The Disappearing Child Support Arrearage
November 12, 2015 § 3 Comments
Occasionally some lawyer will approach me and ask that I sign an Agreed Judgment, signed off by all concerned, that settles a contempt issue. The petition charged that the respondent had something like a $3,500 arrearage, but now the judgment says he is current. “What happened to the arrearage?” I ask. The answer is something like, “Oh, we agreed to let that go if he would agree to supervised visitation from now on,” or “He really owes $3,500, but we agreed to forgive that if he would just pay on time in the future.”
Well, you just can’t do that, not even by agreement.
In the recent COA decision in Caldwell v. Atwood, handed down November 3, 2015, the court noted at ¶20 that, “While the law allows for credit to be made for child-support payments through additional physical support by the noncustodial parent, it does not permit those payments to simply be ‘purged,’ whether by an agreement or order.”
This is a subject about which I have posted here before. You simply can’t contract away an arrearage, and, for that matter, you can’t contract away your minor children’s right to future support.
In Caldwell, the chancellor had found Thomas Atwood in arrears in child support, but did not adjudicate an amount, or order him to pay it. Instead, the chancellor ordered him to “purge” himself of contempt by paying future support equal to 14% of his adjusted gross income. The COA reversed, holding that it was error for the judge in essence to forgive the arrearage. As the court went on to say in its decision:
¶19. It is well settled that “court-ordered child-support payments vest in the child as they accrue and may not thereafter be modified or forgiven, only paid.” [Harrington v. Harrington, 648 So.2d 543, 545 (Miss.1994) … at (¶14) (quoting Varner v. Varner, 588 So. 2d 428, 434 (Miss. 1991)). “Such benefits belong to the child, and the custodial parent has a fiduciary duty to hold them for the use of the child.” Id. at (¶13) (quoting Smith v. Smith, 20 So. 3d 670, 674 (¶13) (Miss. 2009)).
The COA remanded the case for the trial court to determine the amount of arrearage owed to Caldwell, and to formulate a payment plan.
On a related point, there seems to be a vogue whereby the divorcing parents agree to joint legal and physical custody, and they use that arrangement to justify no child support, I guess due to the “shared custodial arrangement.” I do not believe in most cases that this is in the best interest of the children. To me, the custody arrangement is being driven not by what the parents truly believe is best for the children, but rather by the desire to create a mechanism that the judge will approve that will eliminate child support. I look at these with great skepticism. The parents have to convince me that the arrangement is genuinely in the best interest of the children. And, if there is a discrepancy in income, I require the parent with greater income to pay child support based on the difference. When parties learn that there is a way to get out of paying, they will exploit that loophole to gain an advantage in divorce negotiations that can have a negative effect on the children.
Semper Pactiones Quod Non
June 16, 2015 § Leave a comment
If the title of this post is not a legitimate Latin legal maxim, it should be, because it captures the essence of an important principle of extra-judicial modification. The above can be translated as “You don’t always get what you bargained for.”
That most certainly was true in the case of Patrick and Lesa Deckard, who were divorced from each other in 2003. The divorce judgment required Patrick to pay Lesa $1,200 per month as support for their two children.
Soon after the divorce one of the children went to live with the paternal grandparents. Patrick contended that he and Lesa agreed between them that the child support would be reduced to $800 a month, and then later to $600 a month. Yet another, later, agreement had Patrick paying child support of $700 a month, the amount of private school tuition. Lesa took the position that Patrick dictated what he would pay by claiming it was all he could afford; she pointed out also that Patrick never paid the amounts in question, anyway. Patrick did not produce any evidence of any extra-judicial agreements.
The chancellor found Patrick in contempt and awarded Lesa judgments totaling around $114,000 for unpaid child support, unpaid medical expenses of the children, and attorney’s fees. The judge also ordered Patrick to pay $800 in child support from that point on. Patrick appealed.
In the case of Deckard v. Deckard, decided June 2, 2015, the COA affirmed, Judge Ishee’s opinion laid out the rationale:
¶6. In the judgment of divorce issued by the chancery court on December 18, 2003, Patrick was ordered to pay child support in the amount of $1,200 per month. In the order dated March 6, 2014, Patrick was found to be in contempt for his failure to pay $107,013 in child support from 2005–2014. Patrick argues that the amount claimed is too high because their oldest son, Taylor, moved in with his paternal grandparents soon after the divorce.
¶7. Patrick asserts that allowing Lesa to collect child support from Patrick for Taylor’s benefit would be unjust enrichment because “for all practical intents and purposes he had never been in Lesa Deckard’s home and she never expended any monies for child support for his use and benefit.” However, the chancellor disagreed and found that Patrick owed the amount ordered by the original agreement to Lesa in unpaid child support. In doing so, the chancellor quoted the following from Smith v. Smith, 20 So. 3d 670, 674 (¶¶13-14) (Miss. 2009) (citations omitted):
The law remains firm that court-ordered child-support payments vest in the child as they accrue and may not thereafter be modified or forgiven, only paid. But this does not mean that equity may not at times suggest ex post facto approval of extra judicial adjustments in the manner and form in which support payments have been made. The noncustodial parent may be entitled to credit for any additional support which he/she has evinced by satisfactory proof to the trial court.
. . . .
In a contempt action concerning past-due child support, when the custodial parent introduces evidence that the noncustodial parent who is required to pay the support has failed to do so, a prima facie case of contempt has been made. At this point, the burden falls on the defending party, to avoid a finding of contempt, to prove that there was payment or other defense, and this proof must be “clear and convincing and rise above a state of doubtfulness.”
¶8. The chancellor found that while Taylor was living with Patrick’s parents, Patrick did not contribute any money or financial assistance in any manner to his parents for Taylor’s benefit. Accordingly, the chancellor found that there was not any evidence before the court that would allow Patrick to receive a credit for any child-support payments.
¶9. Although Patrick cites the case of Brewer v. Holliday, 135 So. 3d 117 (Miss. 2014), to support his position, the facts in this case are distinguishable from the facts in Brewer. In Brewer, the Mississippi Supreme Court reversed the chancellor’s finding that a man was not entitled to a credit for the amount of child support he had paid to his ex-wife for the period of time in which their son did not live with her. Brewer, 135 So. 3d at 121 (¶16). However, the chancellor only agreed to the credit because the son had been living with his father while his father was still paying the mother child support for him. Id.
¶10. In the instant case, Taylor was living with Patrick’s parents, and Patrick admits that there is no evidence that he contributed any money to his parents for Taylor’s expenses. “Whether or not a non-custodial parent should be given credit against his/her child support obligation[] is a matter left to the sound discretion of the chancellor.” Strack v. Sticklin, 959 So. 2d 1, 5 (¶14) (Miss. Ct. App. 2006). As such, we agree with the chancery court that Patrick is in contempt for his failure to pay $107,013 in child support.
Oh, and Patrick overlooked the fact that when child support is global (i.e., one amount for all children, as opposed to a specified amount per child), the fact that one child is no longer entitled to support (e.g., due to emancipation), it does not necessarily result in a reduction in the total amount of child support.
And on the issue of the enforceability of the extra-judicial agreements, the COA first pointed out that the evidence was in dispute as to whether there were ever any such agreements, and then made this observation:
¶13. “No party obligated by a judicial decree to provide support for minor children may resort to self help and modify his or her obligation with impunity.” Crow v. Crow, 622 So.2d 1226, 1231 (Miss. 1993) (citation omitted). “A party making an extra-judicial modification does so at his own peril.” Id. (citation omitted). Because there is no evidence of an extrajudicial agreement, we affirm the chancery court’s findings that Patrick is in contempt for $107,013 for unpaid child support.
An especially good lawyer will sit down with her client in the aftermath of a divorce, or custody, or child-support case and carefully explain that people quite often will try to reach all kinds of handshake agreements later — whether out of a desire to avoid more bloodshed and hard feelings, or to avoid the pain of more attorney’s fees, or from exhaustion — and those kinds of agreement are fraught with peril. Better to get some legal advice and a court order before changing what the court ordered.
Who’s to Blame?
June 2, 2015 § Leave a comment
This is from a PSA entered into between Joe Bryant and his then-wife, Adella Jones:
[Adella] will receive as property settlement[] fifty percent (50%) of [Joe’s] disposable retirement from the Unites States Marine Corps/Army National Guard and fifty percent [50%] of [Joe’s] disposable retirement from the Veterans Administration which will be paid directly to [Adella] by the United States Marine Corps/Army National Guard and the Veterans Administration.
Joe retired from the VA on November 1, 2008, and from the military on June 30, 2010, and began receiving 100% of his retirement from both. He never paid any of the amounts received to Adella.
In October, 2010, Adella submitted her application for her retirement benefits, unaware whether Joe had retired, and she began receiving her one-half in January, 2011.
After Joe had filed a futile modification action, and she learned that he had begun receiving 100% of his retirement benefits for a time before she received any, Adella filed a contempt action against Joe.
Following a trial, the chancellor ruled that it was the military, and not Joe, that was required to make the payments, and, therefore, that he was not in contempt. The judge did award Adella a judgment against Joe for one-half of the retirement he had received in the interim in the amount of $46,433. Adella appealed.
On April 7, 2015, the COA affirmed in Jones v. Bryant. Judge Carlton’s for a unanimous court explained:
¶15. In the July 2, 2013 order granting Adella’s motion to dismiss [Joe’s pleading for modification], the chancellor found that “after reviewing the property settlement agreement, . . . the provisions regarding military retirement are clear and unambiguous and should not be modified.” The chancellor later entered a final judgment on August 8, 2013, further holding that “the property settlement agreement requires Adella’s portion of the retirement to be paid by the United States Marine Corps/Army National Guard and the Veterans Administration rather than by Joe,” and as a result, “Joe is not in willful and contumacious contempt of the agreement.” We find Adella presented no evidence to support her claims that Joe willfully or intentionally violated any court order. The record reflects that the plain language of the property-settlement agreement in this case provides that Adella’s portion of Joe’s military retirement pay would be paid directly to her by the Marine Corps/Army National Guard and Veterans Administration.
¶16. The Uniformed Services Former Spouses’ Protection Act (USFSPA) provides former spouses, who are awarded a portion of military retirement pay in a divorce, with “a mechanism to enforce retired pay as property award by direct payments from the member’s retired pay.” See Defense Finance and Accounting Service, Frequently Asked Questions, http://www.dfas.mil/garnishment/usfspa/faqs.html; 10 U.S.C. § 1408 (2012). [Footnote omitted] The former spouse must complete and provide the required applications, relevant court order, and supporting documentation, as required by statute and regulations, to the designated Defense Finance and Accounting Service, and the language in the property award must also comply. [Footnote omitted]
¶17. After our review of the record, we find substantial evidence exists in the record to support the chancellor’s final judgment determining Joe was not in willful and contumacious contempt of the property-settlement agreement or any other court order. Accordingly, we also find no error in the chancellor’s denial of attorney’s fees to Adella. See Henderson v. Henderson, 952 So. 2d 273, 280 (¶23) (Miss. Ct. App. 2006).
How can you avoid a similar result for your client?
- Any duty that you want to be enforceable later in favor of your client needs to spelled out. Here, it would have been simple to spell out that Joe had the duty to notify Adella in writing within a specified time of his retirement. For example, he could have been required to send her a copy of his application for benefits simultaneously with its submission to the agency.
- Whenever a contract requires third-party payments on behalf of A, specify that A will be responsible to make the agreed payments himself to B until the third party begins making them. For instance, “Joe will pay one-half of any retirement benefits received by him directly to Adella until such time as the [agency] begins withholding her 50% portion” or words to that effect.
- You might want to read that Department of Defense material and incorporate some of it verbatim in your PSA. Agencies understand their own jargon better than yours or the court’s.
- Is it in your client’s interest to spell out whether the retirement is being paid as property division on the one hand, or as alimony on the other? It might be; you need to consider it.
- Know and understand how the retirement system works. Read the interpretive material. Study the website. Draft your PSA from a position of knowledge, not guesswork.
Some Useful Information on Civil Contempt
May 20, 2015 § Leave a comment
From Newell v. Hinton, 556 So.2d 1037, 1044 (Miss. 1990):
If the purpose of the proceedings is to coerce action or non-action by a party, the order of contempt is characterized as civil. This type contempt proceeding is ordinarily instituted by one of the parties to the litigation who seeks to coerce another party to perform or cease performing an act. The order of contempt is entered by the court for the private benefit of the offended party. Such orders, although imposing a jail sentence, classically provide for termination of the contemnor’s sentence upon purging himself of the contempt. The sentence is usually indefinite and not for fixed term. Consequently, it is said that the contemnor ‘carries the key to his cell in his own pocket.’ [citations omitted]
Jones v. Hargrove, 516 So.2d 1354, 1357 (Miss.1987). See also, Hinds County Bd. of Supervisors v. Common Cause, 551 So.2d 107, 120-21 (Miss.1989); Smith [v. Smith], 545 So.2d at 727 [(Miss. 1989)].
Even when there has been established a prima facie case of contempt, the defendant may avoid judgment of contempt by establishing that he is without present ability to discharge his obligation. Smith, supra at 727; see also, Prestwood v. Hambrick, 308 So.2d 82, 85 (Miss.1975). If the contemnor raises this as a defense, he has the burden of proving his inability to pay, and such showing must be made with particularity and not in general terms. Clements v. Young, 481 So.2d 263, 271 (Miss.1985) cited in Jones, 516 So.2d at 1357.
There are other defenses as well. For example, the defendant may show that he was not guilty of wilful or deliberate violation of the prior judgment or a decree. Dunaway v. Busbin, 498 So.2d 1218, 1222 (Miss.1986) (emphasis added); Hooker v. Hooker, 205 So.2d 276, 278 (Miss.1967). The burden of the defendant in raising this defense, however, is not nearly as great as the defendant who claims he is without ability to pay. Consequently, it is appropriate that this defense be viewed against the “extremely lenient view this Court and the courts of this state have taken of contempt proceedings in general.” Smith, 545 So.2d at 727. Furthermore, a contemnor also has available to him the traditional notion of “clean hands” as a defense. Vockroth v. Vockroth, 200 So.2d 459, 463 (Miss.1967) cited in Smith, supra. Vagueness or the lack of specificity of the decree gives the contemnor another avenue for defense as well. Id.
Even if the defendant cannot successfully raise a defense, the court’s power to commit a person to jail until he complies with the terms of a decree depends upon his present ability to pay. Wilborn v. Wilborn, 258 So.2d 804, 805 (Miss.1972) quoted in Jones, 516 So.2d at 1357. If the person has already been committed to jail, he is entitled to be discharged on proof of inability to pay. Id. at 1358. This contrasts with criminal contempt in that the purpose of incarceration is punitive and the contemnor is jailed regardless of an offer of payment or a present inability to make payment. Id.; see also 27C C.J.S. Divorce § 715 (1986).
In the case sub judice, although the chancellor may have been correct in granting summary judgment on the issue of contempt, he should have given Newell a meaningful opportunity to present her defense as to payment of the attorneys’ fees. There should have been a careful examination of her present ability to pay. It does not matter that the chancellor suspended his order of incarceration for sixty days giving Newell the time to satisfy the judgment. If she had failed to pay the amount within this time period, according to the chancellor, she would go to jail. And, she would remain in jail until she purged herself of the contempt. This was wrong.
This Court is fully aware of the constitutional problems implicated in the chancellor’s ruling. If for some reason Newell is unable to come up with the amount owed during her life time would that also mean imprisonment for life? This may well be the case. Ex Parte Raymer, 644 S.W.2d 889, 890 (Tex.App.1982); Jones, 516 So.2d at 1358.
In the case of Brown v. Brown, (1933), 205 Ind. 664, 187 N.E. 836 [the Supreme Court of Indiana] stated that when one has been imprisoned for failure to comply with an order … and where [the] defendant is able to show that he has not the actual ability to pay for any one of a number of valid reasons, then [the] defendant is entitled to be discharged. The Court went on to hold that a defendant cannot be imprisoned indefinitely because of failure to pay support money where it is shown that he does not have an ability to make such payments and cites such a practice as being unconstitutional on the grounds of cruel and unusual punishment.
Smith v. Indiana State Board of Health, 158 Ind.App. 445, 303 N.E.2d 50, 60 (1973) quoted in Jones, 516 So.2d at 1358. “The result of [Newell’s] inability to pay may well be an unfortunate one, and this Court appreciates the frustration possibly experienced by the trial judge, but the fact remains that one cannot be imprisoned where the failure to pay is due to an inability to comply.” Jones, 516 So.2d at 1358; see also, Murphy v. Murphy, 447 So.2d 798, 800 (Ala.Civ.App.1984).
Therefore, we must remand this case so that the chancellor can determine if Newell has the ability to reimburse Hinton as well as pay his attorneys fees in defending this case.
Karma is a B****, or What Goes Around Comes Around
April 7, 2015 § 1 Comment
John Bowen got into the habit around 2005 of not paying his child support. His ex, Patricia, had to retain an attorney to file repeated petitions for contempt. When he did begin complying — more or less — with the court’s child support orders, he did so by paying the child support into the registry of the court, which required Patricia to retain an attorney to get a judge to sign a court order authorizing the Chancery Clerk to disburse the funds to her.
In 2009, the chancellor found John in contempt and slapped him with $10,000 in attorney’s fees. John appealed, and the COA, in Bowen v. Bowen, 107 So.3d 166 (Miss. App. 2012), affirmed the finding of contempt, but remanded for the chancellor to make findings on the McKee factors.
On remand, the chancellor awarded Patricia $7,350 in attorney’s fees. John again appealed.
In Bowen v. Bowen, handed down March 24, 2015, the COA affirmed. Judge Roberts, hitting the nail on the head, wrote for the unanimous court:
¶5. John’s sole issue on appeal is that the chancery court erred in awarding Patricia $7,350 in attorney’s fees. On appeal, we employ the abuse-of-discretion standard when reviewing a trial court’s grant or denial of attorney’s fees. Proctor v. Proctor, 143 So. 3d 615, 623 (¶34) (Miss. Ct. App. 2014) (citing Miss. Power & Light Co. v. Cook, 832 So. 2d 474, 478 (¶7) (Miss. 2002)). In McKee v. McKee, 418 So. 2d 764, 767 (Miss. 1982), the Mississippi Supreme Court provided factors for consideration when determining the proper amount of attorney’s fees to award:
The fee depends on consideration of, in addition to the relative financial ability of the parties, the skill and standing of the attorney employed, the nature of the case and novelty and difficulty of the questions at issue, as well as the degree of responsibility involved in the management of the cause, the time and labor required, the usual and customary charge in the community, and the preclusion of other employment by the attorney due to the acceptance of the case.
¶6. Following this Court’s mandate, the chancery court held a hearing on the issue of attorney’s fees. Nancy Liddell, Patricia’s attorney, submitted into evidence an itemized bill for her work related to the case. She testified that in any instance where modification was mentioned in the bill, she halved the fee charged; thus, only the time spent working on the contempt action remained. Liddell additionally submitted an affidavit from a local attorney confirming that the range of $150-$200 per hour was the usual and customary rate for DeSoto County. John’s attorney did not dispute that these were the customary rates for DeSoto County. Patricia testified that she believed Liddell’s rate was reasonable, and that she “probably worried [Liddell] to death” with her constant communication. Patricia further elaborated that without Liddell’s aid, she would have been unable to get the owed child support from John. Liddell also testified that she expended many hours on this case, as it was more than just an average contempt action, and she had to turn away potential clients to handle this particular case.
¶7. In addressing the McKee factors in its oral ruling, the chancery court noted that the case was a novel case for a contempt action and had been ongoing since 2005. According to the chancery court, Patricia had to repeatedly file petitions for contempt because John would not obey court orders to pay child support. The chancery court explained that each time John failed to pay child support, Patricia “would have to talk to her attorney, have a petition filed, and after the petition [was] filed, after [John or his attorney were] served, then before [they] actually would have a trial, [John] would pay that child support. But he would not pay it directly to [Patricia].” When John did pay the child support, he would pay it to the chancery court, which required a signed order to release the check to Patricia, again requiring Liddell to prepare a motion for release of funds and an order to release the funds. The chancery court further stated that John, “by his repeated intentional misconduct[,] caused [Patricia] to incur attorney[’s] fees that she did not have money to pay[, o]ver and over and over again[,]” and Liddell successfully obtained relief for Patricia each time John failed to pay. The chancery court also found that Liddell was a skilled lawyer with over twenty years of experience, who missed other employment opportunities due to the constant work and preparation of this case. According to the chancery court, while this amount of attorney’s fees appeared high for an average contempt action, the $150-$200 per hour was a reasonable fee, and the bill would not have been as high if it were not for John’s repeated misconduct.
Patricia’s lawyer did a nice job of addressing the McKee factors with substantial proof. That gave the chancellor an adequate basis to support her ruling.
Remember that proof of McKee factors is not, strictly speaking, required to support an award of attorney’s fees in a contempt action; however, there must be some evidence of reasonableness. In other words, the chancellor has to have some basis to say that the award is reasonable. The best and most expeditious way to do that is via the McKee factors, as the COA ordered in this case.
Oh, and getting back to our starting point, did you notice how spiteful and intransigent John appeared to be in how he responded to the court’s orders to pay child support? Well, that’s where karma comes into play. Judge Roberts addressed the karma factor:
¶8. Based upon the evidence presented, we find that the chancery court did not abuse its discretion in awarding Patricia $7,350 in attorney’s fees. As the supreme court noted in Mabus v. Mabus, 910 So. 2d 486, 489 (¶8) (Miss. 2005), in contempt actions, “[w]here a party’s intentional misconduct causes the opposing party to expend time and money needlessly, then attorney[’s] fee and expenses should be awarded to the wronged party.” The chancery court found that the itemized expensed entered into evidence were reasonably incurred due to John’s repeated misconduct.
Karma is, indeed, a B****. Or, as we say in chancery court: Who seeks equity must do equity.
Trifling with Visitation is no Trifling Matter
February 2, 2015 § Leave a comment
Some of the most bothersome and galling matters with which family lawyers have to contend are problems with visitation. They can include outright denial of visitation, conflicts during exchanges, interference during visitation, refusal to return a child, and every other atrocity one can conjure up. Those calls on the weekend and in the evenings can wear one to a frazzle.
In the case of Ash v. Ash, 622 So.2d 1264 (Miss. 1993), the MSSC affirmed a chancellor’s modification of custody based on a mother’s obstinate refusal to allow visitation and non-compliance with court orders, which the court described as involving the attention of “two prior chancellors and six attorneys” in more than ten court proceedings before the modification judgment.
In the case of Strait v. Lorenz, handed down January 6, 2015, the COA affirmed a chancellor’s decision to modify custody based on Travis Strait’s long-standing denial of visitation to his ex-wife, Kristy Lorenz. The parties had agreed in their irreconcilable differences divorce that they would share joint legal custody of their daughter, Jane, and that Travis would have “primary physical custody.”
Following the divorce, Kristy filed five times for modification and/or contempt, alleging denial of and interference with visitation in most of the actions. Travis filed actions in California and Hawaii for TRO’s, both of which were vacated. The chancellor in Mississippi denied Travis’s efforts to dismiss for lack of jurisdiction or to remove the case from Mississippi based on forum non conveniens.
In her pleadings, Kristy charged that Travis had sexually abused Jane, so the chancellor appointed a GAL to investigate. The GAL’s report was unfavorable to Travis, and, on Kristy’s motion, the chancellor entered an emergency temporary order changing custody to Kristy until the final hearing.
The chancellor awarded Kristy custody and other relief, and Travis appealed.
On the issue of material change, Judge Griffis of the COA said this:
¶27. In Ash, the chancellor issued various visitation-related restraining orders, emergency orders, and modification orders over the course of five years. Id. at 1265. The non-custodial parent then filed another motion to change custody and find the custodial parent in contempt. Id. The chancellor granted the motion, finding a material change in circumstances had occurred. Id. In affirming the chancellor’s ruling, the supreme court found that the visitation dispute was tackled by “two prior chancellors and six attorneys, [and] more than ten court proceedings,” none of which resolved the issue. Id. at 1266.
¶28. The facts in this action are comparable to Ash. As in Ash, the chancellor here contemplated liberal visitation, which was deliberately denied. See id. Also, there was an “onslaught of pleadings . . . stemming from visitation problems,” none of which were resolved by the chancellor’s orders. Id. at 1265.
¶29. Travis admittedly ignored Kristy’s attempts to contact him and would not allow Jane to take Kristy’s phone calls. The chancellor encouraged communication between Kristy and Jane through email and mail, but Travis disabled Jane’s email account that Kristy had created for her and there was testimony that Jane did not receive cards mailed to her. We cannot find the chancellor erred in finding the repeated failure to comply with visitation order was a material change in circumstances, for which contempt orders would not resolve.
¶30. Travis argues that the lack of visitation was not a “change in circumstances,” but rather a foreseeable, continued animosity between the parties that existed from the time of divorce. We cannot find that the chancellor anticipated, at the time of the divorce decree, that Travis would continuously refuse to comply with the visitation orders. Also, we note that no a single act of denying visitation amounted to a material change in circumstances. Rather, as in Ellis [v. Ellis, 952 So.2d 982 (Miss App 2006)], it was the “continued violation of court orders pertaining to visitation and continued hindering of the visitation time” that amounted to a material change in circumstances. Ellis, 952 So. 2d at 990 (¶17) (emphasis in original). Given the severity of the denial of visitation, we cannot find the chancellor abused his discretion in finding the denial of visitation was a material change in circumstances.
So the key is the “severity of the denial of visitation” which, from the cases, must be long-standing and extreme, and most likely involve repeated violations of court orders.
You should note that the proof in Strait included testimony of a mental health professional that the father’s conduct did have an adverse effect on the child. The opinion did not say so, but it apparently is not enough merely to show alienation and interference with contact; rather, the proof must show that the alienating behavior did have an adverse effect on the child, and the testimony of a mental health professional is probably the best means of doing that. In Strait, Travis’s behavior was so adverse that the chancellor characterized his custodial environment as “poisonous.”
I agree that most visitation disputes are more vexing than dangerous, and more paltry than extreme. Yet, if more parents understood that interference with visitation could lead to modification of custody, I believe it would result in far fewer visitation disputes in court.
The Importance of a Hold-Harmless Clause
January 27, 2015 § 1 Comment
Jeremy and Tiffiny Moseley entered into a property settlement agreement (PSA) that was incorporated into their 2000 irreconcilable differences divorce judgment. One of its terms was that Jeremy would have “exclusive use and possession of the 1998 Chevrolet Camaro,” and that he would be “solely responsible for the payment of all debt, insurance, and taxes associated with said vehicle. The agreement also provided that Jeremy would “hold [Tiffiny] harmless for any debt associated with said vehicle.”
Following the divorce, Jeremy filed for bankruptcy in Arizona, where he had moved. He listed as a creditor the lienholder on the Camaro, Trustmark, but he did not list Tiffiny as a co-debtor or separate creditor based on the hold-harmless language. Jeremy was discharged in bankruptcy in 2001. [Note that this was a pre-2005-amendment non-support obligation that was dischargeable in bankruptcy]
Trustmark sued Tiffiny and obtained a judgment against her for more than $15,000, plus interest.
Tiffiny sued Jeremy for contempt for non-compliance with the hold-harmless clause. The chancellor held that the bankruptcy had no effect on his obligation to Tiffiny under the hold-harmless clause, and awarded her a judgment against him, plus interest and attorney’s fees. He appealed.
In Moseley v. Smith, decided December 2, 2014, the COA affirmed, and Judge Maxwell’s opinion includes some significant language about hold-harmless clauses that you need to file away for future use:
¶16. We begin with the bankruptcy issue. Moseley seems to treat his financial obligations involving the Camaro as a singular debt—a debt he owed to Trustmark, which was discharged in his Chapter 7 bankruptcy. But Moseley actually had two debts connected to the Camaro—(1) the debt to Trustmark bank to repay the car loan, and (2) the contingent debt to Smith, which would arise if Trustmark went after her for repayment of the car loan. While Moseley listed the first debt to Trustmark on his bankruptcy petition, he omitted his second debt to Smith. He also failed to otherwise notify Smith that her rights as a creditor may be affected by his bankruptcy petition. Thus, his debt to Smith was not covered by his bankruptcy discharge. See In re Hill, 251 B.R. 816, 821 (Bankr. N.D. Miss. 2000) …
¶17. In bankruptcy terms, the provision in the property-settlement agreement that Moseley would hold Smith harmless for any debt associated with the Camaro “create[d] a ‘new’ debt, running solely between the former spouses.” In re Jaeger-Jacobs, 490 B.R. 352, 357 (Bankr. E.D. Wis. 2013) (citing In re Schweitzer, 370 B.R. 145, 150 (Bankr. S.D. Ohio 2007)). Under the version of the United States Bankruptcy Code in effect during Moseley’s 2001 bankruptcy, this type of debt was presumptively non-dischargeable as a non-alimony debt “incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record[.]” In re Clark, 207 B.R. 651, 655 (Bankr. E.D. Mo. 1997) (quoting 11 U.S.C. § 523(a)(15) (1994)).
The opinion goes on to analyze the notice requirements in effect at the time of Jeremy’s bankruptcy, and how failure to give Tiffiny notice affected her ability to file a timely objection. Those notice and objection requirements were changed by the 2005 amendments to the bankruptcy laws.
The important point here is that when you add hold-harmless language to your PSA you are creating a new debt between the parties that is most likely not dischargeable, is entirely separate and apart from the underlying obligation, and is enforceable via contempt in chancery court.
It would seem to me that even without the hold-harmless language the agreement between the parties is a separate contractual obligation that would be entirely enforceable; however, the authority cited by Judge Maxwell raises the point to a higher level and should remove all doubt if the hold-harmless language is included.
It’s simple to add that hold-harmless language to your PSA templates. It won’t hurt your client if she is the co-debtor who will not be paying the debt, and it just might make a crucial difference somewhere down the line — and that, after all, is your job.
Equitable Estoppel and Enforcement of Child Support
December 18, 2014 § 5 Comments
Jay Wilson and Joy Stewart were engaged in a contempt action over Jay’s failure to pay child support, alimony, and expenses of the children, based on the parties’ 2003 divorce judgment.
The chancellor found Jay in contempt, awarded Joy a judgment, and Jay appealed. Among his grounds for appeal was the claim that Joy was equitably estopped from bringing the child-support-enforcement action, since she had waited several years to do so.
The COA, in Wilson v. Stewart, decided December 9, 2014, by Judge Fair, addressed his argument briefly:
¶14. Jay also argues that Joy is equitably estopped from bringing the contempt action. This Court has found equitable estoppel to be inappropriate in child-support matters. Durr v. Durr, 912 So. 2d 1033, 1038 (¶14) (Miss. Ct. App. 2005). “[C]hild support is for the benefit of the minor. The custodial parent is only a conduit for the support. Therefore, it follows that no action or inaction on the part of the custodial parent can relieve the defaulting parent of that parent’s obligation to pay support.” Id. This argument is without merit.
The Durr decision goes somewhat further:
¶ 13. [Mr.] Durr also argues that Hale is equitably estopped from bringing the contempt action. “Equitable estoppel,” as Durr points out in his brief, “is generally defined as the ‘principle by which a party is precluded from denying any material fact, induced by his words or conduct, upon which a person relied, whereby the person changed his position in such a way that injury would be suffered if such denial or contrary assertion was followed.’ ” Koval v. Koval, 576 So.2d 134, 137 (Miss.1991).
¶ 14. It is well settled law, as we discussed above, that child support is for the benefit of the minor. The custodial parent is only a conduit for the support. Therefore, it follows that no action or inaction on the part of the custodial parent can relieve the defaulting parent of that parent’s obligation to pay support. Moreover, even if we were to find, which we do not, that equitable estoppel might be appropriate in child support cases, we would likewise find that Durr failed to meet the requirements for its application in this case. He has not shown how he changed his position in such a way that he would suffer injury if Hale is allowed to assert his lack of compliance with the judgment of divorce. In a feeble attempt to show that all of the conditions for the application of the doctrine of equitable estoppel exist, Durr argues that he is facing jail time if the arrearage is not paid. This is hardly the type of injury that is contemplated as a condition for the application of “equitable estoppel.”
¶ 15. Further, Durr does not contend that Hale ever informed him that he did not have to pay for Waid’s private school. Rather, his argument, as we have already noted, is that she just waited too long to assert the claim for it. In other words, Durr’s position is that Hale’s inaction in timely pressing the private school tuition, justifiably led him to believe that he did not have to pay it notwithstanding the clear requirements of the judgment of divorce. Surely, Durr knew that any changes to, or modifications of, the judgment of divorce would have to be made by the court in order for them to be enforceable. Therefore, we find this issue lacks merit.
The court also rejected Durr’s claim that his inaction was justified by his ex’s “inaction, representations, and silence.”
So, from the foregoing, I think a proper conclusion is that claims of equitable estoppel are not favored in child-support cases, and that it would take an extreme case to apply it. An example is the fact situation in Varner v. Varner, where the mother informally induced the father to take one of the children back into his custody due to behavior and school problems. During his period of informal custody (i.e., without a court order), the father reduced his child support pro rata. After the father straightened the child out and returned him to the mother’s custody, she sued for the unpaid child support. Varner is not an equitable estoppel case, per se, but its fact situation would justify such a claim in my opinion.
A Double Nightmare for Counsel
December 16, 2014 § Leave a comment
Sometimes we assume something and it makes us say “Ouch.”
Gregory Dailey and his ex, Tracie McBeath, were entangled in child-support-contempt litigation. Hearing had been continued a time or two, and Gregory’s attorney had filed a motion to compel discovery, noticed for the most recent trial setting, and both counsel agreed that the case should be continued. That’s where things went haywire.
Here’s how Judge Barnes, in the COA case of Dailey v. McBeath, issued November 25, 2014, described the situation:
¶5. A hearing on the petition was held April 19, 2012. Tracie’s counsel asserted a motion to compel discovery, claiming that when she had finally received an answer from Gregory a week prior to the hearing, there was no proper documentation (tax returns, check stubs, etc.) included. She also claimed that Gregory had purposely eluded investigators, giving them false information, and that he was hiding assets. Gregory failed to appear at the hearing. His counsel, however, was present and acknowledged that Gregory had not filed tax returns for the last seven years. Gregory’s counsel complained that counsel opposite had not been communicating with him and that he had been unable to depose Tracie, even though he had been trying for months.
So, Gregory is a no-show, possibly because he and his attorney assumed that a simple order addressing the discovery issues with a resulting continuance would be the net result. But, that assumption proved to be painfully incorrect, as Judge Barnes went on to describe:
¶9. Gregory’s counsel made an appearance on his behalf at the April 19, 2012 hearing, evidently expecting that the chancery court was only going to address the motions for discovery and grant the parties’ motions for a continuance. However, the chancellor refused to continue the proceedings and denied both parties’ motions. Although counsel argued that Gregory was located three hours away in Madison, Mississippi, as were the attorney’s files for the case, the chancellor advised the parties to prepare for trial and to attempt to reach an agreement. He admonished:
I’m going to continue with the case and you have no authority to release your client. I have that trouble in other cases and it’s my policy to go forward. . . . And I’m not going to play games with discovery. . . . Y’all should have cooperated with each other. I’m going to try the case, so just get your stuff ready.
. . . .
Now, what I will do is give y’all a chance to visit to see if you can resolve the matter. And it may be that you can talk to your client by phone. I will not tolerate from either one of you all the failure to cooperate and discuss a case.
¶10. On appeal, Gregory argues that the chancellor’s denial of a continuance, which gave his counsel only seventeen minutes to prepare for trial, was “an inherent abuse of discretion” and that he was “ambushed” and “unable to defend himself.” A chancellor’s decision to deny a motion for a continuance is reviewed for abuse of discretion. Sizemore v. Pickett, 76 So. 3d 788, 794 (¶14) (Miss. Ct. App. 2011) (citing Robinson v. Brown, 58 So. 3d 38, 42 (¶10) (Miss. Ct. App. 2011)). Absent a finding of prejudice, we will not reverse the denial of a continuance. Robinson, 58 So. 3d at 42 (¶10). [Footnote omitted]
¶11. While the chancellor’s decision to proceed with the hearing without Gregory present may appear harsh, we find that it was not an abuse of discretion. Gregory and his counsel should have been prepared for the possibility that the motions for a continuance would be denied. Gregory was obviously aware of the hearing, as his counsel was in attendance to represent him. Gregory does not contend that he was unable to attend the hearing, and he knew that he owed the prior judgment to Tracie and that the hearing had been scheduled for several months. Furthermore, the record shows that the chancery court had previously granted a continuance on August 17, 2011, and the chancellor noted at the hearing that the case had been set since February 21, 2011.
¶12. Consequently, we find any prejudice suffered by Gregory due to the chancellor’s decision to proceed with the hearing was of Gregory’s own making, and the chancellor did not abuse his discretion in denying the motions for a continuance.
A few nuggets sifted from the ashes:
- Never wait until the day of trial to bring unresolved discovery disputes to the court’s attention.
- Never assume that you will be granted a continuance, even when both sides ask for it.
- Never, ever, excuse your client from being present for a matter set for hearing by court order.
- Never argue with a straight face that you are being “ambushed” when the case has been set for 14 months.
Remember two important principles:
- The older a case becomes, the less likely the chancellor will be to grant motions that would have the effect of prolonging it, and
- If you insist on assuming something, be prepared to deal with the consequences when your assumption proves to be incorrect.
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.
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