May 17, 2013 § 4 Comments
If you haven’t noticed, the legal profession is at a pivot-point. The big firms have been downsizing for years, finding it more and more difficult to payroll armies of lawyers as damage caps and other litigation-discouraging measures have eroded the caseloads of both defense and plaintiffs’ firms. Corporate clients in a bad economy are relying more and more on in-house counsel and alternate dispute resolution as ways to cut legal costs.
Here in Mayberry, the everyday folk simply don’t have the money to pay big fees when a divorce or custody war looms. They look for cheaper ways, and the internet beckons with the alluring promise of bright success via fill-in-the-blank forms.
Against this backdrop, law school grads are finding more and more that there simply are no jobs. Those student loan repayments loom large as unanswered resumes and rejections pile up.
Richard Susskind, a UK lawyer who has studied the British and American legal systems, has been probing these and other developments to discern the future of the law and the legal profession as society moves inexorably deeper into the technological age. In his book, The End of Lawyers?, he raised the question whether lawyers had not become an anachronism, to be replaced by legal technicians handling routine legal matters, a handful of litigation specialists doing courtroom work, and platoons of document-analysis specialists, financial advisors, legal counselors, and others performing at greatly reduced cost the components of what lawyers do now for $300-$500 an hour. His point is that delivery of legal services will yield to the forces of economics and technology until it offers cheaper, more efficient ways to serve the public.
Susskind’s latest book, Tomorrow’s Lawyers: An Introduction to Your future, condenses all of the foregoing into a concise, quick read, readily accessible to any busy practitioner. The pocket-size book is only 164 pages of text, but it is crammed with provocative ideas. Susskind not only talks about the forces that are reshaping law and the practice, but also how they impact the courts and delivery of legal services.
This is a brilliant book. I commend it to all lawyers and judges, particularly those who will be involved in the legal system over the next 15-20 years. The forces of change that Susskind highlights will be either a sweeping tide of change or a sweeping tide that carries many away. We can ride it and adapt to it, or we can drown in it. We get to choose.
In my opinion, many of the ways we do business in our courts are straight from the nineteenth century. There have been some intrusions of technology, but for the most part Abe Lincoln and his contemporaries would likely find themselves right at home in our courts. We should not be afraid to examine the ways we plead, offer proof, take testimony and otherwise carry out due process in trials and hearings with a view toward streamlining the processes, making them less costly, and trimming months — if not years — off them.
I encourage you to read Mr. Susskind’s book and give this some thought. It’s your future.
May 16, 2013 § 1 Comment
It’s a well-settled principle of Mississippi law that a prerequisite to an award of attorney’s fees in almost all non-contempt cases is proof that the claiming party does not have the ability to pay his or her own attorney’s fees. It’s something we’ve posted about here before.
What about where the spouse claiming an award of attorney’s fees has a present or pre-existing inability to pay, but the equitable distribution award makes adequate provision, leaving no discrepancy?
The COA addressed that very question in Jones v. Jones, rendered April 30, 2013. In reversing the chancellor’s award of attorney’s fees and expert-witness expenses, the COA, per Judge Maxwell, stated:
¶37. We also reverse the award of $18,250 for attorney’s fees and expert-witness expenses. “The question of attorney’s fees in a divorce action is a matter largely entrusted to the sound discretion of the trial court.” Watson v. Watson, 724 So. 2d 350, 356-57 (¶29) (Miss. 1998) (quoting Ferguson, 639 So. 2d at 937). But when “a party is financially able to pay her attorney, an award of attorney’s fees is not appropriate.” Id.
¶38. In Watson, though “reluctant to disturb a chancellor’s discretionary determination whether or not to award attorney[’s] fees,” the supreme court reversed and rendered an award of attorney’s fees because, “with respect to the financial position of the parties after the divorce decree, it [was] evident that [the wife was] financially able to pay for her own attorney’s fees.” Id. at 357 (¶30) (emphasis added); see also Pacheco v. Pacheco, 770 So. 2d 1007, 1012-13 (¶¶26-28) (Miss. Ct. App. 2000) (affirming denial of attorney’s fees because wife’s property award enabled her to pay her attorney’s fees). Here, in finding Jane unable to pay, the chancellor did not consider Jane’s financial position in light of the divorce decree and property division. Jane was awarded almost two hundred thousand dollars in cash, secured by a lien on John’s real property and businesses, a home in Oxford free and clear of any liens, and dividend-paying bank stock, as well as multiple retirement accounts. As in Watson, under the circumstances, we find the award of attorney’s fees and expert-witness expenses to be an abuse of discretion. We reverse and render this portion of the judgment.
As I have said here before, one would think that attorneys would be super-zealous in making an airtight record on attorneys fees, but in my experience the proof is quite often slap-dash and incomplete.
If you want to make your award of attorneys fees bullet-proof, make sure that there is proof in the record to support a finding by the chancellor that, even with the equitable distribution, your client has an inability to pay. Is the equitable division readily liquidable, or is the bulk of it tied up in equity? Will liquidation to pay attorney fees have adverse tax consequences, as with an IRA? Will payment of attorney fees use up most, or all, of your client’s cash? Will it take months or even years to collect all of the equitable distribution? All of these are factors that the judge will consider if you make sure to put supporting proof in the record. With that kind of proof in this case, Jane might have had at least a partial, viable claim for attorney fees that would have survived on appeal.
May 15, 2013 § Leave a comment
Concetter Davis gave birth to a daughter, Sha’Nyla, and in 2008, James Wilson was adjudicated to be the father. Concetter was awarded custody, and James was granted visitation.
When Concetter died in July, 2011, James filed a pleading seeking to “modify” custody, based on the mother’s death. Concetter’s mother, however, resisted, filing pleadings with the court seeking to intervene and be appointed guardian of the child.
The trial proceeded as a modification, not as an original custody determination. The chancellor found that Concetter’s death was a material change in circumstances, and then found, based on an Albright analysis, that it was in the child’s best interest to remain with the grandmother. James appealed.
The COA, in Wilson v. Davis, handed down April 30, 2013, reversed. The court first pointed out that this was not a modification case, since the original custody determination was between the two natural parents, one of whom was dead. Instead, this was an initial child-custody determination between a natural parent and a third-party. The court said, beginning at ¶ 8:
… [I]n a child-custody determination between a natural parent and a third party, such as a grandparent, the law presumes that it is in the best interest of the child for the natural parent to have custody. Lucas v. Hendrix, 92 So. 3d 699, 705-06 (¶17) (Miss. Ct. App. 2012) (citing McKee v. Flynt, 630 So. 2d 44, 47 (Miss. 1993)). This is because “[g]randparents have no legal right [to] custody of a grandchild, as against a natural parent.” Lorenz v. Strait, 987 So. 2d 427, 434 (¶41) (Miss. 2008).
¶9. The natural-parent presumption is rebuttable—but only “by a clear showing that (1) the parent has abandoned the child; (2) the parent has deserted the child; (3) the parent’s conduct is so immoral as to be detrimental to the child; or (4) the parent is unfit, mentally or otherwise, to have custody.” In re Smith, 97 So. 3d 43, 46 (¶9) (Miss. 2012) (citations omitted). Only after the presumption is rebutted is the grandparent on equal footing with the parent, permitting the chancellor to apply Albright to determine whether it is in the best interest of the child for the grandparent, versus the parent, to have custody. In re Dissolution of Marriage of Leverock & Hamby, 23 So. 3d 424, 431 (¶24) (Miss. 2009) (citations omitted).
Only after the presumption is rebutted by showing one of the four bases can the court place a third party on an equal ground with the parent and apply the Albright factors.
To hammer home the point, Judge Carlton added a specially concurring opinion including the thought that, “We must be mindful of the constitutional protection of parental rights against deprivation by third parties.”
May 14, 2013 § 2 Comments
The line of demarcation — also referred to in the cases and in legal circles as “the valuation date” — is an important concept in divorce law. It’s something we’ve addressed here in prior posts.
Under the Ferguson case, the trial court must first identify which assets are marital, then value them, and then divide them equitably. The date that the court picks to establish the values of marital assets is crucial, since appreciation and depreciation mean that the value on one particular date may be sugnificantly different from that on another date.
Some lawyers argue that there is a “bright line” rule that the entry of a temporary order in a divorce or separate maintenance case cuts off all further accumulation of marital interests, and, indeed, some case law would seem to indicate that.
But the MSSC, in the case of Collins v. Collins, handed down May 9, 2013, makes it clear that there is no bright line rule. Here’s what Justice Coleman’s opinion says on the point:
[¶9] … The law in Mississippi is that the date on which assets cease to be marital and become separate assets – what we refer to herein as the point of demarcation – can be “either the date of separation (at the earliest) or the date of divorce (at the latest).” Lowrey v. Lowrey, 25 So. 3d 274, 285 (¶ 27) (Miss. 2009).
¶10. In Selman v. Selman, 722 So. 2d 547 (Miss. 1998), the wife had a retirement fund, and the chancellor awarded the husband half its value even though the fund did not begin to accrue until after the husband had vacated the marital home. Id. at 553 (¶ 22). When including the fund in the marital assets, “the chancellor stated only that ‘[t]he law says that until they are divorced, everything is on the table.’” Id. Applying the well-settled manifest error standard of review, id. at 551 (¶ 12), the Selman Court reversed the chancellor’s ruling and wrote, “while the marriage had not legally terminated, the relationship out of which equitable distribution arises had ended some months earlier.” Id. at 553 (¶ 25).
¶11. A temporary order may [emphasis in original] be considered by the chancellor to be a line of demarcation between marital and separate property, Cuccia v. Cuccia, 90 So. 3d 1228, 1233 (¶ 8) (Miss. 2012); see also Wheat v. Wheat, 37 So. 3d 632, 637-38 (¶¶ 16-18) (Miss. 2010) (recognizing, in dicta, that a temporary support order can indicate the demarcation point), but we have never held that it must. However, in Pittman v. Pittman, 791 So. 2d 857 (Miss. Ct. App. 2001), the Mississippi Court of Appeals held, “[T]he temporary support order serves the same purposes as a separate maintenance order and that property accumulated thereafter is separate property.” Id. at 864 (¶ 19). In so writing, the Pittman Court created the impression that Mississippi now has established a rule that temporary orders always and in every case provide the mark of demarcation. Temporary support orders vary. They may include issues such as which spouse controls the marital home, automobiles, and bank accounts, or they may simply, as in the case sub judice, provide only for temporary custody and support of a minor child. Because of the degree of variance in temporary orders and the particularities of every marital dissolution, we reaffirm our holding in Lowrey and hold that it is necessary that a chancellor maintain discretion to decide in each instance whether a temporary order is the proper line of demarcation. To the extent that the Pittman opinion can be read to create a rule that a temporary support order necessarily and always indicates the point of demarcation, we overrule it.
¶12. In the case sub judice, the chancellor did not explicitly state what date she chose as the date of demarcation, but from the substance of the opinion, it is clear she chose the date of the divorce. In their briefs, the parties accept that the chancellor used the date of the divorce as the point of demarcation. The temporary support order in the instant case dealt only with child custody and temporary child support. It did not go so far toward separating the parties’ several jointly-held assets that we would hold the chancellor abused her discretion in not finding it to be the point of demarcation.
¶13. However, the Cuccia Court noted that the chancellor must set out the specific date used as the line of demarcation and remanded the case partly for the chancellor’s failure to do so. Cuccia, 90 So. 3d at 1233 (¶ 11). The chancellor did not do so here, but, as noted above, the parties do not dispute the issue. We take the instant opportunity to write that had the issue been disputed, or had the chancellor’s order been ambiguous as to the demarcation date used, we would have remanded the case as did the Cuccio [sic] Court. We reiterate here that chancellors should indicate in the record what date they choose for the point of demarcation and why they choose it.
That should settle the debate once and for all that the demarcation date is at the discretion of the chancellor, who must always identify the date chosen and explain why that particular date was selected.
The downside to this is that when your client asks you about whether it would be wise to acquire any new assets between separation and the date of the divorce, your answer now will be an unqualified, “I don’t have any idea.”
As a trial practice matter, I seldom hear any evidence or argument as to what the valuation date should be. If you have a case where one valuation date is advantageous to your client as opposed to another, you should be zealous about informing the judge what date should be selected, and why it should be selected. For instance, if your client acquired a home after the separation, and has accumulated wealth after the separation, you want a valuation date near that separation date, not at the date of the divorce. If you don’t make that clear in the record, the judge might choose a date that’s not so nifty for your client, and you’ll have to ask the COA to fix it.
May 13, 2013 § Leave a comment
I posted here and here about the saga of Cates v. Swain, the COA decision that essentially denied cohabitants any equitable relief to recover assets invested in the relationship. You can read the fact outline in that first prior post.
At trial the chancellor had rejected Mona Cates’ agrument that she was entitled to imposition of either a resulting or constructive trust, but granted her relief on the theory of unjust enrichment.
On appeal, the COA reversed, applying the rationales in Davis v. Davis, 643 So.2d 931 (Miss. 1994) and Estate of Alexander v. Alexander, 445 So.2d 836 (Miss. 1984), to reach the conclusion that equitable remedies are not available to unmarried parties who acquire assets titled in only one party’s name through the contributions of both. The court agreed with the chancellor that neither equitable trust should have been imposed, but disagreed that unjust enrichment could be applied.
On May 2, 2013, the MSSC reversed the COA decision and affirmed the chancellor on the theory of unjust enrichment. The court distinguished the cases that had been relied upon by the COA. The court did modify the amount awarded by the chancellor. Justice Dickinson, concurring in part and dissenting in part, would have remanded the case to the chancellor for further evidence on what would have been an equitable determination of what each party should receive, based on appreciation of the investments over time.
In my opinion, this decision clarifies the state of the law in an important area. Unmarried relationships are a fact in Mississippi, and there has to be a mechanism for people to recover money or property that in good conscience and justice should not be retained by another.
There is, of course, the danger that the doctrine will be overapplied and stretched to the breaking point. As the court’s opinion stated at ¶ 19, quoting an Iowa case, ” … [T]he doctrine of unjust enrichment is not ‘a roving mandate [for a court] to sort through terminated relationships in an attempt to nicely judge and balance the respective contributions of the parties.'” Applied carefully and judiciously, however, as the chancellor did at trial in this case, it’s a useful tool in an appropriate case, and it’s no longer precluded in our jurisprudence.
May 10, 2013 § Leave a comment
“To handle yourself, use your head; to handle others, use your heart.” — Eleanor Roosevelt
“My parents had only one argument in forty-five years. It lasted forty-three years.” — Cathy Ladman
“And they lived happily (aside from a few normal disagreements, misunderstandings, pouts, silent treatments, and unexpected calamities) ever after.” — Jean Ferris
May 9, 2013 § 3 Comments
Attorney Joy Harkness of Legal Services in Meridian posted a comment to a post yesterday that raised an intriguing question — one that you might just bump into in your own practice, particularly with the numbers of migrant workers in our state.
Here’s the query:
“I am looking for assistance in serving process on a resident of Mexico. It is my understanding that process by publication is not valid under the Hague Service Convention if the address if the defendant is known. It is also my understanding that the summons has to be translated into Spanish. I am looking both for advice on the procedure and someone to provide the translation.”
Has anyone else run into this, or has anyone researched this?
I thought this should be in a post, where more folks might see it, rather than in a comment.
We have a notable number of divorces (almost all I.D. divorces) involving Latin-Americans, mostly Mexicans, in this district. They are as routine as any other I.D. divorces, but there are some with problems. I denied one father’s request for visitation because he could not provide a legitimate address, and claimed to have lost his passport. When I asked to see his DL, he produced a fake with a fake address. Since two witnesses had testified that he had said he wanted to take the children back to Mexico with him, I thought that he should be better documented before we did that.
May 8, 2013 § 2 Comments
MCA 43-19-101(e) has been amended, effective July 1, 2013, to provide that:
“In cases in which the adjusted gross income as defined in this section is more than One Hundred Thousand Dollars ($100,000) or less than Ten Thousand Dollars ($10,000), the court shall make a written finding in the record as to whether or not the application of the guidelines established in this section is reasonable.”
Right now the figures are $50,000 and $5,000.
This change is a recognition of changing economic realties. The original figures were established by the legislature in 1989 — 24 years ago.
May 7, 2013 § Leave a comment
The COA case of Jones v. Jones, decided April 30, 2012, is a reminder that, if the equitable division of the marital estate has made adequate provision for the spouses, there should be no award of alimony — not even nominal alimony.
In Jones, the chancellor carefully considered and analyzed all of the Ferguson factors as they applied to the case, and specifically found that the equitable division made sufficient provision for Jane Jones (she received 62.5% of the marital estate). He nonetheless awarded her nominal alimony of $10 a month in case she needed alimony in the future.
The COA affirmed the chancellor’s decision on equitable distribution, but reversed and rendered as to the nominal alimony. Judge Maxwell wrote for a unanimous court:
¶35. However, we do find manifest error with the award of “nominal” permanent—or periodic—alimony in the amount of $10 per month. See Armstrong v. Armstrong, 618 So.2d 1278, 1280 (Miss. 1993) (reviewing alimony awards for manifest error). We note the chancellor correctly identified and applied the Armstrong factors. See id. But he did so after acknowledging he had made sufficient provision for Jane through the equitable division of the property so that permanent alimony was not needed. Alimony should only be considered if the property division leaves one spouse in a deficit. Johnson, 650 So. 2d at 1287. “If there are sufficient assets to provide for both parties, then there is no more to be done.” Carter v. Carter, 98 So. 3d 1109, 1112 (¶8) (Miss. Ct. App. 2012) (citing Johnson, 650 So. 2d at 1287).
¶36. By referring to the award as “nominal” alimony, it does not appear that the chancellor was trying to address an actual deficit in the property award. Rather, he admits he was simply leaving the door open in case future events prove Jane has a need and John has an ability to pay. Such a contingency plan, while well-meaning, simply is not supported by our law. Alimony is to be considered as a remedy to an actual insufficiency in the marital assets, not as a contingency for a possible insufficiency in the future. Because the chancellor found the division of marital property left no need for alimony, we find it was error for the chancellor to nonetheless award “nominal” alimony. We reverse and render the award of $10 per month in permanent alimony award.
A good way to think about this is that equitable division is the gateway to alimony. Only after the chancellor has evaluated the Ferguson factors and adjudicated equitable division, and then having found that the equitable division leaves a discrepancy, may the chancellor even consider awarding periodic or rehabilitative alimony.
A caveat: Lump sum alimony, contrary to periodic or rehabilitative alimony, is a tool to achieve an equitable division of the marital estate.
Another consideration to bear in mind: I have tried contested cases where the lawyers have stipulated that the only issue is alimony, and they offered no proof whatsoever on the Ferguson factors. That, in my opinion, plants error in the record. You can not get to alimony without first going through Ferguson.
May 6, 2013 § Leave a comment
Dorothy Lang and Derrick Higgins were estranged husband and wife. Despite that they were living separate and apart, they maintained two joint bank accounts at the same bank, with Dorothy continuing to use the joint savings account, and Derrick continuing to use the joint checking account.
Derrick got behind in his child support payments to another woman — to the tune of $17,000 — and DHS in April, 2010, froze both joint accounts per MCA 43-19-48, imposing a lien on the deposits. When Dorothy discovered what had happened, her attorney sent a letter to DHS in May, 2010, advising them that the funds were Dorothy’s, not Derrick’s. DHS thoughtfully responded the next day with a letter pointing out that Dorothy was required by statute to file a petition with the court if she wished to challenge the lien.
Dorothy took no action immediately, and on June 17, 2010, DHS received $3,116.69 from the two accounts, no doubt causing Dorothy some economic distress. The date of the disbursement was more than 45 days after the freeze.
Finally, in September, 2010, Dorothy got around to filing a contest to the lien, and, at an evidentiary hearing, produced proof that most of the money seized was, indeed, hers, and not Derrick’s. The chancellor ordered DHS to refund Dorothy $2,000 of the money, and DHS appealed.
In DHS v. Lang, handed down by the COA on April 23, 2013, the COA reversed and rendered. Judge Fair’s opinion for a unanimous court, explained:
¶8. … [A]lthough the statute contemplates an account holder of interest challenging the encumbrance, it does not provide a method to do so. As written, the statute does not require DHS to send notice to joint account holders, and only the obligor is subject to any specific time for filing. Other states, such as Alabama and Texas, have specifically provided for the right of a joint account holder to challenge such an encumbrance and prove ownership of the funds. See Ala. Admin. Code r. 600-3-12-.06 (2011); Tex. Fam. Code Ann. § 157.326 (2001). We conclude that our Legislature intended to acknowledge an account holder of interest’s right to challenge a DHS encumbrance, but it did not create a new mechanism for such a challenge. Instead, the Legislature left that to independent actions, just as ordinary garnishment law does.
¶9. The Mississippi Supreme Court has considered the garnishment of joint accounts. In Delta Fertilizer, Inc. v. Weaver, 547 So. 2d 800 (Miss. 1989), Delta secured a judgment against Weaver, and the circuit clerk issued a writ of garnishment on a joint savings account in the names of Weaver, his sister, and his mother. Before the garnishment was awarded, the mother filed a motion with the court, claiming to be the sole owner of the account. Id. at 801. The mother testified that all the funds belonged to her and that her children’s names were on the account for convenience because she could not handle her own money anymore. Id. Citing Cupit v. Brooks, 237 Miss. 61, 112 So. 2d 813 (1959), the court noted that a joint checking or savings account was subject to garnishment but held that it “should be garnishable only in proportion to the debtor’s ownership of the funds.” Delta, 547 So. 2d at 802-03. The burden rests on each depositor to show what portion of the funds he actually owns, and parol evidence is admissible to show his contributions. Id. at 803.
¶10. Relying on the Mississippi Supreme Court’s decision in Delta, we agree that an account holder of interest may challenge a DHS encumbrance in an independent action and present evidence to prove her contribution to the funds. The depositors are in a much better position than DHS to know the pertinent facts regarding their joint account. And while the DHS Child Support Unit has a legislatively mandated charge to enforce child-support obligations, administratively and through litigation, we do not believe the Legislature intended to dismiss the interest of joint account holders. That being said, a joint account holder must file some formal pleading within a reasonable time. Otherwise, such funds obtained by DHS would always be subject to remittance, preventing the funds from being timely disbursed to impoverished children.
The court then turned to the question whether Dorothy’s letter to DHS or her petition filed nearly three months after the order disbursing funds was effective to regain her funds. The COA answered “no”:
¶12. This Court dealt with an analogous situation in Triplett v. Brunt-Ward Chevrolet, Oldsmobile, Pontiac, Buick, Cadillac, GMC Trucks, Inc., 812 So. 2d 1061 (Miss. Ct. App. 2001). There, a mother, Triplett, held an account with Union Planters and named her daughter as a joint account holder. Id. at 1063 (¶2). A garnishment was issued naming the daughter as the debtor. Id. Although Triplett admitted that she became aware of the attachment within two days of service of the writ of garnishment, but never intervened as a proper party. Id. at 1067 (¶13). After the funds were disbursed to the creditor, Triplett filed a complaint alleging Union Planters was negligent in its failure to notify Triplett that the funds were exempt. Id. at 1064 (¶4). On appeal, this Court explained that the garnishment statute “has been construed to mean that, in order to suspend the execution of the writ of garnishment, a sworn declaration must be filed in the court before the garnishee has answered and paid into court the funds caught by the garnishment.” Id. at 1067 (¶11) (citing Miss. Action for Cmty. Ed. v. Montgomery, 404 So. 2d 320, 322 (Miss. 1981)).
¶13. Here, DHS correctly presumed that all funds in the joint account belonged to Higgins and filed a notice of encumbrance [footnote omitted]. On May 27, DHS advised Lang to file a petition with the court pursuant to section 43-19-48 in order to object the encumbrance. While we disagree that Lang was required to file pursuant to section 43-19-48, she failed to file any petition to the court before the funds were disbursed. Further, Lang presents no reason for her delay. “A letter is not the equivalent to a sworn declaration filed according to the relevant statute. It is too little, too late.” Triplett, 812 So. 2d at 1067 (¶12) (internal citation omitted).
Parting thoughts …
- I wonder whether Dorothy now thinks it was worth the few extra bucks she saved to keep that joint account open with her n’er-do-well estranged husband. [Incidentally, the COA opinion points out that Derrick owed Dorothy back child support also. Ouch.].
- Don’t sit on a case like this. File something right away, even if it’s wrong. You can always amend later, and you can continue to negotiate and talk with pleadings filed. Here, the five-month delay was fatal to Dorothy’s claim.
- This may seem like a rare case, but I actually have had a couple of cases where the question was raised about the rights of joint-account owners. They were resolved, but you never know when yours will not be.