Valuation Bugaboo

July 15, 2019 § 1 Comment

Rodney Kimble and his wife Stepidy went through a divorce. Rodney didn’t like the way the chancellor divided the marital estate, and he particularly objected to the judge’s valuation of a 2006 Volvo truck, a 2000 Freightliner trailer, and a 2007 Transcraft trailer, all of which he complained were overvalued by the chancellor. He appealed, arguing that the trial court erred in not considering his testimony that the truck and trailers were inoperable and had not been used in several years.

Here’s how Judge Tindell, writing for the COA, addressed Rodney’s claims in Kimble v. Kimble, decided June 18, 2019:

¶8. “[T]he foundational step to make an equitable distribution of marital assets is to determine the value of those assets based on competent proof.” Dunaway v. Dunaway, 749 So. 2d 1112, 1118 (¶14) (Miss. Ct. App. 1999) (citing Ferguson, 639 So. 2d at 929). “[I]t is incumbent upon the parties, and not the chancellor, to prepare evidence touching on matters pertinent to the issues to be tried.” Benton v. Benton, 239 So. 3d 545, 548 (¶11) (Miss. Ct. App. 2018). When “a party fails to provide accurate information, or cooperate in the valuation of assets, the chancellor is entitled to proceed on the best information available.” Id. The chancellor possesses sole authority to assess both the credibility and weight of witness testimony. Culumber v. Culumber, 261 So. 3d 1142, 1150 (¶24) (Miss. Ct. App. 2018).

¶9. Here, as previously discussed, both parties submitted Rule 8.05 financial disclosures to the chancellor and testified at the hearing. Rodney’s initial Rule 8.05 disclosure, however, failed to reflect all his assets. During questioning by Stepidy’s attorney, Rodney admitted that his Rule 8.05 financial statement failed to include three bank accounts and five vehicles and/or trailers that he owned. Stepidy’s attorney also questioned Rodney about the values he listed for certain vehicles and the discrepancies between those values and the higher valuations reflected by the National Automobile Dealers Association (NADA). While subsequently questioning Rodney about his valuation of the marital home, the following exchange occurred:

STEPIDY’S ATTORNEY: Okay. And on the financial declaration, you say the house . . . [is] worth about [$]63,000; is that right?

RODNEY: I guess.

STEPIDY’S ATTORNEY: Well, I mean, that’s what you put down.

THE COURT: Hang on. Rule 8.05 requires the parties to exchange a financial statement that’s to be signed under oath. I’ve sat here for the last 30 minutes and listened to various and numerous discrepancies in your 8.05. I’m going to take a break, and at 9:45[a.m.], I’m going to return, and I want that 8.05 to reflect exactly what your knowledge is.

RODNEY: Okay.

THE COURT: I’ve heard vehicles that aren’t listed. I’ve heard checking accounts that aren’t listed. Somebody hasn’t done . . . [his or her] job. I’m going to give you ten minutes to do it, or I’m going to hold you in contempt. Do you understand what I’m telling you?

¶10. On Stepidy’s Rule 8.05 statement, she listed the following values for the three vehicles now at issue on appeal: (1) $20,000 for the 2006 Volvo truck (VIN ending in 3635); (2) $17,000 for the 2000 Freightliner conventional trailer; and (3) $20,000 for the 2007 Transcraft trailer. Stepidy testified that she and her attorney obtained these values from NADA after inputting the vehicles’ VINs and title information. While Rodney’s initial Rule 8.05 statement failed to list any of the three disputed vehicles, Rodney testified that the 2006 Volvo truck (VIN ending in 3635) was inoperable and that he no longer used the 2000 Freightliner conventional trailer. Rodney further testified that he had tried and failed to sell the vehicles. As a result, Rodney claimed that both vehicles lacked any monetary value. As to the 2007 Transcraft trailer, Rodney stated that he rarely used the trailer, and he valued the item at $4,000.

¶11. Despite Rodney’s testimony that he had not driven or operated the 2006 Volvo truck (VIN ending in 3635) in three to five years, Stepidy’s attorney questioned him about two different tickets he had received for the vehicle within the last two years. (The first ticket was issued in August 2015, and the second ticket was issued in February 2016.) In response, Rodney stated that a mistake had occurred and that the VINs for his two 2006 Volvo trucks had been mixed up.

¶12. In rendering his bench opinion, the chancellor found that Rodney lacked credibility and that his testimony had been full of inaccurate and untruthful information intended to conceal his income and assets. Based on the evidence before him, the chancellor valued each of the now disputed items among the amounts provided by Stepidy’s Rule 8.05 statement and Rodney’s testimony and amended the Rule 8.05 statement. Because we find the record contains sufficient evidentiary support for the chancellor’s valuation of the three disputed assets, we refuse to find any manifest error. See Dunaway v. Dunaway, 749 So. 2d 1112, 1121 (¶28) (Miss. Ct. App. 1999) (refusing to find error where “the chancellor, faced with proof from both parties that was something less than ideal, made valuation judgments that find some evidentiary support in the record. . . . [and] appears to have fully explored the available proof and arrived at the best conclusions that he could . . . .”). We therefore find this assignment of error lacks merit.

So …

  • The chancellor found that Rodney lacked credibility. Not surprising given the sorry state of his 8.05 and his slipshod answers to questions about values. When the chancellor bases her findings on credibility, her conclusions are well-nigh bulletproof on appeal because it is within the chancellor’s exclusive realm of responsibility to assess credibility and the weight to assign to testimony.
  • You could just about hear the chancellor’s frustration over the incomplete 8.05. A frustrated chancellor is never a good thing when he is frustrated at you or your client.
  • Rodney sort of self-destructed on the witness stand over his assertion that he hadn’t driven the truck and trailers but had been ticketed while operating them. The judge didn’t buy the mixed-up VIN excuse, and I don’t know anyone else who would have either.
  • Contrast Rodney’s valuations with Stepidy’s. Hers had a rational basis that the chancellor could rely on, and were presented in an orderly and complete fashion.

July 8, 2019 § Leave a comment

State Bar Annual Meeting and Summer School

Next post July 15, 2019

“Quote Unquote”

July 5, 2019 § Leave a comment

“The ideal subject of totalitarian rule is not the convinced Nazi or the convinced Communist, but people for whom the distinction between fact and fiction (i.e., the reality of experience) and the distinction between true and false (i.e., the standards of thought) no longer exist.”  —  Hannah Arendt

“In short, I suspect totalitarianism to be the retribution that befalls all peoples who give free rein to extremists and extremism, who forget the golden rule of political life, which is that ideas are never good except in moderation, and that anything carried to its logical conclusion becomes a menacing caricature of itself.”  — George Kennan

“A little patience and we shall see the reign of witches pass over, their spells dissolve, and the people recovering their true sight, restore the government to its true principles. It is true that in the meantime we are suffering deeply in spirit , and incurring the horrors of war and long oppressions of enormous public debt. . . . If the game runs sometimes against us at home we must have patience till luck turns, and then we shall have an opportunity of winning back the principles we have lost.”  —  Thomas Jefferson, Letter to John Taylor, 1798

July 4, 2019 § Leave a comment

State Holiday

Court House closed

To Seal or Not to Seal

July 3, 2019 § 1 Comment

… That is the question. Or was in a recent COA case.

A chancellor had sealed records in a controversial case, and a Jackson-area law firm sought to intervene in the litigation based on its claim that it should have access to certain documents produced in discovery but now kept from it by seal. The chancellor denied the motion to intervene, with the effect that the firm had no basis to access the records, and the law firm appealed.

In Butler Snow and Clark v. Estate of Mayfield, et al., the COA ruled that the chancellor improperly sealed the records.

¶25. “Mississippi law favors public access to public records . . . .” Estate of Cole v. Ferrell, 163 So. 3d 921, 925 (¶18) (Miss. 2012). “Court filings are considered to be public records, unless otherwise exempted by statute.” Id. at (¶15). “The law allows courts to determine when information should be declared confidential or privileged, exempting it from the Public Records Act.” Id. at 929 (¶33).

¶26. As Estate of Cole explains, the Legislature actually requires sealing certain types of records, such as certain youth court records, or confidential financial information. Id. at 924 (¶10). In general, “parties may request that the trial court seal certain documents,” at which point “the trial court may, in its discretion, limit the public’s access to those records.” Id. That discretion in sealing likewise provides us with a deferential standard of review, for in “determining whether the action taken by the court is proper, we review for an abuse of discretion.” Id. at (¶11).

¶27. In analyzing whether to seal a record, the Supreme Court explained that a trial court must “balanc[e] the parties’ competing interests—the public’s right of access versus confidentiality.” Id.; accord Miss. Dep’t of Corr. v. The Roderick & Solange MacArthur Justice Ctr., 220 So. 3d 929, 951 (¶78) (Miss. 2017) (noting the balancing test to weigh the public right of access against the private desire to seal the record from review).

¶28. Recently, the Supreme Court was faced with a sealed divorce file that contained serious allegations of the sexual abuse of underage children. Smith v. Doe, 2016-CA-00875-SCT, 2018 WL 549404 (Miss. Jan. 25, 2018). “Given the allegations raised and evidence presented in this appeal, th[e] Court ha[d] significant public health and safety concerns.” Id. at *5 (¶27). It “therefore remand[ed] the chancellor’s order sealing the court file for the trial court to conduct the balancing test set out in Estate of Cole . . . and determine whether the court file should remain under seal.” Id.

¶29. In this case, there is no indication the chancery court conducted the balancing test in any fashion. The only request to the chancery court was from Mayfield’s family to seal the matter to shield against all public scrutiny. During oral argument, counsel for Mayfield’s family admitted that any need for sealing the record was lessened by the pendency of the federal suit, which injected the allegations back into the public sphere. Despite this admission, the Mayfield family has actively used the seal as a shield against discovery in the federal litigation, to conceal what information it obtained pursuant to the bill of discovery.

¶30. Our review of the record shows that it does not contain confidential information, or indeed any information, that warrants a seal; as set out above, no balancing test was performed prior to sealing. The three-volume record before us primarily contains notices of subpoenas issued, depositions taken, and various other pretrial matters. The record does not contain the responses to the subpoenas duces tecum, deposition transcripts, or other documents obtained in discovery. We therefore reverse and render, unsealing the trial court record. We take no position on whether the information gained in the suit below is discoverable in the federal action, since that will be determined by the magistrate and district court in that pending action.

Lesson here is that the record must reflect that the chancellor conducted the proper balancing test. If you feel that there is an appeal in your case’s future, it would behoove you and your client to ensure that the judge does so and that it is in the record. If you don’t, you might have to explain to your client why the case is headed back to the trial court for a do-over. Clients hate to pay for a do-over, especially one that their lawyer could have avoided.

Oh, and a related point; when the record is sealed in MEC, everybody — and that includes you — is barred from reading anything in the file. Some lawyers came to me and asked me to seal a file, and I did because every attorney in the case agreed. They then discovered to their chagrin that none of the attorneys was receiving copies of pleadings filed and orders entered. They soon scrambled back and urged me to unseal the file, which I did. Better to ask that a particular document be sealed.

Most sealing takes place in domestic cases by agreement. If you don’t have an agreed order, it’s best either to forego sealing or set the matter for hearing and ask the judge to conduct an Estate of Cole balancing test on the record.

Five Post-Trial Motions that Toll The Time for Appeal

July 2, 2019 § Leave a comment

MRAP 4(d) reads in part this way:

(d) Post-trial Motions in Civil Cases. If any party files a timely motion of a type specified immediately below the time for appeal for all parties runs from the entry of the
order disposing of the last such motion outstanding. This provision applies to a timely motion under the Mississippi Rules of Civil Procedure (1) for judgment under Rule 50(b); (2) under Rule 52(b) to amend or make additional findings of facts, whether or not granting the motion would alter the judgment; (3) under Rule 59 to alter or amend the judgment; (4) under Rule 59 for a new trial; or (5) for relief under Rule 60 if the motion is filed no later than 10 days after the entry of judgment. * * *

A R50(b) is one for a directed verdict or JNOV, which means that it applies only in jury trials where the jury is to render a binding verdict. The only time you would see this in chancery is in a will contest with a jury. In the rare and unlikely case of an advisory jury, this rule would not apply (see Advisory Committee Notes).

R52 allows any party to request the court to make specific findings of fact and conclusions of law.

R59 provides two avenues of relief: R59(a) is a motion for new trial, pursuant to which the chancellor may “take additional testimony, amend findings of fact and conclusions of law or make new findings and conclusions, and direct entry of a judgment;” R59(e), on the other hand, is a motion to alter or amend the judgment.

A R60 motion for relief from judgment filed within ten days of the date of the judgment will toll running of the appeal time; in essence, if it is filed within the ten-day period, it is treated the same as a R59 motion.

More Time for Daddy?

July 1, 2019 § 3 Comments

Bryan Avants and Shawn Hamilton had a child together. After they separated, Shawn, the mother, filed a paternity action seeking custody and other relief. The court entered a temporary order on September 12, 2016, granting the parents joint legal and physical custody, alternating week by week. Following a final hearing, the judge on July 12, 2017, adjudicated Bryan to be the child’s father, awarded joint legal custody, and granted Shawn physical custody. Bryan appealed.

In Avants v. Hamilton, decided May 7, 2019, the COA affirmed. The court’s opinion is an unremarkable Albright analysis. What I found interesting, though, is Judge Tindell’s specially concurring opinion:

¶27. Because Avants and Hamilton had joint legal and physical custody of Jessica with seemingly no problems for nearly a year, and since the Albright factors were seemingly neutral between the parties, [Fn 4] I believe a presumption arose that joint physical custody was in Jessica’s best interest. While I would prefer to reverse the chancellor’s award of primary physical custody to Hamilton and to award joint physical custody to both parents, I recognize that under current Mississippi law there is no standard by which such a presumption may arise in contested cases. Consequently, I feel compelled to write this special concurrence.

¶28. In today’s world, we often hear the term “dead-beat dad.” And while no preference exists as to which parent receives primary physical custody, in most cases primary physical custody goes to the mother. A 2018 national study analyzed the share of parenting time fathers receive in custody arrangements by state. How Much Custody Time Does Dad Get in Your State?, https://www.custodyxchange.com/maps/dads-custody-time-2018.php (last visited May 7, 2019). The study “reflect[ed] cases in which both parents want[ed] custody and no extenuating circumstances—such as criminal convictions or long-distance separation”—existed. Id. Mississippi ranked forty-eighth out of all states, with fathers in Mississippi receiving 23% of the custodial time with their children. Id. “Maybe it’s time to let the old ways die.” [Fn omitted]

[Fn 4] I acknowledge that the chancellor found the Albright factors slightly favored Hamilton. We must keep in mind, however, that the Albright analysis is concerned with choosing a favorite between the two options presented rather than with finding complete neutrality between those options.

In this case, we have a father (Avants) who not only voluntarily agreed to pay child support even though he had joint physical custody, but he also quit his higher paying job as an oilfield worker to work a local job to spend as much time as possible with his daughter.

¶29. A number of states aim to give children equal time with both parents when the parents live in the same geographic area and no other extenuating circumstances exist (such as a history of domestic violence or criminality). When the Albright factors are neutral between both parents, both parents live in the same area, and there are no extenuating circumstances, a presumption that joint physical custody is in the child’s best interest should arise. And when that presumption is not overcome, joint physical custody should be awarded. Mississippi Code Annotated section 93-5-24 (Rev. 2018) provides for an award of joint physical custody. Perhaps the time has come, however, for our appellate courts to set forth the specific factors under which the presumption in favor of joint physical custody arises in contested cases. For these reasons, I specially concur with the majority’s opinion.

Food for thought, indeed. I certainly do agree that the courts should spell out some criteria. What do you think?

 

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