June 30, 2017 § 1 Comment
I try to jot down droll things that people say in the course of their testimony.
Here are two from just last week:
“It was her lies. That was the icing that broke the camel’s back.”
“I spend every penny on my children. It takes the cake to support them.”
My all-time favorite, reported here previously:
“Of course, you realize that the flip side of that coin is a two-edged sword.”
And a note that a defendant enclosed with his temporary alimony:
“I heard that your lawyer had a heart attack. I hope the little grease spot dies.”
That note was admitted into evidence along with several alimony checks with the entry “Fat cow extortion” on the memo line.
In a case I tried, a witness testified that the force of impact in a car crash was so great that her neighbor was “almost decapacitated.”
A woman testifying in a custody case repeatedly referred to her daughter as being “bi-polo.”
Pardon me for this one, but a woman earlier this week told the chancery clerks that she needed some papers “masturbated.” A clerk asked her if she meant notarized or certified. “No,” she said, “masturbated.”
And, finally, this actual exchange in my court:
Atty 1: Objection, irrelevant.
Court: How is that relevant?
Atty 2: I don’t know. I was just throwing up a Hail Mary hoping to hit something.
Court: Well, the pass is incomplete; call another play.
June 28, 2017 § Leave a comment
When is a contract really a will?
That was the question before the COA in the case of Estate of Greer: Oakes v. Ball, about which I posted a little over a year ago at the link. In that case, Greer had included this provision in a lease with the Nunnerys:
In the event of the death of the Lessor, this lease agreement shall not terminate, rather the rights and limitations of Lessor shall immediately be transferred to Linda Ball, who will also have the right to receive payments hereunder.
When the case went to trial, the chancellor concluded that the provision was merely a transfer of the Lessor’s interest, and was not testamentary.
On appeal, the COA reversed, holding that the provision was, indeed, testamentary in nature and, therefore, was unenforceable because it did not meet the requirements of a testamentary instrument such as subscription and being witnessed by two witnesses. The COA’s decision is at this link.
The MSSC granted cert., and on June 1, 2017, affirmed the COA. You can read the court’s opinion at this link; it includes so many footnotes that I simply do not have time to reformat to accommodate all of them.
The important point from this case is that, if the grantee’s right will vest only upon the death of the grantee, then the instrument is is testamentary and must meet the formal requirements of a will in order to enforceable according to its terms.
The court rejected the argument that Ball could validly enforce the contract as a third-party beneficiary.
Justices Kitchens, King, and Chamberlin would have distinguished the case from prior case law on the basis that this one involved a lease contract as opposed to a deed. They make several other compelling arguments that you might find helpful when dealing with similar issues.
June 27, 2017 § 1 Comment
When a widow renounces a will that does not make provision for her or makes inadequate provision, the will proponent may assert abandonment or desertion of the marriage as a defense to the renunciation.
That is what happened in the case of Estes and Estes, Co-Executors of the Estate of Estes v. Estes. I previously posted about the case, in which the COA reversed the ruling of the chancellor that Sarah Estes had not abandoned or deserted her dying husband so as to bar her from renunciation. You can read my take on the case at this link. I made this statement in that post:
What bothers me somewhat here is that our law allows the chancellor, and the chancellor alone, to choose whom to believe and what weight to give testimony. Here, the facts were in dispute, and the chancellor gave more weight to Sarah’s side of the story, as was his prerogative.
Sarah filed a petition for cert, which the MSSC granted. In Estes and Estes, Co-Executors of the Estate of Estes v. Estes, handed down June 1, 2017, the MSSC reversed the COA, affirmed the chancellor, and remanded the case for further proceedings consistent with the court’s ruling. Chief Justice Waller wrote for a unanimous court, Maxwell not participating:
¶10. The standard of review on “findings of fact by a trial judge without a jury [is] manifest error, including whether the findings were the product of prejudice, bias, or fraud, or manifestly against the weight of the credible evidence.” Hale v. State Democratic Exec. Comm., 168 So. 3d 946, 951 (Miss. 2015) (quoting Young v. Stevens, 968 So. 2d 1260, 1263 (Miss. 2007)). This standard of review precludes the “scouring [of] every record before the Court for any and all information which might contradict a . . . court’s factual finding” since this would “amount to an inspection for errors that are far less conspicuous than those that are ‘unmistakable, clear, plain, or indisputable.’”Id. (quoting Black’s Law Dictionary 963
(6th ed. 1990)).
¶11. The Court of Appeals in Estes I directed the chancellor, on remand, to consider the “clear-abandonment standard” of Tillman v. Williams, 403 So. 2d 880 (Miss. 1981). Following the trial, the chancellor addressed the issue of clear desertion, finding that Estes had failed to meet the burden of proof. The following was included in the chancellor’s factual findings and judgment:
Critical to a determination of Sarah’s clear desertion and abandonment of the marriage and resultant estoppel from claiming a statutory right to an inheritance are the facts following Joe’s October hospitalization. According to Sarah, after Joe was discharged from the hospital, he began to act irrationally. He accused her of infidelity and the theft of groceries. On November 26, 2006, Sarah called Joe’s physician, Dr. Pinson, to seek advice on how to help Joe. Sarah then filed a complaint with the Lee County Sheriff’s Department that Joe was threatening her and acting irrationally. A deputy sheriff came to Joe’s residence and made a report. Joe’s irrational behavior is born [sic] out by his refusal to dress appropriately and by him discharging a gun from inside his house through an open window. The severity of Joe’s mental difficulties is perhaps best documented, however, by his tragic May 18, 2007 suicide.
Regardless of the date of separation, the chronology of events following the parties’ separation is not disputed. On January 30, 2007, Sarah files a commitment proceeding against Joe. She attaches a copy of the previously mentioned Sheriff’s report. The two examining physicians fail to find Joe a danger to himself or other[s], i.e., not in need of involuntary commitment. On February 2, 2007, Joe seeks a restraining order against Sarah. Sarah counters on March 7, 2007, by filing for divorce. Joe answers and files a Counter-Complaint on March 27, 2007. On March 26, 2007, the parties agree to a mutual restraining order. On March 29, 2007, a temporary order is entered directing Joe to allow Sarah to retrieve her personal property. Guided by the applicable law and applying that law to the facts and having observed the witnesses, the Court is of the opinion that those urging an estoppel have failed to prove that estoppel.
While the facts exist which show a non-traditional marriage, Joe knew when the parties married that Sarah had, on a daily basis, the responsibilities of attending to her grandchildren. Moreover, Joe’s behavior was at times bizarre and the Court cannot say that Sarah willfully left and had the intention of permanently separating from the marital relationship. Mere absence from home, without more, does not show willfulness.
The court would note that Sarah’s consultation with Dr. Pinson on November 26, 2006, creates an inference that Sarah was trying to get Joe help. Moreover, seeking to have Joe committed, on January 30, 2007, rather than filing for divorce is suggestive to the Court that Sarah was trying to get Joe help and that the marriage was not over. Efforts by a spouse to get a spouse professional help should not be used against that spouse. Finally, the Court notes that Joe filed a Petition to restrain Sarah on February 2, 2007, which may well have caused Sarah to seek a divorce almost a month later. (Citations omitted).
¶12. The Court of Appeals listed the following facts it found in “conflict” with the chancellor’s findings:
(1) Estes becomes ill; (2) Young slowly reduces the amount of time spent with Estes; (3) Young attempts to involuntarily commit Estes; (4) Estes seeks a restraining order against Young upon release from the commitment proceedings; (5) Young files for divorce and restraining orders; (6) Estes counterfiles for divorce; and, (7) Estes takes his own life after receipt of notice for a final hearing on the divorce proceedings.
Estes v. Estes (Estes II), 2016 WL 1564404, *4 (Miss. Ct. App. Apr. 19, 2016). The Court of Appeals then stated the “most glaring evidence of Young’s abandonment of the marriage was her petition for divorce,” citing Tillman as primary legal support. Id.
¶13. However, the Tillman case actually used the language “secure a divorce.” Tillman, 403 So. 2d at 881. In Tillman, this Court reversed the trial court’s judgment, finding that “[a] thorough review of the record reveals that not only was an abandonment uncertain, but there just was not any substantial evidence to show a desertion or abandonment.” Tillman, 403 So. 2d at 882. In fact, Tillman holds that the requirement for clear proof of abandonment must be strictly construed:
Our Legislature has not seen fit to enact any legislation on this abandonment question. It is, therefore, obvious that the statute has to be strictly construed unless there is a clear desertion and abandonment that sets up the estoppel. In Walker, the surviving wife had engaged in a marriage ceremony with another man, and her deceased husband also had married another. There was a clear abandonment of the marriage relationship. Id. (citing Walker v. Matthews, 191 Miss. 489, 3 So. 2d 820 (1941)).
¶14. In Rowell v. Rowell, the Court also focused on the legal status change and determined that the trial court had erred when it had found that the widow’s adulterous relationship was grounds to show abandonment or desertion. Rowell v. Rowell, 251 Miss. 472, 170 So. 2d 267, 271-72 (1964). Relying on an Alabama case, the Court stated, “[a]s long as the marriage relation continued in law, the rights of the wife continued under the [descent and distribution] statute.” Id. at 270 (citing Nolan v. Doss, 133 Ala. 259, 261-62, 31 So. 969, 969-70 (1902)). The Rowell Court found that an adulterous relationship was not sufficient evidence of abandonment or desertion and that no evidence was presented that showed a bigamous marriage, which may have been grounds for abandonment. Id. at 271. The Court again focused on the legal change that occurs when someone remarries. Williams v. Johnson, 148 Miss. 634, 114 So. 733 (1927) (finding that the adulterous conduct was not at issue but only
whether a bigamous marriage resulted).
¶15. Following the renunciation of a will that fails to include the spouse, the will proponent may raise abandonment and desertion as estoppel to the renunciation. Rowell, 251 Miss. at 477-78, 170 So. 2d at 268. Mississippi Code Section 91-5-25 allows the surviving spouse automatically to renounce the will, thus the burden to show evidence of clear abandonment or desertion is on the aggrieved party. Miss. Code Ann. § 91-5-25 (Rev. 2013).
¶16. As this case is close factually and there was no legal change of marital status, we cannot say the chancellor was manifestly wrong in granting Sarah Young a child’s share of Joe Estes’s estate.
This decision illustrates the principle that, if the chancellor’s decision correctly applies the law, and her findings of fact are supported by substantial evidence in the record, the decision should be, and most often is, affirmed on appeal, no matter how close the question or how eyebrow-raising the outcome.
There is much useful law here on the law of renunciation and its defense. This is actually an issue that arises from time to time in chancery, and you would do well to be ready for it.
June 23, 2017 § Leave a comment
Reprise replays posts from the past that you may find useful today.
March 30, 2015 § Leave a comment
Have you ever stopped to ask yourself what the phrase “in evidence” means? We toss it around all the time. “Is that in evidence?” “Your honor, I object because that document is not in evidence.”
The phrase simply means that the judge or the jury can look at the document or hear the testimony, and can consider it in reaching a decision.
The meaning is simple, but the ramifications can be profound.
- If something is not in evidence, it is not part of the record. If it is not part of the record, the judge can not consider it.
- If you offered something into evidence and were denied, you must make the proffered evidence part of the record. If it was oral testimony, you must make an offer of proof (MRE 103(a)(2)). You can do this by requesting to make an “offer of proof,” or a “proffer.” The judge will then allow you to state on the record what the testimony would have been, or will allow you to do it in question-and-answer form (MRE 103(b)). If the ruling was one denying entry of a document in evidence, then you must ask that the document be marked for identification only, which request will always be granted. Remember that neither a proffer nor a document marked solely for identification may be considered by the judge in ruling on the merits; however, they are part of the record on appeal.
- Pleadings are not evidence. Just because you pled something does not mean it is proven.
- Never fail to put on proof based on your assumption that the judge will connect the dots and draw the conclusion favorable to your client. The judge might not. Or the judge might, but there will be inadequate evidence in the record to support the judge’s conclusions, which is the formula for reversal on appeal.
Make sure that every element or factor that you need to prove is supported by proof in evidence. A graphic illustrating this vital concept is here.
June 22, 2017 § 1 Comment
Susan and Thomas Leon Harris were divorced from each other in 2011. Their property settlement agreement provided that Leon would pay Susan $2,755 monthly in periodic alimony. The only contingency recited in the agreement was that the alimony would cease at Susan’s remarriage or death.
At some point after the divorce, Susan filed for and began receiving Social Security retirement benefits in the amount of $1,035 per month. Susan’s benefit was based on Leon’s earnings record and was described as “derivative” of his benefit.
After Susan filed a pleading asking the court to review part of the agreement, Leon counterclaimed to reduce or terminate the alimony because Susan had begin drawing benefits off of his earnings record. Following a hearing, the chancellor ordered that Leon should pay Susan only $1,720 per month in alimony, since he was already receiving $1,035 based on his earnings record. Susan appealed.
In Harris v. Harris, decided May 16, 2017, the COA affirmed. Since the opinion addresses two issues of interest to chancery practitioners, I am including Judge Irving’s entire analysis:
¶6. Susan asserts that the chancellor erred in modifying the Agreement before requiring Leon to show a material change in circumstances. Susan asserts that the Agreement is a binding contract that is devoid of fraud, unconscionability, or any other factors which would render it an invalid contract; thus, the chancellor erred by disturbing the Agreement’s terms. She cites Peebles, in which this Court held that a property-settlement agreement—like any other contract—is “an agreement made between the parties [and] should ordinarily be enforced, and the court should take a dim view of efforts to modify or reform the parties’ settlement agreement.” Peebles v. Peebles, 153 So. 3d 728, 732 (¶17) (Miss. Ct. App. 2014) (quoting McFarland v. McFarland, 105 So. 3d 1111, 1119 (¶23) (Miss. 2013)). Susan also cites Lestrade, in which this Court held that property-settlement agreements “entered into by divorcing parties and incorporated into the divorce decree are not subject to modification, except in limited situations.” Lestrade v. Lestrade, 49 So. 3d 639, 642 (¶10) (Miss. Ct. App. 2010).
¶7. In support of her argument that the chancellor erred when he granted Leon credit for the Social Security benefits that she was receiving without first requiring Leon to show that a material change in circumstances had occurred since entering into the Agreement, Susan cites this Court’s decision in Cockrell, which provides:
A payor spouse’s alimony obligation may be modified or even terminated if the spouse is able to show a material change of circumstances has occurred since the original divorce decree. West v. West, 891 So. 2d 203, 212 (¶21) (Miss. 2004) (citation omitted). However, “the material change must be one that was not reasonably anticipated at the time of the original decree.” Clower v. Clower, 988 So. 2d 441, 444 (¶7) (Miss. Ct. App. 2008) (citing Holcombe v. Holcombe, 813 So. 2d 700, 703 (¶11) (Miss. 2002)). A material change in the income and expenses of both parties should be considered in determining any modification of periodic alimony. Austin v. Austin, 766 So. 2d 86, 90
(¶19) (Miss. Ct. App. 2000) (citing Armstrong [v. Armstrong], 618 So. 2d [1278,] 1280 [(Miss. 1993)]).
Cockrell v. Cockrell, 139 So. 3d 766, 770 (¶12) (Miss. Ct. App. 2014). Susan contends that Leon cannot show a material change in circumstances, as his health status has not changed, and he is still working as a bank president like he was at the time of the divorce. Susan
argues that even if her receipt of Social Security benefits constitutes a material change, Leon should have reasonably anticipated at the time of the divorce that she would begin collecting Social Security benefits in a few years, since Leon was sixty-one years old and Susan was sixty years old at that time. She also points out that at the time the two entered into the Agreement, Leon could have reasonably anticipated the need for a clause addressing Susan’s probable receipt of Social Security benefits in a few years.
¶8. In response, Leon submits that neither Peebles nor Lestrade is proper authority for this issue because both cases address modification of property division, not modification of alimony. Leon references this Court’s decision in Clower, which provides that “[p]eriodic alimony can be modified by increasing, decreasing, or terminating the award due to a material change in circumstances.” Clower, 988 So. 2d at 444 (¶7). Leon asserts that he was not required to show a material change in circumstances because he was not attempting to modify his alimony payment; rather, he maintains that he was only seeking clarification from the court as to how to make his alimony payment, because the Agreement is devoid of language specifying from which source those payments may be derived.
¶9. Leon cites Spalding v. Spalding, 691 So. 2d 435, 439 (Miss. 1997), in support of his argument that the chancellor was correct in finding that he should be credited for Susan’s receipt of the Social Security benefits derived from his work record. The facts of Spalding are similar to those in the matter at hand. In Spalding, the appellant insisted that “the decision of the chancellor to credit derivative Social Security benefits against alimony represented a downward modification of the alimony granted to [the appellant],” and asserted that “[the appellee] failed to meet his burden of proof regarding a material change in circumstances.” Id. The chancellor, in considering whether derivative Social Security benefits could be credited against alimony, relied on the Mississippi Supreme Court’s decision in Mooneyham v. Mooneyham, 420 So. 2d 1072, 1073-74 (Miss. 1982), wherein the court held that Social Security payments derivative from the child-support payor should be credited against the payor’s child-support obligation. Spalding, 691 So. 2d at 438 (citing Mooneyham, 420 So. 2d at 1073-74). The Mississippi Supreme Court in Spalding affirmed the chancellor’s application of Mooneyham, finding that, in light of Mooneyham’s holding that “Social Security payments derivative from the child[-]support payor should be credited against the child support,” it could not “fathom any valid reason or reasonable logic” as to why the rule of law would be any different with respect to periodic alimony rather than child support. Spalding, 691 So. 2d at 439 (citations omitted).
¶10. We agree with Leon that Spalding is dispositive of the issue presented. Therefore, we affirm the decision of the chancellor. The Agreement between Leon and Susan did not specify or qualify the source of income for payment of the alimony obligation. It simply required that Leon pay the amount to Susan. Crediting Social Security payments derivative from Leon against his alimony obligation, as set forth in the Agreement, is not a breach of the terms of that Agreement. As Leon points out, Susan is receiving the same amount of alimony that she is entitled to under the Agreement, and she would not be receiving the Social Security payments unhinged from Leon’s Social Security earnings record. Thus, we find that the chancellor did not abuse his discretion in failing to require Leon to show a material change in circumstances because Leon’s obligation to pay alimony in the amount set forth in the Agreement remains the same.
I agree that Spalding is dispositive for the reasons stated.
I wonder, though, at the statement in ¶8 that Leon argued that he “was not attempting to modify his alimony payment; rather, he maintains that he was only seeking clarification from the court as to how to make his alimony payment, because the Agreement is devoid of language specifying from which source those payments may be derived.” That does not seem to square with the very first sentence of Judge Irving’s opinion that “Thomas L. Harris (Leon) — alleging that a material change in circumstances had occurred since the judgment of divorce from his former spouse, Susan Harris — filed a complaint …” That sounds like modification language, not clarification language.
At any rate, I think both the chancellor and the COA were on the right track in this case. Spalding controls.
Pointer: It seems that older couples are getting divorced at a greater frequency. You would do well to explore the effect Social Security will have on the parties’ post-divorce standard of living. If Susan wants her retirement benefit excluded or to allow only partial credit, the agreement should say so.
June 20, 2017 § 3 Comments
Yesterday we talked about Paige Electric Company’s unsuccessful challenge on appeal to an arbitration clause. The company had asked the circuit court to vacate the award because Davis & Feder were negligent as a matter of law, and that the arbitrator had disregarded the evidence and exceeded his authority. When the circuit judge denied their motion and dismissed their case, they appealed.
In Paige Electric Company v. Davis & Feder, P.A., decided on April 11, 2017, the COA affirmed. Judge Barnes wrote the opinion:
¶19. Paige Electric argues that the award should be vacated as Davis & Feder were negligent as a matter of law, and therefore, the arbitrator disregarded the evidence and exceeded the scope of his authority. The United States Supreme Court has held that in reviewing whether an issue is arbitrable, “considerable leeway [should be given] to the arbitrator” and his or her decision should be set aside “only in certain narrow circumstances.” First Options of Chicago Inc. v. Kaplan, 514 U.S. 938, 943 (1995). Errors of law or fact, or an erroneous decision of matters submitted to the judgment of the arbitrators, are insufficient to invalidate an award fairly and honestly made. Nothing in the award relative to the merits of the controversy as submitted, however wrongly decided, is ground for setting aside an award in the absence of fraud, misconduct or other valid objections. Wilson, 830 So. 2d at 1156 (¶12) (quoting Hutto v. Jordan, 204 Miss. 30, 36, 36 So. 2d 809, 811 (1948)).
¶20. “[J]udicial review of arbitration award is narrowly limited, and a motion to vacate, modify, or correct an arbitration award is not an opportunity to relitigate issues decided in the arbitration.” City of Hattiesburg v. Precision Constr. LLC, 192 So. 3d 1089, 1096 (¶27) (Miss. Ct. App. 2016). Mississippi Code Annotated section 11-15-23 (Rev. 2004) provides the four grounds upon which an arbitrator’s decision may be vacated:
(a) That such award was procured by corruption, fraud, or undue means;
(b) That there was evident partiality or corruption on the part of the arbitrators, or any one of them;
(c) That the arbitrators were guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown, or in refusing to hear evidence pertinent or material to the controversy, or other misbehavior by which the rights of the party shall have been prejudiced;
(d) That the arbitrators exceeded their powers, or that they so imperfectly executed them that a mutual, final, and definite award on the subject matter was not made.
“In Mississippi, we have always considered ‘undue means’ to constitute some nefarious conduct on the part of the arbitrator – not simply an incorrect or sloppy conclusion of law.” Robinson v. Henne, 115 So. 3d 797, 802 (¶17) (Miss. 2013) (citing McClendon v. Stewart, 133 Miss. 253, 258, 97 So. 547 (1923)). The Mississippi Supreme Court has held: “[A] mistake of law, a mistake of fact, or a decision lacking an evidentiary basis is insufficient to constitute a violation of any of the four statutory categories that permit the vacatur of an arbitrator’s decision.” Id. at 803 (¶19).
¶21. The circuit judge found that the arbitrator did not exceed his powers in this instance. She further concluded there was “nothing in this record to indicate that Mr. Latham refused or failed to review the case law, nothing to indicate he had any preconceived notions or opinions and certainly nothing to indicate what evidence he focused on or didn’t focus on.” We find no error in the circuit court’s holding. Giving a reasonable presumption “in favor of the validity of arbitration proceedings,” we affirm the circuit court’s judgment.
Between yesterday’s post and today’s, you can deduce the breathtaking sweep of rights that you cede when you agree to an arbitration clause in a contract. Not only do you give up your right to a jury trial, but you also surrender the right to appellate review except on quite narrow, difficult-to-prove grounds.
June 19, 2017 § Leave a comment
When Paige Electric Company retained the law firm of Davis & Feder, the retainer agreement included a clause requiring any dispute arising out of the agreement, including claims of legal malpractice, to be submitted to arbitration. Paige did sue the law firm, which invoked the arbitration clause, and the case was heard by Arbitrator Larry Latham, who ruled entirely in the law firm’s favor and denied Paige any relief.
Paige filed motions in Circuit Court to declare the arbitration clause void and to vacate the award. The circuit judge denied the motions, dismissed the suit with prejudice, and Paige appealed.
In Paige Electric Company v. Davis & Feder, P.A., decided April 11, 2017, the COA affirmed. Judge Barnes wrote for a unanimous court:
¶10. “In arbitration cases, . . . the scope of review is extremely limited.” Wilson v. Greyhound Bus Lines Inc., 830 So. 2d 1151, 1155 (¶9) (Miss. 2002). “The scope of judicial review of an arbitration award is quite narrow, and every reasonable presumption will be indulged in favor of the validity of arbitration proceedings.” Id. (quoting Craig v. Barber, 524 So. 2d 974, 977 (Miss. 1988)).
¶11. Addressing Paige Electric’s claim that the arbitration clause in the retainer agreement was unconscionable, and its alternative claim the malpractice claims involving the lien should be severed from the arbitration award and set for trial, the circuit court concluded that the company had waived any objection, as it had voluntarily consented to the arbitration.
¶12. Mississippi has not addressed the precise issue of whether a challenge to the validity of an arbitration clause may be brought post-arbitration. But other jurisdictions have held that participation in arbitration proceedings waives the right to object to an arbitrator’s authority. “A party cannot ‘sit silent, wait until an adverse award is issued, and then first argue that the arbitrator did not have the authority even to hear the claim.’” Advocate Fin. Grp. v. Poulos, 8 N.E.3d 598, 609 (¶53) (Ill. App. Ct. 2014) (quoting First Health Grp. v. Ruddick, 911 N.E.2d 1201, 1213 (Ill. App. Ct. 2009)); see also Ahluwalia v. QFA Royalties LLC, 226 P.3d 1093, 1098 (Colo. App. 2009) (“If a party willingly allows an issue to be submitted to arbitration, it cannot await the outcome and later argue that the arbitrator lacked authority to decide the matter.”). “[W]illing participation is consent to the arbitrator’s power to resolve the dispute.” Unite Here Local 23 v. I.L. Creations of Maryland Inc., 148 F. Supp. 3d 12, 19 (D.D.C. 2015). “Given that arbitration is an optional alternative to judicial resolution of disputes[,] . . . when the parties have agreed to arbitration, the law discourages the loser from seeking a second de novo (or even quasi-de novo) shot at obtaining its desired result[.]” Id. at 18-19.
¶13. Paige Electric argues that because there was a “separate contract prepared for lien claims against the hotel” produced on February 25, 2015, during discovery, “Paige Electric cannot be considered to have consented to arbitration,” and it “cannot be bound to any agreement to arbitrate the dispute over the lien claims[.]” [Fn 3] The circuit court judge declined to make any findings “whether there was a second contract or not,” because the lien claims were submitted for arbitration and had been decided by the arbitrator. But the court did observe that the “second contract . . . was known to Paige Electric in February by [its] own pleadings, and at that time [it] had fully the ability to say. . . these liens aren’t included.” The judge concluded:
[It] didn’t do that. What [it] did do, however, was go through the entire arbitration process, two and a half days of arbitration hearings, and then submit a post-hearing memorandum . . . [that] very clearly indicates the lien claims were considered and are part of the arbitration.
. . . .
And, therefore, the court finds [Paige Electric] waived any objection [it] may have had with regard to the arbitration of the lien claims. Whether the court agrees they would have been included or not, the parties agreed to include them, the arbitrator was presented those.
[Fn 3] The second “contract” was merely handwritten notes made by Brisolara on a legal pad, dated March 16, 2007, three days prior to the parties’ signing the retainer agreement. The note has Jerry Paige’s name at the top, and simply states “Hourly pay for lien. [One third]
for suit” and that Jerry Paige “wants to sign contract against [SCS and] Studio Inn and file suit.” There is no evidence that Paige Electric signed a second contract for the lien work at an hourly rate; nor is there evidence Davis & Feder billed Paige Electric for this work.
¶14. At no point prior to or during the arbitration hearing did Paige Electric object to arbitrating the lien claims. Paige Electric was represented by counsel throughout this process, and the parties agreed to arbitration; it was not court-ordered. In a letter to Davis & Feder, dated June 12, 2013, counsel for Paige Electric stated that “[t]here is no objection to this [arbitration] procedure,” and he requested that “appropriate steps be taken at this time to arrange for arbitration of this claim[.]” Thus, we find no error in the circuit court’s determination that Paige Electric waived its right to object to the validity of the arbitration clause and to the arbitration of the lien claims.
¶15. Notwithstanding the waiver of the claims, we find no merit to Paige Electric’s claim that the arbitration clause was procedurally unconscionable because the arbitration clause was not properly explained to Jerry Paige, and because the clause is “inconspicuous” and used “overly broad verbiage.” Whether an arbitration clause is procedurally unconscionable can be shown by: “(1) lack of knowledge; (2) lack of voluntariness; (3) inconspicuous print; (4) the use of complex, legalistic language; (5) disparity in sophistication or bargaining power of the parties; and/or (6) lack of opportunity to study the contract and inquire about the terms.” See Caplin Enters. Inc. v. Arrington, 145 So. 3d 608, 614 (¶12) (Miss. 2014) (citing MS Credit Ctr. Inc. v. Horton, 926 So. 2d 167, 177 (¶29) (Miss. 2006)).
¶16. The retainer agreement was a simply-worded five-page agreement, and the arbitration clause took up an entire page of the contract, in an easy-to-read font. Compare E. Ford Inc. v. Taylor, 826 So. 2d 709, 716-17 (¶21) (Miss. 2002) (finding an arbitration provision “procedurally unconscionable,” as the “preprinted” arbitration clause “appears less than one third the size of many other terms in the document, [and] appears in very fine print and regular type font”). Moreover, in the June 12, 2013 letter from Paige Electric’s counsel to Davis & Feder, the attorney stated that “[Jerry] Paige advises me that his contract with Davis [&] Feder requires all disputes with clients be arbitrated,” indicating an understanding by Jerry Paige of the agreement’s terms and conditions.
¶17. We also reject, on the merits, Paige Electric’s alternative claim that the arbitration clause only applied to the representation for the claim against SCS for payment, not the claims related to the “prosecution of any liens or related claims against Hancock Hotels,” and that “the malpractice claims related to the hotel owner should be severed and set for trial before a jury.” Paige Electric cites Complaint of Hornbeck Offshore (1984) Corp., 981 F. 2d 752, 754-55 (5th Cir. 1993), to support its claim. However, the retainer agreement states that the provision regarding the arbitration of disputes “shall apply to any dispute between the parties which arises from, or is related to, a claimed breach of this agreement[.]” (Emphasis added). In Hornbeck, the United States Court of Appeals for the Fifth Circuit specifically held that “arbitration clauses containing the ‘any dispute’ language . . . are of the broad type.” Id. at 755. “[I]t is difficult to imagine broader general language than that
contained in the arbitration clause, ‘any dispute.’” Id. (citation omitted). The Mississippi Supreme Court has also held:
Broad arbitration language governs disputes “related to” or “connected with” a contract, and narrow arbitration language requires arbitration of disputes that directly “arise out of” a contract. . . . Because broad arbitration language is capable of expansive reach, courts have held that “it is only necessary that the dispute touch matters covered by the contract to be arbitrable.” Horton, 926 So. 2d at 176 (¶¶24-25) (quoting Pennzoil Exploration & Prod. Co. v. Ramco Energy Ltd., 139 F.3d 1061, 1067-68 (5th Cir.1998)). We find the lien claim against the hotel owner was directly “related to” Paige Electric’s claims against SCS; the lien against the hotel owner was necessary only in the event that Paige Electric could not collect a judgment from SCS.
¶18. Accordingly, we find the circuit court did not err in denying Paige Electric’s motion to declare the arbitration clause invalid, or alternatively, to sever Paige Electric’s lien claims from the arbitration award and set those claims for trial.
A few observations:
- Unless you can build a convincing case based on those factors in ¶15 up there, you will find it mighty hard to get around an arbitration provision in a freely-negotiated contract.
- If you’re planning to include an arbitration clause in your retainer agreements, be sure it’s as broad as possible.
- When you wait until after the arbitration is concluded to raise the issue of the validity of the arbitration clause, you’ve waited too late.
We’ll talk in another post about Paige’s claim that the arbitration clause should have been vacated by the circuit court.
June 14, 2017 § 9 Comments
It was seven years ago today that I started my quest via this blog to influence as many lawyers as I could to be better chancery practitioners, to reach higher, to be more professional, and to be the best lawyers they could be.
It has been gratifying to run into lawyers and judges who tell me that they do draw inspiration and useful information, and even humor, from this blog. Mission accomplished as to them.
When it comes time to hang up my robe and turn this office over to my successor, I will have been a successful chancellor if I inspired the lawyers with whom I came in contact to improve their practices and become better … better lawyers, better people, better at all they do. If, on the other hand, those who crossed my path are no better or are worse, then I failed.
That’s why I’ll continue this for the time being. It’s a quest to influence people, particularly lawyers. Oh, and along the way it’s even helped me make some friends.