October 31, 2018 § Leave a comment
A couple of days ago I posted about the big change in tax treatment of alimony coming after December 31, 2018.
Here are some points brought to my attention that correct and fine-tune that post:
- I said that there must be a judgment pre-dating the demarcation date. Other tax experts believe that a binding agreement for alimony to be treated for taxes as it currently exists will satisfy the law. The key is that the agreement must on its face be binding. To me that means either a PSA or a consent with alimony as an agreed issue presented to the court for approval or some other proceeding to make it binding.
- I also said that modification would result in making the pre-demarcation-date-alimony non-deductible and non-taxable. A more accurate statement is that modification may, in some cases, change the tax treatment. It’s too complicated for me to elaborate on here, but you need to get some competent guidance before jumping into any alimony modification post December 31, 2018.
Those are the tweaks. Here are two of my own observations:
- Don’t expect judges to be familiar with all of the nuances of these changes. Be prepared to offer expert testimony or stipulations that cover these points.
- Get some competent tax advice so that you can properly and accurately advise your clients. That disclaimer in your retainer agreements and PSA’s about tax advice does not relieve you of the obligation to be able to advise your clients about basics such as tax treatment of alimony and the pitfalls of modification because that’s not really tax advice — it’s divorce advice.
Thanks to the lawyer who called this to my attention.
October 30, 2018 § Leave a comment
As much as I would like to post results here, however, the resources are lacking in Mississippi to enable me to do that.
So here’s where you come in … I will post a Judicial Elections Results page next Wednesday, and if you feel called to do so, I will ask you to post results in your district via comments. Maybe we can cover most of the state that way.
Thanks to all who participate.
October 29, 2018 § 2 Comments
Effective after December 31, 2018, alimony will no longer be deductible by the payor, and will no longer be income to the payee. That’s per the “Tax Cuts and Jobs Act” passed by Congress earlier this year.
The law refers to “divorce agreements executed” after December 31, 2018, which would seem to indicate that if you have a PSA executed by the parties on December 29, 2018, the payments would maintain their deductible/income character, but at least one tax expert whom I asked said that the law requires a judgment or decree either adjudicating alimony as a contested issue or incorporating an agreement.
Also, any judgment modifying alimony after the cutoff date will cause the alimony to lose its deductible/income character.
So here are some ramifications for Mississippi practitioners:
- If you’ve been dragging out that divorce case and the current alimony treatment is important to your client, you’d better get moving; you’ve only got two months left until the change.
- You need to think twice about modification, especially if you represent the payor. Even a slight modification of alimony after the cutoff date will cause it no longer to be deductible.
- The parties will no longer be able to agree to deductibility or non-deductibility, or taxability or non-taxability. All alimony is non-deductible and non-taxable, no matter what the parties agree.
- It will no longer make any sense to craft hybrid alimony provisions because taxability is no longer a factor.
- The court is required to consider the tax consequences under the Armstrong factors. Keep that in mind as you prepare your witness list. You might want to prepare a stipulation for the court as to taxability of alimony.
- I think this will: (a) make alimony more difficult to negotiate, and (b) have a depressing effect on amounts of alimony awarded and agreed.
- I believe this also applies to separate maintenance, but that’s my opinion.
It’s not too soon to sit down with a tax specialist who can advise you of the consequences of this change. This has drastic strategic consequences for divorce lawyers and their clients.
October 24, 2018 § Leave a comment
Judges’ Fall Conference
Next post October 29, 2018
October 23, 2018 § 3 Comments
Following a hearing on Kellie McCarley’s claim for separate maintenance from her husband, Rickey McCarley, the chancellor announced that, although she would like to make a ruling from the bench right then, she needed to review the exhibits first. She scheduled a telephone conference to discuss her ruling with the attorneys. In that conference, she gave her opinion denying Rickey’s claim for divorce and granted Kellie separate maintenance. The telephone conference was not recorded or otherwise made a part of the record. There was also an amended order that clarified the chancellor’s ground for awarding separate maintenance.
Rickey appealed arguing among other grounds that the chancellor erred in not directing that the telephone conference be made a part of the record.
The COA affirmed in McCarley v. McCarley, decided August 21, 2018, with an opinion by Judge Carlton:
¶10. Rickey argues that the chancellor erred in failing to direct that the transcript from the telephone opinion be made part of the record. Rickey asserts that the amended order only states the chancellor’s conclusions in very abbreviated form and contains none of the underlying facts nor applies the law to those facts.
¶11. In support of his argument, Rickey cites to Uniform Chancery Court Rule 4.02, which provides that a chancellor’s opinion may be given orally or in writing. If the chancellor pronounces her opinion orally, then “it shall be taken down by the [c]ourt [r]eporter who shall, when directed by the [c]ourt, transcribe the same and submit it to the [c]hancellor for correction and approval.” UCCR 4.02. Rule 4.02 mandates that whether the opinion rendered is made orally or in writing, it “shall be filed among the papers and become a part of the record in the cause without any order or direction to that effect.” Id.
¶12. We recognize that Rule 52(a) of the Mississippi Rules of Civil Procedure states that in cases tried without a jury, “the court may, and shall upon the request of any party to the suit or when required by these rules, find the facts specially and state separately its conclusions of law thereon and judgment shall be entered accordingly.” (Emphasis added).
¶13. Similarly, Uniform Chancery Court Rule 4.01 provides “In all actions where it is required or requested, pursuant to [Rule] 52, the [c]hancellor shall find the facts specially and state separately his conclusions of law thereon. The request must be made either in writing, filed among the papers in the action, or dictated to the [c]ourt [r]eporter for record and called to the attention of the [c]hancellor.” (Emphasis added).
¶14. At the conclusion of the hearing in the present case, the chancellor scheduled a telephone conference with the attorneys. The chancellor explained that she would give her opinion on the matter via telephone and would also request one of the attorneys to prepare the order at that time. The record contains no transcript from the telephone conference, but the record does contain the chancellor’s written order and amended order setting forth her ruling.
¶15. In the chancellor’s amended order, she denied Rickey’s complaint for divorce on the ground of habitual cruel and inhuman treatment based on “lack of proof.” The chancellor also found “that [Kellie] is without material fault in the separation and that [Rickey] abandoned [Kellie] and has refused to provide any support.” The chancellor then determined that Kellie “has met the burden of proof necessary to support her claim for separate maintenance.” The record contains no request by Rickey or his attorney for the chancellor to find specially and state separately her conclusions of law.
¶16. We recognize that “[t]he burden rests upon the appellant to provide a record that contains all information needed for an understanding of matters relied upon for reversal on appeal.” Wells v. Price, 102 So. 3d 1250, 1259 (¶30) (Miss. Ct. App. 2012). This Court cannot consider or act upon matters not included in the record; rather, we “must confine ourselves to what actually does appear in the record.” Id. In Wells, 102 So. 3d at 1259 (¶32), the appellant failed to include in the record the transcripts from a bench trial and a telephone hearing, as well as the judgment entered after a separate bench trial. This Court affirmed the trial court’s judgment, explaining that “[b]ecause [the appellant] did not provide us an
adequate record, . . . we cannot find the trial court in error and must assume the trial court’s ruling is correct.” Id. [Fn 2]
[Fn 2] Cf. Daley v. Daley, 909 So. 2d 106, 107 (¶8) (Miss. Ct. App. 2005). In Daley, the record failed to contain a transcript of the proceedings before the chancellor or any factual or legal foundation for the chancellor’s decision below. Id. This Court acknowledged that Uniform Chancery Court Rules 4.01 and 4.02 provide that the chancellor can “create either an oral or a written record at his discretion,” but “if the chancellor opts for an oral opinion, it must be transcribed for the record.” Id. at 107-08 (¶9). This Court then remanded the case back to the chancellor with instructions for the chancellor to create a record of his factual findings and conclusions of law. Id. at 108 (¶10).
¶17. In Baggett v. Baggett, 246 So. 2d 887, 889 (¶21) (Miss. Ct. App. 2017), this Court found no merit to the appellant’s claim that the chancellor erred by failing to make findings of fact and conclusions of law in his judgment denying the appellant’s complaint for divorce. The Baggett court held that not only did the appellant fail to request that the chancellor make findings of fact and conclusions of law, but the facts of the case “were neither hotly contested, greatly in dispute, nor complex so as to require the chancellor to [make findings of fact and conclusions of law] without a request.” Id. at (¶19) (citing Tricon Metals & Servs., Inc. v. Topp, 516 So. 2d 236, 239 (Miss. 1987)).
¶18. Similarly, in Turner v. Turner, 744 So. 2d 332, 337 (¶22) (Miss. Ct. App. 1999), the appellant argued that the chancellor erred by failing to make separate findings of facts and conclusions of law or on-the-record findings regarding his award of child support. Upon review, this Court found no error, explaining that “neither party requested in writing, or in any other acceptable manner, that the chancellor issue separate findings of fact or
conclusions of law.” Id. at (¶26).
¶19. In the case before us, the record contains the transcript of the trial testimony from Rickey, Kellie, Penny, and Rickey’s brother, Roger. Although the record does not contain a transcript of the telephone conference with the attorneys where the chancellor made her ruling orally, the record does contain the chancellor’s amended written order reflecting her aforementioned ruling. Furthermore, Rule 4.02 mandates that if a party requests the chancellor to find the facts specially and state separately her conclusions of law, “[t]he request must be made either in writing, filed among the papers in the action, or dictated to the [c]ourt [r]eporter for record and called to the attention of the [c]hancellor.” No such request by either party appears in the record before us. This issue lacks merit.
I can’t add much to that.
October 22, 2018 § Leave a comment
Dallas Pevey sued his ex-wife, Marie Black, to modify child custody. The chancellor ruled for Marie but expressed reservations. Dallas filed a motion that the court considered under MRCP 59, and took additional testimony. Following that hearing, the chancellor reversed his prior ruling and found that Marie had testified falsely at the previous hearing. The court awarded custody to Dallas and Marie appealed. She contended that Dallas’s claimed newly discovered evidence was lacking, and that the trial court erred in essentially giving him a “do-over” trial.
In Black v. Pevey, decided August 28, 2018, the COA affirmed. The opinion speaks to the nature of a R59 motion (commonly called a “motion for reconsideration, although it is really a motion for rehearing according to its express terms) and what is the extent of authority that a chancellor may exercise in ruling on it. Judge Fair wrote the opinion for a unanimous court:
¶3. Marie contends that the chancery court erred in granting Dallas’s “motion to reconsider” because the claimed newly discovered evidence was lacking and could have been presented at the original hearing. Marie argues, essentially, that the chancery court gave Dallas a “do over” rather than holding him to the stricter standard that Rule 59 requires. But she is wrong about that legal standard.
¶4. It is true that, under the “new” Rules of Civil Procedure, the motion for reconsideration technically no longer exists. See Maness v. K &A Enters. of Miss. LLC, No. 2017-CA-00173, 2018 WL 3791250, at *12 (¶68) (Miss. Aug. 9, 2018) (Maxwell, J., specially concurring and joined by four other justices). But the motion at issue here was properly made, and considered, under Rule 59. See id.
¶5. The chancery court’s authority to modify the final judgment is “limited” by Rule 59, and it is a “higher” standard than under Rule 54(b), which allows a trial court to set aside interlocutory decisions for any reason it sees just. Id. at *13 (¶¶69, 71). Still, Rule 59 permits a chancery court substantial discretion to reconsider its decisions—either on the motion of a party, or sua sponte “for any reason for which it might have granted a new trial on motion of a party.” See M.R.C.P. 59(d). When a case has been tried to the court, Rule 59(a) expressly provides that a new trial may be granted “for any of the reasons for which rehearings have heretofore been granted in suits in equity in the courts of Mississippi.” “The ground rules [for a Rule 59 motion in chancery court] include those that preexisted the Civil Rules regarding the grant or denial of trial court rehearings.” Mayoza v. Mayoza, 526 So. 2d 547, 549-50 (Miss. 1988). In In re Enlargement of Corporate Limits of Hattiesburg, 588 So. 2d 814, 828 (Miss.1991), the supreme court explained that “[i]n equity, the chancellor has always had entire control of his orders and decrees and authority to modify or vacate any of them on motion of any party, or on his own, prior to final judgment.” While the chancellor’s order may have been styled a final judgment, it was rendered non-final by Dallas’s filing of the motion to reconsider. See Wilson v. Mallett, 28 So. 3d 669, 670 (¶3) (Miss. Ct. App. 2009). “It is long-settled that when a final judgment is reopened [under Rule 59,] the judgment remains subject to the control of the court until the motion is disposed of and, until that time, does not become final.” E.E.O.C. v. United Ass’n of Journeymen & Apprentices of the Plumbing & Pipefitting Indus. of the U.S. & Canada, Local No. 120, 235 F.3d 244, 250 (6th Cir. 2000).
¶6. To grant the motion under Rule 59, the chancery court need only be “convinced that a mistake of law or fact has been made, or that injustice would attend allowing the judgment to stand.” See Maness, 2018 WL 379125, at *13 (¶69) (Maxwell, J., specially concurring) (quoting McNeese v. McNeese, 119 So. 3d 264, 272 (¶20) (Miss. 2013)). This is an independent basis for granting the motion, distinct from the court’s authority to order a new trial on the presentation of newly discovered evidence. Id. “When hearing a motion under Rule 59(e), a trial court proceeds de novo, if not ab initio. Recognizing that to err is human, Rule 59(e) provides the trial court the proverbial chance to correct its own error to the end that we may pretermit the occasion for a less than divine appellate reaction.” Bruce v. Bruce, 587 So. 2d 898, 904 (Miss. 1991). A Rule 59 motion is the “functional equivalent” of a motion for rehearing on appeal. King v. King, 556 So. 2d 716, 722 (Miss. 1990).
¶7. Although Rule 59(a) refers to a “new trial,” when a case was tried to the court, the formality of a full retrial is not required. Under Rule 59(a), the chancellor “may open the judgment if one has been entered, take additional testimony, amend findings of fact and conclusions of law or make new findings and conclusions, and direct the entry of a new judgment.” Id.
¶8. Motions under Rule 59 should be distinguished from motions under Rule 60(b), which seek “extraordinary relief” from a judgment that is truly final. Rule 60(b) motions are for “extraordinary and compelling circumstances” and “should be denied when they are merely an attempt to relitigate the case.” S. Healthcare Servs. Inc. v. Lloyd’s of London, 110 So. 3d 735, 742 (¶14) (Miss. 2013). “[T]he trial court has considerably broader discretionary authority under Rule 59(e) to grant relief than it does under Rule 60(b).” King, 556 So. 2d at 722.
¶9. In Adams v. Green, 474 So. 2d 577, 582 (Miss. 1985), the supreme court quoted its 1854 decision in Dorr v. Watson, 28 Miss. 383 (1854), which has been “consistently applied in case after case” ever since:
The granting of a new trial rests in a great measure upon the sound discretion of the court below, to be exercised under all the circumstances of the case with reference to several legal rules as well as the justice of a particular case. If a new trial be refused, a strong case must be shown to authorize the appellate court to say that it was error; and so, if it be granted, it must be manifest that it was improperly granted.
“[G]iven the important corrective role of new-trial motions, the discretion granted to the court is exceedingly broad.” Barriffe v. Estate of Nelson, 153 So. 3d 613, 618 (¶22) (Miss. 2014).
¶10. Sitting as an appellate court, we are in no position to second guess the chancellor on whether he made an error in his initial credibility determinations. We therefore can find no abuse of discretion in granting the Rule 59 motion.
That’s a helpful elucidation not only of the scope of R59, but also how it functions, what authority the court may exercise under it, and how far the court may go to use it to avoid an unjust decision.
I have to add for all of us now-older lawyers who were practicing when the MRCP went into effect: You have to love Judge Fair’s reference to the “new” rules of civil procedure in ¶4.
Oh, and that business about the so-called Motion for Reconsideration … more about that from the MSSC later.
October 19, 2018 § Leave a comment
October 16, 2018 § Leave a comment
We’ve talked about the necessity of filing a judgment with the clerk as required in MRCP 58 and 79(a). It seems to be a fairly ironclad rule.
But there is at least one post-MRCP case in which no judgment was entered following trial, one of the parties died, and the MSSC upheld the chancellor’s nunc pro tunc entry of a divorce for a pre-death date.
Johnnie and Luke White underwent their fourth divorce from each other in 1992. In the course of the trial they agreed to a consent to divorce on the ground of irreconcilable differences that was handwritten, signed by each of them, and filed with the clerk. Following the trial, the chancellor ruled from the bench on the contested issues, directed that the parties be divorced, and ordered Luke’s attorney to draft a judgment. Following the trial, and before the judgment could be entered, Luke died.
Luke’s brother filed a R25 Suggestion of Death and asked to be substituted as a party for the sole purpose of entering a judgment. After hearing both sides the chancellor executed a judgment dating it nunc pro tunc to the date when he had ruled on the contested issues. Johnnie appealed. In the case of White v. Smith, 643 So.2d 875 (Miss. 1994), the MSSC affirmed. (Note that Smith was the administratrix of Luke’s estate, and she was substituted for Luke’s brother as a party in the appeal).
Justice Pittman wrote the unanimous opinion for the court, which is excerpted here in part, beginning at page 880:
“Courts may by nunc pro tunc orders supply omissions in the record of what had previously been done, and by mistake or neglect not entered.” Green v. Myrick, 177 Miss. 778, 171 So. 774 (1937). Nunc pro tunc means “now for then” and when applied to the entry of a legal order or judgment, it normally does not refer to a new or fresh (de novo) decision, as when a decision is made after the death of a party, but relates to a ruling or action actually previously made or done but concerning which for some reason the record thereof is defective or omitted. The later record making does not itself have a retroactive effect but it constitutes the later evidence of a prior effectual act. Thrash v. Thrash, 385 So.2d 961, 963 (Miss.1980), quoting Becker v. King, 307 So.2d 855, 858-59 (Fl.App.1975).
Johnnie relies on Pittman v. Pittman, 375 So.2d 415 (Miss.1979), in support of the arguments raised in issues I, III and IV. The facts in Pittman reflect that Ella Polk Pittman filed a petition for a divorce and requested that she be granted a divorce on the grounds of habitual cruel and inhuman treatment. The hearing was held on September 26, 1978, and the final decree was not entered until October 27, 1978. Some three weeks after receiving the letter, a decree was prepared and mailed to the chancellor. This decree was signed by the chancellor and filed on October 27, 1978. Petitioner died in the interim on October 17, 1978.
This Court held, on the facts of the case, that the death of the party prior to the entering of the decree had rendered moot the question on divorce, stating that “all issues in the case were incidental to the request for a divorce and the contest thereon, and the entire cause died with the complainant.” Pittman, 375 So.2d at 417.
Unlike the facts in Pittman, in the present case, there was a formal adjudication of the issues in writing and signed by the chancellor, prior to the death of one of the parties.
Johnnie also cites Griffith, Mississippi Chancery Practice § 620, at 667 (1950), which states in part:
A valid decree cannot be rendered in favor of two persons, one of whom at the time is dead. Such a decree is void. And likewise a decree rendered against a defendant after his death is void, if he was the sole defendant or was an indispensable party to the suit-although the interlocutory decree was rendered while he was alive.
The general rule is that the death of a party in a divorce action prior to the final decree ends the marriage of the parties and cancels the bill of complaint for divorce. Pittman v. Pittman, 375 So.2d 415 (Miss.1979).
The case of Thrash v. Thrash, 385 So.2d 961 (Miss.1980), is directly analogous to the case sub judice. In Thrash, the wife petitioned the court for a divorce on the ground of habitual cruel and inhuman treatment. The husband answered and filed a cross-bill in which he prayed for a divorce upon similar grounds. The case was fully tried and submitted to the chancellor for final decision. The chancellor took the matter under advisement and on March 31, 1978, determined all issues on the merits and rendered his decision by written opinion. The opinion was signed and filed with the clerk on April 1, 1978. The chancellor awarded the husband a divorce upon the grounds set forth in the cross-bill. A decree was drafted, approved by both solicitors, and forwarded to the chancellor for signature. This decree was duly received by the chancellor on April 8, 1978, signed by him on that same date, but dated April 10, 1978. The husband was killed on April 9, 1978.
On May 16, 1978, Pearl Marie Thrash filed a suggestion of death and motion to dismiss. The motion was based on the fact that the appellee had died prior to the decree’s being filed. The chancellor dismissed the motion and ordered the decree of divorce theretofore signed by the chancellor, to be entered nunc pro tunc, the date it was signed by the first chancellor, April 8, 1978.
The appellant in Thrash claimed that the decree signed by the chancellor on April 8, 1978, and dated April 10, 1978, was without effect and a nullity because appellee died on April 9, 1978, before the decree was filed with the clerk.
The majority opinion in Thrash relied on Section 11-7-25, Mississippi Code Annotated (1972), which in pertinent part provides:
Where either party shall die between verdict and judgment, such death need not be suggested in abatement, but judgment may be entered as if both parties were living….
Applying § 11-7-25, this Court determined that “in a case such as this, where the case has been fully tried and finally decided on its merits and nothing remains to be done except the entry of a decree, the decree would follow as if both parties were living.” Thrash, 385 So.2d at 962.
We have concluded that, in the absence of some special circumstances such as would cause a miscarriage of justice by so doing, the provisions of that section [§ 11-7-25] apply in a case such as this, the death of the husband having occurred long after the formal decision of all issues by the trier of facts. To hold otherwise, we think, would work a manifest miscarriage of justice.
Thrash, 385 So.2d at 964.
In the present case, from a technical standpoint, Luther died while married, since his death was prior to the entry of the decree. However, the record clearly indicates that all submitted issues had been litigated and ruled upon by the chancellor on November 2, 1992. Nothing more was to be accomplished in the interim between the ruling and formal filing of the judgment.
In addition to the reliance on § 11-7-25, the Thrash opinion quoted extensively from 104 A.L.R. 654, 664 (1936):
The general rule, so far as a general rule may be deduced from the few cases falling within this subdivision, is that, if the facts justifying the entry of a decree were adjudicated during the lifetime of the parties to a divorce action, so that a decree was rendered or could or should have been rendered thereon immediately, but for some reason was not entered as such on the judgment record, the death of one of the parties to the action subsequently to the rendition thereof, but before it is in fact entered upon the record, does not prevent the entry of a decree nunc pro tunc to take effect as of a time prior to the death of the party. [citations omitted] But if no such final adjudication was made during the lifetime of the parties, a decree nunc pro tunc may not be entered after the death of one of the parties, to take effect as of a prior date. [citations omitted]
Id. at 962-63.
Because the chancellor both fully considered all issues raised by the parties and rendered his opinion prior to Luther White’s death, the order entering judgment of divorce nunc pro tunc was not manifestly in error, and as such, does not create reversible error.
Although the case can be construed to apply narrowly to its peculiar facts, it’s hard to get around the basic principle announced in it that, ” … all submitted issues had been litigated and ruled upon by the chancellor … Nothing more was to be accomplished in the interim between the ruling and formal filing of the judgment.”
It’s not easy to square that general principle with the current strict application of R58 and 79. This is the MSSC’s word on the subject, though, and it is still good law.
Another post dealing with White and entry of judgments is at this link.