The Value of Valuation
June 11, 2020 § Leave a comment
In the divorce case between Missy and Randy Norwood, the only evidence in the record of property values was in the form of the parties’ 8.05 financial statements. This despite the fact that the property in dispute for equitable division included 129 acres of land with poultry houses, a residence with 3.37 acres and the poultry business. Missy’s financial statement assigned a gross value of $1,148,000, and Randy’s total was $840,000. There was debt. The chancellor sorted through it as best he could, assigned values, and divided the estate. Unhappy with the division, Missy appealed.
The COA affirmed in Norwood v. Norwood, decided May 12, 2020. Judge McCarty wrote the 5-4 majority opinion:
¶11. “It is within the chancery court’s authority to make an equitable division of all jointly acquired real and personal property.” Martin v. Martin, 282 So. 3d 703, 706 (¶7) (Miss. Ct. App. 2019) (quoting Bullock v. Bullock, 699 So. 2d 1205, 1210-11 (¶24) (Miss. 1997)). “This Court reviews a chancery court’s division of marital assets for an abuse of discretion.” Id. “We will not reverse a chancery court’s distribution of assets absent a finding that the decision was manifestly wrong, clearly erroneous, or an erroneous legal standard was applied.” Id.
¶12. “Our Supreme Court has held that the foundational step to make an equitable distribution of marital assets is to determine the value of those assets.” Id. at (¶8) (internal quotation mark omitted). From there the chancery court must equitably divide the marital property according to the factors first articulated in Ferguson. Id. at 706-07 (¶8). [Fn omitted]
¶13. Now on appeal, Missy claims error in the chancery court’s valuation of the marital assets. However, the chancery court relied upon the evidence provided by the parties in valuation and distribution. The general rule is that “[i]t is incumbent upon the parties, not the chancery court, to prepare the evidence needed to clearly make a valuation judgment.” Id. at 707 (¶10). In Martin, the wife had complained that the husband received more than her after the chancery court’s distribution of assets. Id. at 706 (¶6). Yet, “[d]espite numerous requests from the chancery court, neither party provided the court with a single valuation of the assets at issue,” “[t]here was no testimony of the market value of the real property,” and “[a]ppraisals were never conducted.” Id. at 707 (¶9).
¶14. In light of the general rule, we affirmed the court’s decision regarding property distribution. Id. at (¶13). For “[w]here 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. at (¶10); see also Messer v. Messer, 850 So. 2d 161, 170 (¶43) (Miss. Ct. App. 2003) (“This Court has held that when a [chancery court] 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 [its] conclusion.”).
¶15. In this case, the chancery court considered all of the evidence before it—both parties’ Rule 8.05 financial statements and their in-trial testimony. It is clear that more and better proof would have been helpful to the chancery court. But the fact that there was little proof does not automatically warrant a reversal of the chancery court’s determination of this issue. As we declared nearly two decades ago, “[t]o 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).
¶16. The dissent cites Mace v. Mace, 818 So. 2d 1130, 1133-34 (¶¶13-14) (Miss. 2002), to suggest we should remand due to the lack of an expert’s valuation of the marital property. In that case, the Mississippi Supreme Court reviewed the valuation of a medical practice, which the trial court had assessed at $374,000, including the value of the building and equipment. Id. at 1133 (¶13). Because of the complexity of the issues, and because “it [was] abundantly clear from the testimony that the valuation of the practice was unreliable,” the Supreme Court reversed and remanded for a more comprehensive valuation. Id. at 1134 (¶¶15-16).
¶17. However, Mace did not create a requirement that only an expert can conduct a property valuation before an equitable division can be determined. Parties may choose not to hire an expert or not have the resources to do so. Unlike the complex proof needed in Mace, this is not a case that requires clarification on remand. The chancery court was not impeded in this matter because of the proof presented at trial. The chancery court found that “Randy’s 8.05 Financial Statement shows minimal income from the poultry operations” and that both Randy and Missy agreed the expenses he listed from the poultry farm were accurate. There is no reason to re-try this case when there is “minimal income” and the expenses were not in dispute.
¶18. Because it is the parties’ duty, and not the chancellor’s, to prepare and submit evidence for a valuation judgment, we find no abuse of discretion. It is clear that the chancery court’s decision was based upon the proof mustered by the parties at trial. It was the parties’ decision at trial to present slim proof. That choice will not result in reversal on appeal. This decision is affirmed.
As the court points out in ¶17, there are legitimate reasons why parties may choose not to have property appraised by a professional. Cost most certainly can be a factor. The parties may simply choose to leave it up to the chancellor to decide, although that is usually a crap shoot.
You can use requests for admission to help nail down values.
Just remember that the less precise your proof the more the matter falls within the chancellor’s discretion and judgment. And if there’s any proof at all in the record to support her findings, your chances of getting her reversed are practically nil.
The Price Tag for Dishonesty
April 15, 2020 § Leave a comment
An old saw among lawyers is that “It’s better to be hurt by the truth than by a lie.”
One could say that T.J. Anderson’s dishonesty cost him $14,000+ in his divorce case. In essence the COA said precisely that in its opinion affirming the chancellor’s order that he pay his ex, Carrie, that sum plus interest to replace his son Robert’s educational fund. Here’s how Judge Tindell’s March 31, 2020, opinion in Anderson v. Anderson addressed it:
¶29. On the issue regarding the depletion of Robert’s savings account, the chancery court found as follows:
During their marriage Carrie’s grandmother gave Carrie, T.J., and [Robert] $14,000 to put into a savings account for [Robert’s] college education. T.J.
placed this money in his name and in the name of the child. T.J. withdrew the money from this account. He claims that Carrie knew of the withdrawal. While the Court does not believe that Carrie knew that T.J. was withdrawing his son’s money, it would be of small consequence. Carrie knowing would not be justification for the withdrawal. T.J. withdrew and used his son’s money. T.J. will be responsible for replacing any funds he withdrew from his son’s account in the approximate amount of $14,000 together with any interest those withdrawals would have generated.
¶30. T.J. asserts that the chancery court committed manifest error when it ordered that T.J. be fully responsible for replacing the $14,000 removed from Robert’s savings account, in addition to any lost interest attributable to the missing funds. Citing McLaurin v. McLaurin, 853 So. 2d 1279, 1286 (¶24) (Miss. Ct. App. 2003), T.J. argues that the money taken from that account was used to pay marital debts, and thus Carrie “should be equally responsible for replacing the money from the account.”
¶31. We find no merit in T.J.’s assertions. As noted above, when Robert was two years old, Carrie’s grandmother gave Robert $14,000 as a college fund, and T.J. put this money into a savings account in T.J.’s and Robert’s names. The record reflects that T.J. withdrew sums of money on different occasions from this account until there was no money left in the account. At trial, T.J. testified that Carrie was “generally aware” that he had withdrawn the money. Carrie, however, testified that she did not know T.J. had taken this money until the parties separated and she found the passbook savings account showing that the money was missing. T.J. admitted at trial that he did not put the money in the couple’s joint account. He testified that he “paid bills with it,” but he could not specifically account for it.
¶32. We find relevant in this analysis that the record reflects a number of incidents reflecting T.J.’s lack of candor with the chancery court. “[T]he chancellor is vested with the sole authority and responsibility to assess witness credibility as no jury is present. The chancellor alone hears the testimony and sees the demeanor of the witnesses.” Culumber v. Culumber, 261 So. 3d 1142, 1150 (¶24) (Miss. Ct. App. 2018) (citations and internal quotation marks omitted). In this case, the chancellor stated on the record that T.J. was “among the most dishonest individuals that [he had] had on the stand” in the chancellor’s nearly thirty years as a judge. Particular incidents at trial included T.J. substantially misstating his employment history and earnings and T.J. denying that he posted messages on social media berating Carrie and calling her inappropriate names. As described in the chancery court’s opinion and final judgment,
In Exhibit 43 Carrie was berated and called vile names. T.J. swore that he knew absolutely nothing about this posting. Several months later, after Carrie’s attorney had arranged for a police computer expert to testify, T.J. confessed that he had in fact sent the posting and had lied to the Court about it.
¶33. In light of these circumstances and our limited standard of review, we find that the chancery court’s order that T.J. replace the funds withdrawn from Robert’s account, plus interest that would have been generated on those withdrawals, was based on substantial, credible evidence. We therefore find that T.J.’s assignment of error on this issue is without merit.
A point or two:
- If you really expect the chancellor believe that your client spent funds on marital debts as T.J. claimed here, you’d best come up with some credible corroborating proof such as receipts or testimony, particularly when your client has already damaged his own credibility in his testimony.
- Vague testimony, such as T.J.’s general claim about the marital debts not only lacks credibility, it also is most unhelpful to the court. What bills? When? How much was paid? To whom?
Valuation with Less than Ideal Proof
April 14, 2020 § 5 Comments
If you’re looking for the most efficient way to drain your client of all credibility in financial proof, let him submit an 8.05 financial statement that only an idiot would accept as accurate.
When Michael and Lisa Dickinson were in trial over their divorce, Michael submitted a financial statement listing the value of their former residence as $500,000, unsupported by any other evidence. Lisa valued it at $126,170, supported by the tax collector’s bill and valuation. Neither party offered a professional appraisal. The chancellor found Lisa’s valuation more credible. Dissatisfied, Michael appealed.
In Dickinson v. Dickinson, decided March 31, 2020, the COA affirmed. Judge Tindell’s opinion:
¶25. Michael also argues that the chancellor erred in the valuation of the couple’s marital home. Michael concedes that neither he nor Lisa submitted formal appraisals of the home to the chancellor at trial. Rather, each party submitted their Rule 8.05 financial statements with their alleged valuations of the home. [Fn omitted] Michael submitted a $500,000 valuation of the home, which the chancellor found to be speculative and unsupported by any other evidence or documentation. Lisa submitted a valuation of $126,170 along with the Jackson County Tax Collector’s bill and valuation statement, issued on November 26, 2014, which also valued the home at $126,170. Based upon the limited evidence presented, the chancellor valued the home at $126,170 and awarded the home to Lisa.
¶26. Lisa argues that the chancellor appropriately valued the home based upon the limited available evidence, and she cites to Williams v. Williams, 264 So. 3d 722 (Miss. 2019), in support of her argument. In Williams, the Mississippi Supreme Court upheld a chancellor’s valuation of a couple’s marital property based upon limited evidence submitted by the parties. Id. at 728 (¶21). During the couple’s divorce proceedings, the wife submitted no evidence to the chancellor related to valuation other than her Rule 8.05 statement, while the husband did provide some documentation supporting his valuation of the marital property. Id. at (¶18). The chancellor ultimately valued the property based upon the husband’s documentation, which the wife appealed. Id. In upholding the chancellor’s valuation, the Supreme Court stated that it “refuse[d] to blame the chancellor for a party’s failure to present sufficient evidence of property value.” Id. at (¶20). The Supreme Court further held that “the chancellor’s duty is not to obtain appraisals of marital property.” Id. (citing Dunaway v. Dunaway, 749 So. 2d 1112, 1121 (Miss. Ct. App. 1999)). Where the parties present the chancellor with “less than ideal” proof, the Supreme Court held that the chancellor may rightfully use the available proof to arrive to the best conclusion possible. Id. at (¶21).
¶27. Here, the chancellor found Michael’s $500,000 valuation to be speculative and unsupported by any evidence, other than his Rule 8.05 financial statement. While Lisa also failed to submit an appraisal at trial, the chancellor found that her $126,170 valuation matched the Jackson County Tax Collector’s bill and valuation. Again, we cannot fault the chancellor for the parties’ lack of evidence. As such, we also cannot say that the chancellor
committed manifest error by using the best information available to value the marital home.
- A common and ridiculous practice is for parties to assign high values to items they agree for the other to have, and low values to items that they want for themselves. In one case I had where the parties agreed that the husband would have ownership of a riding lawnmower, the wife valued it at $18,000, and the husband valued it at $200. There was no testimony that it was either gold-plated or rusted out, so I settled somewhere in the lower extremity of that range. The case was affirmed on appeal, so I guess I did something right.
- I think it’s malpractice if you don’t go over your client’s 8.05 in advance of trial and challenge the figures. You need to ask, among others: how did you come up with this figure?; are you really spending $700 a month on gas and oil?; why is the spinet piano valued at $10,000? If you don’t get those kinds of things straightened out in your office, you are sending your client off like a sheep to the slaughter.
- On a related note, those of you who don’t work with your clients on their 8.05’s should know that it is painfully obvious that you neglected this aspect of client representation. Figures don’t add up. Some are almost illegible. One I saw actually had a dirty footprint on the front page. Another chancellor calls those “Parking Lot 8.05’s” because they look like they were hastily scrawled in the parking lot before entering the courthouse — and they probably were.
Jointly-titled Separate Property
April 13, 2020 § 3 Comments
Carrie Anderson’s grandmother decided to give her a 59-acre parcel of land in 2013. When she went to the family lawyer’s office to pick up the deed, she found that he had added the name of her husband, T.J., to it as joint tenant. She later said that she was afraid to insist that it be titled in her sole name because of T.J.’s temper.
In 2015 the parties consented to an ID divorce and the chancellor found the property to be part of Carrie’s separate estate. T.J. appealed.
In Anderson v. Anderson, the COA affirmed. Judge Tindell wrote for the unanimous court:
¶18. The chancery court found that the fifty-nine acres from Carrie’s grandmother jointly titled in Carrie’s and T.J.’s names was Carrie’s separate, non-marital property, as follows:
While some coercion may have been placed on Carrie to have T.J.’s name place on the deed [to the fifty-nine acres], even if there had been no coercion, the Court would still find the 59 acres to be Carrie’s separate, non-marital property. The property came from Carrie’s grandmother debt free. The parties never improved the property or put any money into the property.
The chancery court recognized that “[i]nter vivos gifts and inheritances are considered non-marital property unless they have been commingled.” McDonald v. McDonald, 115 So. 3d 881, 885-86 (¶12) (Miss. Ct. App. 2013). The chancery court found that “[t]he fact that the 59 acres was jointly titled [in this case] did not make it a marital asset.” Id. at 886 (¶¶12-14) (finding property purchased with funds inherited by a husband was the husband’s
separate property despite the property being jointly titled in both the husband and the wife); see also Marter v. Marter, 95 So. 3d 733,737-38 (¶¶11-16) (Miss. Ct. App. 2012) (finding that property inherited by a wife prior to marriage and later jointly titled remained the wife’s separate property); Delk v. Delk, 41 So. 3d 738, 741-42 (¶17) (Miss. Ct. App. 2010) (recognizing that condominium property separately owned by a wife prior to marriage but
later jointly titled did not become marital property until the couple began using the property as their marital home, and thus the husband was not entitled to a full half of the proceeds from the condominium). The chancery court expressly noted that “[t]he parties never lived on or improved the property. There was absolutely no commingling with marital property nor was the property utilized for domestic purposes.” Continuing, the chancery court found that the fifty-nine acres did “not los[e] its status as nonmarital property,” and ordered that T.J. deed his interest in the tract of land to Carrie.
¶19. T.J. asserts that the chancery court committed manifest error in this determination because the property at issue in this case was never Carrie’s separate property in the first place, and thus the cases the chancery court relied upon in making its determination, McDonald, Marter, and Delk, are distinguishable. T.J. argues that in contrast to the circumstances in these cases, Carrie did not inherit the property, it was not purchased with inherited money, and was it not property Carrie owned prior to the marriage and later jointly titled. Rather, the property was acquired during the marriage and titled directly from Mrs. Hansberger to both T.J. and Carrie as an inter vivos gift; therefore, according to T.J., it is marital property, and he is entitled to an equitable division of that property.
¶20. Carrie, on the other hand, asserts that the evidence supports the chancery court’s determination that the fifty-nine acres from her grandmother is her separate property and that under the cases relied upon by the chancery court, the mere fact that the property is jointly titled in both her and T.J.’s names does not, standing alone, convert the property to marital property subject to equitable distribution.
¶21. In addressing this issue, we acknowledge that “[a]ssets acquired or accumulated during the course of a marriage are subject to equitable division unless it can be shown by proof that such assets are attributable to one of the parties’ separate estates prior to the marriage or outside the marriage.” Hemsley v. Hemsley, 639 So. 2d 909, 914 (Miss. 1994); see generally Deborah H. Bell, Bell on Mississippi Family Law § 6.03[a], at 139 (2d ed. 2011) (“Because of the presumption in favor of marital property, a spouse seeking separate classification bears the burden of proof.”). Although, as T.J. asserts, the record does contain the 2013 warranty deed from Mrs. Hansberger to both T.J. and Carrie obtained by them during their marriage, we find that the record also contains substantial, credible evidence supporting the chancery court’s determination that this property is attributable to Carrie’s separate estate.
¶22. In particular, although neither Mrs. Hansberger nor the attorney who prepared the deed testified at trial, Carrie testified that it was her grandmother’s intent that she (Carrie) have the property. [Fn omitted] Moreover, there was ample evidence presented at trial that Carrie legitimately feared for her safety and welfare if she did not have the land jointly titled, and thus she was essentially coerced into doing so. [Fn 9] Cf. Estate of Langston v. Williams, 57 So. 3d 618, 620-21 (¶10) (Miss. 2011) (describing the analogous concept of undue influence in the will context as using “undue methods for the purpose of overcoming the free and unrestrained will of the testator so as to control his acts and to prevent him from being a free agent”); Bailey v. Estate of Kemp, 955 So. 2d 777, 783 (¶23) (Miss. 2007) (discussing the analogous concept of duress as requiring “(1) that the dominant party threatened to do something which he had no legal right to do; and (2) that the wrongful threat overrode the volition of the victim and caused him to enter an agreement against his free will”).
[Fn 9] As detailed in the statement of facts, Carrie testified that she was too afraid of T.J. to have title placed in her name alone. Regarding this fear, the record reflects that T.J. had attacked Carrie, punched numerous holes in the walls and doors in both their Tupelo and Senatobia homes, killed several of their dogs, and frequently threatened and verbally abused Carrie. As noted, the chancery court granted Carrie a divorce on the statutory ground of habitual cruel and inhuman treatment.
¶23. In short, there is substantial, credible evidence that the property was intended to be Carrie’s property and that her fear of T.J. prevented her from having it titled in her name. The chancery court therefore was correct in relying on McDonald, 115 So. 3d at 885-86 (¶¶12-14), in determining that “[t]he fact that the 59 acres was jointly titled [in this case] did not make it a marital asset.” See also Marter, 95 So. 3d at 737-38 (¶¶11-16); Delk, 41 So. 3d at 741-42 (¶17). The record reflects that the property was debt-free, the parties made no financial contribution toward the property or its maintenance during the marriage, and the parties did not use it. We find no manifest error in the chancery court’s determination on this issue, and we therefore find that T.J.’s first assignment of error is without merit.
Some Things are Better Left Said
March 9, 2020 § 1 Comment
There’s no accounting for what a client might say on the witness stand. If you’ve done any courtroom work at all you can attest to that.
In their divorce case, Thomas and Debra Oates were locked in a dispute over the marital estate, consisting of a 39-acre parcel of land subject to a mortgage, along with the usual baggage, physical and metaphysical, that one accumulates over the span of a 13-year marriage. Debra claimed that the 39 acres were a non-marital inheritance. Thomas contended that the property, which had indeed been an inheritance, had lost its separate character. And yet …
When he took the witness stand and testified about it, after being asked what, specifically, he wanted the chancellor to award him in the case, here is what he had to say:
Q. If you could state which of those items you would like to have, what would they be?
A. My motorcycle and the apparel and my pictures, personal properties, my daddy’s stuff.
Q. Slow down. Your motorcycle?
A. My apparel, motorcycle apparel, my daddy’s stuff, and my guitars and amp.
Q. And that is all you want the judge to award you in the marital estate?
A. Yeah. I mean I’d like to have the four-wheeler, but I don’t know if it’s there or not. [My emphasis]
Does that seem rather incomplete to you? (Hint: there is no mention of the 39 acres).
The chancellor took Thomas at his word, found the 39 acres to be non-marital, awarded it to Debra, and let Thomas go forth with his stuff.
Thomas appealed, and you have probably already guessed the outcome. Affirmed by the COA on February 18, 2020, in Oates v. Oates.
Every client is more or less unpredictable when it comes to the pressure cooker of the witness stand. Some like it hot. Some wither. All struggle to a greater or lesser degree to find the right words to say what needs to be said. You can make your client’s testimony more predictable and successful by going over some of, the most important parts in particular, in advance of trial. Remember, it’s perfectly ethical to help a client with how to tell the truth — phrases to avoid, better choices of words –, and it is unethical to help the client make up a story that will win the day. Trial preparation is in most cases critical. I wish more lawyers did it.
An Assertion is not Conclusive Proof
February 25, 2020 § Leave a comment
Raymond Reynolds appealed from the chancellor’s ruling on equitable distribution in his divorce case with his wife, Kay. Raymond complained on appeal that the chancellor had erred in not considering Kay’s withdrawal of $6,000 from their joint account counter to the temporary order’s injunction.
The COA affirmed 10-0 in Reynolds v. Reynolds, decided December 17, 2019. Here’s how Judge Tindell’s opinion dealt with Raymond’s claim:
¶19. Prior to distribution, the chancellor entered a temporary order on May 20, 2014, which enjoined the parties from liquidating, transferring, or changing beneficiaries for any marital assets. Raymond claims that Kay transferred approximately $6,000 from the couple’s joint checking account after this order was entered. Raymond now argues that the chancellor abused his discretion by failing to consider this transfer in his Ferguson analysis before distributing the couple’s marital assets.
¶20. The second Ferguson factor requires the chancellor to consider any dissipation of the marital assets, or “the degree to which each spouse has expended, withdrawn or otherwise disposed of marital assets and any prior distribution of such assets by agreement, decree or otherwise.” Ferguson, 639 So. 2d at 928. While Mississippi has no specific test for discerning the dissipation of marital assets, “we find it reasonable when considering if marital assets have been dissipated to look to whether the assets in question were actually wasted or misused.” Smith v. Smith, 90 So. 3d 1259, 1268 (¶37) (Miss. Ct. App. 2011).
¶21. In his final judgment, the chancellor stated that he did not find any unreasonable dissipation of marital assets by either party prior to the injunction of the temporary order or prior to trial. Raymond disagrees with this finding, arguing that he provided the chancellor with undisputed testimony that Kay took approximately $6,000 from the parties’ joint checking account in violation of the temporary order and that the chancellor failed to include this in his Ferguson analysis. However, Kay disputed Raymond’s testimony herself by testifying that Raymond actually withdrew $7,000 from the joint checking account, and she did not. She further testified that when she withdrew from the account, there was only approximately $1,000 left in the account.
¶22. Also, as Kay asserts in her brief, no evidence exists in the record establishing if or exactly when any transfers from the joint checking account would have occurred. Raymond provided no documentation of the alleged transfer to the chancellor prior to or during the trial. The only evidence Raymond used to establish this claim is his own testimony and nothing more. As such, the chancellor had no substantial evidence of Kay’s alleged transfer before him to incorporate into his Ferguson analysis. We therefore find Raymond’s argument to be without merit and find that the chancellor was well within his discretion in determining that no dissipation of assets occurred.
Every chancellor can recount from experience many times when the only evidence on a particular point is one party’s assertion opposed by the other party’s assertion, both unsupported by any other evidence. In that situation the lawyers have left it up to the judge to conclude either that (1) both are credible and the conflict simply can not be resolved, or (2) one is credible and the other is not, and the court goes with the credible one.
When I am presented with a similar situation I wonder why neither party offered the bank statements into evidence, or a series of corroborating text messages, or an admission, or something, anything, to break the tie. Most lawyers do enough discovery to foresee the conflicted positions and to anticipate a way around it. I’m not trying to criticize the lawyering in this case because I don’t know everything that transpired. I am only using this case to illustrate for you what can happen when the testimony is conflicting on a point that proves to be important in your case.
If You Want it You Have to Ask for It
February 3, 2020 § 2 Comments
Back in the day, when I was a mere tadpole of a lawyer, chancellors had broad powers to effect equitable relief. At the end of every pleading were words to the effect: “And she prays for such other and general relief as this honorable court deems mete and right in the premises,” or simply “And she prays for general relief.” Those magic words often evoked unpled-for remedies fashioned by the judge to meet and resolve the problem presented by the evidence. Lawyers (called Solicitors back in those smoke-filled days of yore) foresaw that and were not surprised or blindsided by it. It was the way chancery court business was done.
The MRCP came along in 1982 and made chancery much more like law courts, and the fact that fewer and fewer appellate judges have much chancery experience has accelerated the process. General relief is now no more than a will-o-the-wisp.
That’s the hard lesson that Cheryl Burrell learned in the chancellor’s denial of alimony and use of the former marital residence in her divorce from her adulterous husband, Geoffrey. The lesson was driven home by the COA when it affirmed in Burrell v. Burrell, decided January 7, 2020. Judge Westbrooks wrote the opinion:
¶15. Geoffrey argues that because Cheryl never requested equal or disproportionate distribution of the marital estate, permanent alimony, or spousal support in her pleadings, the court could not grant the relief. Geoffrey, however, did plead for an equitable distribution of the marital estate, which the court granted. Geoffrey further argues that the court did not err in refusing to perform an Armstrong or Cheatham analysis because neither was necessary in light of Cheryl’s non-inclusive pleading.
¶16. In Moore v. Moore, 363 So. 2d 286, 287 (Miss. 1978), the Mississippi Supreme Court rejected Mrs. Moore’s argument for reversal of a chancellor’s decree that did not include an award for permanent alimony. The Supreme Court noted that although Mrs. Moore had been
granted temporary alimony, she had “made no averment pertaining to or prayer for permanent or temporary alimony.” Id. Citing Horton v. Horton, 269 So. 2d 347 (Miss. 1972), the Mississippi Supreme Court held that “the chancellor has considerable discretion in allowing or not allowing permanent alimony, and his beneficence in granting her temporary alimony not sought in her pleadings cannot be reversible error as to her.” Moore, 363 So. 2d at 287.
¶17. Like Mrs. Moore, the record before us does not reflect any request by Cheryl, ore tenus or written, for permanent alimony or spousal support. Even Cheryl’s own pleading for reconsideration does not list alimony or spousal support as one of the issues at trial. Notwithstanding the omission, the court did grant Cheryl temporary spousal support in its temporary order. However, as its name suggests, the court’s grant of spousal support was temporary and does not entitle Cheryl to continued support.
¶18. Cheryl never requested leave to amend her complaint to include a request for alimony or spousal support. No such leave was granted, and no amendment was ever made. Thus, Cheryl was not entitled to permanent alimony or spousal support. Accordingly, we find no error with the chancery court’s decision to deny reconsideration of the award to Cheryl.
A few points:
- If you don’t ask for it in your pleadings, you won’t get it unless you put on evidence to support that relief at trial without a sustained objection from the other side, and then follow up with a R15 motion to conform the pleadings to the proof.
- By asking for equitable distribution himself, Geoffrey opened that door to Cheryl because when the chancellor awards Geoffrey his portion something has to be done with what is left.
- So, what would happen if Geoffrey had asked for an award of alimony? Would that give Cheryl a vehicle to ride toward alimony for herself? No, alimony is a zero-sum game. The prayer for alimony is for the sole benefit of the pleader.
- Although Cheryl argued that she moved ore tenus at trial for alimony, there was nothing in the record to indicate that she had. Always be aware that the most important thing you can do at trial is to make a record. I have tried cases that I knew had no chance of success with a particular chancellor, but carefully loaded up my record to win on appeal.
- If you’re new at this, I urge you to create or steal some form divorce pleadings that ask for every conceivable form of relief: divorce; equitable distribution; alimony, lump-sum, periodic, and rehabilitative; custody; and so on. You can add or delete as necessary, but you will have everything you need as a starting point. Sometimes your client will say, “But I don’t want alimony; it will only make him mad.” You will answer, “If it’s in there we can always not pursue it or even take it out later, but if it’s not in there and you decide at trial that you want it, it may become impossible, so we’d better leave it in. Besides, we’re not in this to make him happy. We’re trying to see that you come through it okay.”
How Much Leeway does the Trial Judge Have Under a Mandate?
November 4, 2019 § Leave a comment
Chip and Melanie Griner underwent a divorce in which the chancellor rendered a judgment in a consent case, and Chip appealed.
In a 2017 opinion, the COA reversed and remanded for the chancellor to correct errors in calculations, to correct the amount of life insurance securing the award, and for clarification of the length of time Chip was required to maintain health insurance covering Melanie. It also ordered Melanie to pay the costs of appeal. The COA issued its mandate so directing.
On remand, the chancellor revised the equitable distribution and the life insurance and health insurance matters. The chancellor denied a motion by Chip to recover the appeal costs. Chip again appealed.
In Griner v. Griner, decided October 8, 2019, the COA again remanded on the issue of recovery of the appeal costs. Here is how Judge McCarty’s opinion addressed the issue for a unanimous court, with Carlton and Tindell not participating:
¶9. For his first assignment of error, Chip argues that the chancery court should have executed this Court’s mandate assessing all appellate costs to Melanie. As a matter of law this is correct.
¶10. In our 2017 opinion we ordered Melanie to pay all costs of the appeal, and the mandate echoed this language. Griner, 235 So. 3d at 190 (¶35) (“All costs of this appeal are assessed to the appellee.”). A party who disagrees with an assessment of costs issued in an opinion may seek relief through a motion for rehearing under Mississippi Rule of Appellate Procedure 40. See M.R.A.P. 36(d) (“a party seeking relief may file a motion for rehearing under Rule 40”). If the mandate issues with a requirement to pay costs, our rules likewise allow a motion to retax costs, which must be filed within fourteen days of the issuance of the mandate. Id.
¶11. While Chip filed a motion for rehearing, Melanie did not. After the Supreme Court denied a request for certiorari review, the mandate was issued. Melanie did not ask for the costs to be retaxed.
¶12. The mandate is an order of this Court which must be followed without deviation. Relying upon a basic definition of the word, the Supreme Court has held it is “[a] command, order, or direction” which, once given, a “person is bound to obey.” Denton v. Maples, 394 So. 2d 895, 897 (Miss. 1981). This “judicial command” directs a lower court “to enforce a judgment, sentence, or decree.” Id. Coupled with the opinion, the mandate is how we communicate with trial courts. “It is inherently necessary that this Court have some method of advising the lower court of the action taken here; under our practice the method used is the mandate.” Edmonds v. Delta Democrat Pub. Co., 221 Miss. 785, 787-88, 75 So. 2d 73, 74 (1954). Because it is to be followed without deviation, “[t]he trial court may not receive any other intelligence of the action of this Court.” Id.
¶13. The procedure following the mandate must be followed strictly. “Upon issuance of our mandate, the trial court simply proceeds to enforce the final judgment.” Collins v. Acree, 614 So. 2d 391, 392 (Miss. 1993). There is no discretion whether to follow a mandate, because “[t]he execution of the mandate of this Court is purely ministerial.” Id. Indeed, the Supreme Court has ruled that any order which is contrary to the mandate is actually outside the jurisdiction of a trial court, and will be held “a nullity and void ab initio.” Denton, 394 So. 2d at 897. [Fn 2]
[Fn 2] 2 Note that while the mandate must be strictly followed, there remains the opportunity to later dive into what costs were actually incurred or should be paid per the mandate, since a party “who seeks relief as to any other matter involving costs shall seek relief in the trial court.” M.R.A.P. 36(d).
¶14. After remand, Chip filed a motion for recovery of appeal costs. Our rules explicitly allow recovery of “[c]osts incurred in the preparation and transmission of the record, the costs of the reporter’s transcript, if necessary for the determination of the appeal, the premiums paid for cost of supersedeas bonds or other bonds to preserve rights pending appeal, and the fee for filing the appeal . . . .” M.R.A.P. 36(c). Because the original appeal included a money judgment, there was a supersedeas bond, and the trial court required it to be one million dollars. The bond carried a $20,000 premium. On remand, Chip requested these premium costs, the docket fee of $200, and a prepayment for record preparation, for a total of $41,200. The request did not seem to be fully formed, as Chip alleged some further bond premium might need to be paid pro rata, and the final record cost was not included. Nonetheless, the motion included exhibits reflecting the two bond premiums.
¶15. Melanie did not respond to the motion at all. The trial court did not make a lengthy ruling on the issue. Instead, its Findings of Fact and Conclusions of Law Following Remand noted in its last line that “All other requests for relief not granted are denied.”
¶16. The chancery court did not have discretion to ignore the mandate. The mandate issued on February 15, 2018, and has to this point not been followed. In accord with our longstanding precedent, we reverse and remand for immediate compliance with the original mandate. Per the mandate for the original appeal, and in accord with the procedures set out in Rule 36, Chip is entitled to all costs for the original appeal.
Pretty clear in this case. The only catch is that sometimes you have to scratch your head over exactly what it is the appellate court is directing to be done.
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 § 1 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.
¶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.