Some Useful Equitable Distribution Points

September 18, 2019 § Leave a comment

Last year’s Pettersen case caused somewhat of a ruffle among many attorneys when it affirmed a chancellor’s findings that pre-marriage assets were marital or converted to marital, and passive appreciation of pre-marital securities was also marital. One lawyer told me that he was still scratching his head over the latter.

Lost in the consternation is that the opinion by Judge Barnes includes some jewels of authority that you might find useful:

Frederick Pettersen claimed that the chancellor erred when he announced that he would not consider child support, but he never objected at trial. In ¶10, the court said, “Furthermore, this issue was not asserted in Frederick’s motion for reconsideration.” Aside from the fact that there is no such thing as a motion for reconsideration, this is a remarkable statement because it assumes that you must assert the bases for your R59 motion in the motion. In my experience, few attorneys recite more than that they want a new trial or an amendment of judgment without detailing the reasons why. R7(b) specifically states that a motion “shall state with particularity the grounds therefor, and shall set forth the relief or order sought.” That “grounds therefor” language is pretty important, but sometimes overlooked.

As for the proper demarcation date, the court said at ¶12:

Our Court has held:

“The law in Mississippi is that the date on which assets cease to be marital and become separate assets—what we refer to as the point of demarcation—can be either the date of separation (at the earliest) or the date of divorce (at the latest).” Collins v. Collins, 112 So. 3d 428, 431-32 (¶9) (Miss. 2013). [However, a] chancellor may consider a temporary order as the line of demarcation between marital and separate property. Id. Ultimately, however, the chancellor has the discretion to draw the line of demarcation. Id. at (¶10).

Randolph v. Randolph, 199 So. 3d 1282, 1285 (¶9) (Miss. Ct. App. 2016).

At ¶18, the opinion discussed classification of assets:

¶18. Furthermore, when determining whether certain property is marital, a chancery court “must inquire whether any income or appreciation resulted from either spouse’s active efforts during the marriage.” Rhodes v. Rhodes, 52 So. 3d 430, 436 (¶20) (Miss. Ct. App. 2011). “If so, that income or appreciation becomes part of the marital estate.” Id.

In ¶19, the court rejected Frederick’s argument that his wife, Audrey, was not entitled to any of his retirement funds because of an extra-marital affair:

Moreover, a spouse’s misconduct is only one factor to consider in the division of marital assets. A chancery court “should not view equitable distribution as a means to punish the offending spouse for marital misconduct. Rather, ‘marital misconduct is a viable factor entitled to be given weight by the chancellor when the misconduct places a burden on the stability and harmony of the marital and family relationship.’” Bond v. Bond, 69 So. 3d 771, 773 (¶6) (Miss. Ct. App. 2011) (quoting Carrow v. Carrow, 642 So. 2d 901, 904-05 (Miss. 1994)).

In discussing whether pre-marital properties were properly classified, the court said at ¶23:

¶23. “Marital property is ‘anyand all property acquired or accumulated during the marriage and is subject to an equitable distribution by the chancellor.’” Mamiaro v. Mamiaro, 179 So. 3d 51, 53 (¶7) (Miss. Ct. App. 2015) (quoting Hemsley v. Hemsley, 639 So. 2d 909, 915 (Miss. 1994)). There is no dispute that these properties were acquired before the marriage. But, in discussing Ferguson, the Mississippi Supreme Court held:

Instead of looking to the bare title of a marital asset, this Court, as should the trial courts, will continue to consider all of the facts and circumstances surrounding the accumulation of the marital assets, including noneconomic contributions and factors, when deciding how the marital property should be divided under our system of equitable distribution.

Carnathan v. Carnathan, 722 So. 2d 1248, 1253 (Miss. 1998). Although Frederick argues that Audrey made no economic contribution to these properties, he acknowledges that Audrey helped prepare balance sheets with respect to the rental properties for a period of time during their marriage. We find, therefore, that the chancery court’s awarding her ten percent of the properties’ value was not an abuse of discretion.

And the court reminded us of the definition of commingling:

¶26. “Commingled property is a combination of marital and non-marital property[,] which loses its status as non-marital property as a result.” Maslowski v. Maslowski, 655 So. 2d 18, 20 (Miss. 1995).

Finally, the opinion considered Frederick’s argument that he used non-marital funds to purchase an asset, so it should be a “mixed asset” with greatly reduced equitable distribution to Audrey:

¶29. “[A] presumption of marital property arises to any property acquired during the marriage.” Maslowski, 655 So. 2d at 20. The chancellor properly considered the applicable Ferguson factors, finding: (1) the property was acquired during the marriage; (2) Audrey had “substantially contributed to this property by serving as bookkeeper”; and (3) Frederick had managed the subject property during the separation and continues to do so. Therefore, we find no merit to this issue.

Res Judicata and the Foreign Divorce

September 11, 2019 § Leave a comment

After Lisa Crew and Ellis Tillotson were divorced from each other in North Carolina, Lisa filed a complaint for equitable distribution in Mississippi, where the parties’ property was located. Following a trial the chancellor divided the marital estate.

Lisa appealed, complaining that the distribution was inequitable and erroneous. Ellis cross-appealed that the North Carolina judgment rendered the equitable distribution claims res judicata, and the chancellor erred in accepting jurisdiction.

In Crew v. Tillotson, decided August 20, 2019, the COA affirmed. Judge Tindell wrote the 6-3 decision:

¶15. With regard to the application of res judicata in divorce cases, this Court previously explained:

The doctrine of res judicata reflects the refusal of the law to tolerate a multiplicity of litigation. It is a doctrine of public policy designed to avoid the expense and vexation attending multiple lawsuits, conserve judicial resources, and foster reliance on judicial action by minimizing the possibilities of inconsistent decisions. Res judicata bars all issues that might have been (or could have been) raised and decided in the initial suit, plus all issues that were actually decided in the first cause of action.

Article IV, § 1 of the United States Constitution requires that full faith and credit be given to the judicial proceedings of sister states. However, those proceedings are only entitled to full faith and credit where the rendering court properly has subject matter and personal jurisdiction. The United States Supreme Court has applied the Full Faith and Credit Clause in the context of divorce actions.

Lofton v. Lofton, 924 So. 2d 596, 599 (¶¶14-15) (Miss. Ct. App. 2006) (citations and internal quotation marks omitted). Our caselaw further recognizes “that a divorce action involving multiple states is ‘divisible.’ That is, a divorce action involving one resident party and one foreign party may or may not be able to adjudicate personal rights, though it can sever a marriage as long as at least one party is a resident of that state.” Id. at 601 (¶27). In addition, “Mississippi law is clear that where the case in the foreign court is not decided on its merits, while suit might be barred from any other court in the state where the judgment was rendered[,] it is not res judicata in Mississippi.” Weiss v. Weiss, 579 So. 2d 539, 541 (Miss. 1991) (internal quotation mark omitted).

¶16. Here, Ellis contends the chancellor erroneously found that North Carolina did not possess personal jurisdiction over him. We agree with Ellis that the record reflects he voluntarily submitted to North Carolina’s personal jurisdiction when he entered a general appearance in the divorce proceeding. Our analysis therefore focuses on Ellis’s arguments that North Carolina statutory law required Lisa to raise equitable distribution in the divorce proceeding there and that her failure to do so barred her from asserting the issue in a subsequent action in Mississippi. Ellis relies on North Carolina General Statute Annotated section 50-11(e) (2013), which provides:

An absolute divorce obtained within this State shall destroy the right of a spouse to equitable distribution under [North Carolina General Statute Annotated section] 50-20 unless the right is asserted prior to judgment of absolute divorce; except, the defendant may bring an action or file a motion in the cause for equitable distribution within six months from the date of the judgment in such a case if service of process upon the defendant was by publication pursuant to . . . [North Carolina General Statute Annotated section] 1A-1, Rule 4 and the defendant failed to appear in the action for divorce.

¶17. The North Carolina divorce judgment adjudicated three matters. The divorce decree granted the parties an absolute divorce under North Carolina law, allowed Lisa to resume the use of her maiden name, and allowed Lisa’s attorney to withdraw from the case. No dispute exists that Lisa’s North Carolina divorce complaint never raised the issue of equitable distribution and that the matter was therefore neither litigated in nor adjudicated by the North Carolina divorce proceeding. Lisa argues, however, that the North Carolina court lacked in rem jurisdiction to dispose of the parties’ property located outside the state. For this reason, Lisa asserts that she did not attempt to raise the issue in the divorce proceeding and that her failure to do so poses no bar to her current Mississippi action. To support her argument, Lisa cites North Carolina General Statute Annotated section 50-11(f), which states:

An absolute divorce by a court that lacked personal jurisdiction over the absent spouse or lacked jurisdiction to dispose of the property shall not destroy the right of a spouse to equitable distribution under [section] 50-20 if an action or motion in the cause is filed within six months after the judgment of divorce is entered.

(Emphasis added).

¶18. As the United States Supreme Court has previously recognized:

[W]hen claims to the property itself are the source of the underlying controversy between the plaintiff and the defendant, it would be unusual for the State where the property is located not to have jurisdiction. . . . The State’s strong interests in assuring the marketability of property within its borders and in providing a procedure for peaceful resolution of disputes about the possession of that property would also support jurisdiction, as would the likelihood that important records and witnesses will be found in the State.

Shaffer v. Heitner, 433 U.S. 186, 207-08 (1977) (footnotes omitted).

¶19. As we have already noted, Mississippi recognizes divisible divorce actions. Lofton, 924 So. 2d at 601 (¶27). Here, during the North Carolina divorce proceeding, neither party ever raised the issue of equitable distribution of their marital property located in Mississippi. Further, as reflected by its decree, the North Carolina court never addressed the issue. Normally, under North Carolina statutory law, a party’s failure to raise equitable distribution waives the issue in a future proceeding. N.C. Gen. Stat. Ann. § 50-11(e). But as the North Carolina Supreme Court has recognized, exceptions do exist. “Chapter 50 clearly contemplates the survival of those rights[to equitable distribution and alimony] under certain circumstances[,]” and section 50-11(f) provides an exception that “applies to cases wherein the trial court lacks personal jurisdiction over the defendant or jurisdiction to dispose of the property.” Stegall v. Stegall, 444 S.E.2d 177, 179, 180 (N.C. 1994).

¶20. We believe that such circumstances exist in the instant case. Because the North Carolina court never exercised jurisdiction to dispose of the parties’ marital property, the grant of divorce did not destroy Lisa’s right to equitable distribution under section 50-11(f) because she filed such an action within six months of the entry of divorce. We therefore find no error in the chancellor’s determination that res judicata failed to bar Lisa’s action in Mississippi. Accordingly, we find that Ellis’s argument as to this assignment of error lacks merit.

Judge Jack Wilson, joined by Barnes and Corey Wilson, wrote a well-reasoned dissent.

The Fifth Amendment and the Adverse Inference

September 9, 2019 § 3 Comments

Can a chancellor grant a divorce solely on the adverse inference created when a witness invokes the Fifth Amendment to the United States Constitution?

That was one of the questions raised in Martha Bradshaw’s appeal from a chancellor’s adjudication that she was guilty of adultery and granting a divorce to her husband, Loyd.

To refresh your recollection as to that adverse inference, here is a quote from ¶22 of the COA’s August 13, 2019, decision in Bradshaw v. Bradshaw, penned by Judge Greenlee:

Concerning a witness’s “taking the Fifth” in civil cases, the trier of fact may draw an adverse inference from a defendant’s refusal to testify. Gibson v. Wright, 870 So. 2d 1250, 1260 (¶42) (Miss. Ct. App. 2004).

Let’s say the witness was asked, “have you committed adultery during the marriage?” and the witness pleads the Fifth, at that point the court may infer that the witness’s answer would have been adverse to his or her interest.

So, when a witness claims the Fifth Amendment’s right against self-incrimination in a divorce case, is that inference enough to satisfy the burden of proof? Judge Greenlee says:

However, we have failed to find a case that allows a divorce to be granted based solely on that inference.

In a specially concurring opinion, Judge McCarty raises the question whether in Mississippi it is even appropriate to invoke the Fifth on the basis that answering the question could subject one to prosecution for adulterous conduct. At footnote 7 he observes:

It is unlawful cohabitation conjoined with more than a single act of adultery that is a crime—a misdemeanor. Miss. Code Ann. § 97-29-1 (Rev. 2014); see Miss. Dep’t of Wildlife, Fisheries & Parks v. Bradshaw, 196 So. 3d 1075, 1085 (¶26) (Miss. Ct. App. 2016) (holding that there is no general crime of adultery, but that the Code prohibits cohabitation when there is a “habitual . . . laying together”).

Then, at footnote 8, he points out:

There have been prosecutions for adultery, but we do not see reported cases on it lately. See Ratcliff v. State, 234 Miss. 724, 728, 107 So. 2d 728, 729 (1958) (examining the law and the corollary prohibition on marriage between blacks and whites, which unlike the cohabitation crime, was a felony punishable with 10 years); Housley v. State, 198 Miss. 837, 839, 23 So. 2d 749, 749 (1945) (affirming dual convictions for unlawful cohabitation). Although it is easy to see the objection as gamesmanship, we have reminded the Bar not too long ago “that cohabitation between persons not married to each other is against the law in Mississippi,” and while “this law is frequently broken has been recognized by the supreme court,” it remains on the books as a crime. Sullivan v. Stringer, 736 So. 2d 514, 516-17 (Miss. Ct. App. 1999). We ruled there that “[c]ommission of crimes by a custodial parent, even if they are only about sex, is properly the concern of a chancellor,” although it should be added that the weight accorded to it is left to the trial court. Id.

He refers to the objection based on possible prosecution for adultery as “incorrect” in footnote 9:

The same incorrect objection was lodged in McDonald v. McDonald, 69 So. 3d 61, 66 (Miss. Ct. App. 2011). We noted in passing that we would “decline to address the question of whether [the husband] could have successfully been prosecuted for adultery . . . . ” Id. at 66 n.2.

 

 

What to do with No Valuation at All?

August 10, 2019 § Leave a comment

James and Shann Martin consented to a divorce on the ground of irreconcilable differences, and left custody and equitable distribution to the judge for adjudication. Following a hearing the chancellor awarded James custody of their son and ownership of 35 acres of land that had been gifted to them by James’s parents. The judge also ordered James to pay Shann $20,000 for some improvements she had made to the property. Shann appealed.

In her appeal, Shann contended that the division of the marital estate was inequitably in James’s favor.

In Martin v. Martin, handed down August 6, 2019, the COA by Judge McCarty affirmed, and in its opinion turned its attention to a significant wrinkle in the record:

¶9. Shann contends that the distribution of assets was overwhelmingly in Mitch’s favor. Yet the record does not contain financial information to support this argument. Despite numerous requests from the chancery court, neither party provided the court with a single valuation of the assets at issue. There was no testimony of the market value of the real property. Appraisals were never conducted. Both parties failed to provide an amount of the tax refunds, the amount of money which was invested into the marital home, or by whom the money was invested. Indeed, the chancery court even noted in the divorce decree that “the Court [was] perplexed at the lack of evidence concerning property values.”

¶10. It is incumbent upon the parties, not the chancery court, to prepare the evidence needed to clearly make a valuation judgment. Stribling [v. Stribling], 906 So. 2d [863] at 870 (¶25). “Where a party fails to provide accurate information, or cooperate in the valuation of assets, the [chancery court] is entitled to proceed on the best information available.” Id.; see also Messer v. Messer, 850 So. 2d 161, 170 (¶43) (Miss. Ct. App. 2003) (“This Court has held that when a chancellor makes a valuation judgment based on proof that is less than ideal, it will be upheld as long as there is some evidence to support his conclusion.”). “To the extent that further evidence would have aided the chancellor in these decisions, the fault lies with the parties and not the chancellor.” Ward v. Ward, 825 So. 2d 713, 719 (¶21) (Miss. Ct. App. 2002).

¶11. Where, as here, a chancery court “appears to have fully explored the available proof and arrived at the best conclusions that [they] could . . . we can discover no abuse of discretion in those efforts that would require us to reverse [their] valuation determinations.” Dunaway v. Dunaway, 749 So. 2d 1112, 1121 (¶28) (Miss. Ct. App. 1999). The chancery court used the information provided by the parties to conduct a Ferguson analysis. “To the extent that the evidence on which the [chancery court] based [its] opinion was less informative than it could have been, we lay that at the feet of the litigants and not the [chancery court].” Id.

Bravo. The chancellor said that she was “perplexed” the lack of valuation evidence. That’s a good word. Amen.

In this district we do not allow the parties to obtain a trial date until they have presented the court with a consolidated asset list showing every asset with each party’s opinion of values and whether or not each asset is marital. If a party delays unreasonably in providing the information the court sets a deadline after which that party may not present proof of values at trial, and the other party’s values are accepted.

Impact on the Harmony and Stability of the Marriage

July 16, 2019 § Leave a comment

Eleanor Ellison and Stephen Williams had a stormy relationship punctuated with Stephen’s numerous departures. After Stephen left her once again and moved in with another woman, Eleanor filed for divorce. Following a trial, the chancellor divided the marital estate, and Eleanor was displeased with the outcome, even though she received a larger share of the marital estate.

She appealed, and one of the issues she raised was that the chancellor had given inadequate attention to the effect of Stephen’s conduct on the marriage, which, of course, is one of the Ferguson factors.

In Ellison v. Williams, handed down June 18, 2019, the COA reversed and remanded on the issue. Judge Westbrooks wrote for a 5-4 court:

¶11. Ellison also asserts that the chancellor should have considered Williams’s extramarital affair. We agree. The Mississippi Supreme Court has reversed and remanded cases when the chancellor did not consider how an extramarital relationship “impacted and burdened the stability and harmony of the marriage.” Watson v. Watson, 882 So. 2d 95, 108 (¶68) (Miss. 2004) (quoting Singley v. Singley, 846 So. 2d 1004, 1009 (¶13) (Miss. 2002)). “Mississippi is in a minority of states in which marital misconduct is a factor for consideration in property division.” Deborah H. Bell, Bell on Mississippi Family Law § 6.08[2][e], 176 (2d ed. 2011).

¶12. Here, Ellison did receive a slightly larger portion of the marital estate than Williams, but the chancellor did not cite that as his reasoning. The chancellor stated that he was aware it was Ellison’s family home that they first resided in and then leveraged to purchase another home; he therefore awarded Ellison sixty percent. The chancellor awarded Ellison a fault-based divorce but then did not directly consider how Williams’s absences and infidelity affected the stability and harmony of the home when dividing the estate. Because we believe the chancellor’s lack of consideration was error, we reverse and remand for further proceedings on this issue to allow the chancellor to consider the extramarital relationship in equitably dividing their estate. Additionally, we reverse and remand to allow the chancellor to make a full Ferguson analysis on the record.

Judge Tindell, joined by Carlton, Greenlee, and McCarty, disagreed in part. His concurring and dissenting opinion:

¶20. Because the chancellor heard evidence of Williams’s extramarital relationship and thereafter awarded Ellison with a greater percentage of the marital estate, I would affirm the chancellor’s judgment in its entirety. Where substantial evidence supports a chancellor’s findings, the Court is without authority to disturb the chancellor’s conclusions even if it would have found otherwise in the original matter. Joel v. Joel, 43 So. 3d 424, 429 (¶14) (Miss. 2010). We have previously held that “failure to make an explicit factor-by-factor analysis does not necessarily require reversal where we are satisfied that the chancellor considered the relevant facts.” Palmer v. Palmer, 841 So. 2d 185, 190 (¶18) (Miss. Ct. App. 2003). Unless the chancellor’s judgment was manifestly wrong, clearly erroneous, or applies an erroneous legal standard, the judgment should stand. Carambat v. Carambat, 72 So. 3d 505, 510-11 (¶24) (Miss. 2011).

¶21. The final judgment does address Williams’s adultery in the chancellor’s findings of fact. Further, after conducting a full Ferguson analysis, the chancellor awarded Ellison sixty percent of the marital assets and forty percent to Williams. Substantial evidence supported the chancellor awarding a greater portion of the marital estate to Ellison, and he did so accordingly. For these reasons, I find no manifest error in his conclusions and respectfully dissent in part from the majority’s opinion.

To say that there is a crazy-quilt of decisions on point would be a laughable understatement: the chancellor must address all of the Ferguson factors; the chancellor must address only the pertinent Ferguson factors; the chancellor’s consideration of the Ferguson factors may be gleaned from her findings in the record, regardless whether she ever mentions Ferguson; Ferguson factors must be specifically addressed; adulterous conduct must be considered for its impact on the stability of the household; the chancellor may not use property division to punish misconduct or reward good conduct.

Valuation Bugaboo

July 15, 2019 § 1 Comment

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

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

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

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

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

RODNEY: I guess.

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

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

RODNEY: Okay.

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

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

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

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

So …

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

Rule 8.05 and Intentional Infliction of Emotional Distress

June 3, 2019 § 1 Comment

UCCR 8.05 should make everyone’s job in chancery court a lot easier. But lawyers, in their eternal ingenuity for contriving ways to complicate nearly all of creation, turn them into an implement of torture that they inflict on the court.

Chancellor Haydn Roberts of Rankin County presented this material at the Bar’s Family Law Section Hot Tips Seminar recently:

How to Confuse, Frustrate and/or Anger a Judge with an 8.05

Seriously, it happens often!

Don’t Prepare an an 8.05

Rule 8.05 states: “Unless excused by Order of the Court for good cause shown, each party in every domestic case involving economic issues and/or property division  shall provide the opposite party or counsel, if known, an 8.05 in compliance with subparts (a) and (b) of the rule

Speights v. Speights, 2016-CA-01691-COA

Prepare your client’s 8.05 in the lobby, hallway or parking lot immediately preceding trial

Most of us Judges aren’t stupid and can tell when an 8.05 is prepared in this fashion

Common errors when this happens include unsigned 8.05s, incomplete property asset listing, incomplete debt listing and amounts, confusing expenses, pages
missing,

AND MY FAVORITE – misspelled children’s names and inaccurate birthdays

Don’t Bring Copies

You need a minimum of 5 copies (6 with a GAL)

Your copy

Counsel opposite

The Court

Evidence

Copy for the witness

GAL copy

Deflate Income

Gross income – “total income from all sources before deductions, exemptions or other tax deductions

Includes wages, investment income, gifts from friends, rentals, social security, pension, child support, etc…

Overtime hours count

Be careful as the Judge may ask for a recent loan application from your client, wherein he/she must report his/her income

See, 2017-CA-1476 SCT; Tracy Marie Miles Williams v. Brent Reid Williams; affirmed 01/17/19; and Trim v. Trim 33 So.3d 471 (Miss. 2010)

Inflate Expenses

If your client’s expenses far exceed his/her income, and he/she doesn’t have much debt…SOMETHING ISN’T CORRECT

Single person in an apartment shouldn’t incur $1200/month in food and household items BUT single person raising multiple children will incur at least that much

Most client’s don’t have much “household maintenance”

Pet expenses, yard expenses, miscellaneous, entertainment should be ACTUAL and know what those items entail

Double-dip Expenses

Some insurance is listed as a deduction

Don’t use health insurance as a mandatory deduction and then also an “insurance expense”

Same with life insurance, property insurance, rental insurance, automobile insurance, personal property insurance, umbrellas

Intermingle Expenses

Use columns

Expenses could be current, past, future

Expenses could be single, family/household, and/or spouse + child(ren)

Keep it realistic even if speculative

Fail to Update

Time Lapse between temporary hearing and final may mean different information

When you update an 8.05 tell the Court

Witness/Client should know the differences and WHY there are differences

If Client has new employment, attach new pay stub

Mislabel property

Make sure personal property matches

“Grandma’s antique roll top desk” on wife’s 8.05 is the same as “desk in bedroom” on husband’s 8.05

2012 Accord on wife’s 8.05 is the Blue Honda on husband’s 8.05

Watch the models, years, makes, account numbers, bank names, creditors’ names

Mark property value/equity as “unknown”

If you list an asset or debt as “unknown” and the opposite party has a value, the Judge will likely use that value

Be prepared to give a value even if it’s an educated guess

Be prepared to discuss the other party’s value(s) and why it/they are wrong

REMEMBER – asset value as to “stuff” is garage sale value, not brand spanking new

Who Needs Statements? [i.e., Documentation]

Debts should be corroborated by statements

Helps if they are at or near date of demarcation you are requesting

Retirement accounts

Bank accounts with substantial balances

Other accounts

Church Donations

This not a way to equalize income to expenses

If client makes church donations during a court matter, they should KNOW the following:

Church’s name
Church’s location
What service time they attend
Preacher’s name

 

Some previous posts on how to improve your 8.05’s are here, here, and here. Or type “8.05” in the search box to access a plethora of posts on financial proof and 8.05’s.

Proving Inability to Pay

May 13, 2019 § Leave a comment

When we think of the award of attorney’s fees in a divorce the first principle that comes to mind is “inability to pay.” We know and focus on the concept that the party with inability to pay will be entitled to attorney’s fees.

But inability to pay is only part of the formula. “The party seeking attorney’s fees is charged with the burden of proving inability to pay; usually where the party is able to pay his or her own attorney’s fees, an award of such fees is inappropriate.” Duncan v. Duncan, 915 So.2d 1124, 1128 (¶16)(Miss. Ct. App. 2005). [Emphasis added]

It’s that burden of proving that often is overlooked. The party’s mere assertion that he has the inability to pay, or a nodded affirmative to the question whether she can pay her own fees simply will not do the job. You have to put proof in the record that will support a finding by the judge that your client does not have the resources to pay.

In the COA case of Vandenbrook v. Vandenbrook, decided March 26, 2019, the court by Judge Carlton found the evidence lacking:

¶49. Based on our perusal of the record, the chancellor made no explicit findings addressing all of the McKee factors, either in her order, or on the record, but it can be surmised from the chancellor’s statement that she had considered them. [Fn 9] The more perplexing question is not the reasonableness of the amount awarded, but the basis for finding that Emma was not able to pay it. As noted, the chancellor stated: “But according to the McKee factors, you know, Emma has an inability to pay.” On the question of whether Emma had the ability to pay her own attorney’s fees, the chancellor offered no analysis of Emma’s financial condition that would support the conclusion that Emma was unable to pay them. During the chancellor’s discussion of the custody issue, she stated the following: “[Emma] has just entered the work force again, but it sounds like she’s got a stable job at this point. And it sounds like she has a stable home at this point.” We note that Emma testified that she could not pay her attorney’s fees. As stated, the burden was on Emma to prove that she could not pay her attorney’s fees. Although the decision to award attorney’s fees in a
divorce proceeding is left to the sound discretion of the chancellor, there must be evidence undergirding the chancellor’s decision that a party is unable to pay her attorney’s fees before an award can be made. Here, we find the record lacks such evidence. Therefore, we find that the chancellor erred in awarding attorney’s fees to Emma for the divorce proceeding, which ultimately resulted in Emma’s complaint for the divorce being dismissed. Accordingly, we reverse and remand the chancellor’s award of attorney’s fees for the chancellor to determine whether Emma has the inability to pay and to apply the McKee factors with supporting findings.

Fn 9 This Court in Evans v. Evans, 75 So. 3d 1083, 1090 (¶25) (Miss. Ct. App. 2011),stated the following: “While this [C]ourt has held that a chancellor’s failure to apply the McKee factors is not necessarily itself reversible error, see Miley v. Daniel, 37 So. 3d 84, 87(¶7) (Miss. Ct. App. 2009), the proof must at least support an accurate assessment of fees under the McKee criteria.”

I seriously doubt that this is a case where the chancellor overlooked the evidence in the record or failed to recite what evidence it was she relied on. My guess is that she had no evidence other than Emma’s assertion in her testimony upon which to base her finding. Why do I say that? Because I see it time and again. As I have posted here many times, lawyers for the most part devote little attention to making an adequate record to support an award of attorney’s fees.

My suggestion is that you spend a little less time on the more flamboyant issues like proof of adultery, and more time on the 8.05. Questions like “What money do you have to pay your attorney’s fees? How much have you had to borrow to pay? Why did you have to borrow? What effect will it have on your ability to buy the children’s school clothes if you have to pay your own attorney’s fees?” And so on. Oh, and while you’re at it, be sure to quiz the adverse party on his ability to pay, because his inability to pay may negate your claim.

Double Fault

April 17, 2019 § 1 Comment

When both parties are clearly guilty of grounds for divorce, who gets the divorce?

Stephen Anderson proved that his wife, Emmarie, was guilty of adultery. She put on proof that he was guilty of habitual drunkenness and habitual cruel and inhuman treatment. The chancellor found both parties had proven the other guilty by the requisite standard of proof.

What is the chancellor to do? Grant both parties a divorce? Grant Stephen a divorce because adultery is more serious? Grant the divorce to Emmarie because people shouldn’t be violent toward each other? Order them to go home together and try to preserve the sanctity of their marriage?

The chancellor granted Emmarie a divorce, and Stephen appealed, arguing that he should have been granted the divorce because it was Emmarie’s adultery that caused his separation from her.

In Anderson v. Anderson, decided March 19, 2019, the COA affirmed. Judge Lawrence wrote the opinion, which analyzed Stephen’s argument on the point:

¶9. Stephen argues that because he proved that Emmarie committed adultery and Emmarie’s adultery caused him to leave, he should have been granted a divorce on that ground. Stephen further argues that Emmarie should not have been granted a divorce on habitual cruel and inhuman treatment because she reconciled with him after her 2012 claim.

¶10. “There can be but one divorce granted. Where each party has requested a divorce and offers proof sufficient to establish a basis for divorce, the chancellor must then determine which of the parties will be granted a divorce.” Garriga v. Garriga, 770 So. 2d 978, 983-84 (¶23) (Miss. Ct. App. 2000) (citing Hyer v. Hyer, 636 So. 2d 381, 382 (Miss. 1994)). Here, Stephen filed for divorce on the grounds of habitual cruel and inhuman treatment and adultery. Emmarie counterclaimed on the same grounds.

¶11. In Sproles v. Sproles, 782 So. 2d 742, 746 (¶14) (Miss. 2001), the chancellor granted the wife a divorce on the grounds of habitual drunkenness and habitual cruel and inhuman treatment instead of granting the husband a divorce on the ground of adultery even though his wife admitted at trial that she had committed adultery. Our supreme court affirmed the chancellor, finding that “[t]here [was] ample proof that it was [the husband’s] conduct that caused the dissolution of the marriage and that [the wife] was entitled to a divorce on the grounds of cruel and inhuman treatment and habitual drunkenness.” Id. at 747 (¶20). In Boutwell v. Boutwell, 829 So. 2d 1216, 1219 (¶¶40-43) (Miss. 2002), our supreme court dealt with a nearly identical issue and relied on Sproles to affirm the chancellor’s grant of divorce to the wife on the grounds of habitual cruel and inhuman treatment.

¶12. Here, Emmarie admitted that she committed adultery. However, the chancellor also heard testimony from Emmarie, Emmarie’s mother, and Emmarie and Stephen’s son about Stephen’s physical abuse upon Emmarie that started prior to and throughout the marriage. Ultimately, the chancellor determined that it was Stephen’s continued course of physical abuse upon Emmarie that caused the breakdown of the marriage. Finding the chancellor’s decision was supported by substantial evidence, we affirm the chancery court’s grant of divorce to Emmarie on the ground of habitual cruel and inhuman treatment.

Here the chancellor specifically found that it was Stephen’s conduct that caused the breakdown of the marriage, and it was on that finding that she made the award of the divorce to Emmarie. That basis has been upheld by the courts.

When you have the possibility that either party may be granted a divorce because both have grounds, it would behoove you to develop proof that the opposing party was more at fault. You need that kind of proof in connection with Ferguson, Albright, and Armstrong factors.

 

 

Bifurcation and the Appeal

April 3, 2019 § Leave a comment

It’s becoming more and more common that contested divorce trials are bifurcated so that the grounds are tried separately from the issues of equitable distribution, alimony, etc. Under this practice, the grounds are tried first. If no divorce is granted, that’s the end of that. If, on the other hand, the court finds that the grounds are proven, then the court retains jurisdiction to determine property division and other such issues at a later date. The advantages are manifold, chiefly that one does not have to invest the time and money to develop evidence relating to property unless and until a divorce is granted.

That’s what was done in the divorce case of Mary and Glen Montgomery. The court bifurcated the case, and a hearing was held on the grounds for divorce. Following the hearing, the chancellor found that Glen had proven HCIT, and granted the divorce. The judge did commence a hearing on the remaining issues, which involved property only, but the hearing could not be concluded, and it was recessed to a date four months later. The court entered a judgment on the day of the hearing granting Glen the divorce and stating that “Matters of equitable division [would] be addressed in a later judgment.” The judgment also recited that “This is a final judgment on the grounds for divorce only. The Court hereby reserves jurisdiction …” over all of the remaining financial issues. Mary, who had represented herself in the proceedings, filed a timely pro se appeal.

In Montgomery v. Montgomery, decided March 5, 2019, the COA dismissed the appeal for lack of jurisdiction. Judge Jack Wilson wrote for the court:

¶5. A fuller recitation of the facts of the case is unnecessary because we lack jurisdiction. See Walters v. Walters, 956 So. 2d 1050, 1051 (¶2) (Miss. Ct. App. 2007). “Though the issue has not been raised by the parties, this Court is required to note its own lack of jurisdiction.” Id. at 1053 (¶8). “Generally, only final judgments are appealable.” Id. (quoting M.W.F. v. D.D.F., 926 So. 2d 897, 899 (¶4) (Miss. 2006)). “A final, appealable, judgment is one that ‘adjudicates the merits of the controversy[,] . . . settles all issues as to all the parties[,]’ and requires no further action by the lower court.” Id. (brackets omitted) (quoting Banks v. City Finance Co., 825 So. 2d 642, 645 (¶9) (Miss. 2002)).

¶6. “A judgment granting a fault-based divorce is a non-final order if issues attendant to the fault-based divorce, such as property division, remain before the lower court.” Id. at (¶9). That is precisely the situation here. The chancery court’s judgment granting a divorce expressly stated that the court reserved jurisdiction to divide the marital estate and resolve all other financial matters related to the divorce. Therefore, the judgment granting a divorce “was not a final judgment from which an appeal could be taken.” Id.; accord, e.g., M.W.F. v. D.D.F., 926 So. 2d 897, 898-900 (¶¶3-6) (Miss. 2006) (holding that a “judgment of divorce” granting a divorce was not final because it did not resolve issues of property
division, alimony, child custody, and child support); Ory v. Ory, 936 So. 2d 405, 408 (¶3) & n.1 (Miss. Ct. App. 2006) (explaining that a “judgment of divorce” was not final because the chancery court reserved the division of the marital assets for a later date). The judgment granting a divorce was not final even though it was labeled as a “final” judgment. Walters, 956 So. 2d at 1052-54 (¶¶5-7, 9, 11-12) (holding that a “Final Judgment of Divorce” was not a final, appealable judgment because the equitable division of the marital estate remained pending before the chancery court). Whether a judgment is “final” is a matter of substance, not form. See M.R.C.P. 54(b).

¶7. Rule 54(b) of the Mississippi Rules of Civil Procedure provides one exception to the rule that only final judgments are appealable. See Walters, 956 So. 2d at 1053 (¶10). Under Rule 54(b), “the [trial] court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an expressed determination that there is no just reason for delay and upon an expressed direction for the entry of the judgment.” M.R.C.P. 54(b). However, the trial court’s “expressed determination that there is no just reason for delay” must be stated “in a definite, unmistakable manner.” Id., advisory committee notes. In other words, the trial court must expressly “certify” that the
interlocutory ruling should be deemed final and “released for appeal.” Jennings v. McCelleis, 987 So. 2d 1041, 1043 (¶6) (Miss. Ct. App. 2008) (quoting Indiana Lumbermen’s Mut. Ins. Co. v. Curtis Mathes Mfg. Co., 456 So. 2d 750, 753 (Miss. 1984)).

¶8. In this case, the trial judge did not make such an express certification. Indeed, the judge did not make any statement to the effect that there was “no just reason for delay” of an appeal. M.R.C.P. 54(b). To the contrary, the judgment granting Glen a divorce expressly stated that the equitable division of the marital estate would be “addressed . . . in a later judgment.” The judgment further stated that the court reserved jurisdiction to address that issue and all other financial matters. Moreover, the court even gave the parties a date for the second day of trial. Therefore, Rule 54(b)’s exception to the final judgment rule does not apply. See Walters, 956 So. 2d at 1052-54 (¶¶5-14) (holding that Rule 54(b) did not apply in the absence of an expressed determination by the trial court that there was no just reason for delay—even though the trial judge stated orally and in a written judgment that he intended to allow an immediate appeal from a “Final Judgment of Divorce”).

¶9. Because the chancery court has not entered a final, appealable judgment in this case, this Court lacks jurisdiction, and this appeal must be dismissed.

Nothing more to add. Keep this in mind the next time you try a bifurcated case.

 

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