Beware Vague Language in College Education Support Provisions
January 7, 2015 § 2 Comments
In the recent COA case of Wilson v. Stewart, handed down December 9, 2014, Jay Wilson argued that the chancellor erred in construing the provision in the original agreed divorce decree to include post-emancipation college education support for his two daughters, Henley and Anabel. He also claimed that Anabel forfeited her right to support due to poor academic performance.
Here’s how Judge Fair treated the point for the court:
¶17. Jay claims that the court should have terminated his obligation to pay Anabel’s and Henley’s college expenses at twenty-one, the age of emancipation. Jay also argues that the court should have terminated his obligation based on Henley’s poor academic performance. In support of his argument, Jay cites Nichols v. Tedder, 547 So. 2d 766, 770 (Miss. 1989), which states that a parent has no legal duty to support a child once that child is emancipated. However, that duty may be extended to post-emancipation care by agreement, whether it be a separate contract or included in the divorce decree. Crow, 622 So. 2d at 1230.
¶18. Here, the provision pertaining to the payment of college expenses is in the original agreed divorce decree: “Jay shall bear, and otherwise provide for the funding of, the full costs of all college education expenses of the minor children . . . .” In Boleware v. Boleware, 450 So. 2d 92, 92-93 (Miss. 1984), our supreme court dealt with a similar provision in a modified divorce decree. The father in that case contracted to “be responsible for the payment of all college education expenses of the minor children . . . .” Id. Similar to the instant case, the children were under twenty-one when the parties entered into the agreement. Id. at 93. The father argued that his obligation ceased when the children reached twenty-one. Id. The court disagreed, relying on the chancellor’s finding that, at the time of the agreement, the parties intended for the obligation to extend post-majority. Id. In Crow, the court likewise held that a father’s separate agreement to pay for all reasonable college expenses remained in effect post-majority. Crow, 622 So. 2d at 1229. And in Mottley v. Mottley, 729 So. 2d 1289, 1290 (¶¶4-7) (Miss. 1999), the court referred back to its decision in Crow when discerning a father’s agreement to pay half of his son’s educational expenses; the court ultimately found that the father was bound by contract to pay post-emancipation support.
¶19. The chancellor in the present case ruled as our supreme court did in Boleware, Crow, and Mottley, reasoning that vague college-support provisions have been routinely construed to include post-majority support. Further, Jay’s agreement to pay for the children’s college expenses was not dependent upon their academic performance. We find no error in the chancellor’s ruling. [Emphasis added]
A few crucial points:
- “Vague college-support provisions have been routinely construed to include post-majority support.” That’s critical. I think some lawyers often blur language in agreements in hopes that everyone will read into it what they want to be there, so as to induce an agreement. But that tactic can produce a result radically different from what your client really wanted. If you make it vague, it will be construed to include post-majority support, no matter what your client intended.
- Vague language is indefinite language. Don’t assume that the judge will find the language to be ambiguous, so as to open it to parol evidence for interpretation, especially in light of the cited cases.
- A good rule of practice is to make your agreements say exactly what you intend, and to be as specific as possible. If that hangs the agreement up, work through it by give and take, but don’t compromise by making the language less definite. A good example of the importance of drafting to the ultimate outcome is the case of Zweber v. Zweber, the college flying lessons case about which I previously posted.
In case after case, the lesson is inescapable that if you opt for indefiniteness, the outcome could seriously damage your client. A few other examples: when the alimony provision is unclear, it will be interpreted to be periodic alimony; the IRS considers that the custodial parent has the tax exemption when the PSA or judgment does not provide otherwise; and use of the term “family support” has been construed by the US Tax Court to create an alimony, and not a child support, obligation.
A Primer on Termination of Alimony
November 3, 2014 § Leave a comment
The COA’s decision in McMinn v. McMinn decided October 28, 2014, includes a handy resume of the law applicable in termination of alimony cases. Since there has been so much turnover in this area of the law, I thought you might find this excerpt from Judge James’s opinion useful:
¶22. Keith argues that Sharon was receiving financial benefits from her then-boyfriend, Rooks. According to Keith, Sharon and Rooks entered into a de facto marriage and lived together from June 2011 to June 2012. Keith asserts that as a result of Sharon and Rooks’s cohabitation, alimony should be terminated.
¶23. Alimony may be terminated if the recipient spouse has entered cohabitation or a de facto marriage. Wallace v. Wallace, 12 So. 3d 572, 575 (¶14) (Miss. Ct. App. 2009). “[P]roof of cohabitation creates a presumption that a material change in circumstances has occurred.” Id. “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). In Byars, this Court held that evidence of a sexual relationship between the recipient spouse with another is not enough to terminate alimony. Byars, 850 So. 2d at 149 (¶5). However, alimony may be terminated if a payee purposefully avoids marriage to continue receipt of alimony payments. Pritchard v. Pritchard, 99 So. 3d 1174, 1179 (¶24) (Miss. Ct. App. 2012).
¶24. “There is indeed a general presumption that, where there is cohabitation, there is also mutual support.” Coggins v. Coggins, 132 So. 3d 636, 643 (¶27) (Miss. Ct. App. 2014). We have previously stated:
This presumption is based on two considerations. One is the difficulty a providing spouse faces in presenting direct evidence of mutual financial support between cohabiting parties. And the second consideration stems from the notion that parties who live in cohabitation can easily and purposely keep their condition of mutual financial support concealed from the paying spouse as well as from courts seeking only financial documentation before granting a modification. Id.
¶25. The recipient spouse has the burden of proving that there is no mutual support. Alexis v. Tarver, 879 So. 2d 1078, 1080 (¶8) (Miss. Ct. App. 2004). If the recipient spouse proves no support existed, then it is possible that the alimony payments can continue. Id.
¶26. At trial, it was established that Sharon had a sexual relationship with Rooks, regularly stayed overnight weekends and several days during the week, and went on vacations with him and his family. Sharon and Rooks testified that Sharon did not receive any financial help from him to pay her bills or contribute to her everyday expenses. Sharon also maintained a separate residence and stated that she and Rooks had no plans to marry. Keith testified that he observed Sharon’s car at Rooks’s house several times a week. The trial court stated that “[a] relationship accompanied by sexual activity, alone, does not rise to the level necessary to forfeit alimony.” In his brief, Keith enumerates certain behaviors such as overnight trips, Sharon’s visits to Rooks’s home, and gift exchanges. The course of conduct described, however, is similar to a normal, casual dating relationship.
¶27. “The chancellor’s findings of fact about cohabitation, de facto marriage, and mutual support are entitled to substantial deference when reviewed on appeal.” Coggins, 132 So.3d at 643 (¶29). The chancellor, as the trier of fact, found that alimony was properly awarded to Sharon. There is nothing in the record to indicate that the chancellor’s findings were manifestly wrong or there was an abuse of discretion. Accordingly, this issue is without merit.
These cases are extremely fact-intensive, and one chancellor (and the COA) may see it differently from another. They are within the trial court’s discretion, so lean heavily on your knowledge of your judge’s predilections and preferences.
Separate Property and Family Use
October 29, 2014 § 2 Comments
It’s no secret that family use of an asset during the marriage can convert it from separate property to marital property.
Steve Cupp tried to argue that his Lake Cormorant house was separate property, not subject to equitable distribution, because: (1) he acquired the property before his ten-month marriage to his wife, Jenny; (2) he titled it in his sole name; (3) he made all of the mortgage payments from his separate account; and (did I already mention this?) (4) he and Jenny lived together only ten months before they separated.
The chancellor agreed with Jenny that family use had converted the property from separate to marital, and included it in the equitable distribution. Steve appealed.
The COA affirmed in Cupp v. Cupp, handed down October 8, 2013. Judge Maxwell’s opinion explained:
¶16. We first address Steve’s argument that the chancellor erred in classifying the Lake Cormorant property as marital, and, therefore, the property should not have been included in the division of marital assets. Steve asserts that because he acquired the property prior to the marriage, titled the property solely in his name, and made mortgage payments from his separate account, that the property is not marital in nature. Jenny counters Steve’s claims by noting that she lived in the home with her son and Steve before Steve moved to Sevierville. At that time, Jenny contributed domestically to all maintenance on the home for a number of months until she joined Steve in Sevierville.
¶17. Mississippi employs the family-use doctrine when determining whether a couple’s separate property has become marital due to the family’s use of the property. See, e.g., Stewart v. Stewart, 864 So. 2d 934, 937-38 (¶13) (Miss. 2003); Rhodes v. Rhodes, 52 So. 3d 430, 438 (¶¶25-26) (Miss. Ct. App. 2011); Brame v. Brame, 98-CA-00502-COA (¶20) (Miss. Ct. App. Mar. 28, 2000), rev’d in part on other grounds, 796 So. 2d 970 (Miss. 2001). Property that was acquired prior to the marriage by one of the parties can become marital property when used by the family. See id. Furthermore, a party’s contribution to the maintenance of a family home, whether monetary or physical, is considered when dividing the home equitably. See, e.g., Ferguson, 639 So. 2d at 928; Hemsley v. Hemsley, 639 So. 2d 909, 915 (Miss. 1994); Tatum v. Tatum, 54 So. 3d 855, 861 (¶21) (Miss. Ct. App. 2010).
It seems to me that the only way to avoid having property succumb to the family use doctrine is to do everything that Steve did here, except to allow his wife to set foot on the property. Ever. He should have kept it padlocked and given her a letter informing her that if she entered the property she would be prosecuted for trespass.
Of course, I am being facetious. But only in part. What else must one do to keep property separate? It seems that the so-called family-use doctrine can have a decidedly un-family-friendly whipsaw to it. Imagine telling your wife she can’t set foot on your lake property because you want to keep it separate. Imagine telling your child that you can’t take her fishing there because it’s separate. Imagine telling your musically-gifted son he can not practice on the grand piano you keep locked up in a warehouse because you promised grandma that you would keep it in the family.
In my opinion, it would be better to say in a case like this that it is separate property, the value of which causes a disparity in the financial situations of the parties, opening the possibility for time-limited alimony for Jenny.
¶18. The record reflects that the chancellor determined that the property in question was converted to a marital asset by means of the family-use doctrine. The chancellor also noted “that while [Steve] made the primary financial contributions to the accumulation of marital assets, [Jenny] made significant domestic contributions to the marriage.” We agree. Steve, Jenny, and Jenny’s son all lived in the home for some time prior to their move to Sevierville. Jenny also physically maintained the home by herself for several months after Steve moved. We cannot find manifest error in the chancellor’s determination that the Lake Cormorant property was part of the marital estate. This issue is meritless.
Retirement and Modification of Alimony
October 16, 2014 § Leave a comment
Leo and Gracie Russell were divorced in 1978. Leo was ordered in the divorce to pay Gracie $2,500 a month in periodic alimony.
In 2006, Leo filed a petition to terminate or reduce his alimony obligation, which the chancellor dismissed without prejudice.
In 2011, Leo filed again to terminate or reduce alimony. In May, 2012, the chancellor reduced Leo’s obligation to $1,533, based on the fact that Gracie was receiving $947 a month in Social Security benefits based on Leo’s earnings. After hearing all of the evidence, the judge found that Leo had failed to prove a material change in circumstances or inability to meet his alimony obligation. Leo appealed.
The COA affirmed the chancellor’s ruling in Russell v. Russell, handed down October 7, 2014. Judge Carlton, writing for the majority, said this:
¶5. In his first assignment of error, Leo argues that the chancellor erred by denying his petition to terminate or modify his monthly alimony payments. Leo asserts that the chancellor erroneously found no material change in his circumstances and that his retirement and reduction of income were foreseeable at the time of the parties’ divorce.
¶6. With regard to our review of a chancellor’s award of alimony, this Court has previously stated:
An award of alimony, if allowed, should be reasonable in amount, commensurate with the wife’s accustomed standard of living, minus her own resources, and considering the ability of the husband to pay. The amount of an alimony award is largely within the discretion of the chancellor. Unless the chancellor is in manifest error and abused [his] discretion, we will not reverse.
Peterson v. Peterson, 129 So. 3d 255, 256-57 (¶5) (Miss. Ct. App. 2013) (internal citations and quotation marks omitted).
¶7. “The general rule has been that periodic alimony terminates upon death or remarriage.” Skinner v. Skinner, 509 So. 2d 867, 869 (Miss. 1987) (citing Wray v. Wray, 394 So. 2d 1341, 1344 (Miss. 1981)). When considering a party’s petition to modify or terminate an award of periodic alimony, a chancellor must first determine whether “an unforeseeable and material change in circumstances occurred since entry of the initial divorce decree.” Peterson, 129 So. 3d at 257 (¶7) (citing Holcombe v. Holcombe, 813 So. 2d 700, 703 (¶11) (Miss. 2002) (“The change in circumstance must not be anticipated by the parties at the time of the original decree.”). If no unforeseeable and material change has occurred, then a modification of the alimony award is improper. Id. However, where a substantial unanticipated change has occurred, the chancellor should consider the Armstrong factors to determine the proper amount of alimony. Id. at (¶8).
¶8. In the present case, Leo argues that his retirement and the resulting reduction in his income were unanticipated at the time the parties divorced in 1978. In his brief, Leo asserts the following:
[T]hough it may have been anticipated that at some time in the future [he] might retire and discontinue working, such an event is not an event that the [c]ourt can hold [him] to with respect to [the] same being a “foreseeable future event” that will preclude a termination of alimony or a reduction of alimony at the time of retirement.
¶9. In denying Leo’s petition to terminate or reduce his alimony payments, the chancellor found that retirement, by itself, proved insufficient to justify a modification. Although Leo had retired since the parties’ divorce, the chancellor found that Leo still possessed sufficient assets and income to satisfy his alimony obligation. The chancellor noted that Leo’s living expenses were approximately $10,000 a month and that Leo bought a new home about seven years earlier. Other than the remaining home payments, the chancellor found that Leo had finished paying all other significant debt.
¶10. The chancellor also noted that Leo’s other financial obligations resulting from the divorce, such as child support, had long since been fulfilled. In addition, the chancellor stated that Leo had received proper credit for the Social Security benefits Gracie received from his past employment earnings. Therefore, based on the evidence presented by the parties, the chancellor found that Leo failed to demonstrate a substantial and material change in his circumstances.
¶11. The chancellor also discussed whether any changes in Leo’s circumstances were unanticipated, stating, “There was no mention [made] at the time [of the parties’ divorce] . . . of what would transpire when one or the other party retired. Certainly it was foreseeable that [Leo] would retire, [but] it’s not mentioned.” As the record reflects, Leo retired in 2010 after turning seventy-five. Although he found that Leo’s retirement was a reasonably foreseeable event at the time the parties divorced, the chancellor still considered the Armstrong factors. Concluding his analysis, the chancellor stated:
There has been no substantial and material change. The fact that [Leo] is retired was foreseeable. And even if you do a—well, it’s impossible to do much of an analysis because we don’t have beginning information [for 1978,] . . . but if you do an analysis under Armstrong and you look at the assets and the income[s] of the parties, not only today but over the years, no reduction in alimony is warranted.
¶12. After reviewing the record and relevant caselaw, we find no abuse of discretion by the chancellor’s denial of Leo’s petition for modification of his alimony payments. See Peterson, 129 So. 3d at 256-57 (¶5). The chancellor found that no material change occurred and that Leo possessed sufficient financial resources to continue paying his monthly alimony obligation. The chancellor also found that no unanticipated event occurred since Leo’s retirement was reasonably foreseeable at the time of the parties’ divorce. Because the record contains substantial evidence to support the chancellor’s findings, we find no merit to this assignment of error.
The outcome should shock no one because retirement is always foreseeable. The real issue is what financial impact the retirement has on the ability to pay. And that latter statement is the unspoken, hidden issue in the question of foreseeability: isn’t it reasonably foreseeable that there will be a reduction in income resulting from retirement? That is something the cases just don’t seem to address in any meaningful way.
There was no baseline in this case for the judge to go back to in the 1978 judgment. The judge could not tell from the previous judgment what the parties’ situations were in 1978 compared to 2012 (34 years later). In my opinion, it’s always a good idea to include that kind of information in your PSA’s. This case illustrates one major reason why that is a good idea.
The chancellor’s action in reducing alimony to take into account the wife’s receipt of Social Security benefits is pretty much common practice when the benefits are based on the alimony-payer’s earning history. See, e.g., Spaudling v. Spaudling, 691 So.2d 435, 439 (Miss. 1997). I am not aware of any case law supporting a reduction or termination of alimony based on the ex-spouse’s receipt of Social Security due to that spouse’s earnings history.
No Judgment of Modification = No Modification
October 14, 2014 § Leave a comment
You’re going to have to read for yourself the MSSC’s decision in Shumake v. Shumake, handed down September 18, 2014. It’s a dizzying scenario involving a divorce judgment ordering payment of alimony, bankruptcy, petition to modify, contempt hearing, a temporary reduction of alimony, and subsequent contempt. The Special Chancellor ultimately found that ex-husband Leslie Shumake owed his ex-wife Katarina Shumake $58,550, plus interest, in alimony arrearage. Leslie appealed.
The case was first assigned to the COA. The court noted some confusion arising from language that the special chancellor had used in effecting a temporary reduction in alimony while bankruptcy payments were being made. In its November 23, 2013, opinion, the COA held, among other things, that on the unique facts of this case, it ” … would be fundamentally unfair to charge Leslie with a $58,550 arrearage …” and reversed and rendered that part of the judgment.
The COA granted cert and reversed the COA. Here’s what Justice King said for the unanimous court (Lamar not participating):
¶11. Originally, the chancellor ordered Leslie to pay Katarina $5,750 per month in periodic alimony. Leslie never met this obligation. Instead, he paid Katarina $650 per week in alimony. Katarina filed a contempt complaint asking the chancellor to require Leslie to comply with the divorce judgment. In response to Katarina’s contempt complaint, Leslie requested a modification, claiming that his extreme economic hardship had resulted in a substantial and material change in his circumstances. The chancellor then entered an order requiring Leslie to transfer his interest in the marital home to Katarina to cover part of the arrearage at that time. Leslie was to pay the remaining amount of the arrearage from cash. Of particular note, the chancellor did not modify the alimony or specifically address Leslie’s request for modification. Moreover, the order states that the chancellor “reserves the right to make a ruling regarding any arrearage and/or future arrearage . . . .”
¶12. According to the parties, the chancellor entered another order in November 2010 which required Leslie to pay Katarina $750 per week. This order is not in the record, although it was discussed at length at an April 2011 hearing, and the docket reflects that the chancellor entered an order at that time. At the hearing, Leslie argued that the November 2010 order temporarily modified the alimony. Katarina, on the other hand, maintained that Leslie was still required under the divorce judgment to pay $5,750 per month in alimony. Thus, Katarina claimed that Leslie owed $58,550 in arrears.
¶13. The [special] chancellor, who was not the chancellor who entered the divorce judgment or prior orders in the case, ultimately found that the previous chancellor never entered an order permanently modifying the original divorce judgment which required Leslie to pay $5,750 per month in alimony. Thus, the chancellor found that Leslie was in arrears for $58,550 to Katarina. The chancellor ordered that Leslie, upon completion of his bankruptcy payments, pay Katarina for the arrearage in monthly payments of $1,500.
¶14. After reviewing the record in today’s case and considering our law with respect to alimony modification, we cannot find that the chancellor abused his discretion. An alimony payment vests on the day it is due. Bowe [v. Bowe], 557 So. 2d [793] at 794 [(Miss. 1990)]. And a court order is required to modify alimony. Id. Because no order expressly modified Leslie’s alimony obligation, the [special] chancellor in today’s case did not abuse his discretion in ordering Leslie to pay the arrearage.
¶15. Further, the Court of Appeals’ statement that it would be “fundamentally unfair and unjust” to require Leslie to pay the arrearage is supported by neither our caselaw nor the chancellor’s order. The order considers – and provides some allowance for – Leslie’s bankruptcy by allowing him to pay the arrearage when the bankruptcy is complete. Our caselaw addressing the effect of bankruptcy on alimony payments is consistent with this approach. See Varner, 666 So. 2d at 497-98. Finally, the chancellor’s decision not to punish Leslie through contempt does not absolve Leslie’s arrearage. See Hand, Mississippi Divorce, Alimony, and Child Custody § 14-6 (“If the responding party is found to be in contempt and refuses or fails without justification to pay the arrearages as previously required by the court, he may be punished by civil or criminal sanctions, or both.”) (emphasis added). Put simply, Leslie’s alimony payments vested on the day they were due and the record does not support a finding that the vested payments were or should have been modified. The chancellor did not abuse his discretion in ordering Leslie to pay the arrearage. [Emphasis added]
There is a handful of lessons here:
- Never walk away from a case until you are sure that every order that should have been entered has gotten entered. You can not rely on opposing counsel to agree with you to the terms of a missing order so as to reconstruct it. Even if counsel opposite wants to “do the right thing,” memories fade with the passage of time, and two honest people can remember the same event in quite different ways.
- Without an order in which to rely, your client has no cover for his actions. That November order might have saved Leslie a lot of money because alimony payments become vested when they are due, and they can not be modified except by express order of the court.
- Note the language about bankruptcy. In ¶10, the court points out that bankruptcy does not in all cases rise to the level of substantial change in circumstances that would warrant modification.
The Bite of Draftsmanship
September 15, 2014 § Leave a comment
How you draft your legal instruments can have a huge impact on your clients’ future.
Take, for instance, the parties’ property settlement agreement (PSA) in the case of Aaron v. Aaron, a COA case handed down September 9, 2014. George and Annie Aaron were divorced in 2002 on the ground of irreconcilable differences. At the time, George was employed with the Amory Police Department, and was a participant in PERS. We don’t know from the court’s opinion the exact language of the parties’ agreement, but we know this much from ¶ 1:
As part of the divorce, George agreed to pay Annie one-half of his retirement funds acquired during the marriage. The judgment stated the funds would be transferred through a Qualified Domestic Relations Order (QDRO). At the time the judgment was entered, George was not receiving any retirement benefits. The judgment did not state which party was responsible for entering the QDRO.
We also can divine from the opinion that: the language of the PSA did not specify whether Annie was to receive 1/2 of the retirement accumulated during the marriage, or 1/2 of all George’s retirement, a significant portion of which would be earned after the divorce; it did not spell out what consideration would be given to future pay increases on George’s ultimate obligation to Annie; it also did not settle the question whether the payments were intended to be paid out in a lump sum as property settlement or whether they were intended to be paid monthly as benefits were paid out to George, in the nature of alimony.
The legal considerations that remained unaddressed in the parties’ agreement were, at least, the following:
- PERS takes the position that federal ERISA and Mississippi law do not allow division of PERS benefits by QDRO. The agreement should have provided that it would be divided by payment, unless George left PERS employment and withdrew his account, at which time it would be divided by specified percentages between them. No mention should have been made of a QDRO vis a vis the PERS benefits. Also, whose responsibility it was to trigger the payment of benefits should have been specified in the agreement.
- Final calculation of the PERS benefit is based on the highest four years of earnings. Since George was not a retirement age at the time of the divorce (he did not retire until 2011), the parties should have negotiated and included in their agreement how Annie’s 1/2 benefit would be calculated, taking into account the probability of George’s future pay increases.
- PERS benefits can not be paid out in a lump sum unless the employee leaves PERS employment. As mentioned above, this obvious point should have been addressed in the parties’ agreement. In essence, these parties had no choice but to have Annie’s share paid out over time. That is what the chancellor in Pruitt v. Pruitt tried to do, but was reversed by the COA. The problem, based on Pruitt, seems easy to address in a rational way, but is in reality deceptively difficult to resolve.
Every one of the foregoing deficiencies came back to bite these parties in the proverbial nether regions. Annie brought a contempt action against George because he did not initiate a QDRO, and for her unpaid benefits. George countered that he owed nothing, since PERS could not be divided by QDRO. The chancellor calculated what she concluded was Annie’s portion, and ordered that Annie receive that from George’s retirement payments as paid, and she awarded Annie a judgment with modest interest for the benefits that he had received and not shared with Annie. She died not find George in contempt.
George appealed, raising all of the points above. The COA affirmed.
It would have saved everyone involved a lot of legal fees, costs, aggravation, anxiety, and time if only some more attention and effort had been put into the drafting of the PSA in the first place. Yes, it would have required more time for negotiation and drafting, but it would have settled the issue as early as 2011 without the need for further litigation. It’s called draftsmanship.
Checklists, Checklists, Checklists
August 12, 2014 § 11 Comments
You can skip over this post if you’ve been paying attention to this blog for any appreciable length of time.
For you newcomers and oblivious long-timers, you need to know and appreciate that proving many kinds of cases in chancery court is a matter of proving certain factors mandated from on high by our appellate courts. I’ve referred to it as “trial by checklist.”
If you don’t put on proof to support findings of fact by the chancellor, your case will fail, and you will have wasted your time, the court’s time, your client’s money. You will have lost your client’s case and embarrassed yourself personally, professionally, and, perhaps, financially.
I suggest you copy these checklists and have them handy at trial. Build your outline of the case around them. In your trial preparation design your discovery to make sure that you will have proof at trial to support findings on the factors applicable in your case. Subpoena the witnesses who will provide the proof you need. Present the evidence at trial that will support the judge’s findings.
If the judge fails to address the applicable factors in his or her findings of fact, file a timely R59 motion asking the judge to do that. But remember — and this is critically important — if you did not put the proof in the record at trial to support those findings, all the R59 motions in the world will not cure that defect.
Here is an updated list of links to the checklists I’ve posted:
Income tax dependency exemption.
Modification of child support.
Periodic and rehabilitative alimony.
And here are two checklists that will help you in probate matters:
What has to be Re-addressed in an Equitable Distribution Remand?
August 11, 2014 § Leave a comment
When equitable distribution is reversed and remanded for a do-over, alimony has to be redone also, because the two are inextricably intertwined; as equitable distribution expands, alimony contracts, and vice versa.
But what about child support?
The COA’s decision in Rodrigue v. Rodrigue, handed down July 29, 2014, reminds us that child support and attorney’s fees have to be revisited, as well:
¶47. Deidi argues that the chancellor committed error in the computation of child support and by not awarding her attorney’s fees. As set forth above, in Lauro [v. Lauro, 847 So.2d 843, 850 (¶17) (Miss. 2003)], the Mississippi Supreme Court determined that since the case was remanded for further consideration of equitable division, the chancellor should be instructed “to revisit the awards of alimony and child support after he has properly classified and divided the marital assets.” Lauro, 847 So.2d at 850 (¶17). Thus, since this case has been remanded for further consideration of equitable division of assets and alimony, on remand, the chancellor will have all the tools of marital dissolution available: equitable division, lump-sum alimony, and periodic alimony. Likewise, the chancellor may revisit the awards of child support and attorney’s fees.
I was aware of the language in Lauro that requires the remand court to look not only at equitable distribution, but also at alimony and any child support. I was unaware that the remand also embraced attorney’s fees. It is logical, though, that the judge on remand, after completing a re-analysis of the division of the marital estate, and after the award of alimony and child support, could arrive at a different conclusion about ability to pay attorney’s fees.
An interesting feature of this case is that the chancellor did not treat a private-school debt, apparently for tuition, as a marital debt. It’s pure speculation on my part, but I will bet that stems from the chancellor’s confusion over how exactly to treat private school expenses. It’s a confused area, with cases going every which way. If we need some bright line guidance in an area, private school expenses is one.
The Calculating Judge
August 5, 2014 § 10 Comments
I don’t think I’m overstating when I say that the sum of case law requires chancellors to be at times mindreaders, engineers, valuation experts, tax experts, soothsayers, sages, interpreters, accountants, astrologers, psychologists, geneticists, mathematicians, theologians, and, always, legal scholars. I am sure, with a little research, I could add some more roles that our jurisprudence has conferred on chancery judges.
As for the role of mathematician, it has long been the law in Mississippi that the judge may do calculations to arrive at her conclusions. That almost goes without saying, since many cases we hear involve piles of bank statements, appraisals, balance sheets, general ledgers, financial statements, tax returns, and all kinds of other data that require number-crunching.
But how far does that computational authority extend?
That was the question posed in the COA case of Pruitt v. Pruitt, decided July 29, 2014. In Pruitt, the chancellor had less than ideal proof of the value of the parties’ respective PERS accounts in an equitable distribution/alimony case. He requested further proof to support his decision, but the parties told him, in essence, that such proof was unavailable. In other words, “Judge, you’re on your own.”
Faced with what he apparently considered a dearth of proof, the chancellor found information in a PERS handbook and website that he used to calculate the value of the husband’s PERS account. Based on the figures he derived from his computations, the judge ordered Mr. Pruitt to pay Mrs. Pruitt alimony (or division of PERS benefits; it’s not clear to me which), and he awarded her a judgment for more than $90,000, which was his calculation of the difference in their estates.
Mr. Pruitt appealed. Judge Roberts, for the COA, addressed his issues:
¶9. Ira’s issue on appeal stems from the fact that after the parties went to trial, the chancellor found information from a PERS handbook and the PERS website and determined a value for Ira’s PERS retirement account. Ira argues that the chancellor erred by considering evidence outside the record. We agree.
¶10. In Dunaway v. Dunaway, 749 So. 2d 1112, 1121 (¶28) (Miss. Ct. App. 1999), a chancellor was faced with proof of valuation that was “something less than ideal.” Consequently, the chancellor “made valuation judgments” that had at least some evidentiary support in the record. Id. This Court stated that “[t]o the extent that the evidence on which the chancellor based his opinion was less informative than it could have been, we lay that at the feet of the litigants and not the chancellor.” Id. Accordingly, this Court found that the chancellor had not abused his discretion. Id.
¶11. Although a chancellor may value assets based on evidence that is based on something less than ideal, the chancellor’s valuation must be based on at least some evidentiary support in the record. In other words, we must draw a distinction between less-than-ideal evidence presented by parties to the litigation, and information outside of the record that neither party presented. Despite the chancellor’s clear and thorough attempt to resolve the issue in an equitable manner, under the precise circumstances of this case, we must find that it was an abuse of discretion to consider evidence that was outside the record. It follows that we remand this case for further proceedings.
Having said that, the COA’s remand instructions help illuminate the scope and approach that applies:
¶12. On remand, the chancellor may exercise his considerable discretion when calculating the manner in which Ira’s PERS retirement benefits should impact the equitable distribution of Ira’s and Lena’s marital assets and liabilities. We are aware of no restriction on the chancellor’s right to calculate Ira’s income based on the monthly payments he receives from his PERS annuity – at least to the extent that such income impacts Ira’s ability to pay Lena alimony. But we caution the chancellor to remain mindful that Ira cannot exercise any option to pay Lena a lump-sum figure from his PERS retirement account. Essentially, a lump-sum payment from Ira’s PERS account would operate as a qualified domestic relations order (QDRO). A QDRO is permissible in the context of a retirement account governed by the Employment Retirement Income Security Act (ERISA). See Parker v. Parker, 641 So. 2d 1133, 1137 (Miss. 1994). But ERISA does not apply to retirement plans that are “established and maintained for its employees by . . . the government of any State . . . .” 29 U.S.C. § 1321(b)(2) (2012). PERS was established “for the purpose of providing retirement allowances and other benefits . . . for officers and employees in the state service and their beneficiaries.” Miss. Code Ann. § 25-11-101 (Rev. 2010). Furthermore, accrued PERS benefits are “exempt from levy and sale, garnishment, attachment or any other process whatsoever, and shall be unassignable except as specifically otherwise provided in this article . . . .” Miss. Code Ann. § 25-11-129(1) (Rev. 2010). Therefore, a lump-sum payment from an accrued PERS retirement account is not permissible by way of a QDRO. We recognize that the chancellor’s order did not specifically attempt to award Lena any figure by way of a QDRO – at least not in name. When the chancellor denied Ira’s motion for reconsideration, he noted Ira’s claim that the lump-sum judgment was a “masked” QDRO “under another name.” The chancellor found no merit to Ira’s claim, but he did not discuss his reasoning. Notwithstanding the name used to describe the lump-sum judgment, the mechanics involved operate no differently than a QDRO. Most importantly, it is legally impossible for Ira to transfer a lump-sum figure from his PERS account. A legally impossible option is not an option at all.
That last paragraph is something you should clip and paste into your notebook of useful chancery information.
Keep in mind that it’s up to the lawyers, and not the judges, to marshal and get into evidence the proof that will support their client’s case. It’s frustrating in the extreme for a judge to have an incomplete and inadequate record which the chancellor is required to analyze applying two, three, four, or more sets of appellate-court-mandated factors.
One point about this case has me scratching my head, though. MRE 201 specifically states that “[a] court may look to any source it deems helpful and appropriate, including official public documents, records and publications …” Unless I am missing sosmething, I would guess that a PERS handbook and the agency’s website would come within that definition. I wonder whether the COA took into account or even considered the broad scope of judicial notice that the MSSC has allowed judges. I posted about the rather breathtaking scope of it here. Three points from that post:
- In Witherspoon v. State ex rel. West, 138 Miss. 310, 320, 103 So. 134, 136-37 (1925), the court held that it was within the judge’s diecretion to ” … resort to … government publications, dictionaries, encyclopedias, geographies, or other books, periodicals and public addresses. (citing, inter alia, Puckett v. State, 71 Miss. 192, 195, 14 So. 452, 453 (1893)). Nothing in Rule 201 casts doubt on Witherspoon.”
- In Enroth v. Mem’l Hosp. at Gulfport, 566 So. 2d 202, 205 (Miss. 1990), the chancellor’s decison was upheld, notwithstanding that he took judicial notice, without advising the parties in advance, of: (1) numerous newspaper articles discussing the nature, operation and funding of Memorial Hospital, (2) conversations with physicians, (3) conversations with the Chancery Judge’s own niece who was an employee at the hospital, (4) conversations with a lawyer not involved with this particular case but who was familiar with the matter, and (5) the fact that, before becoming Chancery Judge and in his prior capacity as a lawyer, he had been involved in a lawsuit regarding the hospital in which its legal status had been an issue.
- In neither of these cases, nor in the more contemporary case cited in my previous post, to my knowledge, did the judges give advance notice of the matters of which they took judicial notice in their rulings.
Why was it error for the chancellor in Pruitt to consult with official publications in making his calculations, but it was not error in the cases cited above for the judges to range far beyone the record in making their findings?
Was it the computation in Pruitt that was the offending act, or was it going outside the record? I’ll leave it to you to calculate.
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