What You Say and How You Say it
June 13, 2016 § Leave a comment
When Lori and Gary Mosher appeared for the divorce trial to end their 26-year marriage, they agreed to a divorce on the ground of irreconcilable differences, and submitted several contested issues for adjudication by the court.
The parties agreed that Lori would receive “one-half of [Gary’s] military retirement,” but left it to the court, apparently, to decide the amount. The chancellor found that Gary’s “military retirement” consisted of two components: “his disposable retired pay”; and his VA disability retirement of around $400 a month. Half of the two components came to $1,795, after deduction for a survivor annuity. Since the VA benefit was not subject to division under federal law, the chancellor awarded Lori a greater share of the retirement.
Gary appealed, complaining that the chancellor had no authority to divide the VA benefits because their agreement was to divide the military retirement only.
The COA affirmed on the point in Mosher v. Mosher, handed down May 24, 2016. Judge Fair wrote for the majority:
¶8. This argument misses the mark. Although it is true that the parties here agreed to divide the “military retirement” equally, the property settlement agreement did not specify what that was. Property settlement agreements are contracts, and like all contracts, there are sometimes disputes regarding the meaning of their terms. Gaiennie v. McMillin, 138 So. 3d 131, 135 (¶8) (Miss. 2014). It is apparent that the chancery court interpreted the parties’ agreement rather than disregarding it as Gary contends. The chancellor dedicated nearly ten of the fifty-six pages of her written judgment to this question.
¶9. As to the interpretation of the agreement, while it is clear Gary does not agree with the chancellor’s decision, he has not briefed that issue. “[T]here is a presumption that the judgment of the trial court is correct and the burden is on the Appellant to demonstrate some reversible error to [the appellate court].” Birkhead v. State, 57 So. 3d 1223, 1231 (¶28) (Miss. 2011); see also M.R.A.P. 28(a)(6). Gary has failed to meet his burden of showing error on this issue.
There are other issues addressed in the opinion dealing with equitable distribution and alimony. Judge Carlton dissented in part, joined by Greenlee and Griffis.
The main takeaways here for practitioners:
- What you say and how you say it are pretty dadgum important when it comes to court. If the parties intended that only the military retirement, not including the VA disability retirement, was to be divided, then the agreement should have stated exactly that. Precision makes all the difference. It’s pretty hard to argue that something was intended when that intent does not appear in the specific language.
- If you do not cite authority for your position on appeal, you have effectively waived it.
Rehabilitative Alimony vis a vis Equitable Distribution
May 25, 2016 § Leave a comment
In a recent case, the COA reversed a chancellor’s calculation of equitable distribution because she counted the mortgage balance both as a liability and as a reduction of the value of the mortgage property. The chancellor had also awarded rehabilitative alimony.
The appellant, Tony Hearn, argued that the chancellor was in error in awarding rehabilitative alimony to his ex, Varena, and that the COA’s reversal of equitable distribution mandated reversal of the rehabilitative alimony award. That’s because as equitable distribution expands, periodic alimony contracts, and vice versa. So, when equitable distribution is thrown out for recalculation, it’s back to the drawing board for periodic alimony recalculation.
Does that rule apply to rehabilitative alimony, though?
In the COA case Hearn v. Hearn, handed down May 10, 2016, the court answered, “no,” and affirmed the chancellor’s award. Judge Lee’s opinion explained:
¶16. In his other issue on appeal, Tony contends the chancellor erred in awarding Varena rehabilitative alimony. “Rehabilitative alimony provides for a party who is trying to become self-supporting and prevents that party from becoming destitute while searching for a means of income. Moreover, ‘the primary purpose of rehabilitative alimony is to give the former spouse the opportunity to enter the work force.’” McCarrell v. McCarrell, 19 So. 3d 168, 170 (¶8) (Miss. Ct. App. 2009) (quoting Alexis v. Tarver, 879 So. 2d 1078, 1080 (¶7) (Miss. Ct. App. 2004)) (internal citation omitted).
¶17. Ordinarily, the reversal of a chancellor’s division of marital property requires reversal of an alimony award. Mace v. Mace, 818 So. 2d 1130, 1134 (¶16) (Miss. 2002). However, the decision to award rehabilitative alimony “is not considered during equitable distribution.” Lauro v. Lauro, 847 So. 2d 843, 849 (¶15) (Miss. 2003); see also Hensarling v. Hensarling, 824 So. 2d 583, 595 (¶39) (Miss. 2002) (court affirmed award of rehabilitative alimony even though it reversed for chancellor to reevaluate value of marital estate); Rhodes v. Rhodes, 52 So. 3d 430, 447 (¶72) (Miss. Ct. App. 2011) (“[A]n award of rehabilitative alimony is exempted from the general proposition that reversal of one financial award requires reversal of all.”); Lauro v. Lauro, 924 So. 2d 584, 588 (¶14) (Miss. Ct. App. 2006) (“Periodic alimony is to be reconsidered when the marital estate is redistributed under principles of equitable distribution. However, rehabilitative alimony is not considered during equitable distribution.”). “Rehabilitative periodic alimony is an equitable mechanism which allows a party needing assistance to become self-supporting without becoming destitute in the interim.” Hubbard v. Hubbard, 656 So. 2d 124, 130 (Miss. 1995).
¶18. In this instance, the chancellor evaluated the award of alimony under the factors enunciated in Armstrong v. Armstrong, 618 So. 2d 1278, 1280 (Miss. 1993). The chancellor divided the marital estate in order to adequately provide for Varena, eliminating the need for periodic alimony. In her amended judgment, the chancellor noted that Varena was employed and working towards self-sufficiency but her monthly expenses still exceeded her monthly income. The chancellor stated that “[c]learly, the award of rehabilitative alimony was intended to . . . allow [Varena] to start anew without becoming destitute.” The chancellor reduced the award of rehabilitative alimony from $650 per month for three years to $600 per month for six months, finding that six months was “a reasonable amount of time to allow [Varena] to address the financial issues involved in her becoming self-sufficient in her living conditions.” We can find no abuse of discretion by the chancellor in awarding Varena rehabilitative alimony. This issue is without merit.
The mention of an amended judgment must refer either to a post-R59(a) ruling by the judge, or to a change in her ruling within ten days per R59(d)..
Can Your Client Do What She Agreed to Do?
May 24, 2016 § Leave a comment
When Karen and Rickey Chance got an ID divorce in 2003, the parties’ PSA provided that Karen would get ownership of a home in Ocean Springs. Rickey was to be responsible to obtain a 30-year mortgage on the property, and to pay the mortgage debt and one-half of the ad valorem taxes for 96 months. Karen was responsible to pay her one-half of the ad valorem taxes, the hazard insurance, and to pay all taxes, insurance, and mortgage debt payments after Rickey’s obligation expired. Rickey also was to pay Karen alimony.
In 2004, Rickey got the mortgage, and the closing attorney suggested in a letter that Rickey simply reduce his alimony payments by the amount of Karen’s monthly obligation, but neither party acted on the recommendation.
To make a long story somewhat shorter, Karen never paid either her half of the taxes or the hazard insurance between 2003 and 2013. In 2013, Karen did send Rickey nearly $4,500 to pay her share of the 2013 expenses.
In the 10-year interim between 2003 and 2013, the parties talked about the situation. Karen steadfastly maintained that she did not have the financial ability to carry out her end of the deal.
In 2013, Rickey filed a petition for contempt against Karen, who responded with several defenses, most notably that of inability to pay. After a hearing the chancellor awarded Rickey a judgment for $38,584.90, and attorney’s fees. Karen appealed.
In the case of Chance v. Chance, decided May 10, 2016, the COA affirmed. You can read the opinion for yourself to see how the court dealt with Karen’s claims of laches, inability to pay, and error in award of attorney’s fees.
I want to focus on the agreement itself:
- I have seen several PSA’s lately in which one party agrees to refinance the home within some stated period of time. In every case, when I asked the lawyer whether the obligated party had the ability to do it, the answer was a shrug with a whimsical smile and “that’s what they agreed to do.” Yes, but if it’s your client who is on the hook, have you discussed whether he or she has the ability to do it? And if it’s the other party who has the duty, what impact will it have on your client if he or she proves incapable of doing as promised? Have you explored these things?
- One critical reason why this is so important to your client’s interest is that the property-division portions of a PSA are unmodifiable. East v. East, 493 So.2d 927, 931 (Miss. 1986). Your client does not get a do-over on the “oops” principle.
- Another important factor is that attempting to prove inability to pay is rarely successful. The burden is heavy, as I have pointed out here before.
- To avoid these swivet-inducing situations, build some alternatives into the agreement. If, say, your client ever can not pay her share of the taxes or insurance, the home could be listed for sale, the other party may reduce alimony and pay the taxes and insurance himself until sold, and he will be reimbursed from the proceeds. That’s one example; I am sure your creative legal genius can conjure up many others.
- Remember that if all you do is take your client’s notes and convert them into a legal-looking sheaf of papers, you are nothing more than a clerk-typist; you are misleading the public and fooling yourself if that’s what you do and you call yourself a lawyer.
What You Need To Prove for Homemaker Services
December 14, 2015 § Leave a comment
In equitable distribution, one of the factors the court is required to consider is “Substantial contribution to the accumulation of the property … ” by … “Direct or indirect economic contribution …” Ferguson vs. Ferguson, 639 So.2d 921, 928-9 (Miss. 1994).
Over the years since Ferguson the courts have recognized that a homemaker’s contribution is to be recognized as an indirect contribution. In doing that, I think most of us have accepted a modicum of evidence on the point to support a finding. But is that enough?
In the divorce trial between Rodney and Courtney Williams the chancellor made this finding that:
“the wife was the homemaker of the parties[ and] that the husband earned the majority of the financial income. This is reflected by the domestic services rendered by [the wife] shown during the periods of time in which the grandchildren lived in the home, and she, as well as the husband, took care of them. I find that both have contributed equally toward the acquisition of property[—]he directly financial[] and she through domestic and in-kind services. Accordingly, I find that both are entitled to an equal distribution of those properties.”
To be honest, I think most chancellors make similar findings and conclusions. On appeal, Rodney took issue with the chancellor’s statements, arguing that Courtney had made only meager contributions.
In the case of Williams v. Williams, handed down November 17, 2015, the COA found that the chancellor’s findings were not supported by substantial evidence on homemaker services, and remanded for further proceedings. Judge Irving wrote for the majority:
¶35. In Lowrey v. Lowrey, 25 So. 3d 274, 287 (¶31) (Miss. 2009) (citation omitted), the Mississippi Supreme Court explained:
[T]he concept of homemaker services rests on a showing that the homemaker has contributed to the economic well-being of the family unit through the performance of the myriad of household and child-rearing tasks. In valuing this service[,] consideration should be given to the quality of the services. For example, a homemaker who, over the course of the marriage, has been frugal in the handling of homemaker expenditures and has thereby enhanced the family assets is entitled to a more equitable return than one who has been extravagant.
¶36. In this case, the record does not establish the extent of Courtney’s contribution toward the acquisition of the marital property. It appears that the chancellor mistakenly thought Courtney was a stay-home spouse and grandmother. As noted, Courtney worked during the course of the marriage, working eleven of the twelve years of marriage at one place, where her net income was approximately $1,600 per month. The record does not inform us where Courtney worked during the first year of the marriage or how much she earned during that year. The parties had no children together, and there is no testimony in the record regarding the division of the household duties. Although Courtney took care of the grandchildren in the home for some period of time, we note that the grandchildren were her grandchildren, but not Rodney’s grandchildren. It appears that the chancellor placed some weight on this fact in determining that Courtney was a homemaker and that her grandchild-caring duties contributed to the acquisition of the marital estate. The record reflects that Rodney paid the majority of the household expenses and the entire mortgage note on the marital home. It further reflects that Courtney deposited only $250 biweekly in a joint bank account to help with the household expenses but routinely withdrew money from that account for other purposes unrelated to household expenses. And the record is silent as to any other financial contributions that Courtney may have made during the marriage. Therefore, there is not substantial evidence in the record supporting the chancellor’s finding that the parties “both have contributed equally toward the acquisition of property[—]he directly financial[] and she through domestic and in-kind services.”
A few takeaways:
- The chancellor here believed that Courtney’s contribution to the household should have been recognized, but there was simply not enough evidence to support his conclusion. Unless you really want your case to be reversed and remanded, it’s up to you to develop the evidence on the record that will support the judge’s findings. Here, the chancellor could just as easily have found against Courtney on the factor, which could have adversely impacted her equitable distribution. Read Lowrey and take it to heart. Use it as a template in your next equitable distribution case.
- If you represent the homemaker and your case is weak on this factor, make sure you bulk up your proof on the other factors, and try to convince the judge that this is not the key factor to consider in making a division. Remember that all of the factors do not have equal weight; the weight to be accorded to each varies from case to case, depending on the facts.
- The converse is true if you represent the direct contributor. Emphasize the direct contribution in terms of its role in the acquisition and appreciation in value of the marital estate.
- Never assume that the judge’s findings will make up for gaps in your case. If the judge stretches to make an assumption, you could find the case ricocheting back to you because those findings are not supported by substantial evidence. Client’s don’t like having to pay for a do-over.
No More Heightened Scrutiny, But …
November 23, 2015 § Leave a comment
Back in April of last year I pondered the COA’s decision in Burnham v. Burnham, which affirmed the chancellor’s rulings on child support and equitable distribution in a divorce, but subjected his findings to “heightened scrutiny” and “less deference” because he adopted one side’s proposed findings of fact and conclusions of law verbatim. That post is here.
Dissatisfied with the COA’s affirmance, Matthew Burnham filed a petition for cert, which the MSSC granted. One issue he raised was the chancellor’s verbatim adoption of the other side’s proposed findings of fact and conclusions of law.
In ¶7 of the MSSC’s opinion in Burnham v. Burnham, handed down November 12, 2015, Justice Dickinson stated:
In Bluewater Logistics, LLC v. Williford, we abandoned the rule that a chancellor’s decision to adopt a party’s proposed findings of fact was subject to “heightened scrutiny.” A chancellor’s factual findings , even those adopted from a party, are reviewed for an abuse of discretion. [footnotes omitted]
So that would seem to be the last word on that subject.
This case does, however, highlight a pitfall of proposed findings. The MSSC reversed because several of the chancellor’s findings of fact, particularly those upon which he based a finding of dissipation of assets, were unsupported by evidence in the record. Those findings of fact were submitted to the chancellor by the attorneys for Mrs. Burnham. Although the chancellor had the duty to satisfy himself that the proposed findings he adopted were accurate and supported in the record, the first duty was on her attorneys to ensure that their proposed findings were accurate. As the outcome of this case illustrates, if you play loose with the facts, it can cost your client down the road.
Chancellors have different approaches to proposed findings. Some ask for them in many cases, particularly complicated ones. Others have told me that they do not like them because lawyers tilt them in favor of their clients. Still others, as I do, call for them selectively.
If you’re going to offer proposed findings, make sure you draft them like the judge is supposed to — relying only on facts in evidence and drawing fair inferences, and applying the law as it is applies. If you use proposed findings as a partisan opportunity, you just might snatch defeat from the jaws of victory.
Equity Delayed is Equity Denied
August 26, 2015 § 2 Comments
If your trial judge in a bench trial takes a case under advisement and fails to render a decision within a reasonable time, MRAP 15 provides the remedy:
(a) When a trial judge in a civil case takes under advisement a motion or request for relief which would be dispositive of any substantive issues and has held such motion or request under advisement for sixty (60) days, the plaintiffs and the defendants shall each within fourteen (14) days thereafter submit a proposed order or judgment to the trial judge and shall forward to the Administrative Office of Courts, the trial court clerk and the opposing parties true copies thereof with a statement setting forth the style and number of the case, the names and addresses of the judge and of all parties and the date on which such motion or request was taken under advisement. On receipt of such proposed orders and notices, the Administrative Office of Courts shall calendar them and notify the trial judge and the trial court clerk of the filing. At any time thereafter that an order or judgment is entered on the motion or request for relief, the plaintiffs and the defendants shall, in writing, promptly notify the Administrative Office of Courts and the opposing parties of the date of entry of the decision; copies of such notification shall be sent to the judge and the trial court clerk. If no written notice of a decision is received by the Administrative Office of Courts within six(6) months from the date the case was taken under advisement, the Administrative Office of Courts shall confirm with the trial court clerk that no order or judgment has been entered and notify the Supreme Court. The Administrative Office of Courts will forward copies of its notification to the trial judge and parties and shall advise the judge and counsel that they are to respond to the notice within a specified period. The Supreme Court shall treat such notification as the filing of an application for a writ of mandamus by all the parties to the action and shall proceed accordingly. The notice of the Administrative Office of Courts of the time within which to respond shall satisfy the requirements of M.R.A.P. 21(d).
(b) The trial judge, not later than thirty (30) days prior to the expiration of the six (6) months from the date the case was taken under advisement, for just cause shown, may apply in writing to the Supreme Court for additional time beyond said six (6) months in which to enter a decision. Concurrently, the judge shall provide a copy of such application to each of the parties.
No one wants to tick off a chancellor who holds the fate of the client in his or her hands, but sometimes you just gotta do what you gotta do.
I mention this with the COA’s decision in Chipley v. Chipley, decided August 11, 2015, in mind. In that case, the Special Chancellor granted a divorce between Wanda and Kenneth Chipley on January 25, 2011, and directed the attorneys to provide, in effect, proposed findings of fact and conclusions of law on Ferguson factors within ten days. Thereafter, the case sat dead in the water for two years, until the MSSC ordered the chancellor to adjudicate the property division, which he did on February 15, 2013. After some post-trial-motion maneuvering that ate up the remainder of the year, Wanda filed an appeal on December 17, 2013, which the COA determined to be timely.
In its August 11, 2015, opinion (that’s four years and nearly eight months after the divorce), the case was reversed and remanded because the Special Chancellor failed to include a Ferguson analysis in his final ruling. It’s axiomatic that the judge’s decision must be supported by findings of fact and conclusions of law on Ferguson. Dickerson v. Dickerson, 34 So.3d 637, 644 (¶24) (Miss. App. 2010). It’s not enough merely to mention the factors. Lee v. Lee, 78 So.3d 326, 329 (¶10) (Miss. 2012). No analysis = reversal and remand. Reed v. Reed, 141 So.3d 450, 455 (¶18) (Miss. App. 2014).
Still to be dealt with are a motion for rehearing and possible cert petition before a mandate is issued, chewing up some more time in the Chipleys’ lives. After all that, they will return to where they started, still without a determination of their property interests. It will take some time to appoint a replacement Special Chancellor, since the original one has died, and the remand hearing will need to be scheduled to accommodate the lawyers, judge, and the parties, which likely will mean more delay and a trial either in the first quarter of 2016, if no further appellate proceedings are had, or much later if the case tarries in the higher courts. I wonder whether those assets that they are fighting over will still even exist after all that time.
Demarcation Date on Remand
August 24, 2015 § Leave a comment
The date on which the marital assets are assigned a value can make a drastic difference in the ultimate outcome of the equitable distribution. It’s a concept that we’ve touched on here before. In Lowery v. Lowery, 25 So.3d 274, 285-286 (Miss. 2009), the court said:
¶ 27. For purposes of determination of equitable division … the date for determination would be either the date of separation (at the earliest) or the date of divorce (at the latest). “Cases appear to hold that, as a matter of law, property acquired during separation is marital unless a support order has been entered…. However, a few cases suggest that the issue is a question of fact for the chancellor to decide….” Bell on Mississippi Family Law at § 6.02[3][b] n. 58 (citing Stone v. Stone, 824 So.2d 645, 647–48 (Miss.Ct.App.2002); Aron v. Aron, 832 So.2d 1257, 1258–59 (Miss.Ct.App.2002)).
Other cases have suggested that the valuation date can vary according to the assets. In other words, one asset could have one valuation date, and another a different valuation date.
So, is the rule any different when the case is remanded to the trial court for a do-over? Things can change in the lengthy time it takes to complete the appeal process, after all.
That’s what happened in Lewis v. Pagel, handed down by the MSSC on August 13, 2015. Following a trip through the COA, and from there to the MSSC, Drake Lewis and Tonia Pagel (formerly Lewis), found themselves back before the chancellor for a do-over on equitable distribution. The case was remanded for the chancellor to treat certain real properties as non-marital, to re-value a business, and to re-analyze equitable distribution. The chancellor followed the appellate courts’ instructions, using the asset values as of the date of the divorce.
Drake appealed, complaining that the chancellor’s approach skewed the ultimate outcome because values had changed in the time it took to complete the appeal cycle. Justice Chandler addressed his argument this way:
¶27. It is well-established that “an equitable division of property does not necessarily mean an equal division of property.” Chamblee v. Chamblee, 637 So. 2d 850, 863-64 (Miss. 1994). “[F]airness is the prevailing guideline in marital division.” Lowery v. Lowery, 25 So. 3d 274, 285 (Miss. 2009) (quoting Ferguson, 639 So. 2d at 929). Here, the chancellor’s division of the property was approximately equal. Drake’s argument that he received substantially less than Tonia relies on circumstances that occurred after the divorce judgment. However, the date for determination of equitable distribution is, at the earliest, the date of separation, or, at the latest, the date of divorce. Lowery, 25 So. 3d at 285. Additionally, an order of equitable division is a nonmodifiable judgment. East v. East, 493 So. 2d 927, 931 (Miss. 1986). Therefore, when the Court of Appeals remanded for the chancellor to revisit the equitable distribution, the chancellor properly redetermined the equitable distribution as of the divorce.
When you read the entire Lewis opinion (as I am sure you will), note that the chancellor did consider a post-appeal change in value that favored Drake. Legacy Holdings, LLC, a family business, was valued at the time of the divorce at $1,148,270, but the chancellor found that it had no value at the time of the remand hearing.
Here is a post about a case in which the chancellor’s use of the divorce trial date on remand was affirmed.
It would be a nifty skill for a lawyer to be able to tell the future. None of us in real life, however, has a crystal ball. Still, it’s a good idea to impress on your client that a side effect of an appeal could be that you can win the battle and lose the war. By the time the case descends from the lofty, rarified atmosphere of the appellate courts to ground level, things may have changed drastically in the meantime, resulting in a bounce that does not favor your client. In Lewis, the appeal on the equitable distribution saved Drake some rehabilitative alimony, but cost him $100,000 in lump-sum alimony. That’s going to leave a mark.
Double Dipping in Equitable Distribution
August 18, 2015 § 3 Comments
When Michael and Rosie Jackson went through their divorce, the chancellor awarded the former marital residence to Rosie and ordered that she pay the mortgage debt on it. The parties agreed that the value of the home was $78,000, and that its mortgage debt was $50,103, resulting in equity of $27,897.
When the chancellor toted up the assets, he assigned the equity to Rosie. Her share of the marital assets amounted to $31,928, and Michael’s share came to $120,310.64. The difference in favor of Michael was $88,382.64.
Then the chancellor allocated the marital debts between the parties. Michael was assigned $4,950 in credit card debt, reducing Michael’s asset value to $115,360. Rosie was assigned the mortgage debt, which the chancellor found to have reduced Rosie’s asset value to minus $18, 175. In order to equalize the estates based on that arithmetic, the chancellor awarded Rosie lump-sum alimony $57,680.32.
Before going any further, take a moment and ask yourself whether there is any flaw in that arrangement.
In Jackson v. Jackson, handed down by the MSSC on August 13, 2015, the court reversed in part and remanded because the chancellor counted the mortgage debt twice: once by subtracting it from the total value of the property; and a second time by including it in the debts assigned to Rosie. The result was that Rosie’s share of the marital estate was undervalued by $50,103, which in turn affected the amount of lump-sum alimony awarded. The case was sent back to the trial court for a re-do on that issue. All other issues were affirmed.
The COA had affirmed this decision and brushed aside Michael’s complaint about the calculation, noting that our law requires only that the division of the marital estate be equitable, not necessarily equal. The COA’s decision was the subject of a prior post here dealing with homosexual behavior as habitual cruel and inhuman treatment.
Judges do make mistakes when it comes to juggling those numbers in equitable distribution cases. Always check behind the judge for errors in handling debt such as was done here. While you’re at it, check arithmetic and make sure that the figures used match up with the evidence. File a timely R59 motion if you catch an error. Better to let the judge fix it, if she will, than to have to go to the expense of an appeal.
Love and the Family Jewels
August 17, 2015 § 5 Comments
Love, as they say, conquers all, including good judgment in some cases.
Most of us have seen this scenario more than once: Boyfriend, hopelessly in love with girlfriend, proposes marriage; Girlfriend, eyelids batting furiously, says “yes”; Boyfriend slips a rather expensive engagement ring on Girlfriend’s finger; wedding ensues, converting Boyfriend and Girlfriend to Husband and Wife; marital bliss soon gives way to combat; Husband retains attorney; Wife does the same. You represent Husband. Here is the conversation in your office:
H: Oh, and not only do I not want her to get anything, but I want that engagement ring back.
You: Under our law an engagement ring is a gift; the judge will not give it back to you.
H: Oh yes he will because it belonged to my mother. It’s been in the family for 175 years. It was given to my great (etc., etc.) grandmother by Napoleon just after his victory at Austerlitz.
So let’s pause right there while you catch your breath. So it’s an heirloom. And a valuable antique, to boot. What to do?
Well, first off, you were right to point out that if it meets the elements of a valid gift, the judge is not going to take the ring away from her. Those elements are: (1) that the donor was competent to make a gift; (2) that the donation was a voluntary act and the donor had donative intent; (3) that the gift must be complete and not conditional; (4) that delivery was made; and (5) that the gift was irrevocable. In re Estate of Ladner, 909 So.2d 1051, 1053 (Miss. 2004). Those are fact issues, and the burden of proof is clear and convincing.
In a recent case the COA addressed a similar situation (not involving Napoleon). Here’s how Judge Barnes’ opinion laid out the dispute in Lomax v. Lomax, decided August 11, 2015:
¶11. The main point of contention in the divorce and the determination of marital property concerned the chancery court’s award of the engagement ring to Tara. The chancellor concluded that Tara was entitled to keep the ring, which had previously belonged to Max’s mother, since Max had given the ring to Tara as an inter vivos gift prior to the marriage. Max argues that the parties had an oral agreement that if the marriage did not work out, the ring would be returned to his mother. At the hearing, Max testified that his mother’s ring was given to Tara under the condition that once Max could afford another stone for the ring setting they had purchased, she would return the ring.
¶12. Tara, however, emphatically denied that there was an actual agreement that the ring would be returned, but she acknowledged that after the couple separated, she told her mother-in-law she wanted to be “fair” and return the stone. But she explained at the hearing that when she made that comment to Max’s mother, she “didn’t realize that [Max] intentionally wanted to cost [her] $20,000” to obtain the divorce.
The chancellor awarded Tara the ring. Judge Barnes addressed Max’s claim that the chancellor was in error by letting Tara keep the family jewels:
¶13. In Neville v. Neville, 734 So. 2d 352, 357 (¶19) (Miss. Ct. App. 1999), this Court held that since an engagement ring was a gift that predated the marriage of the parties, it “was not a marital asset subject to equitable division.” “It was, therefore, beyond the chancellor’s authority to order [the wife] to return possession of that item to [the husband] and [the chancellor’s] refusal to do so cannot constitute reversible error on appeal.” Id. Accordingly, we find no error in the chancellor’s decision to award the engagement ring to Tara.
In the Neville case, incidentally, Mr. Neville claimed that the ring was a family heirloom.
A few observations:
- The ring does not just disappear from the marital equation. It is considered Tara’s separate property, and its value will be considered, along with her share of the equitable distribution, in determining whether she has a “deficit” that would justify alimony.
- The fact that it was a family heirloom does not enter into the picture. If the giving of the ring meets all the requirements of a gift under Mississippi law, it belongs to the donee.
- Max might have wanted to memorialize his version of the transaction with a pre-nup that provided that Tara would return the ring in the event of a marital dissolution, particularly if it had monumental value like the Napoleon ring mentioned above.
- I think the outcome would have been different had Tara admitted on the witness stand that the ring was not a gift, but was hers temporarily only until Max could replace the valuable stone in it. The judge believed Tara that the ring was an unconditional gift, and that did in Max’s position. The chancellor is the ultimate determiner of whom to believe.
- Would the outcome before the COA have been different if it were not only a family heirloom, but also a priceless antique with a provenance linked to one of the great figures in world history? We’ll have to wait until our appellate courts are confronted with such a fact situation. Until then, I think it’s safe to conclude that if the ring is gifted, it’s the property of the one to whom the gift is given — divorce or none.
Who Gets to Decide Fair Market Value?
May 19, 2015 § 2 Comments
Gary Marter and his wife Celeste were divorced, and Gary appealed complaining that the chancellor erred when he assigned a value of $110,000 to 120 acres of jointly-owned real property. The COA found that the chancellor had not adequately explained how he arrived at the figure, and so remanded the case in Marter v. Marter, 95 So.3d 733 (Miss. App. 2012).
On remand the chancellor conducted a hearing, and both sides had the opportunity to present evidence. The court heard from two appraisers hired by Gary, and from both of the parties. The chancellor then rendered an opinion concluding that the property was worth $110,000. Gary appealed again.
In Marter v. Marter, handed down by the COA May 12, 2015, the COA, by Judge Fair, affirmed. The main issue I want to address is what the chancellor is to do when confronted by conflicting and inconclusive proof of fair market value. Here’s what Judge Lee said in his opinion:
¶12. Gary first argues that the chancellor erred in valuing the 120 acres at $110,000 because neither party placed that specific value on the property . But he presents no authority supporting this proposition. Instead, the chancellor is the ultimate finder of fact, and as the finder of fact he is entitled to accept or reject the testimony of witnesses, in whole or in part, and to give the various testimony the weight it deserves; the chancellor’s findings can be disturbed only if clearly wrong or derived from the application of an erroneous legal standard. Mize v. Westbrook Constr. Co. of Oxford LLC, 146 So. 3d 344, 348 (¶6) (Miss. 2014). Our courts have repeatedly recognized that the chancellor is entitled to make an independent judgment of a property’s value, especially where the estimates of the parties vary widely. In McKnight v. McKnight, 951 So. 2d 594, 596 (¶¶7, 10) (Miss. Ct. App. 2007), this Court affirmed a valuation where the chancellor had apparently just averaged the two proposed values, because the evidence in the record supported the conclusion that the low estimates were too low and the high estimates were too high. We reached the same result in Williams v. Williams, 129 So. 3d 233, 241 (¶32) (Miss. Ct. App. 2013). “If the court finds all of the competing values to be inaccurate, it may make its own independent valuation.” Brett R. Turner, 2 Equitable Distribution of Property § 7:12 (3d ed. 2005).
¶13. Gary next contends that the chancellor erred in considering the tax assessor’s appraisal of the property, which was noted to be approximately $49,000. The chancellor took notice of the tax appraiser’s valuation on his own initiative, but without objection from either party. Gary cites to Watson v. Watson, 882 So. 2d 95, 106-07 (¶¶55-57) (Miss. 2004), where the supreme court reversed a valuation determined by simply adding 15% to the tax roll assessment. The chancellor derived this formula from his own experience, and he applied it despite all the other evidence in the record supporting a higher value. But, in today’s case, the chancellor did not apply a rigid formula; he merely noted that he had found the value of the 120 acres to be significantly in excess of the tax assessment. The chancellor’s observation does not demonstrate a defect in his reasoning.
¶14. Finally, Gary argues that the chancellor committed reversible error when he failed to consider the value of the timber separately from the land. In the judgment on remand, the chancellor expressly noted that there was timber on the property, but he treated it as a fixture of the land and did not assign it a separate value. Gary offers no authority requiring land and timber to be valued separately; he only supports this claim by saying that “[Celeste] has never presented any evidence to contradict [his] contention.” Gary suggests that the chancellor could not disregard the testimony of Gary’s timber appraiser, but that appraisal was done years after the divorce, and there was greatly varying testimony as to the value of the timber. Celeste and the tax assessor valued the land, including the trees, at approximately $50,000. Gary points out that both of these valuations have their flaws, which the chancellor was very much aware of. But Gary himself originally valued the land at $55,000 plus the unspecified value of 28 acres of trees. The timber appraisal he now relies upon was conducted several years after the divorce and valued 108 acres of timber. “Expert opinions are not obligatory or binding on triers of fact but are advisory in nature.” Downs v. Ackerman, 115 So. 3d 785, 791 (¶18) (Miss. 2013). In situations like this, “where there is reason to doubt the trustworthiness of the appraisal,” the “chancellor is justified in rejecting the values an appraiser places.” A & L Inc. v. Grantham, 747 So. 2d 832, 842 (¶44) (Miss. 1999).
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¶15. The chancellor has twice found himself in circumstances such as those described by this Court in the oft-cited case of Dunaway v. Dunaway, 749 So. 2d 1112, 1121 (¶28) (Miss. Ct. App. 1999), in which this Court said:
It is our conclusion that 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. To the extent that the evidence on which the chancellor based his opinion was less informative than it could have been, we lay that at the feet of the litigants and not the chancellor.
¶16. We conclude that, as in Dunaway, the chancellor did the best he could with the evidence presented to him. Id. at 118 (¶14). As this Court will not disturb a chancellor’s findings unless manifestly wrong or clearly erroneous, our standard of review requires that the judgment be affirmed. Johnson v. Johnson, 650 So. 2d 1281, 1285 (Miss. 1994) (citation omitted).
There’s really nothing more to add to that.
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