A Primer on Third-Party Custody

December 11, 2013 § 2 Comments

The cases on third-party custody can be confusing in their own right, but when one adds into the mix the cases where third parties acting in loco parentis also claim custody, it can become downright confusing.

The MSSC case of Davis v. Vaughn, decided November 21, 2013, includes a welcome exposition on the subject that you just might want to save for future reference. It stands for the proposition that a third party’s in loco parentis status, standing alone, is not enough to overcome the natural-parent presumption. Here is the key language from Justice Kitchen’s opinion for a unanimous court:

¶10. We first address Davis’s assertion that parties standing in loco parentis should be able to seek custody of the child without having to prove that the natural parent has relinquished his or her parental rights. The law recognizes that parents are the natural guardians of their children, and “it is presumed that it is in the best interest of a child to remain with the natural parent as opposed to a third party.” In re Dissolution of Marriage of Leverock and Hamby, 23 So. 3d 424, 429 (Miss. 2009) (citing K.D.F. v. J.L.H., 933 So. 2d 971, 980 (Miss. 2006)). See also Miss. Code Ann. § 93-13-1 (Rev. 2013) (“The father and mother are the joint natural guardians of their minor children and are equally charged with their care, nurture, welfare and education . . . . If either father or mother die or be incapable of acting, the guardianship devolves upon the surviving parent.”). However, the presumption in favor of the parent may be rebutted by clear and convincing evidence 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.” Smith, 97 So. 3d at 46 (citing Vaughn II, 36 So. 3d at 1264-65 (Miss. 2010); Leverock, 23 So. 3d at 429-30; Carter v. Taylor, 611 So. 2d 874, 876 (Miss. 1992)). If the natural-parent presumption is successfully rebutted, the court may then proceed to determine whether an award of custody to the challenging party will serve the child’s best interests. Id. (citing In re Custody of M.A.G., 859 So. 2d 1001, 1004 (Miss. 2003); Logan v. Logan, 730 So. 2d 1124, 1127 (Miss. 1998)).

¶11. A person in loco parentis is one who stands in place of a parent, having assumed the status and obligations of a parent. Favre v. Medders, 241 Miss. 75, 81, 128 So. 2d 877, 879 (Miss. 1961). “Any person who takes a child of another into his home and treats it as a member of his family, providing parental supervision, support and education, as if it were his own child, is said to stand in loco parentis.” W.R. Fairchild Constr. Co. v. Owens, 224 So. 2d 571, 575 (Miss. 1969) (citing Favre, 128 So. 2d 877). In loco parentis status carries with it the same duties and liabilities that belong to a natural parent, including a right to custody of the child “as against third persons.” Favre, 128 So. 2d at 879 (emphasis added) (citations omitted).

¶12. Although this doctrine grants third parties certain parental rights, such rights are inferior to those of a natural parent. Thus, in a custody dispute between one standing in loco parentis and a natural parent, the parent is entitled to custody unless the natural-parent presumption is rebutted. Smith, 97 So. 3d at 46-47. The court may not consider granting custody to a third party, including one standing in loco parentis, unless and until the third party rebuts this presumption. In other words, “[t]he doctrine of in loco parentis does not, by itself, overcome the natural-parent presumption,” although it may be a factor in determining whether the presumption has been rebutted. Id. at 46-47.

¶13. Giving preference to natural parents, even against those who have stood in their place, honors and protects the fundamental right of natural parents to rear their children. Vance v. Lincoln County Dep’t of Pub. Welfare, 582 So. 2d 414, 417 (Miss. 1991) (citing Prince v. Massachusetts, 321 U.S. 158, 166-67, 64 S. Ct. 438, 88 L. Ed. 645 (1944)). This concept is hardly new:

Nature gives to parents that right to the custody of their children which the law merely recognizes and enforces. It is scarcely less sacred than the right to life and liberty, and can never be denied save by showing the bad character of the parent, or some exceptional circumstances which render its enforcement inimical to the best interests of the child.

Moore v. Christian, 56 Miss. 408 (1879). See also Prince, 321 U.S. at 166 (“It is cardinal with us that the custody, care and nurture of the child reside first in the parents, whose primary function and freedom include preparation for obligations the state can neither supply nor hinder.”) (citing Pierce v. Society of Sisters, 268 U.S. 510, 45 S. Ct. 571, 69 L. Ed. 1070, (1925)). Furthermore,

[A]s a consequence of this, it is presumed to be for the real interest of the child that it should be in the custody of its [natural parent], as against collateral relatives, and he, therefore, who seeks to withhold the custody against the natural and legal presumption, has the burden of showing clearly that the [parent] is an unsuitable person to have the custody of his [or her] child; or that, however moral a [person] may be, he [or she] had abandoned his child, contributing nothing to its support, taking no interest in it, and permitting it to remain continuously in the custody of others, substituting such others in his own place so that they stand in loco parentis to the child, and continuing this condition of affairs for so long a time that the affections of the child and of the foster parents have become mutually engaged to the extent that a severance of this relationship would surely result in destroying the best interest of the child.

Hibbette v. Baines, 78 Miss. 695, 29 So. 80 (1900). In other words, by allowing one’s child to remain in another’s custody, without providing any support to or pursuing a relationship with the child, a natural parent may, over time, relinquish his or her parental rights in favor of a de facto parent. More than a century later, the Court continues to recognize these legal maxims, declaring in Smith that “grandparents who stand in loco parentis have no right to the custody of a grandchild, as against a natural parent, unless the natural-parent presumption first is overcome by a showing of abandonment, desertion, detrimental immorality, or unfitness on the part of the natural parent.” Smith, 97 So. 3d at 47-48 (Ethredge v. Yawn, 605 So. 2d 761, 764, 766 (Miss. 1992)).

¶14. Davis has cited no authority to support our overruling this line of precedent. Instead, she relies on the facts in her case, arguing that, without a change in the law, there is no “real legal benefit” to the doctrine of in loco parentis. But, this Court clearly has recognized that the doctrine protects those standing in the shoes of the natural parents from outside intrusions, and these rights are constitutionally guarded. For example, in Britt v. Allred, 199 Miss. 786, 25 So. 2d 711 (1946), this Court held that parties who had taken in and cared for an orphaned child stood in loco parentis to the infant and could not be deprived of their “parental rights” without notice and an opportunity to be heard. Id. at 789-90 (emphasis added) (citations omitted). That decision noted that this holding was founded upon the “universal rule governing due process of law,” as recognized in our state and federal constitutions. Id. See U.S. Const. amend. XIV; Miss. Const. art. 3, § 14.

¶15. Judges often are faced with the difficult task of removing a child from a loving home in deference to a natural parent’s custodial rights. Even so, the law does not allow parental rights to supercede the best interests of the child. Parental rights, as is true of other fundamental rights, can be forfeited or taken away, and our law does recognize some means by which third parties can overcome the law’s preference of natural parents. See Smith, 97 So. 3d at 46 (listing the ways in which the natural-parent presumption may be rebutted). Consistent with longstanding legal authority, requiring Davis first to demonstrate that Vaughn had relinquished his right to parent his child, was not an undue burden. The law protects the best interests of the child by its recognition that a natural parent’s “liberty interest . . . in the care, custody, and management of their children and families,” is not an absolute right. G.Q.A. v. Harrison County Dep’t of Human Res., 771 So. 2d 331, 335 (Miss. 2000) (citing Santosky v. Kramer, 455 U.S. 745, 753-54, 758-59, 102 S. Ct. 1388, 71 L. Ed. 2d 599 (1982)).

This is the latest iteration of the Vaughn case. You can read an earlier post that mentions it here.

The Nexus Between Separate Maintenance and Desertion

December 10, 2013 § Leave a comment

Brenda Reeves left her husband Howard in February, 2008, and, soon after, Howard sued her for separate maintenance. Brenda responded with a motion to dismiss, and, after a hearing, the chancellor found that Howard’s abuse of alcohol, and his physical and emotional abuse of Brenda, were the proximate causes of her departure. He dismissed Howard’s complaint for separate maintenance following the trial, in February, 2010.

In March, 2010, Howard filed a Complaint for Divorce on the ground of desertion, which he shortly after dismissed.

In April, 2011, Howard filed another Complaint for Divorce on the ground of desertion. Brenda again filed a motion to dismiss, which the court denied. At trial in February, 2012, Brenda argued that Howard’s complaint should be dismissed because, under Mississippi law, if the plaintiff had previously filed an unsuccessful separate maintenance action, he must prove that he made a good-faith offer to reconcile with his spouse at least one year prior to filing the divorce complaint. The chancellor ruled that Howard had not submitted adequate proof to meet his burden, and he dismissed Howard’s complaint. Not at all happy with the outcome, Howard appealed.   

In the COA case of Reeves v. Reeves, decided December 3, 2013, the COA affirmed the trial judge’s ruling. This is case law of which you need to be aware. Here is how the COA, by Judge Ishee for a unanimous court, addressed it:

¶8. Howard asserts the chancery court erred in finding that he failed to meet the one-year requirement for seeking a divorce on the ground of desertion. As such, Howard also asserts that the chancery court erred in failing to grant him a desertion-based divorce. The supreme court has addressed divorce cases such as the instant case wherein a separate maintenance action has been adjudicated prior to the filing for divorce on the ground of desertion. See Day v. Day, 501 So. 2d 353, 354 (Miss. 1987). In Day, the supreme court summarized desertion as follows:

If either party, by reason of such conduct on the part of the other as would reasonably render the continuance of the marital relationship unendurable, or dangerous to life, health[,] or safety, is compelled to leave the home and seek safety, peace[,] and protection elsewhere, then the innocent one will ordinarily be justified in severing the marital relation and leaving the domicile of the other, so long as such conditions shall continue, and in such case the one so leaving will be not guilty of desertion. The one whose conduct caused the separation will be guilty of constructive desertion[,] and if the condition is persisted in for a period of one year, the other party will be entitled to a divorce.

Id. at 356 (citation omitted).

¶9. However, the determination of whether desertion exists is viewed differently in light of an adjudicated separate-maintenance order. Id. (citation omitted). The supreme court noted that if a plaintiff seeking divorce can show that, “since the judgment for separate maintenance in favor of the defendant, the conditions have changed and the plaintiff has made efforts of reconciliation with the defendant with no avail, [then] the defendant is now a deserter and the plaintiff is entitled to a divorce for desertion.” Id. (citation omitted). The proof must show that the plaintiff was “honest in his intention to remedy his fault, and that his offers of reconciliation and request to return were made in good faith, with honest intention to abide thereby, and that the defendant deliberately refused his offers.” Id. at 357 (quoting Rylee v. Rylee, 142 Miss. 832, 840-14, 108 So. 161, 163 (1926)).

¶10. The evidence before us fails to prove that Howard made a good-faith reconciliation offer at least one year prior to April 11, 2011, as required by Day and Rylee. Howard testified at trial that he called Brenda once a month asking to reconcile. Brenda disputes this fact and further asserts that Howard’s occasional generic request to reconcile did not include a promise that he would seek rehabilitation for his alcohol abuse, nor did his requests include repentance for his prior abusive actions toward Brenda or promises that the abuse would not occur again. The evidence shows that the only good-faith reconciliation offer acknowledged by both parties was made on or about June 7, 2011 — approximately two months after Howard filed his complaint for divorce on the ground of desertion.

¶11. This was reflected in the chancellor’s following comments made during his ruling:

It seems to me that after a separate[-]maintenance proceeding, in order for the time to start ticking under Day, it is incumbent upon Mr. Reeves to make a good[-]faith offer. . . . I don’t have proof that I think rises to a preponderance of the evidence to show that Mr. Reeves made an offer for Mrs. Reeves to return home, satisfying whatever concerns she may have had, that would have started the one year running as contemplated by Day. I’m going to decline to talk about the reasonableness or unreasonableness of these post[-]filing offers that have transpired between Mr. and Mrs. Reeves . . . .

We agree with the chancellor. The law is clear that, under these circumstances, Howard was required to make a good-faith reconciliation offer at least one year prior to filing a complaint for divorce on the ground of desertion. The evidence simply does not show that he did so. As such, the chancellor did not err in his determination that Howard failed to meet the one year requirement at issue. This issue is dispositive of Howard’s second claim on appeal that the chancery court erred in failing to grant him a divorce on the ground of desertion. These issues are meritless.

Two observations:

  • Notice in ¶10 that the COA finds from the record that Howard had neither (1) undergone rehabilitation for his alcohol abuse, nor (2) repented for his prior conduct. This is language that you can use when you have a separate maintenance case in which the payer claims to have had his offers to reconcile rejected. It seems that what the COA is saying is that the offeror must prove measures to reform, and must make amends with the offended party. “Generic” offers to return home won’t cut it.
  • Cases of this type were more common before irreconcilable differences divorces by consent became available. Every now and again one runs into a pleading and procedural scenario like the Reeves case presented, and you have to be prepared to meet it. Remember that it takes more to prove desertion than mere separation without fault for a year or more. Since a good-faith offer of reconciliation within the one-year period will stop its running, the offended party must prove that she or he would have been willing to reconcile within that first year if a bona fide offer to do so had been made, but none was made. 

Next Step for Adult Disabled Children?

December 9, 2013 § 3 Comments

NOTE … If you have any interest at all in this issue, you should read Paul Snow’s comment to this post.

I posted here about the MSSC case, Hays v. Alexander, which I thought may have laid to rest the issue of a court-created duty of support for adult disabled children.

Well, hold on while I slam on the brakes, and I hope I’m not giving anybody whiplash.

This appeared on the MSSC decisions web page last Thursday:

EN BANC
2012-CA-01085-SCT

John W. Ravenstein v. Elisha Ravenstein (Hawkins)

      ; Madison Chancery Court; LC Case #: 96-350-B; Ruling Date: 04/18/2012; Ruling Judge: Cynthia Brewer; Disposition: On the Court’s own motion, the parties are directed to file the original and nine copies of supplemental briefs, and to serve a copy of the briefs on the Office of the Attorney General, addressing whether equal protection would be violated by an interpretation that child support may not be ordered for adult children who are mentally or physically incapable of self-support under Sections 93-5-23 and 93-11-65, given the mandate of Section 43-19-33 that a certain class of people may receive such support, due on the following schedule: within 30 days of the entry of this order John shall file his supplemental brief which shall not exceed 25 pages; within 30 days of the service of John’s supplemental brief, Elisha shall file her supplemental brief which shall not exceed 25 pages; and within 14 days of the service of Elisha’s supplemental brief, John may file a supplemental reply brief which shall not exceed 10 pages. The Clerk of this Court shall serve a copy of this order on the attorneys of record, as well as on the Office of the Attorney General. If the Attorney General chooses to file a brief, it shall be due within 30 days of the service of Elisha’s supplemental brief and shall not exceed 25 pages. Lamar, J., Disagrees. Order entered.

It appears this particular case is a matter of statutory interpretation, not a request for the court to create a remedy. It’s an interesting possible development.

Stay tuned.

“Quote Unquote”

December 6, 2013 § Leave a comment

“The trouble with many married people is that they are trying to get more out of marriage than there is in it.”  —  Elbert Hubbard

“The sign of a good marriage is that everything is debatable and challenged; nothing is turned into law or policy. The rules, if any, are known only to the two players, who seek no public trophies.”  —  Carolyn G. Heilbrun

“Perhaps that is what love is: the momentary or prolonged refusal to think of another person in terms of power.”  —  Phyllis Rose

021

Non-DNA Parenthood

December 5, 2013 § 2 Comments

Disestablishing parentage has been a statutory procedure since 2011, when the legislature adopted MCA 93-9-10. I posted here an annotated version of the provision that set out my opinion of how to plead and prove it.

The MSSC at last was presented with an opportunity to address its application in the case of Jones v. Mallett, et al., handed down November 14, 2013.

Terence Jones was involved in a romantic relationship with Annette Mallett in 2000. Mallett gave birth to a child on August 22 of that year. Mallett says that she told Jones he was not the father when she learned of the pregnancy. Jones claims that he did not learn that he was not the father until after signing the paternity agreement and birth certificate application, or as much as four months later.

Jones was listed as the father on the birth certificate, and he signed it. In October, 2000, he and DHS entered into a “Stipulated Agreement of Support and Admission of Paternity,” which was approved by order of the chancery court.

In December, 2010, Jones had a DNA test performed, which excluded him as the father. He filed an action in chancery court to disestablish paternity, rather than a MRCP 60(b)(5) or (6) motion. The chancellor eventually dismissed Terence’s pleading, based on MCA 93-9-10. Terence appealed.

The supreme court brushed aside Terence’s argument that the agreement was the result of a “material mistake of fact” under MCA 93-9-10(3)(b), finding that “The facts as presented do not establish sufficient circumstances for the application of subsection (b).” [ ¶7 ]

Terence also argued that subsections (c) and (d) must be read together, mandating a finding that he meets the criteria for disestablishment, but the court rejected that position, pointing out that (c) relates to stipulations of paternity, and (d) relates to stipulations of support, which are two different things.

That last point is critical to the case because (c) says that the court may not set aside an agreement of paternity that has been approved by the court (as this one had been). Subsection (d), on the other hand allows disestablishment of parentage if he signed an agreement of support without knowledge that he is not the father of the child. That without knowledge language is significantly absent from (c). Since Terence had signed both, he had no wiggle room.

To me, the MSSC is sending the signal via this opinion that the statute will be strictly applied.

No doubt the considerable passage of time from the signing of the paternity agreement to DNA testing and the filing of suit and eventual court appearance figured into the unhappy result for Terence.

Proving Attorney’s Fees Requires Some Proof

December 4, 2013 § 3 Comments

Shain (husband) and Dana (wife) Speights submitted an irreconcilable differences divorce by consent. After a hearing, the chancellor awarded Dana custody, ordered Shain to pay child support, and awarded Dana $2,500 in attorney’s fees, among other relief.

Shain appealed, and one of his grounds was the award of attorney’s fees.

Judge James, for the COA majority, in an opinion rendered November 5, 2013, set out the standard:

¶15. Next, Shain argues that the chancellor erred in awarding $2,500 in attorney’s fees to Dana. “The award of attorney[’s] fees in divorce cases is left to the discretion of the chancellor, assuming he follows the appropriate standards.” Creekmore v. Creekmore, 651 So. 2d 513, 520 (Miss. 1995) (citing Adams v. Adams, 591 So. 2d 431, 435 (Miss. 1991)). “Attorney[’s] fees are not generally awarded unless the party requesting such fees has established the inability to pay.” Id. (citing Dunn v. Dunn, 609 So. 2d 1277, 1287 (Miss. 1992)) …

We’ve talked here before about the standard that the trial court is required to apply in order to justify an award of attorney’s fees. We’ve also addressed the steps you need to take to prove attorney’s fees. It’s not complicated. It just requires a little preparation and documentation.

In Speights, though, the record was bereft of even the most elemental proof to support the award. As Judge James put it:

¶16. Although Dana offered testimony regarding her lack of income, she did not offer any evidence of the amount of attorney’s fees she incurred. The record shows that Dana’s attorney briefly mentioned her intention to offer evidence of attorney’s fees at the conclusion of trial, but she never did so. At no time during trial did Dana or her attorney provide the chancellor with evidence of attorney’s fees. Thus, it is unclear to this Court how the chancellor arrived at a figure of $2,500. Further, there is no financial statement from Dana in the record to substantiate her inability to pay.

¶17. “An award of attorney’s fees should be ‘fair and should only compensate for services actually rendered after it has been determined that the legal work charged for was reasonably required and necessary.’” Jordan, 105 So. 3d at 1135 (¶20) (quoting Dunn, 609 So. 2d at 1286)). It has long been the practice of trial courts to apply the factors in McKee v. Mckee, 418 So. 2d 764, 767 (Miss. 1982), in awarding attorney’s fees. Although it is not necessarily reversible error for the chancellor not to make an on-the-record analysis of the McKee factors [footnote omitted], without any evidence of fees in the record, we have absolutely no way of determining whether the chancellor’s award was reasonable.

A point raised in Judge Carlton’s dissent on the attorney’s fee issue is that the trial judge is empowered by MCA 9-1-41 to take judicial notice of a reasonable attorney’s fee, so that the chancellor’s decision should not be reversed. That is a code section that I called to your attention in a prior post.

The majority, however, rejected that approach. The majority opinion said, beginning in ¶18:

 … The dissenting opinion also relies on Mississippi Code Annotated section 9-1-41 (Rev. 2002), which states:

In any action in which a court is authorized to award reasonable attorneys’ fees, the court shall not require the parties seeking such fees to put on proof as to the reasonableness of the amount sought, but shall make the award based on the information already before it and the court’s own opinion based on experience and observation; provided however, a party may, in its discretion, place before the court other evidence as to the reasonableness of the amount of the award, and the court may consider such evidence in making the award.

¶19. In the present case, the chancellor made insufficient findings and there is insufficient proof in the record for this court to determine whether the chancellor’s findings were fair and reasonable. Although the statute gives the court broad discretion, the award of attorney’s fees cannot be upheld by this court unless the record supports the award. An award of attorney’s fees may be sufficient in a simple matter before the court, where the award is based on the court’s experience and observation. However, in a case of this nature, where there are many billable hours that the court is unable to observe or lacks knowledge of, it is incumbent upon the party requesting fees to place before the court evidence as to the reasonabless of the amount of the award, so that the record as a whole can support the award of attorney’s fees. Because the chancellor’s award of $2,500 is not supported by the evidence, we reverse and remand this portion of the judgment for a proper assessment of attorney’s fees.

So here are a few points to walk away with:

  • Notice that the statute only dispenses with proof of reasonableness, not with all proof whatsoever. In other words, once you have put proof into the record that you have expended 21 hours, and that your rate is $200 an hour, then the court may impose its own opinion as to whether it is reasonable. So proof of what you have done is essential to get you to the reasonableness issue.
  • Why not take a few extra minutes and put on proof of the McKee factors? It’s not that hard. You can do it yourself, and you can even carry a script with you to the witness stand if you need it.   
  • Remember: in a divorce case, you must prove your client’s inability to pay before the chancellor can even get near the issue of reasonableness. That would seem to require, at a scant minimum, a Rule 8.05 financial statement. Your client’s naked assertion that she can’t afford her attorney’s fees is most likely not going to cut it on appeal, and maybe not at trial.

This is yet another case where the chancellor did the best he could with the proof he had. A little more preparation and attention to detail, and this award of attorney’s fees would have been bulletproof on appeal.

Seeking Relief from Alimony Can be a Travail

December 3, 2013 § 2 Comments

When their 33-year marriage ended in divorce in 2005, Richard Peterson was ordered to pay his ex-wife, Josephine, $2,500 a month in periodic alimony. At the time, Richard, who was then 58, intended to continue his employment with the US Army Corps of Engineers in Vicksburg until age 75.

But things began to fall apart for Richard, or, more accurately, Richard began to fall apart. Within five years of the divorce, he suffered a series of physical injuries that affected his ability to work. He fell and broke his patella, and had to have two knee surgeries. He also suffered multiple joint injuries, and developed degenerative arthritis in both hips, both knees, and his left shoulder. To add to his misery, he tore a bicep, developed spinal stenosis in his lower back, underwent a total hip replacement, and had rotator-cuff surgery. We don’t know what his job entailed, but there are NFL players who do not suffer that many physical catastrophes in an entire career. Richard was placed on disability retirement due to the combination of woes that caused him intense pain, forced him to use a cane to walk, and disabled him from further employment.

Richard filed a petition to modify the alimony in 2010, and after a trial, the chancellor ruled that he had proven a material change in circumstances justifying a downward modification, and she reduced the alimony from $2,500 to $1,800.

Richard appealed, complaining that the reduction was not enough, since it left him with a monthly deficit of nearly $1,000. Josephine cross-appealed, contending that the retirement was foreseeable.

The COA addressed both appeals in the case of Peterson v. Peterson, handed down November 19, 2013. On the issue of modification, Judge Maxwell’s opinion set out the law applicable to modification of alimony: 

¶7. With respect to requests for modification of a previously ordered alimony award, chancellors are vested with general statutory authority to modify divorce decrees and make “new decrees as the case may require.” Miss. Code Ann. § 93-5-23 (Rev. 2013). Within this broad authority is the more specific power to increase, decrease, or terminate periodic alimony payments. Hubbard v. Hubbard, 656 So. 2d 124, 129 (Miss. 1995). When asked to modify periodic alimony awards, chancellors must first determine if an unforeseeable and material change in circumstances occurred since entry of the initial divorce decree. Holcombe v. Holcombe, 813 So. 2d 700, 703 (¶11) (Miss. 2002). If not, modification is not permitted.

¶8. However, if a substantial unanticipated change has in fact occurred, the chancellor should then consider the Armstrong [footnote omitted] factors to determine the appropriate amount of alimony. Holcombe, 813 So. 2d at 703 (¶12) (citing Armstrong, 618 So. 2d at 1280). In evaluating these factors when “deciding whether to modify periodic alimony,” chancellors should “compar[e] the relative positions of the parties at the time of the request for modification in relation to their positions at the time of the divorce decree.” Steiner v. Steiner, 788 So. 2d 771, 776 (¶16) (Miss. 2001) (citing Anderson v. Anderson, 692 So. 2d 65, 72 (Miss. 1997); Tilley v. Tilley, 610 So. 2d 348, 353-54 (Miss. 1992); Armstrong, 618 So. 2d at 1280). As with any alimony consideration, the chancellor must consider the wife’s accustomed standard of living, less her own resources, as well as the husband’s ability to pay. Gray, 562 So. 2d at 83.

The opinion goes on to evaluate the evidence, and concludes that Richard’s disability was, indeed, unforeseeable at the time of the divorce and the circumstances giving rise to it took place after the divorce. Josephine’s argument was that Richard had intended to retire at some point, so retirement was foreseeable and anticipated at the time of the divorce, and, therefore, modification should not lie. The COA pointed out that the case law did not support her argument:

¶12. We have previously held that a payor’s retirement due to unforeseeable health issues constituted a material change sufficient to modify an alimony award. See Broome v. Broome, 75 So. 3d 1132, 1140-41 (¶¶26-28) (Miss. Ct. App. 2011); Clower v. Clower, 988 So. 2d 441, 444-45 (¶9) (Miss. Ct. App. 2008) (holding that husband’s retirement due to health problems and loss of income constituted a material change in circumstance, justifying a reduction in alimony). Because there is record support that Richard’s later-arising injuries forced his retirement, the chancellor did not abuse her discretion in finding that a material, unanticipated change in Richard’s circumstances had occurred since the divorce.

As for the issue of alimony reduction, the opinion addressed it this way:

¶14. Permanent periodic alimony is “a substitute for the marital-support obligation.” Deborah H. Bell, Mississippi Family Law § 9.02[1] (2005). It arises from the duty of the husband to support his wife. McDonald v. McDonald, 683 So. 2d 929, 931 (Miss. 1996). “Consistent with Armstrong, a financially independent spouse may be required to support the financially dependent spouse in the manner in which the dependent spouse was supported during the marriage, subject to a material change in circumstances.” Rogillio v. Rogillio, 57 So. 3d 1246, 1250 (¶11) (Miss. 2011). But “alimony awards in excess [of] a spouse’s ability to pay are ‘per se unreasonable.’” Sheffield v. Sheffield, 55 So. 3d 1142, 1145 (¶9) (Miss. Ct. App. 2011) (quoting Yelverton v. Yelverton, 961 So. 2d 19, 28 (¶18) (Miss. 2007)).

¶15. Having found a material change, the chancellor correctly moved to the next step and considered the Armstrong factors, comparing the parties’ financial positions at the time of the modification request to their former positions when divorced. See Steiner, 788 So. 2d at 776 (¶16). But the chancellor did not make any findings about Richard’s ability to pay. And on appeal, Richard suggests that even after the $700 alimony reduction, he still endures a monthly deficit and is unable to pay the reduced award.

¶16. From our review, it is obvious the chancellor performed a detailed financial analysis of the parties’ incomes and expenses, health and earning capacities, needs, assets, and tax consequences, as required. However, considering these unchallenged figures, it is not apparent from the record that Richard was financially able to pay the reduced alimony obligation.

The court went on to do its own analysis of the financial proof, and found lacking any analysis of Richard’s ability to pay even the reduced sum. The opinion concluded:

 ¶26. Because “alimony awards in excess [of] a spouse’s ability to pay are ‘per se unreasonable,’” Sheffield, 55 So. 3d at 1145 (¶9), we remand for the chancellor to consider Richard’s ability to pay this amount, or any amount of alimony, while maintaining as normal a life as possible with a decent standard of living. See Brendel v. Brendel, 566 So. 2d 1269, 1272 (Miss. 1990).

So Richard turns once again to the trial court, slogging his way toward what he surely hopes will be a more satisfactory outcome.

Balancing the needs of one party against the resources of the other is a devilishly difficult task for a chancellor that requires deft juggling of many competing factors.

Equitable Division of Personal Injury Settlement Proceeds

December 2, 2013 § Leave a comment

Gail Williams received more than $50,000 from Dow Chemical in settlement of a defective breast implant suit she had filed. She deposited the money in an account separate from her husband, Phillp, and spent some of it. When the couple went through a divorce, Phillip argued that the remaining $25,000 was acquired during the marriage, and that it should be subject to equitable distribution. He pointed out that the breast implants had been paid for with $8,000 of marital funds; ergo, the proceeds from them should be marital property. The chancellor treated the account as Gail’s separate property, not subject to division, and Phillip appealed.

The COA affirmed on November 5, 2013, in Williams v. Williams. Judge Fair’s opinion includes a nifty recitation of the applicable law. Here it is:

¶15. As recognized by the chancellor, in an equitable division of property brought into or acquired during a marriage, the property must first be subjected to a Hemsley analysis, the determination of whether assets are marital or separate and assignment of a value to each item or groups of items. Property acquired during marriage is presumed marital. In this case Gail had received a money settlement based on defective breast implants made by Dow Chemical Company during the marriage. She kept it, however, in a separate account in her name only. The sum in the account was alternatively stated in the record as $25,097, $25,075, or “about $25,000.”

¶16. The Supreme Court of Mississippi had wrestled with determination of the status of personal injury settlements as marital or separate property long before it handed down the Hemsley and Ferguson cases on July 7, 1994. In fact, in Hemsley it noted specifically the case of Regan v. Regan, 507 So. 2d 54 (Miss. 1987), as a harbinger of things to come. In Regan, using language adopted in Hemsley some seven years later, the supreme court had held that:

Incident to a divorce the Chancery Court certainly has the power to look behind the formal state of title to property and decree an equitable division of jointly accumulated property, the division to be made by reference to the economic (though not necessarily monetarily economic) contributions made by each to the acquisition and maintenance of the property. Pickle v. Pickle, 476 So. 2d 32, 34 (Miss. 1985); Spearman v. Spearman, 471 So. 2d 1204, 1205-06 (Miss. 1985); Watts v. Watts, 466 So. 2d 889, 890-91 (Miss. 1985); cf. Pickens v. Pickens, 490 S o.2d 872, 875-76 (Miss. 1986). Here, however, the evidence is overwhelming that these monies derived in substantial part, if not in whole, from Lloyd’s personal injury claim. The Chancery Court in its opinion notes:

It is undisputed that the origin of the money was a 1981 settlement of a personal injury/loss of consortium claim arising from defendant’s [Lloyd’s] injuries.

While it is true that the evidence suggests that a good bit of the settlement proceeds have been expended for the mutual benefit of the parties, there is no evidence that Lloyd ever made any gift of one-half or any other part of the proceeds to Jeanette. See May v. Summers, 328 So. 2d 345, 347-48 (Miss. 1976); Tucker v. Tucker, 252 Miss. 344, 358, 173 So. 2d 405, 411 (1965). To the extent that the funds reflected by the certificate of deposit were in fact derived from the Lloyd’s maritime personal injury claim, they are his property and may not be ordered shared with his wife as a part of a property division incident to divorce proceedings. See Amato v. Amato, 180 N.J. Super. 210, 434 A.2d 639, 641-44 (1981).

The Chancery Court erred when it ordered the certificate of deposit divided equally between the parties. Rather, the property division should have reflected, pro-rata, the extent to which the settlement proceeds were fairly attributable to the respective claims of Lloyd and Jeanette. On this appeal Lloyd strongly urges that Jeanette had no claim and, accordingly, that he should receive the entire certificate of deposit. There is enough in the record, however, to suggest to us that this may well not be the case. Under the circumstances we remand to the Chancery Court and direct that court to determine the amount of the $225,000.00 settlement attributable to the claims of Lloyd and the amount of that settlement attributable to the claims of Jeanette. The proportions can then easily be calculated from which it will follow that the certificate of deposit will be divided in those proportions.

Regan v. Regan, 507 So. 2d 54, 56-57 (Miss. 1987).

¶17. Regan was recognized twelve years later by this Court in decisions, later affirmed by the supreme court, holding that funds acquired in a personal injury case are not automatically separate property. Justice Mills began the supreme court’s opinion by noting:

We granted certiorari to address the division of personal injury settlements between spouses in divorce proceedings. The Court of Appeals found that the law has broadened in favor of the non-injured spouse since we last squarely addressed the issue in Regan v. Regan, 507 So. 2d 54 (Miss. 1987). The Court of Appeals reversed and remanded to the Chancery Court of Panola County for further proceedings. Tramel v. Tramel, *** So.2d ***, 1998 WL 536861 (Miss. Ct. App. Aug. 18, 1998). Finding the decision of the Court of Appeals to be correct, we affirm.

Tramel v. Tramel, 740 So. 2d 286, 286 (¶1) (Miss. 1999). Revisiting the subject addressed in Regan was found appropriate because:

In 1994, this Court completely transformed the law of property division in divorce proceedings in Hemsley v. Hemsley, 639 So. 2d 909 (Miss. 1994), and Ferguson v. Ferguson, 639 So. 2d 921, 930 (Miss. 1994). In Hemsley, we held:

We define marital property for the purpose of divorce as being any and all property acquired or accumulated during the marriage. Assets so acquired or accumulated during the course of the marriage are marital assets and are subject to an equitable distribution by the chancellor. We assume for divorce purposes that the contributions and efforts of the marital partners, whether economic, domestic or otherwise are of equal value.

Tramel, 740 So. 2d at 288 (¶9).

¶18. In their Tramel opinions, both of our appellate courts described the three approaches being taken by other states in classification of personal injury settlements in equitable division cases. They drew from the comprehensive discussion in the South Carolina Supreme Court Case of Marsh v. Marsh, 437 S.E.2d 34 (S.C. 1993), which set out the three methods of classification then in use: (1) award to the injured spouse; (2) the analytic approach in which compensation for pain and suffering is personal, compensation for loss of wages during the marriage is marital, but future economic compensation non-marital; and (3) a mechanistic finding the settlement, since acquired during marriage, is wholly marital property. Declining, however, to leave the choice of approaches to the trial court as did the South Carolina court, our courts adopted the reasoning in Georgia and North Carolina cases, rejecting the first and third mechanistic approaches and adopting the analytical approach. Our supreme court expressly overruled any provisions of Regan contrary to its adoption of the analytic approach and held that the lines “a chancellor must draw, as difficult as they may be, are these:

1) that portion of the proceeds allocable to compensation to the initially injured spouse for pain, suffering, and disfigurement should be awarded in its entirety to the injured spouse;

2) that portion of the proceeds allocable to lost wages, lost earnings capacity, and medical and hospital expenses, to the extent those apply to the time period of the marriage, are marital assets and are to be divided according to equitable distribution principles; and,

3) that portion of the proceeds allocable to loss of consortium should be awarded in its entirety to the spouse who suffered that loss.

Tramel, 740 So. 2d at 291 (¶18).

¶19. In her opinion in this case, the chancellor found:

After a careful consideration of the proof presented in this matter and the application of the above summarized guidelines, the Court finds all of the real property and personal property addressed in these proceedings is marital property subject to equitable distribution, with the exception of the personal injury settlement proceeds received by Gail. Those funds are contained in the Woodman of the World account #973 in Gail’s name, in the approximate amount of $25,097. See Exhibits 17, 18 and 32. These funds were obtained by Gail as a result of a settlement with Dow concerning defective breast implants. Pursuant to the principles set forth in Tramel v. Tramel, 740 So. 2d 286, 291 (Miss. 1999), the Court finds those personal injury proceeds were for Gail’s pain and suffering and disfigurement. Further, insufficient proof was presented to establish those funds had been co-mingled with marital assets.

(Emphasis added). The account records show the principal amount deposited and withdrawal of interest, as testified to by Gail, on that money, which she said was commingled with marital funds. Gail testified that her full settlement was for $45,000, and she was additionally awarded $5,000 for medical expenses for corrective surgery. She paid $20,000 for a new car, a marital asset, and placed the remaining $25,000 in a separate account. She related that she and Phillip discussed why she wanted it in her name at the time. “It was for pain and suffering,” she said three times in her testimony, adding that the additional $5,000 was for medical expenses. She concluded by saying that there were also accounts in Phillip’s name only and that she wanted to have that account in hers only. It was established that the cost of the implant surgery, which occurred fifteen years before trial, was paid from the marital checking account. The amount paid is not in the record on appeal, although Phillip claims it is, and that it is $8,000. The chancellor found Gail’s testimony that the amount left in the account is for pain and suffering to be credible, and not directly contradicted by Phillip’s testimony.

¶20. We affirm the chancellor’s finding the settlement proceeds were separate property as well within her discretion.

Not much more needs to be said except that what you have there is the body of a brief if you’re ever called upon to recite the law on the issue of equitable distribution of personal injury settlement proceeds.

Where Am I?

You are currently viewing the archives for December, 2013 at The Better Chancery Practice Blog.