The Rule 59 Motion and the Scope of the Appeal

April 24, 2018 § Leave a comment

Can an MRCP 59 motion that is limited in scope have the effect of limiting the scope of your appeal?

Jennifer Baumbach argued in her appeal to the COA that her ex, Robert, had foregone the issue of child custody by not raising it in his R59 motion following entry of their divorce judgment. In the case of Baumbach v. Baumbach, decided April 3, 2018, the court rebuffed her argument, per Judge Barnes:

¶20. Citing Jennifer’s previous attempts to interfere with his visitation, Robert claims the chancellor’s decision to award Jennifer sole physical custody of the children “was against the weight of the evidence and should be overturned.” Jennifer contends that because Robert did not address the issue of custody in his motion to amend the judgment, he is procedurally barred from asserting it on appeal. However, in reference to Mississippi Rule of Civil Procedure 59, the Mississippi Supreme Court has stated:

[Although i]t is clearly the better practice to include all potential assignments of error in a motion for new trial . . . when the assignment of error is based on an issue [that] has been decided by the trial court and duly recorded in the court reporter’s transcript, . . . [an appellate court] may consider it regardless of whether it was raised in the motion for new trial.

Kiddy v. Lipscomb, 628 So. 2d 1355, 1359 (Miss. 1993); see also Jackson v. State, 423 So. 2d 129, 131 (Miss. 1982) (“[I]t is not necessary to make a motion for a new trial grounded upon errors shown in the official transcript of the record, including the pleadings, transcribed evidence, instructions, verdict[,] and judgment of the court.”). Since the issue of child custody was clearly decided by the chancery court at trial, we find any failure to raise this issue in Robert’s motion to alter or amend the judgment does not bar it from review on appeal.

That certainly has been the rule in chancery court bench trials from time immemorial, or at least as long as I can remember. I’ve posted about it previously here and here.

Notwithstanding all that, I still encourage you to plead the figurative kitchen sink in your R59 motions. A post explaining my thoughts on the matter is at this link.

Summoning the Unknown

April 23, 2018 § Leave a comment

It’s frustrating and expensive to find out that your summons by publication for unknown heirs is rejected because you didn’t do it right. Nine out of ten times the flaw is in the affidavit that is required to precede publication.

“What?” you say, “there must be an affidavit?”

Oui, mon ami. Consider the language of MRCP 4:

MRCP 4(c)(4)(D): When unknown heirs are made parties defendant in any proceeding in the chancery court, upon affidavit that the names of such heirs are unknown, the plaintiff may have publication of summons for them and such proceedings shall be thereupon in all respects as are authorized in the case of a nonresident defendant …

MRCP 4(d)(4)(A): If the defendant in any proceeding in a chancery court, or in any proceeding in any other court where process by publication is authorized by statute, be shown by sworn complaint or sworn petition, or by a filed affidavit, to be a nonresident of this state or not to be found therein on diligent inquiry and the post office address of such defendant be stated in the complaint, petition, or affidavit, or if it be stated in such sworn complaint or petition that the post office address of the defendant is not known to the plaintiff or petitioner after diligent inquiry, or if the affidavit be made by another for the plaintiff or petitioner, that such post office address is unknown to the affiant after diligent inquiry and he believes it is unknown to the plaintiff or petitioner after diligent inquiry by the plaintiff or petitioner, the clerk, upon filing the complaint or petition, account or other commencement of a proceeding, shall promptly prepare and publish a summons to the defendant to appear and defend the suit. The summons shall be substantially in the form set forth in Form 1-C.

Notice that the affidavit is required to be made and filed before publication.

Here’s the 1-2-3 of how to do it:

  1. Have your fiduciary or someone with personal knowledge sign an affidavit that (a) there are no other persons known to be heirs of the decedent, and, if there are, they are unknown to the affiant, (b) after diligent inquiry.
  2. The affidavit must be filed before issuance of the summons.
  3. The publication must be substantially in the form of Form 1-C.

That’s all there is to it. That will result in an effective publication.

It’s important that you do it right, because bad process is ineffective to confer jurisdiction. A judgment rendered without jurisdiction is void.

Here are some tips for the more zealous among you:

  • Any sworn statement with the proper language filed before issuance of the summons will do the job, so why not revamp your form complaint to open an intestate estate to include the affidavit language.
  • If you do a stand-alone complaint for determination of heirship, add a paragraph with the appropriate language and make sure it is sworn to by a client with knowledge. One lawyer I know added a prayer for determination of heirship to his estate-opening complaint so that he did not have to file a separate pleading.
  • While you’re at it, erase all the faulty affidavits and pleadings from your cloud or hard drive lest you repeat the same old errors by using incorrect forms.

Why is all this necessary? Because MCA § 91-7-293 requires in part that “The executor or administrator shall file with his final account a written statement, under oath, of the names of the heirs or devisees and legatees of the estate, so far as known … the statement must aver that diligent inquiry has been made to learn the same without avail …”

This is a subject I have posted about often, and probably will again as long as lawyers keep tripping over themselves. You can access those prior posts by entering “unknown heirs” in the search box.

Mark Twain in his own Words

April 20, 2018 § Leave a comment

Mark Twain, born Samuel Clemens, died 108 years ago tomorrow. He died on April 21, 1910, at age 74.

His sharp humor crackles today as relevant and fresh as it was in the late nineteenth and early twentieth century. I think it’s fair to say that modern American humor learned much of its appreciation for irony and intelligence from his droll wit.

Enjoy these samples:

I haven’t a particle of confidence in a man who has no redeeming petty vices whatsoever.

Soap and education are not as sudden as a massacre, but they are more deadly in the long run.

He is now fast rising from affluence to poverty.

Barring that natural expression of villainy which we all have, the man looked honest enough.

Formerly, if you killed a man, it was possible that you were insane—but now, if you, having friends and money, kill a man, it is evidence that you are a lunatic.

A baby is an inestimable blessing and bother.

Reader, suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself.

When the doctrine of allegiance to party can utterly up-end a man’s moral constitution and make a temporary fool of him besides, what excuse are you going to offer for preaching it, teaching it, extending it, perpetuating it? Shall you say, the best good of the country demands allegiance to party? Shall you also say it demands that a man kick his truth and his conscience into the gutter, and become a mouthing lunatic, besides?

Get your facts first, and then you can distort them as much as you please.

There is nothing in the world like a persuasive speech to fuddle the mental apparatus and upset the convictions and debauch the emotions of an audience not practised in the tricks and delusions of oratory.

Loyalty to petrified opinions never yet broke a chain or freed a human soul in this world — and never will.

An experienced, industrious, ambitious, and often quite picturesque liar.

It does look as if Massachusetts were in a fair way to embarrass me with kindnesses this year. In the first place, a Massachusetts judge has just decided in open court that a Boston publisher may sell, not only his own property in a free and unfettered way, but also may as freely sell property which does not belong to him but to me; property which he has not bought and which I have not sold. Under this ruling I am now advertising that judge’s homestead for sale, and, if I make as good a sum out of it as I expect, I shall go on and sell out the rest of his property.

The difference between the almost right word and the right word is really a large matter—’tis the difference between the lightning-bug and the lightning.

Noise proves nothing. Often a hen who has merely laid an egg cackles as if she had laid an asteroid.

Honesty is the best policy — when there is money in it.

Prosperity is the best protector of principle.

You tell me whar a man gits his corn pone, en I’ll tell you what his ‘pinions is.

We all do no end of feeling, and we mistake it for thinking. And out of it we get an aggregation which we consider a boon. Its name is public opinion. It is held in reverence. Some think it the voice of God.

It is curious that physical courage should be so common in the world, and moral courage so rare.

The late Bill Nye once said “I have been told that Wagner’s music is better than it sounds.”

Travel is fatal to prejudice, bigotry, and narrow-mindedness, and many of our people need it sorely on these accounts. Broad, wholesome, charitable views of men and things cannot be acquired by vegetating in one little corner of the earth all one’s lifetime.

There isn’t time–so brief is life–for bickerings, apologies, heartburnings, callings to account. There is only time for loving–and but an instant, so to speak, for that.

April 18, 2018 § Leave a comment

Judges’ Spring Conference

Next post April 20, 2018

The Test(s) for Unconscionability

April 17, 2018 § 1 Comment

Carl Smith filed an action to set aside or modify the final judgment in his divorce case, alleging coercion and unconscionability. The irreconcilable differences divorce, incorporating the agreement between his ex-wife Lisa Doe and him, was entered two and one-half years before the filing of Carl’s action. The chancellor rejected Carl’s arguments, and he appealed.

After addressing and disposing of Carl’s MRCP 60 issues, the MSSC affirmed in Smith v. Doe, decided January 25, 2018. On the issue of unconscionability, Justice Maxwell wrote for the 7-2 majority:

¶16. The chancellor alternatively found that, even if Carl’s filing was deemed timely under Rule 60, it still lacked merit. After review, we agree. While we find no abuse in the chancellor refusing to set aside the agreement under Rule 60(b), we also see no error in the chancellor’s finding Carl was not overly browbeaten or otherwise coerced into signing a procedurally or substantively unconscionable agreement.

A. Procedural Unconscionability

¶17. “Procedural unconscionability may be proved by showing ‘a lack of knowledge, lack of voluntariness, inconspicuous print, the use of complex legalistic language, disparity in sophistication or bargaining power of the parties and/or an opportunity to study the contract and inquire about the contract terms.’” East Ford, Inc. v. Taylor, 826 So. 2d 709, 714 (Miss. 2002) (quoting Pridgen v. Green Tree Fin. Servicing Corp., 88 F. Supp. 2d 655, 657 (S.D. Miss. 2000)). But here, the chancellor found none of these problems.

¶18. To the contrary, after sifting the testimony and evidence, the chancellor found Carl “was able to make the payments, he understood the terms ofthe contract[,] and he voluntarily entered into the Agreement.” Our review of the record shows strong support for these discretionary findings.

¶19. The agreement was incredibly clear. It emphasized that its terms strongly favored Lisa, and it mentioned why. The written explanation of Carl’s enhanced obligations was not inconspicuous or hidden in fine print or a footnote—it was front and center in the agreement.

¶20. Furthermore, Carl’s new procedure-based challenge is also completely at odds with his prior written acknowledgment that his and Lisa’s negotiations were even-handed and not the product of duress, coercion, or overreaching. The agreement says so:

ACKNOWLEDGMENT OF FAIRNESS IN EXECUTION OF DOCUMENT:

Husband and Wife agree that this Settlement Agreement is not entered into as a result of any fraud, duress, misrepresentation, overreaching, coercion, or undue influence. In executing this document, both Husband and Wife acknowledge and agree that they are free from any of these matters, and are executing this agreement as their own voluntary and free act, and that they do so knowingly and willingly . . . .

And his claim that Lisa kept him from obtaining counsel not only conflicts with her testimony but is also undercut by the agreement:

ATTORNEYS:

. . . Husband agrees that he has been encouraged to and has had adequate opportunity and has been free to seek his own legal representation or other advice concerning this matter, before he signed and obligated himself to this Settlement Agreement.

¶21. The chancellor essentially found Carl knew exactly what he was doing and exactly what he was obligating himself to do when he signed the settlement agreement. Indeed, according to the agreement, Carl accepted its strict terms based on “the unique difficulties in which [his] behavior has placed the family unit[.]” The chancellor recognized this and noted that “[Carl] was in a place of self-loathing and felt extreme guilt for his choices that had caused the destruction of his marriage and family.” That his extramarital activities and devious behavior gave Lisa the upper hand in negotiating a favorable settlement did not negate that Carl “freely and willingly” agreed to the settlement’s terms. Nor did Carl’s “self-imposed guilt” and Lisa’s “obvious hostility,” in the chancellor’s view, amount to an unconscionable disparity of bargaining power. Based on his advanced education, Carl was certainly aware of the finality of signed legal contracts and judgments. And the chancellor’s findings and the agreement’s express acknowledgments undermine Carl’s newly minted procedural-unconscionability claim.

B. Substantive Unconscionability

¶22. “Substantive unconscionability occurs when the terms of the agreement are so one-sided that no one in his right mind would agree to its terms.” West v. West, 891 So. 2d 203, 213 (Miss. 2004) (citing In re Johnson, 351 So. 2d 1339, 1341 (Miss. 1977)). Considering the agreement’s terms, the chancellor found Carl “was able to make the payments . . . .” And he understood the heightened terms, which he voluntarily accepted. Though the settlement agreement was disadvantageous to Carl, the chancellor could not find that no person in his senses would accept it. See id. This finding is supported by the record.

¶23. In addition, Carl testified he is “very stable” financially. Indeed, his Rule 8.05 [Fn omitted] disclosure shows a monthly surplus of more than $5,000 after support obligations, expenses, and taxes are paid. It is also undisputed that Carl has abided by the agreement’s terms, making all required payments for more than two-and-a-half years.

¶24. The chancellor did recognize support provisions are modifiable where an unanticipated substantial or material change in circumstances arises. See Wallace v. Bond, 745 So. 2d 844, 848-49 (Miss. 1999); McDonald v. McDonald, 683 So. 2d 929, 931 (Miss. 1996). But Carl did not suggest or prove his financial circumstances had materially changed. So the court found no showing of a material change in circumstances warranting a downward modification.

¶25. An agreement made between parties should ordinarily be enforced. Williams v. Williams, 37 So. 3d 1171, 1174 (Miss. 2010). And courts should “take a dim view of efforts to modify it, as we ordinarily do when persons seek relief from their improvident contracts.” Id. (quoting West, 891 So. 2d at 211). Absent a finding of unusual circumstances—like fraud, overreaching, or mistake—“parties are afforded wide latitude in entering property settlement agreements.” Id. (citing Steiner v. Steiner, 788 So. 2d 771, 776 (Miss. 2001)).

¶26. Here, the chancellor “expressly determined that no fraud or overreaching existed in this matter.” Thus, he deemed “all provisions of the agreements regarding fixed alimony or a division of property” nonmodifiable. We therefore find, even if Carl’s motion was not snagged on the chancellor’s Rule 60(b)(1) and Rule 60(b)(6) timeliness findings, the chancellor did not abuse his discretion in alternatively rejecting the merits of the unconscionability claims.

A couple of morals to this story come to mind …

  • One is that the words of the agreement are powerful and binding. Some of that boilerplate you have been adding to your agreements can carry some serious weight. Why? Because the court looks first to the words used by the parties in trying to determine their intent. If Carl felt coerced in the inducement he should not have said expressly that he had not been coerced. If he was deprived of the right to counsel, he should not have signed off on the language to the contrary.
  • Another is that it’s hard as the dickens to get a judgment — particularly an agreed judgment — set aside. Oh, it can be done, but it’s a herculean task.

The authority for unconscionability in this case is something you might use to analyze and present a claim that a pre-nuptial agreement does or does not meet the test of conscionability as set out in the MSSC’s 2015 Sanderson v. Sanderson case about which I posted at this link.

A Reminder of How the Albright Factors Count

April 16, 2018 § Leave a comment

In too many appeals, I read that the appellant challenges how the chancellor analyzed and applied some or all of the Albright factors.

The case of In re N.B., 135 So.3d 220, 227 (Miss. App. 2014), the court stated the rule:

An Albright analysis is not premised solely on a scoring system to determine which parent “wins[,]” … [a]nd our review for manifest error is not a mechanical check on the chancellor’s score card to see if she “tallied” each parent’s score correctly. Instead, we ask whether the chancellor considered all relevant facts, giving deference to the weight she assigns each factor. [quoting May v. May, 107 So.3d 1052, 1054 (¶ 8) (Miss. App. 2013)].

To put it another way, the appellate courts are not going to check the final scorecard for errors of judgment as to runs, hits, and errors; rather, the court looks at whether the chancellor considered all of the relevant facts and analyzed them in light of the factors, and the court will give deference to he judge’s decision on the weight to be assigned to each factor.

If the judge did consider all of the relevant facts and addressed the applicable Albright factors, the chancellor will be affirmed, and that includes the chancellor’s decision as to which factors to assign greater weight.

N.B. was quoted in the COA’s decision in In the Matter of Adoption of a minor Child: J.A.G. and S.G. v. C.T. and B.T., decided November 14, 2017.

Five Came Back Alive

April 13, 2018 § 2 Comments

In April, 2007, five newly-minted Mississippi jurists descended on the unsuspecting National Judicial College (NJC) in Reno, NV, for the General Jurisdiction Course required by Mississippi law. They returned home after two weeks, and NJC has never been the same.

Front row, L to R: Chancellor Edward Fenwick (6th), Chancellor Neil Harris (16th) Back row, L to R: County Court Judge Allen Couch (DeSoto); County Court Judge Derrick Parker (Yazoo); Chancellor Larry Primeaux (12th)

 

 

 

Charging for Medical Records

April 11, 2018 § Leave a comment

Jane’s Law Blog reports that there is a petition for interlocutory appeal before the MSSC filed by Neurospine LLC, a medical provider, from sanctions assessed by Jasper County Circuit Court for overcharging for medical records. You can read the details at this link.

Although the case reported is from a circuit court, it is of interest to chancery practitioners as well, since medical records play a role in many chancery proceedings. Are you (or your client) being overcharged? Read the authority cited in Jane’s post and judge for yourself.

Jane Tucker’s blog is a helpful resource to keep up with decisions of the appellate courts, as well as filings, pending issues, and interesting oral arguments and briefs.

Doing Away with Alimony: Two Routes

April 10, 2018 § 3 Comments

Adam Lewis filed a complaint to terminate alimony against his ex-wife, Karen. Adam contended that Karen was cohabiting or in a de facto marriage with her boyfriend, Dobel, since the parties’ 2002 divorce. There was a lot at stake, since the parties’ divorce agreement provided that Adam would pay Karen $15,000 a month in periodic alimony.

Following a trial, the chancellor dismissed Adam’s case per MRCP 41(d). Adam appealed. The COA affirmed the dismissal in In the Matter of the Dissolution of the Marriage of Lewis, decided March 20, 2018. You can read the facts as developed at trial for yourself. Here is how Judge Wilson addressed Adam’s arguments on cohabitation and de facto marriage:

A. Cohabitation

¶17. “Modification of alimony may occur upon the existence of a situation of mutual support between the recipient spouse and another individual which alters the recipient spouse’s financial needs.” Scharwath v. Scharwath, 702 So. 2d 1210, 1211 (¶6) (Miss. 1997). “[C]ohabitation creates a presumption that a material change in circumstances has occurred. This presumption will shift the burden to the recipient spouse to come forward with evidence suggesting that there is no mutual support . . . .” Id. at (¶7) (citation omitted).

¶18. In the present case, Adam did not prove cohabitation and failed to prove any mutual financial support. Adam admitted that Karen and Dobel maintain separate homes and do not spend the night at each other’s homes. Adam also admitted that he had subpoenaed Karen’s financial records but had found no evidence that Dobel financially supported Karen or vice versa. On this record, the chancellor did not clearly or manifestly err by finding that Adam failed to meet his burden of proving cohabitation or mutual financial support.

B. De Facto Marriage

¶19. “In the absence of cohabitation, alimony can be terminated based on proof of what has been termed a ‘de facto marriage.’” Hughes, 186 So. 3d at 400 (¶18). “A de facto marriage may be proven in two ways.” Id. “First, a chancellor may find a de facto marriage if the alimony recipient is deliberately avoiding remarriage merely to continue receiving alimony.” Id. (citing Martin v. Martin, 751 So. 2d 1132, 1136 (¶16) (Miss. Ct. App. 1999)). “Second, a de facto marriage can be found . . . if the alimony recipient and another person have ‘so fashioned their relationship, to include their physical living arrangements and financial affairs, that they could reasonably be considered as having entered into a de facto marriage.’”
Id. (quoting Pope v. Pope, 803 So. 2d 499, 504 (¶12) (Miss. Ct. App. 2002)).

¶20. In Martin, Ben and Linda’s divorce judgment required Ben to pay Linda periodic alimony. Martin, 751 So. 2d at 1133 (¶3). After the divorce, Linda became involved in a long-term relationship with Norm Anderson. Id. at (¶5). Linda wore a diamond engagement ring that Anderson gave her, and the couple consistently told friends that they planned to marry “next year.” Id. Moreover, on cross-examination, Linda “admitted . . . that she and Anderson had not married because she need[ed] the financial support provided by the alimony received from [Ben].” Id. Linda and Anderson maintained separate residences, but Anderson’s was a “small . . . efficiency apartment,” while Linda’s was a “luxurious home.” Id. at 1133, 1136 (¶¶6, 15). Anderson had a key to Linda’s home, spent the night at her home a few times each month, ate meals at her home regularly, ran errands for her, and did yard work and other household chores. Id. at 1133 (¶6). In addition, Linda had written Anderson checks totaling over $11,000 over a three-year period. Id. Anderson also provided Linda with substantial discounts on clothes and cosmetics from the store where he worked. Id. Based on this evidence, the chancellor found that Linda and Anderson had entered into a “de facto marriage” and terminated Ben’s alimony obligations. Id. at 1134-35 (¶¶10, 14).

¶21. On appeal, this Court affirmed the chancellor’s finding that Linda had “structured her relationship with Anderson in an attempt to circumvent the appearance of cohabitation so as to continue her alimony.” Id. at (¶16). We did so based on Linda’s admission under oath “that she and Anderson had not married because she need[ed] the financial support provided by [her] alimony.” Id. We held that when “an alimony recipient spouse purposefully avoids marriage merely to continue receiving alimony, equity should not require the paying spouse to endure supporting such misconduct.” Id.

¶22. In contrast, in Hughes, supra, the chancellor found that the alimony payor failed to prove that his ex-wife, Mariel, had entered into a “de facto marriage” with her boyfriend, Darrell. Hughes, 186 So. 3d at 396 (¶3). Mariel and Darrell had been in an exclusive dating relationship for four years, and Mariel wore a diamond ring that Darrell had given her. Id. at 398-99 (¶¶11, 13). They maintained separate residences, but they spent the night at each other’s homes once a week or more. Id. at 398 (¶11). They also traveled and vacationed together, and Darrell had exhibited one of his Corvettes at the National Corvette Museum with a plaque stating that the car was on loan from “Darrell Hill & Mariel Hughes.” Id. at
399 (¶13). Mariel and Darrell denied that they had discussed marriage or planned to get married. Id. at (¶14). However, there was testimony that Mariel once “said that marrying Darrel would ‘mess things up’ in some unspecified way.” Id. at 401 (¶22).

¶23. On those facts, we affirmed the chancellor’s finding that the alimony payor failed to prove the existence of a de facto marriage. We concluded that Martin was distinguishable because there was no outright admission or other clear evidence that Mariel “was avoiding remarriage solely to continue her alimony payments.” Id. at 401 (¶22). In addition, the evidence was, at best, conflicting as to whether Mariel and Darrell had “so fashioned their relationship, to include their physical living arrangements and financial affairs, that they could reasonably be considered as having entered into a de facto marriage.” Id. at 403 (¶26) (quoting Pope, 803 So. 2d at 504 (¶12)). They were in a long-term, exclusive relationship, she wore a diamond ring that he gave her, they traveled together frequently, and they spent the night together regularly. However, they maintained separate homes and had no access to one another’s financial accounts. Id. at 402-03 (¶26). Therefore, there was evidence to
support the chancellor’s finding that the long-term, exclusive relationship was not a scheme to avoid remarriage to continue alimony payments or a de facto marriage. Id. We emphasized, as we had in a prior case, that “[t]he most important distinction” in our precedents on de facto marriage “is the finding of the chancellor.” Id. at 403 (¶26) (quoting Burrus, 962 So. 2d at 621 (¶15)). “We will not reverse a chancellor’s findings regarding the existence or nonexistence of a de facto marriage unless they are manifestly or clearly erroneous.” Id.

¶24. We reach the same conclusion in the present case. Karen and Dobel obviously are in a long-term, serious relationship. However, unlike Martin, there is no outright admission or any other clear or direct evidence that Karen is avoiding remarriage just to continue receiving alimony. Adam testified that he believes that is what Karen is doing. However, Adam did not call Karen or Dobel as an adverse witness. In addition, although Adam apparently deposed Karen prior to trial, he did not seek to introduce any part of her deposition into evidence. See M.R.C.P. 32(a)(2) (“The deposition of a party . . . may be used [at trial] by an adverse party for any purpose.”); Fred’s Stores of Tenn. Inc. v. Pratt, 67 So. 3d 820, 827-28 (¶¶39-44) (Miss. Ct. App. 2011) (Maxwell, J., concurring in part and in result) (explaining that a plaintiff may introduce a defendant’s deposition during the plaintiff’s case in chief). Moreover, as in Hughes, Karen and Dobel maintain separate residences and separate finances. As noted above, Adam admitted that he had found no evidence that Dobel supports Karen financially or vice versa. Therefore, as in Hughes, we cannot say that the chancellor manifestly or clearly erred by finding that Adam failed to prove a de facto marriage.

¶25. To reiterate, a trial judge’s ruling on a Rule 41(b) motion to dismiss “is, for purposes of appeal, treated like any other finding of fact. In other words, [her] decision will not be disturbed on appeal unless it was manifestly wrong.” Gray, 477 So. 2d at 1357. On such a motion, the trial judge is entitled to weigh the credibility of the plaintiff’s evidence as if “making findings of fact and rendering final judgment.” Id. at 1356-57. Thus, to the extent that Adam offered circumstantial evidence that could have permitted an inference of a de facto marriage, the chancellor was “not required to look at the evidence in the light most favorable to [Adam],” nor was she required to give him “the benefit of all favorable inferences.” Mitchell v. Rawls, 493 So. 2d 361, 362 (Miss. 1986) (quoting Davis v. Clement, 468 So. 2d 58, 61 (Miss. 1985)). The chancellor was entitled to judge the credibility of the evidence and make findings of fact. And we will reverse her decision only if she would have been “obliged to find for [Adam] if [Adam’s] evidence were all the evidence offered in the case.” Corson, 612 So. 2d at 369. Adam’s evidence was not so compelling as to oblige the chancellor to find in his favor. Therefore, we affirm.

Voilà, a textbook statement of the law on modification of alimony.

Some observations:

  • Cohabitation and de facto marriage are the two main avenues to termination of alimony.
  • Mutual support is the key characteristic of cohabitation. That will require financial proof. Discovery and use of subpoenas duces tecum are what it will take to develop your proof.
  • As far as de facto marriage is concerned, try to get an admission of avoiding marriage to preserve alimony. Friends may provide admissions of the principals against interest. Living and financial arrangements are crucial evidence. As with cohabitation, commingled finances and mutual support may create circumstantial evidence.

The Effect of Interpleader on a Counterclaim

April 9, 2018 § Leave a comment

We posted previously about the COA’s decision in Pulliam v. Alfa Ins. Co. and Nance, in which the court upheld a chancellor’s decision that C.D. Pulliam had no authority to change the ownership and beneficiary of a life insurance policy owned by his deceased daughter.

Another issue raised by Mr. Pulliam on appeal is whether the chancellor erred in ruling that his counterclaim was rendered moot when the court approved the interpleader by Alfa. The question is whether the trial court’s granting of the request to interplead funds operates as a release of the interpleader’s liability as to the funds. C.D. had claimed that the litigation, including the interpleader, was made necessary by Alfa’s own negligence and misconduct. Did the interpleader act to absolve Alfa of any wrongdoing?

Judge Wilson wrote the COA’s unanimous opinion on the issue:

 ¶13. Mississippi Rule of Civil Procedure 22 permits a plaintiff to file a complaint for interpleader and join as defendants “[p]ersons having claims against the plaintiff . . . when their claims are such that the plaintiff is or may be exposed to double or multiple liability.” M.R.C.P. 22(a). “Any party seeking interpleader . . . may deposit with the court the amount claimed, . . . and the court may thereupon order such party discharged from liability as to such claims and the action shall continue as between the claimants of such money . . . .” M.R.C.P. 22(b). Interpleader protects a stakeholder subject to competing claims to identifiable funds “from being obligated to determine at his peril which claimant has the better claim.” M.R.C.P. 22 cmt. “[A]nd, when the stakeholder himself has no interest in the fund, [interpleader] forces the claimants to contest what essentially is a controversy between them without embroiling the stakeholder in the litigation over the merits of the respective claims.” Id. “The primary test for determining the propriety of interpleading the adverse claimants and discharging the stakeholder is whether the stakeholder legitimately fears
multiple vexations directed against a single fund.” Id.

¶14. “Ordinarily, interpleader is conducted in two ‘stages.’” Id. In the first stage, the court determines “whether the plaintiff is entitled to interplead the defendants,” and in the second stage, the court determines who is entitled to the interpled funds. Id. Alfa has admitted from the outset of this litigation that the beneficiary of the subject life insurance policy is entitled to its proceeds, which Alfa deposited with the chancery court. And Alfa’s complaint only asked the chancery court to identify the proper beneficiary or beneficiaries under the policy. Therefore, Alfa emphasizes that its role should be limited to the “first stage” of the interpleader action.

¶15. We have no difficulty affirming the chancery court’s determination that Alfa was entitled to interplead the defendants. Indeed, this case presents a common, well-recognized scenario in which interpleader is appropriate. See, e.g., Jeffrey Jackson & Jason D. Childress, Mississippi Insurance Law and Practice § 19:12 (3d ed. 2017) (“A life insurer that is uncertain regarding to whom policy proceeds should be paid may interplead the competing claimants and tender the policy proceeds to the court.”);  7 Charles Alan Wright, Arthur R. Miller et al., Federal Practice and Procedure § 1705 (3d ed. 2001) (“Typical examples involve multiple claims against a life-insurance company for the proceeds of a policy that
focus on an attempted change of beneficiary . . . .”). Alfa legitimately feared multiple liability based on competing claims to the same life insurance proceeds. Therefore, interpleader was appropriate. See M.R.C.P. 22(a) & cmt.

¶16. On appeal, C.D. argues that interpleader is not appropriate because Alfa has “unclean hands.” By “unclean hands,” C.D. means that Alfa’s alleged tortious conduct is responsible for the failure of his attempt to change the ownership and beneficiaries of the policy—or perhaps that Alfa induced him to pay premiums on a policy that he did not own. However, C.D.’s allegations—even if true—are not a defense to Alfa’s interpleader complaint.

¶17. C.D.’s argument harkens back to the “historical requirements” for “equitable interpleader.” First Nat’l Bank of Vicksburg v. Middleton, 480 So. 2d 1153, 1155 (Miss. 1985). “Historically”—that is, prior to the adoption of the Mississippi Rules of Civil Procedure—“equitable interpleader ha[d] four requirements,” one of which was that the party seeking interpleader “must have incurred no independent liability to either of the claimants.” Id. (quoting V.A. Griffith, Mississippi Chancery Practice § 23 (2d ed. 1950)). However, our Supreme Court held that “Rule 22 of the Mississippi Rules of Civil Procedure . . . terminated the historical requirements for interpleader in the chancery courts,” including the no
independent-liability requirement. Id. at 1155, 1156-57. The Court explained that Rule 22 was “designed to eliminate the technicalities which formerly limited the use of interpleader, and thereunder interpleader is available to cover any situation of exposure to multiple liability under the procedure outlined in the rule.” Id. at 1156 (emphasis added) (quoting 48 C.J.S. Interpleader § 5, at 125-26 (1981)). Rule 22 is to be applied “liberally” and not subjected to “technical” limitations, “and any doubts should be resolved in favor of permitting an interpleader action to lie.” Id. Rule 22 “interpleader is a procedural device” “directed toward increasing the availability of interpleader.” Id. Its availability is not subject
to the equitable doctrine of unclean hands. Because interpleader was appropriate, and because Alfa deposited the full amount of the life insurance proceeds with the court, the chancery court appropriately released and discharged Alfa from any liability under the policy and as to the interpled funds. See M.R.C.P. 22(b) & cmt.

¶18. However, C.D.’s counterclaims against Alfa present a different issue. To begin with, it is clear that counterclaims are permissible in an interpleader action. See Robertson v. La Linda Inc., 548 So. 2d 1308, 1311-12 (Miss. 1989); Middleton, 480 So. 2d at 1156-57; M.R.C.P. 22 cmt. (explaining that counterclaims by a claimant against the party that initiated the interpleader may be litigated in the second or third stage of an interpleader action); James W. Shelson, Mississippi Chancery Practice § 17:3 (2017) (“All . . . counterclaims . . . are appropriate for a resolution in the course of the interpleader proceedings, and the court will be in error if it refuses to entertain and decide all claims.”); see also Kentucky Cent. Life Ins. v. Vollenweider, 844 S.W.2d 460, 461 (Mo. Ct. App. 1992) (interpleader action to determine rights to proceeds from life insurance policy; one claimant counterclaimed against insurer for misleading the insured “on how to go about changing ownership of the policy”; the appellate court noted that the counterclaim had been stayed pending appeal).

¶19. In this case, Alfa’s motion for summary judgment in the chancery court did not directly address C.D.’s counterclaims. Rather, Alfa’s motion addressed the availability of the interpleader procedure and Alfa’s liability under the insurance policy as to the interpled funds (the proceeds of the policy). Moreover, it is clear that the chancery court’s order granting summary judgment to Alfa did not address the merits of C.D.’s counterclaims. The court’s order expressly stated that C.D.’s countercomplaint was “dismissed as moot.”

¶20. C.D.’s independent claims against Alfa for negligence, fraud, and other torts may or may not have any merit. No court has addressed that issue, which is not before us on appeal. However, C.D.’s counterclaims are not “moot.” They are separate and independent tort claims against Alfa. Moreover, Alfa’s discharge from liability under the terms of the insurance policy did not terminate or bar C.D.’s tort claims. C.D. properly asserted these claims as counterclaims in the interpleader action, and the chancery court’s refusal to entertain the claims was in error. See supra ¶18.

¶21. On appeal, Alfa argues that C.D.’s counterclaims involve distinct issues of fact and law and, thus, are only “permissive counterclaims,” not “compulsory counterclaims.” Alfa also predicts that C.D. “would likely seek discovery as to Alfa and its agents were [he] to proceed on [his] negligence claim.” Alfa argues that, for these reasons, C.D.’s counterclaims “were properly dismissed as moot.” However, characterization of the counterclaims as “permissive” or “compulsory” is irrelevant to the issues in this appeal. Even assuming (solely for the sake of argument) that the counterclaims were not compulsory, that does not render the claims “moot.” Again, C.D. was entitled, under Mississippi Rules of Civil Procedure 13 and 22, to assert counterclaims against Alfa in this interpleader action. That being the case, it was error for the chancery court to dismiss the claims as “moot.”

¶22. In summary, with respect to Alfa, we affirm the judgment of the chancery court insofar as the court permitted Alfa to interplead the defendants and discharged Alfa from liability under the policy and with regard to the interpled funds. However, we reverse and remand the judgment of the chancery court insofar as it dismissed C.D.’s counterclaims against Alfa as “moot.” …

The court, then, goes on to affirm the chancellor’s ruling that C.D. had no authority to change ownership or the beneficiary of the policy. Does that not render His counterclaim moot, since it charged

” … breach of contract, breach of the duty of good faith and fair dealing, negligence, gross negligence, bad faith failure to adjust and pay an insurance claim, tortious breach of contract, and punitive damages. C.D.’s countercomplaint generally alleged, among other things, that he
had paid all premiums on the policy after Annie’s death, that Alfa’s agents or employees had filled out the change-of-ownership forms for him, and that any mistake in making the change of ownership and designation of new beneficiaries was the result of Alfa’s tortious conduct.” (¶7)?

If C.D. had no power to change ownership or the beneficiary, how was he injured by Alfa’s negligent or even willful failure and refusal to allow him to do so?

 

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