Contempt | The Better Chancery Practice Blog

JUST AND PROPER UNDER THE CIRCUMSTANCES

November 29, 2012 § Leave a comment

A chancellor has the power to impose conditions that may seem “just and proper under the circumstances,” regardless whether any party demanded such relief. Miss. State Highway Commission v. Spencer, 233 Miss. 155, 101 So.2d 499, 504-05 (1958).

The source of this power is apparent in several of the maxims of equity:

Equity will not suffer a wrong without a remedy.
Equity delights to do complete justice and not by halves.
Equity acts specifically and not by way of compensation.

The proper focus of a chancery court remedy, then, should be to fix the underlying problem, completely and not in part.

In three recent COA cases, the court upheld chancellors’ rulings where the trial judge went beyond the pleadings to fashion a remedy designed to fix the underlying problem.

In Goolsby v. Crane, decided October 23, 2012, and discussed in a previous post, the parties were before the court on the mother’s petition to modify to increase child support, and the father’s counterclaim for custody. After hearing all of the testimony, particularly that of the children, the chancellor found that the then-existing visitation schedule was not working, and he modified the visitation schedule. No one had asked for that particular relief, but the COA affirmed on the basis that there was substantial evidence to support the judge’s action.

The case of Finch v. Finch, handed down October 2, 2012, which was the subject of a previous post here, arose from post-divorce contempt and modification procedures. The ex-husband pled that the ex-wife’s alimony should be terminated because she had misled him about joint debts when he agreed to a property settlement agreement, and he now found himself saddled with considerable debt. The chancellor took it a step further and found that the ex-wife had committed a fraud on the court, justifying termination of her alimony. The ex-wife appealed, copmplaining that the ex-husband had failed properly to plead fraud (see Rogers v. Rogers, decided August 1, 2012, and posted about here). The COA affirmed, finding that there was a substantial basis to support the chancellor’s decision, and pointing out anyway that the mention of the words “falsely represented” in the ex-husband’s petition was enough notice that the issue was in play. The court also pointed out that the chancellor has the power under MRCP 60(b) on her own motion to address fraud.

In Scott v. Scott, decided October 30, 2012, the parties had entered into a 1997 property settlement agreement that gave the ex-wife all of the ex-husband’s Tier II Railroad Retirement Benefits “through the date of the divorce.” A separate order was drafted for submission to the retirment agency in the form required by that agency, but the order left out the phrase “through the date of the divorce.” Predictably, when the husband applied for his benefits, he learned to his chagrin that the agency, relying on the order, had awarded the wife 100% of the Tier II without limitation. The ex-husband asked the chancellor to modify to correct the situation, and the ex-wife denied that the property division could be modified. The chancellor brushed aside both positions and invoked MRCP 60(a) to correct the clear discrepancy between the express terms of the parties’ agreement and the order. The COA affirmed.

The common thread in each of these cases is that the trial judge did what she or he deemed “just and proper under the circumstances” to fix the underlying problem. It’s a matter of substance over form.

WHAT DOES IT TAKE TO TRIGGER RELIEF FROM FRAUD ON THE COURT?

October 10, 2012 § 4 Comments

Basically, all you have to do is bring it to the court’s attention, and the judge can do the rest. That’s what the COA decision in Finch v. Finch, handed down October 2, 2012, says.

But before we talk about Finch, let me remind you of the MSSC decision in Trim v. Trim, which held that “the intentional filing of a substantially false Rule 8.05 statement is misconduct that rises above mere nondisclosure of material facts to an adverse party,” and constitutes fraud upon the court. There is no time limit to when that issue can be raised. So to allow your client to submit a false 8.05 is to allow the judgment always and forever to be vulnerable to possibly fatal attack, as was the case in Trim.

Only two months ago the COA held in Rogers v. Rogers that if you are going to claim fraud on the court, you will have to prove all of the classic elements of fraud, or you will fall short.

Now we have Finch, further defining the scope of fraud on the court. In Finch, Rosemary and Stewart, no longer love birds, got an irreconcilable differences divorce in which the special chancellor awarded Rosemary alimony based on financial proof submitted by the parties, including Rosemary’s claim that she was paying certain marital debts that she claimed she had been paying throughout the marriage.

The special chancellor’s appointment expired, and a newly-elected chancellor took the bench and assumed responsibility for the case.

In post-divorce litigation, Stewart asked the court to find Rosemary in contempt and to modify the alimony to take into consideration that Rosemary had “falsely represented” to the court that she had been paying the marital bills. He claimed and proved that she had failed to pay an American Express account, forcing Stewart to borrow some $38,000 to pay it. Also, she had not disclosed other family debt in the divorce that affected Stewart.

The chancellor found that Rosemary’s actions were a fraud on the court, and she decided that the fraud permitted her to reduce the alimony under MRCP 60(b). Stewart had not filed a 60(b) motion, had not specifically requested any 60(b) relief, and did not specifically plead or charge fraud. Rosemary appealed, claiming that it was error for the chancellor to grant 60(b) relief sua sponte, which had the effect of setting aside and doing away with issues to which the parties had agreed and settled before the original trial.

Judge Ishee’s opinion for the court states:

¶18. While Stewart did not file a Rule 60(b) motion, he did allege fraud in the petition for contempt and modification. Furthermore, “[t]he chancery court is vested with broad equitable powers with which it is able to decide if the original order was entered by mistake, fraud of a party, or for another reason justifying relief from the judgment under Rule 60(b) and may do so upon its own motion.” Tirouda v. State, 919 So. 2d 211, 214 (¶7) (Miss. Ct. App. 2005) (citing Edwards v. Roberts, 771 So. 2d 378, 386 (¶28) (Miss. Ct. App. 2000)).

Rule 60(b) even states: “This rule does not limit the power of a court to entertain an independent action to relieve a party from a judgment, order, or proceeding, or to set aside a judgment for fraud upon the court.” Accordingly, the chancery court did not err by finding fraud upon the court and altering the final divorce decree without Stewart filing a Rule 60(b) motion.

Rosemary also tried to claim that the fraud, if any, was on Stewart and not on the court, which argument the COA rejected, based on Trim. She argued in addition that there was inadequate proof in the record of the elements of fraud, which the COA likewise rejected, based on the proof in the record and the findings of the chancellor.

To return to my initial point: all that was necessary in this case was to give the chancellor a suggestion that there may have been a fraud on the court, and she picked it up and ran with it. The chancellor has broad, equitable power when it comes to relief under MRCP 60(b), which the court can exercise on its own motion. In this particular case the problem was fraud, but 60(b) vests the court with the same equitable powers to address mistake, “or any other reason justifying relief from judgment …”

RECIPES FOR INDIRECT CONTEMPT

October 9, 2012 § 2 Comments

We talked here before about the distinction between indirect and direct criminal contempt. Indirect contempt is also called constructive contempt.

Here are some examples where the courts have found it proper to proceed for indirect criminal contempt …

Acts committed outside the presence of the court that hamper its functioning. In Hinton v. State, 222 So.2d 690, 691 (Miss. 1969), the court found that defense counsel’s failure to disclose to the DA (and, presumably, to the court) that he represented a juror’s wife was constructive criminal contempt.
Acts that hinder or prevent service of process, with or without force. Aarons v. State, 105 Miss. 402, 62 So. 419 (1913).
Published materials that address pending court matters and tend to prejudice potential jurors may be punished for constructive contempt; however, there are free speech ramifications that must be carefully weighed by the court. See, Jeffries v. State, 724 So.2d 897, 899 (Miss. 1998).
Abuse of process. In Higgins v. State, 218 Miss. 883, 891, 56 So.2d 61, 63 (1952), the filing of 58 suits for the purpose of harassing the Rankin County Sheriff was found to be constructive criminal contempt.
Contemptuous language in a motion. Wood v. State, 227 So.2d 288, 290 (Miss. 1969).
Contacting or attempting to influence jurors. Young v. State, 230 Miss. 525, 527 (1957). Even a request to bribe a juror, which was not actually attempted despite the request, has been found to be indirect contempt. Brewer v. State, 176 Miss. 803, 809, 170 So. 540, 541 (1936).
Filing false affidavits of return of process with the court clerk. Corr v. State, decided September 20, 2012, and In re McDonald and Cheshire, decided October 4, 2012, both by the MSSC.

RECIPES FOR DIRECT CONTEMPT

October 3, 2012 § 4 Comments

We visited the various types of contempt and how the court addresses them in a previous post.

Here are some examples of direct criminal contempt that the courts have recognized:

Foul or threatening language or physical assault. Lamar v. State, 607 So.2d 129 (Miss. 1992). Note that the misconduct in Lamar took place in the foyer of a court room. Also, Varvaris v. State, 512 So.2d 886, 887-88 (Miss. 1987).
Language insulting to or in ridicule of the court. In re Smith, 926 So.2d 878, 883 (Miss. 2006). Also, Miss. Bar v. Lumumba, 912 So.2d 871, 880-82 (Miss. 2005). See, also UCCR 1.01.
Outrageous dress or costume may be contemptuous, but only after a warning to correct the offense. 17 Am. Jur. 2d Contempt §56.
Refusal to answer questions on the witness stand is contemptuous if no privilege applies. Hentz v. State, 496 So.2d 668, 675 (Miss. 1986).
Disrespectful language in a motion or in argument may be found to be contempt, but if the language is personally insulting to the judge, he should recuse and allow another judge to adjudicate it as constructive criminal contempt. Purvis v. Purvis, 657 So.2d 794, 797 (Miss. 1995).
Tardiness or failure to appear at the appointed time. Wyssbrod v. Wittjen, 798 So.2d 352 (Miss. 2001). See, also UCCR 1.05.
Arriving late for a hearing, even though the attorney had a conflict with another court-scheduled matter, where the attorney did not notify the second court of the conflict and request a rescheduling. Alviers v. Bay St. Louis, 576 So.2d 1256, 1257 (Miss. 1991).
Refusal to attend a court-ordered proceeding without justifiable cause. In re Hampton, 919 So.2d 949, 955 (Miss. 2006).
Contumacious objections that show a refusal to accept the rulings of the court may be contempt, although it is improper for the court to threaten contempt for a single, timely objection. Young v. State, 679 So.2d 198, 205 (Miss. 1996).
Refusal to produce documents in violation of a court order to do so, where no provilege applies. Morgan v. Thomas, 448 F.2d 1256 (5th Cir. 1971). Note that this may also be dealt with as civil contempt.
Drunkenness in the court room that interferes with the court. Neely v. State, 98 Miss. 816, 54 So.2d 315 (1911).
Subornation of perjury. 17 Am. Jur. 2d Contempt §79. But, see Corr v. State, where a false affidavit filed with the clerk for return of process was held to be indirect contempt.

THE INS AND OUTS OF CONTEMPT

September 26, 2012 § 7 Comments

Last week’s Corr v. State decision from the MSSC is a reminder that there are some intricacies to contempt that we should all be aware of as we go about our business in chancery court.

Contempt can be either civil, or criminal, or a combination of both.

Civil contempt is for the benefit of the complaining party, and its purpose is remedial. An example is where the respondent owes child support and is jailed until he can come up with what he owes. The remedy is coercive and is intended to produce compliance. The burden of proof is by a preponderance of evidence.
Criminal contempt is intended to vindicate the authority of the court. The sentence is punitive.
The two types of contempt may be used in combination, as where the court orders the respondent jailed until he pays the amount due, and the court sentences him to thirty days as a punishment for non-compliance.

Civil contempt may be tried on seven days’ notice by Rule 81 summons.

Criminal contempt under Mississippi law may be either direct or indirect. The distinction determines what kind of due process notice is required.

Direct criminal contempt involves words or actions in the presence of the court that are an affront to the authority or dignity of the court. Conduct such as insulting language or behavior, resistance to the court’s authority, disruption of the proceedings and the like may be treated as direct contempt. The court may act instantly to punish the contemnor because no evidence other than the judge’s own perception is necessary to sustain sanctions. In the alternative, the court may wait until later in the proceedings, at a break or at the end of a hearing, to address the misconduct.
Indirect, or constructive, criminal contempt is contemptuous conduct that takes place outside the presence of the court which resists the court’s authority and tends to obstruct, interrupt or embarrass the administration of justice.

Direct contempt may be dealt with immediately, summarily, and without further notice to the contemnor. Some authorities suggest that, if the court delays action, the judge should recuse herself if the contempt is based on personal attacks.

In cases of indirect, or constructive, criminal contempt, the defendant: (1) is presumed innocent until proven guilty beyond a reasonable doubt; (2) is entitled to resonable notice of the nature and cause of the accusation; (3) has a right to be heard; (4) has a right to retain counsel; (5) has the right to call and cross-examine witnesses; (6) has the right to an unbiased judge; (7) has the right to a jury trial; and (8) has the right against self-incrimination. Dennis v. Dennis, 824 So.2d 604, 609 (Miss. 2002). If the judge, as in Corr, is substantially involved in the prosecution, as where he is instrumental in initiating the proceeding, or where he acts as prosecutor and judge, he should recuse himself and have the actual contempt hearing conducted by another judge.

When you draft contempt pleadings, give some thought to what it is you are trying to accomplish. If all you are trying to do is to get the ex-husband to pay his child support, civil contempt may do the job for you. It only requires a preponderance of evidence, as opposed to the heavier burden for criminal contempt. If you insist on criminal contempt, look carefully at Dennis and its requirements. Do you really want to strap them on? Are they really in your client’s best interest? When you insist on criminal contempt, you are affording the defendant Fifth Amendment self-incrimination protection, the higher burden of proof, and even right to a jury trial (this applies in cases where the aggregation of penalties would result in a sentence that would require Sixth Amendment protection. McGowan v. State, 258 So.2d 810, 802 (Miss. 1972); Purvis v. Purvis, 657 So.2d 794, 798 (Miss. 1995); Walls v. Spell, 722 so.2d 566, 574 (Miss. 1998)).

If you simply can not resist the urge to rattle the incarceration saber, be sure to acquaint yourself with the US Supreme Court decision in Turner v. Rogers.

REASONABLENESS AND ATTORNEY’S FEES IN CONTEMPT

September 17, 2012 § 4 Comments

In the COA case of Bowen v. Bowen, decided September 11, 2012, the court reversed and remanded the chancellor’s award of $10,000 fees in a case where the judge found the defendant in contempt. It was not the award of fees that the COA questioned, but rather the amount and reasonableness.

As we have mentioned here before, inability to pay is not a threshhold issue to an award of attorney’s fees based on contempt. In a contempt case, attorney’s fees may be awarded where a party’s intentional conduct causes the opposing party to spend time and money needlessly.

Judge Ishee’s opinion in Bowen points out that the determination whether a fee is reasonable depends on consideration of Mississippi Rule of Professional Conduct 1.5(a) and the McKee factors. He said:

” … even in contempt actions, “[t]he reasonableness of attorney’s fees [is] controlled by the applicable [Rule] 1.5 factors and the McKee factors.” …

¶25. When awarding Patricia attorney’s fees, the chancery court stated:

‘Although [John] has attempted to purge himself of his contempt by bringing the child support and medical insurance payments current, . . . the [c]ourt is going to assess [John] with attorney’s fees incurred by [Patricia]. If not for [John’s] repeated, willful refusal to abide by the orders of this court, [Patricia] would not have incurred the attorney’s fees, which the court finds to be reasonable and [to] meet all of the McKee factors.

There is no indication the chancery court adequately considered the McKee factors when assessing the reasonableness of the attorney’s fees. There was no consideration regarding the parties financial abilities, the novelty and difficulty of the question at issue, or the assessment of the charges.

¶26. The case at hand appears to be a routine contempt action. While large awards for attorney’s fees may still be awarded in contempt actions, they are not typical for a routine contempt action. … Here, an award of $10,000 appears excessive for a routine contempt action in which only $135 in child support remains unpaid. Furthermore, upon a review of the fees incurred, some charges relate to matters outside of the contempt action, such as modification of child support. Because the attorney’s fees were awarded based on John’s ‘repeated, willful refusal to abide by the orders of [the chancery court],’ fees not related to the contempt action should not have been included in the award amount awarded.”

I’ve made the point here before that …

Notwithstanding the more relaxed standard for contempt and misconduct cases, I encourage you to put on proof of the McKee factors and documentation of your time in the case, so that it is in the record if you need it. A post on what you need to prove attorneys fees is here.

Most attorneys in my opinion do not devote much attention or care to making a record on attorney’s fees. That’s ironic, because you would think it would be a subject of sublime importance to the trial attorney.

Here’s a post about how to prove attorney’s fees in a divorce case. It’s more elaborate than the minimum required in a contempt, but it will give you an idea of what is involved in making a record that won’t spring a fatal leak.

YET ANOTHER MILITARY DIVORCE POTHOLE

September 10, 2012 § 2 Comments

Representing military parties in a divorce case got a little more difficult a couple of weeks ago, and you need to pay attention or you might unwittingly victimize a client.

The problem lies in the intersection between state divorce law and federal statues governing military benefits.

The latest case is Mallard v. Burkart, decided by the MSSC on August 30, 2012. The parties were divorced in 2001. A significant part of the financial settlement that Burkart received was 40% of Mallard’s “disposable military retirement pay” for ten years. The language of the PSA to effect this division was as follows:

Pursuant to the Uniform Services Former Spouses Protection Act (“USFSPA”), 10 U.S.C. §1408, the Court makes the finding followings of fact:

(A) That the Husband is currently an active duty service member in the United States Air Force.

(B) That Husband’s rights under the Soldiers and Sailors Civil Relief Act have been observed in these proceedings.

(C) That Wife and Husband were married for at least ten (10) years during which Husband performed at least ten (10) years creditable service, making Wife eligible for involuntary military deductions under The USFSPA at such time [a]s Husband becomes entitled to retirement pay.

(D) Wife is awarded 40% of Husband’s disposable military retired pay for ten (10) years unconditional. Wife shall continue to receive 40% of Husband’s disposable military retired pay after ten (10) years if she does not remarry or has not lived with someone for a cumulative of sixty (60) days. Payments shall continue until Wife remarries or lives with someone for a cumulative of sixty (60) days upon which time payments shall cease. It is Wife’s responsibility to notify the Defense Finance and Accounting Service and Husband of any change of eligibility for payment.

(E) The Husband voluntarily consents to the exercise of jurisdiction to the State of Mississippi, County of Forrest for division [of] military retired pay.

That would appear to me to be a competently drafted provision that invokes every element needed for Burkart to cash in on her prpoperty settlement. It would also appear to give Burkart a full 40% of Mallard’s retirement pay. But things are not always as they appear, are they?

At some point after the divorce, Mallard elected to take a 60% disability rating as part of his retirement pay. By doing so, under federal law, he reduced his “disposable military retired pay,” dollar for dollar, by 60%. He reduced his payments to Burkart by a corresponding amount, limiting his payments to his ex-wife to the non-disability portion of his retirement. Due to the election, his payments to Burkart fell from $571 a month to between $80 and $120.

When Mallard sued Burkart for modification on some custody issues that are not part of this appeal, Burkart counterclaimed for contempt, based on Mallard’s payment of reduced retirement benefits. She charged that Mallard had improperly structured his retirment so as to defeat her contractual rights in the PSA. The chancellor found for Burkart, awarding her a judgment for $21,213.57, and Mallard appealed.

The MSSC stated the issue before it: ” … today we must determine whether federal law preempts state law, thus precluding state courts from treating as property divisible upon divorce, military retirement pay waived by the military spouse in order to receive military [veterans’] disability benefits.” Justice Carlson’s opinion noted that this was a case of first impression in Mississippi.

The court held that the issue was disposed of in the US Supreme Court case of Mansell v. Mansell, 490 US 581 (1989), in which the high court held: “In this appeal, we decide whether state courts, consistent with the [USFSPA], may treat as property divisible upon divorce military retirement pay waived by the rtetiree in order to receive veterans’ disability benefits. We hold that they may not.”

Another post highlighting a similar preemption problem with military life insurance beneficiary designation is here.

A few observations:

The MSSC opinion points out that it is unclear when Mallard was determined to be disabled. In my opinion, if the determination had predated the divorce, there is a fraud question in connection with the PSA.
Considering the minefield of federal law and regulation dealing with retired service members, you might want to define your client’s settlement in terms of alimony and property settlement in set figures as opposed to percentages. I know that percentages are a good way to make sure your client is not short-changed, and I know that alimony can terminate, but wouldn’t Ms. Burkart have been better off with an agreement that Mallard would pay her $571 a month in alimony, or that same sum as a division of her property rights in his military retirement? Then it would have been Mallard’s problem to figure out how to pay it.
What business do you have representing military parties — either husband or wife — if you don’t keep up with and fully grasp all the ins and outs of federal law and regulations governing military retirement?

None of this is a knock on the lawyers who participated in the drafting of the PSA in this case. This was, after all, a case of first impression in Mississippi. And, apparently and presumably, no one knew at the time of the divorce that there would be a disability election. If they had known, that Mansell case would have loomed large. Very large.

CHILD SUPPORT AS A MIRAGE

August 21, 2012 § 1 Comment

Any agreement that provides for child support must be found by the judge to be adequate and sufficient, and it must be definite and specific enough to be enforceable.

Most agreements meet those requirements. You won’t go far astray if the child support is within the statutory guidelines and the language awarding it is clear and unambiguous as to how it was calculated, the exact amount to be paid, the due dates, and its duration (e.g., “until further order of a court of competent jurisdiction,” or “until the minor child is emancipated by operation of law or order of this court,” etc.).

These requirements don’t stop lawyers from presenting some pretty fanciful child support arrangements that sometimes make chancellors scratch their heads. Here are some that have been proven not to be allowable under Mississippi law, that you should avoid:

An unspecified amount. In Lowrey v. Lowrey, 919 So.2d 1111, 1112 (Miss.App. 2005), the court rejected a provision that the mother would pay child support in the form of buying clothes for her children “in an amount that she can afford.” The provision is so indefinite as to be unenforceable. It also violates the fundamental principle that a person can not be held in contempt for failure to comply with a court order that is too vague or ambiguous to be understood. The court in Lowrey said at ¶33, “As it stands, a finding of adequacy and sufficiency depends upon enforceability of the child support provisions contained in a property settlement agreement.”
Percentage child support. A provision that “husband shall pay 14% of his adjusted gross income as child support” is unacceptable. In Hunt v. Asanov, 975 So.2d 899, 902 (Miss.App. 2008), the court stated, “Before a party may be held in contempt for failure to comply with a judgment, ‘the judgment must be complete within itself … leaving open no matter or description or designation out of which contention may arise as to meaning’” [Citations omitted]. In order to determine what the father’s obligation might be or might have been, the court must look beyond the four corners of the judgment to extraneous earnings data and other information that in all likelhood is in controversy. The argument may be made that the case of Rogers v. Rogers, 919 So.2d 184, 188-89 (Miss.App. 2005) is contra. In that case, the COA held as unambiguous a provision that the husband would pay “14% of his adjusted gross income or $600 a month.” The argument raised by appellant there was that the apparent dichotomy betweeen 14% and $600 created an unresolvable ambiguity. The court rejected that argument and found the language clear, as did the chancellor. Rogers, however, did not directly address the problem of enforceability created by the need of the trial court to consider extraneous evidence to make a complete judgment, and the court pointed out that the $600 amount specified was clear enough to give the appellant an idea of his obligation. I do not see Rogers as an endorsement of percentage child support.
Amount tied to unspecified return. In Rudder v. Rudder, 675, 678 (Miss. 1985), the court found a provision that the husband would pay any income or divident received from “any investments in the name of the child” was too “indefinite in amount, type, whereabouts, and the name of the holder.” The court held that the award was worthless, as a practical matter, to the custodial parent for enforcement. This type of support order is a subspecie of percentage child support. It requires the court to look to material extraneous from the four corners of the judgment in order to enforce it.
Lump sum. In Pittman v. Pittman, 909 So.2d 148, 153 (Miss.App. 2005), the court reversed a chancellor’s award of $26,000 in residential equity as additional child support that he said was more ” … in the nature of child support than accumulated assets.” The COA held that the chancellor has no authority to make an award of lump sum child support. If the chancellor lacks such authority, then I am certain that a chancellor lacks authority to approve such an agreement between the parties. Note: Professor Bell says that the statute authorizing guardians to settle claims on behalf of wards has been held to allow lump sum settlements in paternity actions. Bell on Mississippi Family Law, 2d Ed., §11.06[2][b], p. 321.

The kinds of alternative child support provisions that lawyers come up with is only limited by the imagination. It is the court’s duty, however, to make sure that the provisions are adequate and sufficient for the support and maintenance of the child. The further you stray from statutory guideline child support the more likely it is that you will be sent back to the drawing board.

When you draft an agreement you want it to produce tangible benefits for your client. The last thing you should want is for a court to find that language you threw together heedlessly is no more than an illusory mirage or an insubstantial chimera.

STUNG BY ATTORNEY’S FEES

August 7, 2012 § 2 Comments

The usual standard in chancery court is that a party will not be entitled to an award of attorney’s fees unless the party proves an inability to pay. It’s a subject we’ve touched on before.

The exception to the rule is when the court finds a party in contempt. In that case, no inability to pay need be shown. And, when you represent the contemnor, you are wise to advise your client in advance to be prepared to get stung by those fees if the case is tried and he or she is on the losing side.

The latest manifestation of these principles is in the COA case of Rogers v. Rogers, decided July 25, 2012. In Rogers, the chancellor had found Mr. Rogers to have perpetrated a fraud on the court and assessed him with $1,605 in his ex-wife’s attorney’s fees. The COA reversed the finding of fraud (subject of another post), and Mr. Rogers complained that (a) there was no basis to assess fees absent the fraud finding, and (b) that there was insufficient evidence to support the award. Here’s the pertinent part of Judge Carlton’s decision:

¶29. Our jurisprudence generally provides that “[a]n award of attorney’s fees is appropriate in a divorce case where the requesting party establishes an inability to pay.” Gray v. Gray, 745 So. 2d 234, 239 (¶26) (Miss. 1999) (citations omitted). Additionally, a chancellor may also award attorney’s fees based on a party’s wrongful conduct, as stated in Chesney v. Chesney, 849 So. 2d 860, 863 (¶12) (Miss. 2002), as follows:

There have been a number of prior decisions upholding the award of attorney’s fees to one party where the other party has been found to be in contempt of court or where that party’s actions caused additional legal fees to be incurred. See A & L, Inc. v. Grantham, 747 So. 2d 832, 844-45 [(¶60)] (Miss. 1999) (holding that awarding attorney’s fees under certain circumstances, regardless of the party’s ability to pay, is not a reward, but reimbursement for the extra legal costs incurred as a result of the opposing party’s actions); Douglas v. Douglas, 766 So. 2d 68, [72 (¶14)] ((Miss. Ct. App. 2000) (where a party who is entitled to the benefits of a previous judicial decree is forced to initiate further proceedings to gain compliance with the previous order of the court, an award of attorney’s fees is appropriate).

See also McCarrell v. McCarrell, 19 So. 3d 168, 172-73 (¶¶18-19) (Miss. Ct. App. 2009). Further, the issue of whether to award attorneys’ fees in a divorce case constitutes a discretionary matter left to the chancellor, and this Court is “reluctant to disturb” such a finding. Young v. Young, 796 So. 2d 264, 268 (¶11) (Miss. Ct. App. 2001).

¶30. Chancellors are instructed to apply the McKee factors in granting or denying attorney’s fees. See McKee v. McKee, 418 So. 2d 764, 767 (Miss. 1982). However, the chancellor’s September 28, 2010 final judgment, where the chancellor awarded Julianne $1,605 in attorney’s fees, shows no mention of, nor specific findings on, the McKee factors. The chancellor stated only that “evidence reflected that [Julianne’s] attorney’s fees and court costs totaled $1,605.”

¶31. Our supreme court has held where there is substantial evidence in the record supporting the chancellor’s award of attorney’s fees, the omission of specific findings cannot be deemed reversible error. See Varner v. Varner, 666 So. 2d 493, 498 (Miss. 1995) (no McKee findings); Prescott v. Prescott, 736 So. 2d 409, 416 (¶31) (Miss. Ct. App. 1999) (no finding of inability of recipient to pay). We further note that a specific, on-the-record finding of inability to pay is not necessary where attorney’s fees are awarded due to the other party’s failure to comply with discovery requests. Russell v. Russell, 733 So. 2d 858, 863 (¶16) (Miss. Ct. App. 1999). A specific finding of inability to pay is also not required when attorneys’ fees are assessed against a party found to be in contempt. Mount v. Mount, 624 So. 2d 1001, 1005 (Miss. 1993).

¶32. In the case before us, the chancellor recognized Charles’s continued failure and refusal to comply with the divorce decree, including his failure to make alimony payments, failure to provide medical-insurance coverage, and failure to pay Julianne’s uncovered medical expenses. The chancellor also found Charles in contempt of court for his failure to provide adequate medical-insurance coverage for Julianne. For these reasons, we affirm the chancellor’s award of attorney’s fees to Julianne. This assignment of error is without merit.

The significance of Rogers with respect to attorney’s fees awards is two-fold: (1) it reiterates the rule that the inability-to-pay test is inapplicable when the assessment of fees is due to contempt or misconduct; and (2) it clarifies that the amount of proof and documentation necessary to support the award for contempt or misconduct is not as great as in an inability-to-pay case.

DEFINING THE SCOPE OF TRIM

August 1, 2012 § 2 Comments

You’ve read here before about the case of Trim v. Trim and its ramifications for family law practitioners. Trim is the MSSC case holding that intentional filing of a substantially false UCCR 8.05 financial statement constitutes a fraud on the court, so that any judgment based on it is vulnerable to being set aside any time.

In the case of Rogers v. Rogers, decided July 24, 2012, the COA confronted the question of intentionality and exactly how substantial the falsehood needs to be to warrant setting aside the prior judgment.

At trial in 2009, Charles Rogers submitted a financial statement that showed his monthly adjusted gross income as $4,651.71. The court awarded child support and alimony based on that figure.

Later, in a 2010 contempt proceeding brought by his ex-wife Julianne, Charles disclosed in discovery that his gross income was in excess of $88,000 a year, which would produce considerably greater adjusted gross income.

The chancellor found that the discrepancy was “proof of a gross misrepresentation and fraud” upon the court, and revised the final judgment of divorce to increase both the child support and alimony.

On appeal, the COA noted that in his 2009 trial testimony Charles had expressly testified that his yearly gross income was $88,000, that the $4,400 figure represented two weeks’ pay, and he had been asked about it in detail both on direct and under cross examination. At the contempt trial, Charles steadfastly stood by his position that he had not intentionally failed to disclose or falsified the financial information.

Judge Carlton recited the well-known Mississippi rule on establishing the elements of fraud:

¶18. The general rule is well settled that fraud will not be presumed but must be affirmatively proven. Taft v. Taft, 252 Miss. 204, 213, 172 So. 2d 403, 407 (Miss. 1965). The Mississippi Supreme Court has held that in order to establish fraud, the burden is on the proponent to prove the following elements:

(1) a representation, (2) its falsity, (3) its materiality, (4) the speaker’s knowledge of its falsity or ignorance of its truth, (5) his intent that it should be acted on by the hearer and in the manner reasonably contemplated, (6) the hearer’s ignorance of its falsity, (7) his reliance on its truth, (8) his right to rely thereon, and (9) his consequent and proximate injury.

Koury v. Ready, 911 So. 2d 441, 445 (¶13) (Miss. 2005) (citing Mabus v. St. James Episcopal Church, 884 So. 2d 747, 762 (¶32) (Miss. 2004)). Additionally, “fraud . . . must be proved with clear and convincing evidence.” Hamilton v. McGill, 352 So. 2d 825, 831 (Miss. 1977). We have recognized that “[c]lear and convincing evidence is such a high standard that even the overwhelming weight of the evidence does not rise to the same level.” Moran v. Fairley, 919 So. 2d 969, 975 (¶24) (Miss. Ct. App. 2005) (citation omitted).

¶19. To vacate a decree due to fraud, the supreme court, in Manning v. Tanner, 594 So. 2d 1164, 1167 (Miss. 1992), listed the four necessary requirements that must be met:

(1) that the facts constituting the fraud, accident, mistake[,] or surprise must have been the controlling factors in the effectuation of the original decree, without which the decree would not have been made as it was made; (2) the facts justifying the relief must be clearly and positively alleged as facts and must be clearly and convincingly proved; (3) the facts must not have been known to the injured party at the time of the original decree, and (4) the ignorance thereof at the time must not have been the result of the want of reasonable care and diligence.

Applying the law of fraud to the case at hand, Judge Carlton concluded that the elements of fraud had not been proven, and that the chancellor’s judgment essentially setting aside the original judgment was, therefore, in error. Her opinion distinguished Trim in this way:

¶24. Julianne cites Trim v. Trim, 33 So. 3d 471 (Miss. 2010), in support of her argument that Charles’s inaccurate Rule 8.05 statement perpetrated a fraud upon the court. In Trim, George Trim submitted his Rule 8.05 statement listing the value of his company’s stock at $100,000. Id. at 473 (¶4). George and his ex-wife, Lisa, entered into a property-settlement agreement, which the chancellor later ratified, based on their assets and liabilities disclosed in their Rule 8.05 statements. Id. Lisa later discovered that George had misrepresented his stock value in his Rule 8.05 statement, and filed suit against him for fraudulent misrepresentation. Lisa’s expert valued George’s stock at $694,000 at the time of George and Lisa’s divorce. Id. at 474 (¶4). On appeal, the Trim court held that George’s intentional filing of a substantially false Rule 8.05 statement constitutes a fraud on the court, noting the chancellor’s finding that George’s Rule 8.05 statement drastically undervalued a major marital asset. Id. at 478 (¶17).

¶25. The case before us differs from Trim in that the record shows that Charles testified during trial and explained that his Rule 8.05 submission reflected a two-week pay period. In applying the standard for proving fraud to the facts and record before us, we cannot agree that Julianne met her burden of proving fraud by clear and convincing evidence. See Hamilton, 352 So. 2d at 831. Although Charles’s Rule 8.05 statement incorrectly reflected his monthly salary, the record shows that he explained the discrepancy several times in his trial testimony. As a result, we find that the chancellor erred in considering Charles’s Rule 8.05 statement only, and not also his trial testimony, in determining that Charles’s misrepresentation of his income rose to the level of fraud. In her July 6, 2010 judgment, the chancellor erroneously found that Julianne proved by clear and convincing evidence that Charles perpetrated a fraud upon the court. Therefore, the chancellor erred in vacating the prior decree and revising the final divorce decree by increasing the alimony award. Accordingly, we reverse and set aside the revised final judgment and reinstate the original divorce decree. We also reverse and render the increased award of $1,000 in rehabilitative alimony for thirty-six months, which was based upon the erroneous finding of fraud on the court. Since the record does not support a finding of fraud by clear and convincing evidence, we reinstate the chancellor’s original divorce decree. See Manning, 594 So. 2d at 1167; Shaeffer v. Shaeffer, 370 So. 2d 240, 242 (Miss. 1979).

So, unless and until the MSSC chooses to clarify the matter further, you will have to prove all of the elements of fraud by clear and convincing evidence in order to invoke Trim relief. Proof of discrepancies and oversights in 8.05 statements will not be enough to do the job.

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