A Harum-Scarum Scam

August 15, 2014 § 10 Comments

Periodical print publications are, I fear, going the way of the aurochs due to the internet. So publishers have had to contrive some clever ways to troll for prospective subscribers.

One honest strategy is to get sample magazines into the hands of potential subscribers in hopes that they will say “Why not,” and take the plunge. For instance, I recently ordered some shirts from a catalog, and *VOILA!* I am now receiving gratis a rotating subscription (for I do not know how long) to the various Condé-Nast publications, not a single one of which in the non-gratis world would I bother to pick up, much less read. These are a “bonus” for my catalog order. Until this week I had received Vogue, Glamour, and Travel & Leisure.

This week the rotation brought me a copy of Gentlemen’s Quarterly magazine here at the courthouse. The 98%-nude model on the cover set off quite a titilation — so to speak — up here on the second floor, as you can imagine. One of our local barristers took the issue home with him, no doubt to do forensic study. Thanks to these publications I have wearily become accustomed to having to explain to everyone who sees my mail on the desk of the court administrator that I did not subscribe … blah, blah, blah … you know the rest of the story.

Some publishers, however, have taken the low road.

My wife subscribed for several years to a certain magazine. She simply subscribed, using one of those little cards that fall on the floor in the doctor’s office. She did not sign a contract with a door-to-door magazine peddler. That periodical, as is the custom, sends out renewal notices almost from the first month of your subscription offering phenomenal deals in the hope, I guess, that you will keep extending your enlistment and they will keep on receiving injections of your cash. Every promo they send is marked “Urgent!” and “Last Chance” and “Warning — Offer Expiring.”

So far not so bad. Annoying, but not so bad. My wife chose to ignore the offers and let her subscription lapse.

But this is where it takes an unhappy turn. This week she received notice that if she did not remit $20.97 immediately, her account would be turned over for collection. Yes, collection.

She was upset when she showed me the notice. Why should she be dunned and sued over this? She did not understand. I reassured her that she owes them nada. I pointed that, even if she did owe them something, no business could stay in business by turning over $20 accounts for collection.

My wife had the benefit of counsel. But I wonder how many recipients of a similar notice without legal knowledge simply caved in out of fear of lawyers and telephone collectors dunning them at all hours. A check for $20 is a small price to pay to be shed of that worry. Multiply that by thousands of letters, and you have a nice subscribership built on peeople who would rather pay a few bucks in the equivalent of blackmail than be sued.

So this is what business has come to nowadays.

Years ago there was a common scam that an unscrupulous business would send you a package — a pair of stockings, say, or a small box of candy — that you did not order. If you opened it, you were obligated to pay the enclosed invoice, which might be 10, 20 or 50 times more than you would pay for a similar item downtown at the nicest department store. The UCC put an end to that by providing that if a merchant sends you merchandise you did not order, it is yours to keep.

At least that is my understanding of the law. I don’t believe our legislature has changed it. Could be that the law was changed in Washington, where corporations that pay the price of admission to the halls of the Capitol have acquired immense power over those who are supposed to represent us, to the extent that now corporations are recognized as being people … as in “We, the people …”

We’re not going to pay the magazine its extortion. I hope many others who receive similar letters recognize this for the scam it is and trash that offensive letter.

Whatever it takes. That seems to be the code of commerce in this age.

Binding a Minor to a Settlement

August 14, 2014 § 4 Comments

Minors can not act for themselves. That creates some obstacles when a minor is injured in an accident, and the insurance company or some other paying party needs a signature on a  release to settle the claim.

In Matter of Wilhite: Woolbright v. Wilhite, handed down September 10, 2013, by the COA, 18-year-old Lacey Wilhite had been severely injured in a catastrophic collision with a drunk driver. Her mother, Celeste Sloan, who had custody, filed a petition to be appointed guardian. Lacey’s father, Rodford, with whom Lacey had been living for several years before the accident, in response filed a petition to be appointed guardian and for custody.

The chancellor appointed Rodford as guardian, and authorized him to accept the insurance company’s tender of policy limits in the amount of $100,000. The judge also approved the contract of the attorney for Rodford for a 25% contingent fee. More about that attorney’s fee in a bit.

On appeal, Sloan’s lawyer argued that, even though her contract with Sloan had not been approved by the court, she had a reasonable expectation of compensation from the child’s estate, based on quantum meruit. The COA disagreed. Beginning at ¶11, Judge Fair explained:

Sloan may have been a “natural guardian” of Lacey under Mississippi Code Annotated section 93-13-1 (Rev. 2004), but the chancery court is the “superior guardian.” See Carpenter v. Berry, 58 So. 3d 1158, 1163 (¶19) (Miss. 2011). As the Mississippi Supreme Court detailed in Mississippi State Bar Association v. Moyo, 525 So. 2d 1289, 1293-96 (Miss. 1988), there are three ways to bind a minor in a settlement: (1) removal of the disability of minority, (2) the formal appointment of a guardian, and (3) the chancery court’s approval, without a guardianship, when the claim is worth $25,000 or less (Mississippi Code Annotated section 93-13-211 (Supp. 2012)). It stands to reason that a parent who has no authority to bind her daughter’s estate in a settlement cannot bind the estate to an attorney’s fee contract, particularly when such a contract would have to be, but was not, approved by the chancery court. See UCCR 6.12. In Carpenter, 58 So. 3d at 1163 (¶19) (citation omitted & emphasis added), the supreme court reiterated its longtime holding that:

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 a 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. 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.

See also Union Chevrolet Co. v. Arrington, 162 Miss. 816, 826-27, 138 So. 593, 595 (1932) (original source) …

You can take away from that that there are no shortcuts in obtaining a release that is binding on a minor. You can either: (1) get the disabilities of minority removed, which you will likely find to be a hard sell; or (2) have a guardian appointed, who can petition the court to approve an on-the-record minor’s settlement; or (3) present the matter as a minor’s settlement not requiring a guardianship, if the settlement amount is below the statutory amount and the chancellor finds it to be in the child’s best interest. That’s it. The parents can not bind the child acting in their capacities as parents without court approval.

Another feature of this case is that both parents hired their own attorneys to take legal action for the benefit of Lacey before a guardianship was established, and neither had their contract approved in advance by the court. The trial court rejected Ms. Sloan’s attorney’s contract, which called for 33 1/3% of the settlement, and approved that of Mr. Wilhite for 25% The chancellor also reduced Sloan’s attorney’s quantum meruit claim to $2,500, despite that she claimed to have invested 125 hours in the case. The COA affirmed

You can read the COA’s rationale for yourself. What is important here is that you appreciate that when you go out on a limb without court approval in a case such as this, you run the risk of recovering nothing or a greatly reduced fee. UCCR 6.12 clearly lays out what is required. Here it is, broken down point by point for clarity:

  • Every petition by a fiduciary or attorney for the allowance of attorney’s fees for services rendered shall set forth the same facts as required in Rule 6.11, touching his compensation, and if so, the nature and effect thereof.
  • If the petition be for the allowance of fees for recovering damages for wrongful death or injury, or other claim due the estate, the petition shall show the total amount recovered, the nature and extent of the service rendered and expense incurred by the attorney, and the amount if any, offered in compromise before the attorney was employed in the matter.
  • In such cases, the amount allowed as attorney’s fees will be fixed by the Chancellor at such sum as will be reasonable compensation for the service rendered and expense incurred without being bound by any contract made with any unauthorized persons.
  • If the parties make an agreement for a contingent fee the contract or agreement of the fiduciary with the attorney must be approved by the Chancellor.
  • Fees on structured settlements shall be based on the “present cash value” of the claim. [Emphasis added]

Before you go crashing off into a case involving a minor’s interest, think through what you are being called on to do, and cover your bases. If you don’t, you might find, much to your chagrin, that you have donated a lot of free work to the youngster.

An Archaicism that Needs to be Fixed

August 13, 2014 § 1 Comment

If one is to follow the statutory scheme as it currently stands in estate matters, here is what one would do after opening an estate:

  • Unless waived by the court, warrants of appraisal issue under seal of the court “commanding three or more discreet persons not related to the deceased or interested in the estate” to make inventory and appraisal. Any three or more of the appointees may act. The warrant commands the appraisers to set aside the exempt property and one year’s support “and tuition” for those eligible (MCA 91-7-109 and -111).
  • The form of the warrant is provided in MCA 91-7-113.
  • The appraisers must report to the court the personal property that is exempt, and “set it apart” to the widow and/or children of the decedent. The court may allow or disallow all or part of the report, with instructions to the appraisers (MCA 91-7-117 and -137).
  • Defaulting appraisers may be fined.
  • MCA 91-7-93 requires executors and administrators, within 90 days of appointment, to inventory the money of and debts due to the decedent.

I could actually go on, but let me stop here and ask: Who has ever heard of an estate being administered in that fashion in any of our lifetimes?

Most attorneys ask to waive appraisement and work with the fiduciary to arrive at an inventory for the court to approve.

The problem is that, other than the cumbersome 3-headed appraisal procedure stated above, there is no clearcut procedure to determine the exempt property that passes outside the estate. Yes, I said outside the estate. That’s because MCA 91-7-117 specifically states that title of the widow and children to the exempt property vests in them by operation of law upon death of the decedent. DeBaum v. Hulett Undertaking Co., 169 Miss. 488, 153 So. 513, 515 (1934).

I think that Title 91, Chapter 7, needs to be rewritten — NOT to import some exotic provisions from other states that would drastically change our Mississippi probate practice — but rather to eliminate some of these archaic, unused, impractical provisions that clutter and confuse our code, and replace them with simple, clear, direct statements that reflect how lawyers and judges actually do business in these matters.

These points at a minimum need to be addressed:

  • The code needs to charge the fiduciary with the responsibility to identify and report to the court the exempt property, and to obtain the court’s ruling as soon as possible after opening the estate.
  • The 3-appraiser procedure needs to be abolished. When it was adopted in 1848, I am sure it was quite nifty. Today, it would cost a fortune to hire three disinterested persons to investigate the belongings of an individual, determine values, and report to the court not only the items and their values, but determine what is exempt and recommend a year’s support.

A previous post dealing with exempt property and estates is at the link.

Checklists, Checklists, Checklists

August 12, 2014 § 11 Comments

You can skip over this post if you’ve been paying attention to this blog for any appreciable length of time.

For you newcomers and oblivious long-timers, you need to know and appreciate that proving many kinds of cases in chancery court is a matter of proving certain factors mandated from on high by our appellate courts. I’ve referred to it as “trial by checklist.” 

If you don’t put on proof to support findings of fact by the chancellor, your case will fail, and you will have wasted your time, the court’s time, your client’s money. You will have lost your client’s case and embarrassed yourself personally, professionally, and, perhaps, financially.

I suggest you copy these checklists and have them handy at trial. Build your outline of the case around them. In your trial preparation design your discovery to make sure that you will have proof at trial to support findings on the factors applicable in your case. Subpoena the witnesses who will provide the proof you need. Present the evidence at trial that will support the judge’s findings.

If the judge fails to address the applicable factors in his or her findings of fact, file a timely R59 motion asking the judge to do that. But remember — and this is critically important — if you did not put the proof in the record at trial to support those findings, all the R59 motions in the world will not cure that defect.

Here is an updated list of links to the checklists I’ve posted:

Attorney’s fees.

Attorney’s fees in an estate.

Adverse possession.

Child custody.

Child Support.

Grandparent visitation.

Equitable distribution.

Income tax dependency exemption.

Modification of child support.

Periodic and rehabilitative alimony.

Lump sum alimony.

Separate maintenance.

And here are two checklists that will help you in probate matters:

Closing an estate.

Doing an accounting in a probate matter.

What has to be Re-addressed in an Equitable Distribution Remand?

August 11, 2014 § Leave a comment

When equitable distribution is reversed and remanded for a do-over, alimony has to be redone also, because the two are inextricably intertwined; as equitable distribution expands, alimony contracts, and vice versa.

But what about child support?

The COA’s decision in Rodrigue v. Rodrigue, handed down July 29, 2014, reminds us that child support and attorney’s fees have to be revisited, as well:

¶47. Deidi argues that the chancellor committed error in the computation of child support and by not awarding her attorney’s fees. As set forth above, in Lauro [v. Lauro, 847 So.2d 843, 850 (¶17) (Miss. 2003)], the Mississippi Supreme Court determined that since the case was remanded for further consideration of equitable division, the chancellor should be instructed “to revisit the awards of alimony and child support after he has properly classified and divided the marital assets.” Lauro, 847 So.2d at 850 (¶17). Thus, since this case has been remanded for further consideration of equitable division of assets and alimony, on remand, the chancellor will have all the tools of marital dissolution available: equitable division, lump-sum alimony, and periodic alimony. Likewise, the chancellor may revisit the awards of child support and attorney’s fees.

I was aware of the language in Lauro that requires the remand court to look not only at equitable distribution, but also at alimony and any child support. I was unaware that the remand also embraced attorney’s fees. It is logical, though, that the judge on remand, after completing a re-analysis of the division of the marital estate, and after the award of alimony and child support, could arrive at a different conclusion about ability to pay attorney’s fees.

An interesting feature of this case is that the chancellor did not treat a private-school debt, apparently for tuition, as a marital debt. It’s pure speculation on my part, but I will bet that stems from the chancellor’s confusion over how exactly to treat private school expenses. It’s a confused area, with cases going every which way. If we need some bright line guidance in an area, private school expenses is one.

The Laws of Stupidity

August 8, 2014 § 5 Comments

My posts have taken on a somewhat sententious tone lately, so I am going to temper that for a while. But before I do, I want to address a subject that lawyers and judges deal with every day: stupidity.

One might expect that stupidity is a force that ricochets through human nature unconstrained by the basic principles of physics and rationality that underlie the affairs of humankind.

Not so, says Italian Economic Historian Carlo Maria Cipolla (1922 – 2000), who came up with the idea that there are actually laws that govern the operation of stupidity. By stupidity in this context, we are talking about conduct that involves unthinking and irrational behavior, willful ignorance, brutishness, obtuseness in the face of overwhelming evidence that such a course of action is self-destructive or destructive to others, and senseless activity.

Cipolla posited five fundamental Laws of Stupidity:

  1. Always and inevitably each of us underestimates the number of stupid individuals in circulation.
  2. The probability that a given person is stupid is independent of any other characteristic possessed by that person.
  3. A person is stupid if they cause damage to another person or group of people without experiencing personal gain, or even worse causing damage to themselves in the process.
  4. Non-stupid people always underestimate the harmful potential of stupid people; they constantly forget that at any time anywhere, and in any circumstance, dealing with or associating themselves with stupid individuals invariably constitutes a costly error.
  5. A stupid person is the most dangerous type of person there is.

You can reflect on these and come up with your own thoughts. Mine:

  • Law #1. As the old saying goes, “Never ascribe to malice what can be adequately explained as stupidity.” Most people who operate rationally assume that everyone else does also. That’s simply not so. Many people bumble along unthinkingly, leaving a wake of damage on themselves and others. The only way to protect yourself from stupid people is to recognize them and neutralize or protect yourself from their impact on your life as much as you can.
  • Law #2. Just because a person is suave and urbane, or shares your religion or political party, or is extremely likeable or has a forceful, commanding personality, does not mean that that person is not stupid. Also, bear in mind that there are stupid people who do stupid things, and there are non-stupid people who do stupid things. The former are dangerous; the latter are unfortunate (and, alas, include most of us).
  • Law #3. There are serious ramifications when we vest authority in stupid people. These are the people who clamor that the house needs to be burned down because it needs painting. In the name of principle or dogma or doctrine they ignore the possibility of unintended consequences and exhort their followers to embrace self-destructive ways. If reason conflicts with their convictions, reason be damned.  
  • Law #4. See Law #3. Too often, we realize only in hidsight that we have made the costly error of placing our welfare in the hands of stupid people, or have allowed them to lead us into a swamp that is hard to get out of.
  • Law #5. Collateral damage from stupid people can be especially galling. Despite our best efforts to protect ourselves, the ripple effect of stupidity can blindside us, capsizing us into waters that can threaten to overwhelm us.  

While we’re on the topic, it’s important to distinguish between ignorance and stupidity. Knowledge cures ignorance; knowledge is irrelevant to the stupid. Many of us make the mistake of wasting time and effort to address stupidity by elucidating facts and posing rational arguments. That approach will avail for the ignorant person, but it is absolutely ineffective on the stupid.

A grizzled, old lawyer told me in my youth that, “If they ever stop making stupid people, the legal profession will be doomed.” Cynical, yes. Inaccurate, no.

A Dog Bites Man Case

August 7, 2014 § 2 Comments

Charles Anderson Dana, Civil-War-era managing editor and part-owner of the New York Tribune newspaper is credited with the astute observation that “When a dog bites a man that is not news, but when a man bites a dog that is news,” or words to that effect.

So, when a particular case from our appellate courts is not news, so to speak, I guess one could call it a “Dog-bites-man case.”

Squarely in that category is the COA’s July 15, 2014, decision in McBride v. McBride, which ascended to that lofty court from a chancellor’s ruling in the midst of a contentious series of legal battles between Lindsey and Jimmie McBride, a divorced couple, over custody and visitation. Lindsey had opened a second front in the pair’s warfare by enlisting the aid of a sympathetic family court in Louisiana. Jimmie counterattacked with another round of modification pleadings in Mississippi.

The chancellor’s ruling was this:

Jimmie’s “[p]etition for [m]odification of [v]isitation/[c]ustody shall be stayed for thirty (30) days from the date of entry of this order upon condition that within said thirty (30) days the Louisiana [c]ourt, on [Lindsey’s] motion, set aside [its] May 17, 2012 [o]rder, and allow [Jimmie] to answer the Rule to Show Cause filed on March 9, 2012[,] in the Louisiana [c]ourt. In the event that does occur, counsel for each party shall notify [the chancery c]ourt at which time [the chancery c]ourt shall recognize that a proceeding concerning the custody of the child is pending in [Louisiana], and [the chancery c]ourt will consider whether or not it should transfer jurisdiction to [Louisiana] . . . . In the event the Louisiana court does not set aside [its] May 17, 2012 [o]rder within said thirty (30) days, [Jimmie] may set for hearing his [p]etition for [m]odification of [v]isitation/[c]ustody.”

Not particularly satisfied with this ruling, Lindsey appealed. She did not request to file an interlocutory appeal.

Now, if you have been paying even scant attention to this blog in the past year or so, I think you’ll guess correctly where this is heading.

The chancellor’s ruling left Jimmie’s modification action pending, and the chancellor did not certify his order under MRCP 54(b). Result = Appeal dismissed. Not really news. Happens every time … and quite frequently.

This has been a slow chancery-news summer, so a dog-bites-man case was newsworthy enough to merit a post. But, a man-bites-dog case … now there’s some real news. I’ll be waiting for one to report on.

A Few Random Thoughts About Pre-Nups

August 6, 2014 § 3 Comments

If you’ve practiced law for any length of time, you have been confronted with this scenario:

Mr. X, a client for whom you likely have done some agreeable work before, enters your office accompanied by a pleasant woman, Miss Y, who is introduced as his fiancée.

After the initial pleasantries, Mr. X informs you that the happy couple is being married tomorrow, and they need you to prepare an antenuptial agreement. It should not be any big problem, because they have agreed, after much discussion, to the terms upon the piece of notebook paper that Mr. X pulls out of his wallet and lays on your desk. If you will have it typed up, they will sign it and go forth to embark on an ensuing lifetime of marital bliss, they tell you while gazing lovingly into each other’s eyes (eyelashes batting furiously).

Now, let’s stop right there before you hand it to your secretary to type up. Let’s consider a few points:

  • Antenuptial agreements are enforceable, if they are fair in their execution and a full disclosure of assets and liabilities has been made. Smith v. Smith, 656 So.2d 1143 1147 (Miss. 1995). If the parties agree to language that a full disclosure has been made, that creates a presumption that it was done. See, Kitchens v. Estate of Kitchens, 850 So.2d 215, 217 (Miss. App. 2003). The presumption may, however, be overcome by proof of fraud, misconduct, or overreaching. Id. In a case I had recently, both parties testified that neither had the benefit of any financial disclosures of the other, and neither had any clue as to the financial situation of the other, effectively negating the language in their own agreement.
  • Just as in an irreconcilable differences divorce, you can not ethically represent both parties. You need to make it clear that you can only represent one, and my suggestion is that it be the one with whom you had a previous attorney-client relationship. In a case where you represented neither or both before, they will have to choose.
  • You need to confer separately with your client about the content of the agreement, and you need to inform the other party that (s)he should seek and obtain independent legal advice. This is critical. Laypeople do not understand the intricacies and nuances of marital property, alimony, and divorce, and the seemingly innocuous provisions they jotted down on that paper may have far-reaching and even drastic repercussions for either or both later in the context of a divorce or estate.
  • Whom you represent, and the fact that you have not provided legal advice to the the other party, and that the other party is aware of the need to consult with independent counsel, all need to be spelled out in the agreement you draft
  • And while I am on that point, fastidiously avoid saying or doing anything that can be construed as legal advice to the unrepresented party. I can guarantee that that will come back and bite you in your nether regions.
  • Seriously consider whether you even want to touch this with the virtual ten-foot pole. Can all the bases be covered in the brief twenty-four hour period? Who will be held responsible if it all blows up in your client’s face? Do you have time to do the investigation and consultation with your client necessary to protect him?

It’s for another post to talk about the ingredients of an effective, successful pre-nup. My advice is, unless you have a tried-and-proven form in which you have complete confidence based on its being upheld in other cases, you should not even attempt to do one. I also suggest that you never do a pre-nup at the eleventh hour, as was the case here.

The Calculating Judge

August 5, 2014 § 10 Comments

I don’t think I’m overstating when I say that the sum of case law requires chancellors to be at times mindreaders, engineers, valuation experts, tax experts, soothsayers, sages, interpreters, accountants, astrologers, psychologists, geneticists, mathematicians, theologians, and, always, legal scholars. I am sure, with a little research, I could add some more roles that our jurisprudence has conferred on chancery judges.

As for the role of mathematician, it has long been the law in Mississippi that the judge may do calculations to arrive at her conclusions. That almost goes without saying, since many cases we hear involve piles of bank statements, appraisals, balance sheets, general ledgers, financial statements, tax returns, and all kinds of other data that require number-crunching.

But how far does that computational authority extend?  

That was the question posed in the COA case of Pruitt v. Pruitt, decided July 29, 2014. In Pruitt, the chancellor had less than ideal proof of the value of the parties’ respective PERS accounts in an equitable distribution/alimony case. He requested further proof to support his decision, but the parties told him, in essence, that such proof was unavailable. In other words, “Judge, you’re on your own.”

Faced with what he apparently considered a dearth of proof, the chancellor found information in a PERS handbook and website that he used to calculate the value of the husband’s PERS account. Based on the figures he derived from his computations, the judge ordered Mr. Pruitt to pay Mrs. Pruitt alimony (or division of PERS benefits; it’s not clear to me which), and he awarded her a judgment for more than $90,000, which was his calculation of the difference in their estates.

Mr. Pruitt appealed. Judge Roberts, for the COA, addressed his issues:

¶9. Ira’s issue on appeal stems from the fact that after the parties went to trial, the chancellor found information from a PERS handbook and the PERS website and determined a value for Ira’s PERS retirement account. Ira argues that the chancellor erred by considering evidence outside the record. We agree.

 ¶10. In Dunaway v. Dunaway, 749 So. 2d 1112, 1121 (¶28) (Miss. Ct. App. 1999), a chancellor was faced with proof of valuation that was “something less than ideal.” Consequently, the chancellor “made valuation judgments” that had at least some evidentiary support in the record. Id. This Court stated that “[t]o the extent that the evidence on which the chancellor based his opinion was less informative than it could have been, we lay that at the feet of the litigants and not the chancellor.” Id. Accordingly, this Court found that the chancellor had not abused his discretion. Id.

¶11. Although a chancellor may value assets based on evidence that is based on something less than ideal, the chancellor’s valuation must be based on at least some evidentiary support in the record. In other words, we must draw a distinction between less-than-ideal evidence presented by parties to the litigation, and information outside of the record that neither party presented. Despite the chancellor’s clear and thorough attempt to resolve the issue in an equitable manner, under the precise circumstances of this case, we must find that it was an abuse of discretion to consider evidence that was outside the record. It follows that we remand this case for further proceedings.

Having said that, the COA’s remand instructions help illuminate the scope and approach that applies:

¶12. On remand, the chancellor may exercise his considerable discretion when calculating the manner in which Ira’s PERS retirement benefits should impact the equitable distribution of Ira’s and Lena’s marital assets and liabilities. We are aware of no restriction on the chancellor’s right to calculate Ira’s income based on the monthly payments he receives from his PERS annuity – at least to the extent that such income impacts Ira’s ability to pay Lena alimony. But we caution the chancellor to remain mindful that Ira cannot exercise any option to pay Lena a lump-sum figure from his PERS retirement account. Essentially, a lump-sum payment from Ira’s PERS account would operate as a qualified domestic relations order (QDRO). A QDRO is permissible in the context of a retirement account governed by the Employment Retirement Income Security Act (ERISA). See Parker v. Parker, 641 So. 2d 1133, 1137 (Miss. 1994). But ERISA does not apply to retirement plans that are “established and maintained for its employees by . . . the government of any State . . . .” 29 U.S.C. § 1321(b)(2) (2012). PERS was established “for the purpose of providing retirement allowances and other benefits . . . for officers and employees in the state service and their beneficiaries.” Miss. Code Ann. § 25-11-101 (Rev. 2010). Furthermore, accrued PERS benefits are “exempt from levy and sale, garnishment, attachment or any other process whatsoever, and shall be unassignable except as specifically otherwise provided in this article . . . .” Miss. Code Ann. § 25-11-129(1) (Rev. 2010). Therefore, a lump-sum payment from an accrued PERS retirement account is not permissible by way of a QDRO. We recognize that the chancellor’s order did not specifically attempt to award Lena any figure by way of a QDRO – at least not in name. When the chancellor denied Ira’s motion for reconsideration, he noted Ira’s claim that the lump-sum judgment was a “masked” QDRO “under another name.” The chancellor found no merit to Ira’s claim, but he did not discuss his reasoning. Notwithstanding the name used to describe the lump-sum judgment, the mechanics involved operate no differently than a QDRO. Most importantly, it is legally impossible for Ira to transfer a lump-sum figure from his PERS account. A legally impossible option is not an option at all.

That last paragraph is something you should clip and paste into your notebook of useful chancery information. 

Keep in mind that it’s up to the lawyers, and not the judges, to marshal and get into evidence the proof that will support their client’s case. It’s frustrating in the extreme for a judge to have an incomplete and inadequate record which the chancellor is required to analyze applying two, three, four, or more sets of appellate-court-mandated factors.

One point about this case has me scratching my head, though. MRE 201 specifically states that  “[a] court may look to any source it deems helpful and appropriate, including official public documents, records and publications …” Unless I am missing sosmething, I would guess that a PERS handbook and the agency’s website would come within that definition. I wonder whether the COA took into account or even considered the broad scope of judicial notice that the MSSC has allowed judges. I posted about the rather breathtaking scope of it here. Three points from that post:

  • In Witherspoon v. State ex rel. West, 138 Miss. 310, 320, 103 So. 134, 136-37 (1925), the court held that it was within the judge’s diecretion to ” … resort to … government publications, dictionaries, encyclopedias, geographies, or other books, periodicals and public addresses. (citing, inter alia, Puckett v. State, 71 Miss. 192, 195, 14 So. 452, 453 (1893)). Nothing in Rule 201 casts doubt on Witherspoon.”
  • In Enroth v. Mem’l Hosp. at Gulfport, 566 So. 2d 202, 205 (Miss. 1990), the chancellor’s decison was upheld, notwithstanding that he took judicial notice, without advising the parties in advance, of: (1) numerous newspaper articles discussing the nature, operation and funding of Memorial Hospital, (2) conversations with physicians, (3) conversations with the Chancery Judge’s own niece who was an employee at the hospital, (4) conversations with a lawyer not involved with this particular case but who was familiar with the matter, and (5) the fact that, before becoming Chancery Judge and in his prior capacity as a lawyer, he had been involved in a lawsuit regarding the hospital in which its legal status had been an issue.
  • In neither of these cases, nor in the more contemporary case cited in my previous post, to my knowledge, did the judges give advance notice of the matters of which they took judicial notice in their rulings.

Why was it error for the chancellor in Pruitt to consult with official publications in making his calculations, but it was not error in the cases cited above for the judges to range far beyone the record in making their findings?

Was it the computation in Pruitt that was the offending act, or was it going outside the record? I’ll leave it to you to calculate.

Publication Process When the P.O. Address of the Defendant is Stated

August 4, 2014 § 3 Comments

It can’t be overstated that the process requirements of MRCP 4 must be satisfied in every particular in order for the court to have personal jurisdiction over a defendant. There is no such thing as “close is good enough.” There are plenty of cases that hold that even if you can prove that the absent party knew of the proceedings, unless that party was properly served with process, the court has no jurisdiction.

MRCP 4(4)(A) allows you to obtain process by publication if you allege by sworn complaint or petition, or by affidavit, that the defendant is a non-resident, or is not to be found in this state, after diligent inquiry.

If the party’s post office address is unknown, you can proceed from there.

But, if you have a last-known address, there are some technical requirements that trip up many lawyers.

R4(4)(C) says expressly: ” … Where the post office address of the absent defendant is stated, it shall be the duty of the clerk to send by mail (first class mail, postage prepaid) to the address of the defendant, at his post office, a copy of the summons and complaint and to note the fact of issuing the same and mailing the copy, on the general docket, and this shall be the evidence of the summons having been mailed to the defendant.”

The rule puts the duty on the clerk, but let’s think about that a minute. What is the penalty if the clerk fails to mail or note on the docket? The penalty is that you have to do it over … and over again … until it’s done right. So, what do you do?

I think you have a choice between two ways to go …

  1. You bring your own extra copy or copies, as many as necessary, along with postage, and help the clerk get those copies into the envelopes and ready to mail, first class, postage prepaid, and then you ask the clerk — politely — to note the fact on the record. The principle being that if you want something done right, you should … well, you know the rest.
  2. You can whine and complain about how unjust and unfair this is. In the meantime, your client is stuck on the starting line, waiting for you to effect process.

I’ve posted about this before here, here, here, and here.

Where Am I?

You are currently viewing the archives for August, 2014 at The Better Chancery Practice Blog.