DEFINING THE SCOPE OF TRIM

August 1, 2012 § 2 Comments

You’ve read here before about the case of Trim v. Trim and its ramifications for family law practitioners. Trim is the MSSC case holding that intentional filing of a substantially false UCCR 8.05 financial statement constitutes a fraud on the court, so that any judgment based on it is vulnerable to being set aside any time.

In the case of Rogers v. Rogers, decided July 24, 2012, the COA confronted the question of intentionality and exactly how substantial the falsehood needs to be to warrant setting aside the prior judgment.

At trial in 2009, Charles Rogers submitted a financial statement that showed his monthly adjusted gross income as $4,651.71. The court awarded child support and alimony based on that figure.

Later, in a 2010 contempt proceeding brought by his ex-wife Julianne, Charles disclosed in discovery that his gross income was in excess of $88,000 a year, which would produce considerably greater adjusted gross income.

The chancellor found that the discrepancy was “proof of a gross misrepresentation and fraud” upon the court, and revised the final judgment of divorce to increase both the child support and alimony.

On appeal, the COA noted that in his 2009 trial testimony Charles had expressly testified that his yearly gross income was $88,000, that the $4,400 figure represented two weeks’ pay, and he had been asked about it in detail both on direct and under cross examination. At the contempt trial, Charles steadfastly stood by his position that he had not intentionally failed to disclose or falsified the financial information.

Judge Carlton recited the well-known Mississippi rule on establishing the elements of fraud:

¶18. The general rule is well settled that fraud will not be presumed but must be affirmatively proven. Taft v. Taft, 252 Miss. 204, 213, 172 So. 2d 403, 407 (Miss. 1965). The Mississippi Supreme Court has held that in order to establish fraud, the burden is on the proponent to prove the following elements:

(1) a representation, (2) its falsity, (3) its materiality, (4) the speaker’s knowledge of its falsity or ignorance of its truth, (5) his intent that it should be acted on by the hearer and in the manner reasonably contemplated, (6) the hearer’s ignorance of its falsity, (7) his reliance on its truth, (8) his right to rely thereon, and (9) his consequent and proximate injury.

Koury v. Ready, 911 So. 2d 441, 445 (¶13) (Miss. 2005) (citing Mabus v. St. James Episcopal Church, 884 So. 2d 747, 762 (¶32) (Miss. 2004)). Additionally, “fraud . . . must be proved with clear and convincing evidence.” Hamilton v. McGill, 352 So. 2d 825, 831 (Miss. 1977). We have recognized that “[c]lear and convincing evidence is such a high standard that even the overwhelming weight of the evidence does not rise to the same level.” Moran v. Fairley, 919 So. 2d 969, 975 (¶24) (Miss. Ct. App. 2005) (citation omitted).

¶19. To vacate a decree due to fraud, the supreme court, in Manning v. Tanner, 594 So. 2d 1164, 1167 (Miss. 1992), listed the four necessary requirements that must be met:

(1) that the facts constituting the fraud, accident, mistake[,] or surprise must have been the controlling factors in the effectuation of the original decree, without which the decree would not have been made as it was made; (2) the facts justifying the relief must be clearly and positively alleged as facts and must be clearly and convincingly proved; (3) the facts must not have been known to the injured party at the time of the original decree, and (4) the ignorance thereof at the time must not have been the result of the want of reasonable care and diligence.

Applying the law of fraud to the case at hand, Judge Carlton concluded that the elements of fraud had not been proven, and that the chancellor’s judgment essentially setting aside the original judgment was, therefore, in error. Her opinion distinguished Trim in this way:

¶24. Julianne cites Trim v. Trim, 33 So. 3d 471 (Miss. 2010), in support of her argument that Charles’s inaccurate Rule 8.05 statement perpetrated a fraud upon the court. In Trim, George Trim submitted his Rule 8.05 statement listing the value of his company’s stock at $100,000. Id. at 473 (¶4). George and his ex-wife, Lisa, entered into a property-settlement agreement, which the chancellor later ratified, based on their assets and liabilities disclosed in their Rule 8.05 statements. Id. Lisa later discovered that George had misrepresented his stock value in his Rule 8.05 statement, and filed suit against him for fraudulent misrepresentation. Lisa’s expert valued George’s stock at $694,000 at the time of George and Lisa’s divorce. Id. at 474 (¶4). On appeal, the Trim court held that George’s intentional filing of a substantially false Rule 8.05 statement constitutes a fraud on the court, noting the chancellor’s finding that George’s Rule 8.05 statement drastically undervalued a major marital asset. Id. at 478 (¶17).

¶25. The case before us differs from Trim in that the record shows that Charles testified during trial and explained that his Rule 8.05 submission reflected a two-week pay period. In applying the standard for proving fraud to the facts and record before us, we cannot agree that Julianne met her burden of proving fraud by clear and convincing evidence. See Hamilton, 352 So. 2d at 831. Although Charles’s Rule 8.05 statement incorrectly reflected his monthly salary, the record shows that he explained the discrepancy several times in his trial testimony. As a result, we find that the chancellor erred in considering Charles’s Rule 8.05 statement only, and not also his trial testimony, in determining that Charles’s misrepresentation of his income rose to the level of fraud. In her July 6, 2010 judgment, the chancellor erroneously found that Julianne proved by clear and convincing evidence that Charles perpetrated a fraud upon the court. Therefore, the chancellor erred in vacating the prior decree and revising the final divorce decree by increasing the alimony award. Accordingly, we reverse and set aside the revised final judgment and reinstate the original divorce decree. We also reverse and render the increased award of $1,000 in rehabilitative alimony for thirty-six months, which was based upon the erroneous finding of fraud on the court. Since the record does not support a finding of fraud by clear and convincing evidence, we reinstate the chancellor’s original divorce decree. See Manning, 594 So. 2d at 1167; Shaeffer v. Shaeffer, 370 So. 2d 240, 242 (Miss. 1979).

So, unless and until the MSSC chooses to clarify the matter further, you will have to prove all of the elements of fraud by clear and convincing evidence in order to invoke Trim relief. Proof of discrepancies and oversights in 8.05 statements will not be enough to do the job.

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