t take too long to make a sizeable dent in your bank account. SquawkFox has a recipe for a frappuccino it claims is every bit as good as Starbucks, and every bit as fattening, and all the ingredients together cost only $.32. The recipe also discloses the secret ingredient that will make your home-made cup identical to the store-bought. Making it at home will save you about $3.40 a cup over usual Starbucks prices. At one frap a day for a 30-day month, that’s a savings of $102 a month. You can use that money to pay in part for time at the gym.
I keep saying I am going to try this sticky balsamic rib recipe, but I never seem to get around it. So maybe one of you could do it and let us all know how it turned out. Looks delicious.
Should there be a code of ethics for bloggers?
Curvy, Louisiana? That’s what Baton Rouge would be renamed if you made an atlas of the US and renamed US communites according to the adjectives most used by users of dating web sites to describe themselves. Check out my home town of Tissue, LA.
“This is a private matter,” said the victim in a California case in which his estranged wife poisoned his food, tied him to a bed, severed his — uh — “private matter,” and threw it into a garbage disposal before calling the police. This development should spice up their pending divorce considerably.
Picklefreak.com is the creation of Monroe County native Katy Tackett, who is to pickles what Carl Sagan was to the cosmos.
The well-attired pickle freak at Mardi Gras

As I write this, around 500 Mississippi lawyers and judges, many with their families, are in Destin, Florida, for this year’s bar association meeting. That is around 1,000 Mississippians who are spending Mississippi dollars in Florida hotels, on Florida golf courses, in Florida restaurants and bars, in Florida shops, on Florida souvenirs, on Florida fishing charters and equipment, and at Florida gas stations and convenience stores.

Why is Mississippi not worthy of this largesse?

Admittedly, when the Mississippi Bar made its move away from Mississippi back in the 80’s, the coast was a tired place in serious need of updating, but that was before the casinos. Now, even after Katrina, the coast is well able to accommodate the brigade of lawyers and their retinue. There are hotels, casinos, restaurants and shops, there are fishing charters, excursions and every conceivable amenity.

Money spent by the bar members here in Mississippi would pay Mississippi jobs, put money in the pockets of Mississippi vendors, and directly benefit the coast … and any other area with a fitting venue, like, for instance, Desoto County, Jackson, Vicksburg or Natchez. Even if the bar were to meet in Mississippi every other year, that would be a positive.

And it would be a plus in the eyes of Mississippians for a profession that continues to be cynically judged from the Scruggs fallout.

Why not Mississippi?

THE LAWYER’S MISSION IN LIFE

July 13, 2011 § Leave a comment

The Mississippi Bar Association annual meeting commences today in faraway, sunny Florida. I thought this would be a propitious time to look back more than a hundred years at the proceedings of the association in its earliest days.

On May 5-7, 1908, the Mississipi State Bar Association held its third annual meeting in Meridian.

Various papers were presented, among them “Railroads and the People,” Suggestions of Error, Legal and Otherwise,” “Reminiscences of a Few Mississippi Lawyers,” and “The Power of the Courts.”

The convention even adopted a resolution that, because their presence would “lend grace and dignity to its annual meeting and wisdom of its deliberations,” members in future were “invited to attend sessions accompanied by their wives, daughters, sisters and sweethearts as the condition may then exist.” That language of that resolution sounds patronizing to us more than a century later, but we need to keep in mind that lawyers in those days were, if not exclusively male, almost exclusively male, and their language reflected not only that reality but also the more patriarchal usages of the day, which used the masculine gender to denote the general, as the text below shows.

Another of the papers delivered at that meeting was by Meridian’s own S. A. Witherspoon, who spoke on “The Lawyer’s Mission in Life.” The language is perhaps too flowery for todays tastes, but the message is no less relevant and thoughtful now than it was 102 years ago. It is too long to reproduce in its entirety, but here are some excerpts:

” … if the exigencies of [the lawyer’s] professional duties do not lead him into the investigation of the truth and require the exercises of his powers in maintaining the cause of justice, and demand the aid of his influence in establishing the great law of love between man and man, then the lawyer’s life work is at war with his better nature, and deterioration instead of development must be his certain doom.”
“… in the solution of all political, social and religious problems that affect the happiness of humanity [lawyers] have been found in the front ranks, and the cause of freedom, justice and morality has found in them its most devoted and ablest advocates.”
“The strife, contention and never ending warfare of the lawyer’s life may conceal from the casual observer its logical relation and productive tendency toward the peace, goodwill and love among men, but it should be remembered that the legal battle which he constantly wages merely takes the place of violence and bloodshed of the barbarian, and that the lawyer in civilized life simply confines the fighting, which seems to be a necessity of humanity, within the ranks of his own profession, and this relieves his fellow men of the evils of human warfare.”
“But the prominent feature of the lawyer’s work is the problem of truth, and his greatest difficulty is measured by its laborious discovery.”
“And the light of his truth, streaming through all the walks of human life, as distinctly marks the lawyer’s mission as does the warmth and light that gives life and beauty to the flowers and defines the mission of the sunbeam.”
“The mission of the lawyer is not confined to the court room and does not end when the decree or judgment of the court is placed on the minutes, but it extends into all the affairs of men, and finds its last boundary at that point where his service is not needed for the betterment of humanity.”
“The professional duties of the lawyer develop in him a capacity for the ascertainment of truth, a power to explain and expound it to others, and the art and ability to advocate the cause of justice, and to win the triumph of right; and the possession of any power involves the duty of exercising it for the good of others. He has no right to bury his talent, or to hide his candle under a bushel. Whatever advantage and superiority he may enjoy over his fellow men is the result of his relation to society and the special privileges which it has granted him. And, therefore, I say that in all the religious, moral, social, and industrial controversies that divide the people, the lawyer is obliged to take part, and to give them the benefit of whatever wisdom and virtue he may possess.”

Excerpted from “The Mississippi Bar’s Centennial: A Legacy of Service,” 2006 by the Mississippi Bar.

CHIRP, CHIRP

July 12, 2011 § 2 Comments

Lawyer, meet stress. It’s your bane, your motivator, your constant companion, your all-too-familiar demon. It comes from clients, deadlines, judges, finances, family and ethics. It visits you on the day the bills are due, the day after those requests for admissions were unansweredly due, at 2:00 a.m., and when you walk in the court room door. It can make you sick, grumpy, sad, drunk, ineffective, inattentive, erratic and even violent. It’s part of the job. Learn to live with it or die.

So kick back and allow a respite in your busy routine to let your blood pressure subside. Here are some calming nature sounds to help salve your bruised psyche. Chill.

“A PERILOUS MISTAKE” IN HANDLING FIDUCIARY MATTERS

July 11, 2011 § 8 Comments

Lawyers in my district are aware that I have begun cracking down on the handling of estates, guardianships and conservatorships. Delinquent and inadequate accountings, lack of inventories, absence of vouchers and other deficiencies are no longer tolerated.

My motivation in part has been the fact that there are lawsuits pending against local lawyers claiming mishandling of fiduciary matters. On the coast only last year, it was discovered that a lawyer serving as county administrator until his death may have misappropriated funds in excess of a million dollars.

If you’re going to handle probate matters, understand that as the lawyer you have a grave responsibility for which you may be held liable by judgment for the proper handling of the estate by the fiduciary. Let me repeat that you may be held liable by judgment.

My responsibility as chancellor is not only to ensure that the assets and rights of the ward or estate are protected, but also to see that the attorney does not err.

To get an idea of the gravity, you need to read and take to heart the Mississippi Supreme Court’s decision in Matthews v. Williams, 633 So.2d 1038 (Miss. 1994). In that case, the conservator failed to file an inventory and, when he finally did, omitted financial assets. He failed to file accountings, and when he finally did reported expenditures made without any prior approval of the court. He made investments without approval of the court, and was unable to account properly for them. The chancellor approved his actions, but when that chancellor left office, the next chancellor granted a petition to remove the conservator. Here are some key excerpts from the court’s opinion (beginning at page 1039):

A chancery court-appointed conservator has the “same duties, powers and responsibilities as a guardian of a minor, and all laws relative to the guardianship of a minor shall be applicable to a conservator.” Miss.Code Ann. § 93-13-259 (1972). [NOTE: And MCA § 93-13-38 states that “All the provisions of law on the subject of executors and administrators, relating to settlement or disposition of property limitations, notice to creditors, probate and registration of claims, proceedings to insolvency and distribution of assets of insolvent estates, shall, insofar as applicable and not otherwise provided, be observed and enforced in all guardianships.”

I. INVENTORY

Miss.Code Ann. § 93-13-33 (1972) states:

Every guardian shall, within three months after his appointment, return to the court, under oath, a true and perfect inventory of the estate, real and personal, and of all money or other things which he may have received as the property of his ward; and he shall return additional inventories of whatever he may subsequently receive. And he shall annually return an inventory, under oath, of the increase of the estate, if there be any. A guardian who shall fail to return inventories may be removed and his bond put in suit, unless he can show cause for the default. (Emphasis added)

The first inventory was not filed until February 23, 1988, a year and two months following Dan’s appointment. It did not mention bonds owned by the estate. The third inventory filed May 13, 1990, purporting to show the inventory of the estate as of December 31, 1989, lists “Series E. Bonds $2,063.22.”

The bonds were first identified by serial number and date of purchase in the fourth inventory showing assets as of December 18, 1990, and filed January 7, 1991, which states: “Series E Bonds (all $25.00/7 year Bonds),” and then lists twenty-seven bonds by serial number and showing dates of purchase from July 1966 through July 1969. Subsequent inventories were not timely filed, and no reason was given therefor. There is no explanation for failure to include the bonds.

II. ANNUAL ACCOUNTS

The annual accounts required by Miss.Code Ann. § 93-13-67 (1974) were not timely filed, and no reason was offered therefor. [NOTE: MCA § 93-13-67 states: “Except as herein provided, and as provided in section 93-13-7, every guardian shall, at least once in each year, and oftener if required, exhibit his account, showing the receipts of money on account of his ward, and showing the annual product of the estate under his management, and the sale or other disposition thereof, and showing also each item of his expenditure in the maintenance and education of his ward and in the preservation and management of his estate, supported by legal vouchers…. And such accounts shall be examined, approved, and allowed by the court in the same way that the accounts of executors and administrators are examined, approved, and allowed. Compliance with the duties required, in this section, of guardian shall be enforced by the same means and in the same manner as is provided in respect to the accounts of executors and administrators. (Emphasis added)

III. EXPENDITURES WITHOUT COURT APPROVAL

Much more serious is the failure of Dan to seek court approval prior to making expenditures. Section 93-13-38 (1993) provides:

It shall be the duty of the guardian … to improve the estate committed to his charge, and to apply so much of the income, profit or body thereof as may be necessary for the comfortable maintenance and support of the ward and of his family, if he have any, after obtaining an order of the court fixing the amount…. The guardian is empowered to collect and sue for and recover all debts due his said ward … (Emphasis added)

This statute requires that a court order fixing the amount to be spent for the care and maintenance of the ward be obtained prior to making such expenditures. Dan simply made the expenditures as he saw fit. When this Court addressed such action in Welch v. Childers, 195 Miss. 415, 420, 15 So.2d 690, 691 (1943), we held:

A minor under guardianship is a ward of the Chancery Court. All receipts and disbursements of his estate are required to be under the authority and direction of the Chancery Court or the Chancellor in vacation. The expenses for the maintenance and support of the ward cannot be proved in any other way. The object of the law is to guard against dishonesty and mismanagement of the estate by the guardian…. The law does not leave the amount of the expenditures by the guardian for the maintenance, support and education to (the guardian’s) discretion. The sum must be fixed by the court. If the guardian contracts therefor without the sanction of the Chancery Court or Chancellor, the liability therefor is personal to him, and he cannot be allowed for it in his accounts for the ward. The guardian has no power to bind the estate of his ward without the sanction of the Chancery Court or the Chancellor.

That prior court approval is absolutely required by statute before a conservator makes expenditures seems never to have occurred to counsel representing Dan or the chancellor who then examined and approved them. Expenditures for the care and maintenance of Mrs. Mathews and her property were made by Dan as though he had some blanket power of attorney to spend as he thought best, and only then report it to a chancellor. No explanation was offered to the chancellor for all these expenditures having been made without court approval, nor did the chancellor require one. This is of profound concern to this Court. We again remind attorneys for estates of wards and decedents and the chancellors who examine accounts and inventories that they, too, have special and far-reaching fiduciary duties. It was the obligation of the attorney to advise the conservator as to his statutory duties, responsibilities, and limitations on expenditures. As for chancellors, a chancellor who must approve accounts and inventories has a duty beyond deciding lawsuits. He is under an obligation first to see that accounts and inventories filed comply with the statutes before he approves them. He is also the “superior guardian” of the ward. This Court long ago in Union Chevrolet Co. v. Arrington, 162 Miss. 816, 826, 827, 138 So. 593, 595 (1932), held:

Infants and persons of unsound mind are disabled under the law to act for themselves. Long ago it became the established rule for the court of chancery to act as the superior guardian for all persons under such disability. This inherent and traditional power and protective duty is made complete and irrefragable by the provisions of our present state constitution. It is not competent for the Legislature to abate the said powers and duties or for the said court to omit or neglect them. It is the inescapable duty of the said 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 from unnatural 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 cannot permit the rights of an infant to be prejudiced by an waiver, or omission or neglect or design of a guardian, or of any other person, so far as within the power of the court to prevent or correct. Grif.Chan.Prac. §§ 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 act to the contrary thereof at their peril. (Emphasis added) Also, Mississippi State Bar Association v. Moyo, 525 So.2d 1289, 1293 (Miss.1988).

Solicitors for guardians and conservators and chancellors who must approve their accounts and inventories who ignore these fiduciary responsibilities make a perilous mistake. [Note from the opinion: We are not comforted by the May 18, 1990, decree approving the third annual account in which the chancellor first authorized the conservator to “pay all future medical, personal, and other expenses for the creature comforts of Frances Mathews.” With no representation from Dan as to why any of these expenses might be, the chancellor gave him blanket authorization to expend his estate’s funds.

IV. INVESTMENTS WITHOUT COURT APPROVAL

Section 93-13-57 Miss.Code Ann. (1972) deals with the method the guardian is to utilize in disposing of surplus money not necessary for the current expenditures for the ward. This section provides in part:

Whenever the guardian shall have money of his ward not needed for current expenditures, or directed to be invested for the ward, he shall apply to the court, or chancellor in vacation, for direction as to the disposition he shall make of it. The court or chancellor shall determine whether he shall lend it at interest, and upon what security, or how he shall dispose of it. If the court or chancellor designate the person to whom the loan shall be made, or the security on which it shall be made, and the loan to be so made, responsibility shall not attach thereafter to the guardian; but if the court or chancellor shall entrust him with discretion in the matter, he shall be bound for the exercise of sound judgment…. Any guardian who fails to report to the court the fact that he has money of his ward not needed or allowed to be used for current expenditures, and to ask the order of the court as to the disposition of such money, may be chargeable with interest on the same at the rate of eight per centum (8%) per annum during the time of failure. (Emphasis added)

Dan, on behalf of Mrs. Mathews, purchased certificates of deposit, invested in stock, and sold stock, all without prior court approval.

Moreover, we have been unable to trace the certificates of deposit from one accounting period to the next because the numbers identifying them differed. Interest proceeds appear to have been treated inconsistently, some deposited in the ward’s checking account, other reinvested. Interest deposited in the checking account identified by certificate of deposit numbers differed from the numbers identifying the certificates in the inventory for that period.

On January 23, 1987, Dan petitioned and on January 26, 1987, received court approval to commence legal action to recover money fraudulently obtained from her. No report was ever made to the court of the outcome of this action.

V. QUESTIONABLE EXPENDITURES

In deciding whether Dan should be removed as conservator, the chancellor also had authority to consider his expenditure, and without prior court approval, of more than $1,800 in repairs on a pickup truck valued at $800, and in an 18-month period following the ward’s admittance to the nursing home, $498 for oil, gas and service for the truck. Utilities and household expenses, including a telephone, were kept active after Mrs. Mathews went to a nursing home, and expenditures made, all without court approval. Some vouchers were made to “cash.”

We do not have before us and do not address the justification for any expenditures made by Dan as conservator, or their reasonableness or necessity. These may be proper inquiries upon remand. Neville v. Kelso, 247 So.2d 828, 834-835 (Miss.1971).

The chancellor should also upon remand see that inventories reflect and accurately trace the investment of all funds.

Our sole inquiry on this appeal is whether the chancellor abused his discretion in removing Dan as conservator, and for the reasons set forth she clearly did not. Harris v. King, 480 So.2d 1131, 1132 (Miss.1985); Conner v. Polk, 161 Miss. 24, 29, 133 So. 604, 605 (1931).

I don’t know how it could be any clearer. You deal lackadaisically with probate matters at your peril. Your law license, your reputation as an attorney, your malpractice coverage, and even your own assets are on the line. I am not being melodramatic when I say this; I am being completely truthful and trying to wave a huge caution flag. Matthews v. Williams makes it abundantly clear that the approval of the chancellor will not shield you or your fiduciary.

DICTA

July 8, 2011 § Leave a comment

We’ve talked before about the increasingly negative ROI for law school grads, and just when the picture looks its bleakest comes the news that some law schools are considering the “private funding model.” That’s fancy academic-ese for “We are going to increase the tuition out of sight because the state has underfunded us for the nth year in a row.” Using this approach, the school eschews state money and generates its own budget. The University of Minnesota Law School is considering it.
Who profited from the Fed’s quantitative easing, and who lost?
New Orleans ephemera: some haunting images of Lost Big Easy.
NPR reports that there is much movement by both sides in the federal debt ceiling debate that must be resolved before July 22.
Preservation in Mississippi (MissPres) has a fascinating piece on the the second battleship U.S.S. Mississippi, the figurehead of which rests on the grounds of the State Capitol in Jackson. In the course of uncovering its history, the blog discovers a mystery. If you’re a history geek like I am, you owe it to yourself to check out MissPres.
Hardworking Americans who make between about $40,000 and $120,000 a year currently are paying the freight for operation of the federal government. Everyone else gets a more-or-less free ride. It hasn’t always been that way, as this historical graph of the tax burden shows.
U.S.S. Mississippi, 1905-1914

THE DISAPPEARANCE OF MARRIAGE

July 7, 2011 § 1 Comment

In its issue of June 25, 2011, The Economist offers some arresting insights into the state of marriage in our nation that bear reflection by lawyers and judges who deal with family issues. Some of the article’s points:

Married couples, for the first time, now make up less than half (45%) of all households.
In every state the numbers of unmarried couples, childless households and single-person households are growing faster than those comprised of married people with children, according to the 2010 census. Married couples with children comprised 43% of households in 1950; they now account for just 20%.
Traditional marriage has evolved over the past 50 years from a near-universal rite to a luxury for the educated and affluent. In 1960, only four percentage points separated the wedded ways of college and high-school graduates (76% versus 72%). The gap has since widened to 16 percentage points, according to the Pew Research Center. A Census Bureau analysis released this spring found that brides are significantly more likely to have a college degree than they were in the mid-1990s.
The divorce rate has been declining as the marriage rate has been declining. The National Marriage Project at the University of Virginia in Charlottesville has studied the phenomena and concluded that both declines are due to the fact that marriages are becoming more and more selective. The project also found that divorce rates for couples with college degrees are only a third as high as for those with a high-school education.
Americans with a high-school diploma or less (who account for 58% of the population) tell researchers they would like to marry, but do not believe they can afford it. Instead, they raise children out of wedlock.
Only 6% of children born to college-educated mothers were born outside marriage, according to the National Marriage Project. That compares with 44% of babies born to mothers whose education ended with high school. “Less marriage means less income and more poverty,” reckons Isabel Sawhill, a senior fellow at the Brookings Institution. She and other researchers have linked as much as half of the income inequality in America to changes in family composition: single-parent families (mostly those with a high-school degree or less) are getting poorer while married couples (with educations and dual incomes) are increasingly well-off. “This is a striking gap that is not well understood by the public,” she says.

There are implications here that reach far beyond mere economic considerations. Are we witnessing the degeneration of the American Middle Class, with its credal optimism grounded in family, economic opportunity, improvement, education and hard work? The American mantra at least since the 1930’s has been that the next generation will be better off than this one, and so on and on to infinity; the data suggests that principle is dead or dying.

Single parents have less income at their disposal than do married couples living together. Single mothers often live at or near poverty level. Children raised in poverty or near poverty have fewer opportunities to better themselves, and are more likely to pass their accustomed way of life on to their children.

The negative impact on children of being fatherless has been well documented.

The sociology behind these developments is beyond the scope of this blog. It’s important, however, for us to be aware of the forces that affect the lives of those who pass through our courts.

A LESS-THAN-FINAL JUDGMENT

July 6, 2011 § 3 Comments

It sometimes happens that the chancellor grants some of the relief requested, saying in effect, “That’s all I’m going to do,” and directs entry of a final judgment. It happens, for instance, where one party asks for an award of attorney’s fees and the court does not want to grant it, or where one party in a divorce wants the living room furniture that the other party has and the judge leaves things as they are. You can conjure up some similar scenarios.

The question is: when the judge does that, is there a final, appealable judgment?

The COA addressed what is not a final, appealable judgment in two recent decisions handed down the same day.

In Jackson v. Lowe, decided June 28, 2011, the COA answered the question by reference to MRCP 54(b), which states:

When more than one claim for relief is presented in an action, whether as a claim, counter-claim, cross-claim, or third-party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an expressed determination that there is no just reason for delay and upon an expressed direction for the entry of the judgment. In the absence of such determination and direction, any order or other form of decision, however designated which adjudicates fewer than all of the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.

In Jackson, the court held that since the chacellor’s decision did not address several issues and did not certify that it was a final judgment as to the issues adjudicated, it was an interlocutory judgment that was not appealable, and until the parties saw to it that all issues had been addressed, there was no jurisdiction for an appeal.

A similar result was reached in S.E.B. v. R.E.B. decided June 28, 2011, in which the chancellor flatly refused to adjudicate alimony and child support.

What the COA is telling you is that unless the trial court’s judgment addresses every claim, or unless you have a Rule 54(b) certificate from the trial judge, you are going nowhere on appeal until you do.

I posted here about some of the nuances of Rule 54(b), and you might want to take a look at the post again.

I have almost always included a paragraph in my judgments that states to the effect that “The court has considered all other issues and prayers for relief asserted by the parties and finds that they should be denied and no further relief granted.” I do not know whether that will suffice as an adjudication, and after the S.E.B. decision, I’m not so sure; no one has ever raised the issue. Of course, I use that only for miscellaneous issues that do not have trial factors because failure to address applicable trial factors is reversible error. I also have included a Rule 52(b) certificate in appropriate cases.

Moral of the story: If you are not satisfied that the chancellor has met the requirements of Rule 52(b), be sure to file the proper motion for a certificate, and do it timely. If you are outside the 10-day requirement of Rule 59, you might want to file a motion to set the remaining issues for trial. Yes, this will likely steam up your judge, who probably figured your case was concluded, but just smile and show her a copy of Jackson v. Lowe, and maybe everything will be all right.