THE SMELL TEST: YOU’LL KNOW IT WHEN YOU SEE IT
June 16, 2011 § Leave a comment
Sometimes you know something ain’t right. It doesn’t pass the smell test.
Or, as US Supreme Court Justice Potter Stewart opined, famously employing a different sense when attempting to define obscenity: “I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it …” Jacobellis v. Ohio, 378 US 184, 197 (1964).
Returning to the olfactory realm, we encounter the fetid aroma of impropriety in chancery proceedings now and then. Parties conceal assets from one another, warring child custodians grab a child and run and then lie about the whereabouts, witnesses lie under oath, 8.05 statements just don’t add up, et cetera and so on.
But is it fraud?
A finding of fraud opens the defrauded party to all manner of equitable relief. Before you set out to claim fraud, though, there are some things you need to know.
The Elements of Fraud
The elements of fraud, which must be proven by clear and convincing evidence:
- A representation;
- its falsity;
- its materiality;
- the speaker’s knowledge of its falsity or ignorance of its truth;
- the speaker’s intent that it should be acted on by the person and in the manner reasonably contemplated;
- the hearer’s ignorance of its falsity;
- the hearer’s reliance on its truth;
- the hearer’s right to rely thereon; and
- the hearer’s consequent and proximate injury.
In re Estate of Law, 869 So.2d 1027, 1029 (Miss. 2004), citing Levens v. Campbell, 733 So.2d 753, 761-62 (Miss.1999). See also Spragins v. Sunburst Bank, 605 So.2d 777 (Miss.1992); Martin v. Winfield, 455 So.2d 762 (Miss.1984)
Pleading Requirements
MRCP 9(b) states: “In all averments of fraud or mistake, the circumstances constituting the fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other conditions of mind of a person may be averred generally.” The comment is worth reading.
A party is not entitled to relief on the basis of fraud where the complaint fails to state the circumstances constituting fraud with particularity and the parties did not try the issue by consent. Brown v. Chapman, 809 So.2d 772, 774 (Miss. App. 2002).
Fraud cannot be inferred, presumed, or charged in general terms. The specific acts of fraud must be definitely averred. Nichols v. Tri-State Brick and Tile Co., Inc., 608 So.2d 324, 331 (Miss. 1992).
This is important: If a finding of fraud is important to your client’s case, you must plead it, identifying the specific acts you claim are fraud, and specifying for each the acts complained of. The other party may challenge the sufficiency of your pleadings using MRCP 12(b), but if she does, the court is required to give you an opportunity to amend. What if the other party creates a nightmare scenario for you by not going the 12(b) route and simply waiting for trial, then objecting right and left to any proof you offer of fraud, moving ultimately to dismiss for failure to plead properly?
The Badges of Fraud
The Mississippi courts have recognized ten “badges of fraud” that a court may use to consider in making a determination whether a party’s intent was fraudulent:
- Inadequate consideration for the transfer.
- Conduct out of the ordinary course of business.
- An absolute conveyance as security for a loan.
- Secrecy.
- The transferor’s insolvency.
- A transfer of all the transferor’s property.
- Retention of possession by the grantor.
- Failure to list the property covered by the conveyance.
- The relationship between the transferor and the transferee.
- Whether the transfer was to someone with no apparent use for the property.
A&L, Inc. v. Grantham, 747 So.2d 832, 843 (Miss. 1999).
WHEN IS A GIFT A GIFT?
June 9, 2011 § Leave a comment
We’ve talked here before about inter vivos gifts between spouses, and how they do not raise a presumption of undue influence.
What about where the question is whether in actuality there was a gift at all, as where a child claims that the now-deceased or infirm parent made a gift of an item, and the siblings deny that any gift was made?
As a general rule, the donee bears the burden of proof by clear and convincing evidence all of the following:
- That the donor is competent to make a gift;
- That the gift was a voluntary act of the donor who had donative intent;
- That the gift was complete and not conditional;
- That the donor delivered the gift; and
- That the gift was irrevocable.
In re Estate of Ladner, 909 So. 2d 1051, 1054 (Miss. 2004).
In the case of real property, however, the person seeking to set aside a facially valid deed bears the burden of proof. Mullins v. Radcliff, 515 So.2d 1183, 1190 (Miss. 1987).
In the case of a CD titled in the names of two or more persons, payable to any of the persons named, it is presumed that those persons are owners of the account.
In re Last Will and Testament and Estate of Dunn v. Reilly, 784 So. 2d 935, 942 (Miss. 2001) (citing Madden v. Rhodes, 626 So. 2d 608, 616 (Miss. 1993)). “When an account is held jointly in the name of one depositor or another, ‘each depositor is allowed to treat joint property as if it were entirely his own.’” DeJean v. DeJean, 982 So. 2d 443, 449-50 (Miss. App. 2007) (quoting Drummonds v. Drummonds, 248 Miss. 25, 31, 156 So.2d 819, 821 (1963)). That presumption of ownership may be overcome “‘upon proof of forgery, fraud, duress, or an unrebutted presumption of undue influence.’” Reilly, 784 So. 2d at 942 (quoting Madden, 626 So. 2d at 617).
These notes are taken from Judge Griffis’s COA opinion in Yarborough v. Patrick, decided June 7, 2011, at ¶¶ 22-26.
UPDATED CHECKLIST OF CHECKLISTS
May 27, 2011 § 5 Comments
Proving your case by proving certain factors is a fact of legal life in Mississippi. I’ve referred to it as trial by checklist. If you’re not putting on proof of the factors when they apply in your case, you are wasting your and the court’s time, as well as your client’s money, and you are committing malpractice to boot.
Many lawyers have told me that they print out these checklists and use them at trial. I encourage you to copy these checklists and use them in your trial notebooks. And while you’re at it, you’re free to copy any post for your own personal use, but not for commercial use. Lawyers have told me that they are building notebooks tabbed with various subjects and inserting copies of my posts (along with other useful material, I imagine). Good. If it improves practice and makes your (and my) job easier and more effective, I’m all for it.
Here is an updated list of links to the checklists I’ve posted:
Doing an accounting in a probate matter.
Income tax dependency exemption.
Modification of child support.
SURREBUTTAL SURVIVES
April 28, 2011 § Leave a comment
Not long ago an attorney asked to be allowed surrebuttal. I refused the request and quipped that surrebuttal had been deep-sixed by the MRCP.
I was wrong. About the MRCP, anyway.
Actually, the MRCP does not even mention surrebuttal. I do remember a discussion about surrebuttal in the various seminars we had around 1982-3 in preparation for the effective date of the “new” rules. The common wisdom in those sessions was that the old practice in chancery for liberal surrebuttal was going away. In the ancient, pre-rules days it was common practice to get trampled by an older lawyer who was invariably afforded one or even more “surrebuttals” that he used skillfully to repair whatever damage you had done or points you had scored in your examination of a witness.
After the new rules went into effect, that practice thankfully died out in our district, and every other one where I set foot, and since then one rarely hears requests for surrebuttal — as on that day in my court not long ago.
The matter is covered by UCCR 3.02, which provides in part:
The examination of witnesses shall be limited to the direct examination, the cross-examination, and the redirect examination concerning matters brought out on cross-examination. Counsel for either party may be permitted, on request, to inquire about new matters pertinent to the issues which may have been inadvertently omitted. Opposing counsel may also inquire concerning the same matter.
There you have it. It’s what we used to call surrebuttal.
Nowadays it arises mainly in situations where the court allows evidence in over the objection that the question is “outside the scope of rebuttal.” In McGaughy v. State, 742 So2d 1091, 1094 (Miss. 1999), the court said, “Where there is doubt as to whether the evidence is properly case-in-chief or rebuttal evidence, the trial court should resolve the doubt in favor of reception in rebuttal if: (1) its reception will not consume so much additional time as to give an undue weight in practical probative force to the evidence so received in rebuttal, and (2) the opposite party would be substantially as well prepared to meet it by surrebuttal as if the testimony had been offered in chief, and (3) the opposite party upon request therefor is given the opportunity to reply by surrebuttal.”
It is error to permit the introduction of case-in-chief evidence in rebuttal where the evidence clearly should have been offered in the case in chief. Hosford v. State, 525 So.2d 789, 791-92 (Miss. 1988). But where it is not clear, introduction is within the discretion of the trial judge and will be reversed only if the decision is found to be arbitrary and capricious. Smith at 1095.
After the court has allowed in the testimony, you may request further questioning under UCCR 3.02.
To preserve the point for appeal, you need to object timely when your opponent offers evidence in rebuttal that should have been offered in the case in chief. If the court overrules the objection, ask immediately for surrebuttal or explain to the court why you will be unable to meet the evidence and how it will prejudice your client.
In the case in my court, I did not see that surrebuttal was necessary or desirable to meet anything offered in rebuttal, but it’s an interesting point that arises rarely in chancery court.
SEASONAL VARIATIONS IN INCOME
April 18, 2011 § 1 Comment
One of the vexing questions in child support cases is how to treat seasonal variations in income.
Let’s say your client is a salesman who brings home only $2,000 per month eleven months out of the year. Every December, however, he receives a bonus that has averaged $10,000 a year over the past ten years. What can you tell him to expect about child support for his two children?
What you have here is a seasonal variation in income. For ten months guideline child support would be $400 per month, and for one month it would be $2,000.
How should you ask the court to address it?
I have heard attorneys argue that the bonus should not be counted because the client is never automatically entitled to a bonus, and he might not get it. That argument usually does not fly because of the all-encompasing language of MCA § 43-19-101 (3)(a), which defines income for child support purposes. Consider the following case:
In Alderson v. Morgan ex rel. Champion, 739 So.2d 465, 466 (Miss. App. 1999), the chancellor had based his adjudication of modified child support on total yearly income, including the bonus, divided by twelve. Using the figures above, the total yearly income, then, would be $34,000, which produces adjusted gross income of $2,833. The resulting child support would be $566. In effect, the chancellor’s decision spread the bonus over the entire year. On appeal, the court of appeals rejected the father’s argument that it was improper for the trial court to base child support on anticipated income. The court noted that it was proper in that case for the chancellor to assume the bonus based on a one-year history of a bonus.
In the alternative, you could ask the court to find that the seasonal variation in income rebuts the presumption that the guidelines are applicable, and that the court should not apply the guidelines to all twelve months equally. Your authority is MCA § 43-19-103(d), which specifies “seasonal variations in one or both parents’ income or expenses” as authority for the ccourt to find that it would be unjust or inappropriate to apply the guidelines. Applying that statute to our scenario, you could propose that the court order $400 for eleven months and $2,000 in December.
What if the bonus that you are asking to except from the guidelines varies? Say your client receives $10,000 in most years, but has gotten as little as $5,000, and has averaged $8,000. Logic would dictate that you could suggest a 20% figure of whatever the amount of the bonus might be, but the appellate courts have frowned on percentage child support. Why not propose a hybrid amount for the bonus month that would be 20% of the actual bonus, but not less than 20% of the average. In other words, you would be asking the court to rule that child support would be “Twenty percent of the actual adjusted gross income received from the bonus, or $1,600, whichever is greater.” That gives the court an actual, minimum figure to enforce, and allows the parties some leeway to bring the matter to the court if there is a dispute as to the amount.
THE UNDESIGNATED EXPERT
April 4, 2011 § 3 Comments
Uniform Chancery Court Rule (UCCR) 1.10 states that, “Absent special circumstances the court will not allow testimony at trial of an expert witness who was not designated as an expert witness to all attorneys of record at least sixty days before trial.”
The question arises from time to time whether Rule 1.10 requires disclosure where there has been no discovery request asking information about expert witnesses. The question was answered succinctly in City of Jackson v. Perry, 764 So.2d 373, 383 (Miss. 2000), in which the Mississippi Supreme Court was confronted with a situation in a circuit court trial where the trial judge had allowed the testimony of two expert witnesses who had not been designated under the circuit court rule counterpart to UCCR 1.10. The high court’s opinion states the law as follows:
“The City and Edwards argue that the trial court erred in allowing Officers Charles Smith and Tim Corbitt to testify as experts without being designated pursuant to Rule 4.04A of the Uniform Rules of Circuit and County Court. Rule 4.04A of the Uniform Circuit and County Court Rules, states that, “[a]bsent special circumstances, the court will not allow testimony at trial of an expert witness who was not designated as an expert witness to all attorneys of record at least 60 days before trial.” The City argues that Perry did not offer any special circumstances, at trial for not having designated either Officer Smith or Officer Corbitt and therefore, the trial judge abused his discretion when he allowed them to testify. The City argues that this Court should rule that the testimony from Officers Smith and Corbitt inadmissible.
“¶ 52. The City’s reliance on Rule 4.04A is misplaced. Rule 4.04A does not stand alone. In order for there to be a violation of a discovery request, there must first be a discovery request. Here, neither party made a discovery request pursuant to Rule 26(b)(4) of the Mississippi Rules of Civil Procedure. Here, the City failed to propound any discovery and conceded there is no discovery violation. The trial court stated that a party “can[not] object to them [Perry] offering it [expert witness] if you don’t ask for it in a discovery request.”
“¶ 53. There was no violation of Rule 4.04A because there was no discovery request pursuant to Rule 26(b)(4).”
If you want to invoke Rule 1.10, you must have made the discovery request for designation of experts. And on the the flip side, if you’re asked to designate experts in discovery, you’d better do so more than sixty days before trial unless you can prove “special circumstances.”
I recently found special circumstances and allowed the testimony of an expert on less than sixty days notice where the case had been put on a fast track to trial due to exigent circumstances, no order expediting discovery had been sought or entered, and the discovery responses were not due under the rules until the day of trial.
Thanks to Professor Guff Abbott at Ole Miss Law School for the cite.
WHEN THE JUDGE RESERVES RULING
March 31, 2011 § Leave a comment
So you just made the most brilliant objection of your legal career and the blankety-blank judge reserved ruling. How could this be? You begin to stew and fret, so much so that you let the witness conclude her testimony and be excused.
Guess what. Your brilliant objection went out the window as the witness left the courtroom. Why?
Uniform Chancery Court Rule 3.04 deals with objections to testimony. It specifically states, “If the Chancellor shall reserve his ruling, counsel interposing the objection shall make a note thereof and renew his objection at the conclusion of the testimony; otherwise he shall be deemed to have waived his objection.” You didn’t renew the objection, so it is waived.
It is fairly common for Chancellors to reserve ruling on an MRCP Rule 41(b) motion to dismiss at the conclusion of the plaintiff’s or petitioner’s case. If the judge reserves ruling, you must renew your motion at the conclusion of your case, or it is deemed waived.
In similar fashion, if the judge reserves ruling on a question or line of questions, be sure to renew that objection in a timely fashion, or you may be “procedurally barred” from raising the point on appeal.
A MOTHER LODE OF PROOF
March 28, 2011 § Leave a comment
Suppose in an equitable distribution case that you have to prove the balance in a PERS account and its balance on a past date? Or in a contempt case that you have to prove it was a hail storm that did the damage on May 15, 2008? Or in a modification of child support case that the consumer price index has increased by x percent since 2006?
And suppose that in each of the scenarios above counsel opposite will not stipulate to the facts or allow you any easy way to go about proving what you need to prove?
Do you have to subpoena a witness from PERS to bring the records and do calculations in person? Do you have to subpoena a meteorologist to testify as an expert? Are you required to enlist a respected economist to testify about the CPI?
There’s an easier, more efficient way that opens up endless, inexpensive opportunities to prove even the most esoteric matters.
It’s MRE 803(8), which states that, even if the declarant is available to testify, the following are not excluded by the hearsay rule:
Records, reports, statements, or data compilations, in any form, of public offices or agencies, setting forth (A) the activities of the office or agency, or (B) matters observed pursuant to duties imposed by law as to which matters there was a duty to report …
There’s more to the rule involving reports such as police reports and investigative reports, but that’s a subject for another post.
To utilize that part of Rule 803(8) stated above, all you have to do is produce a certified copy of a record or report of a public agency that sets forth either activities of the agency or matters observed pursuant to a duty imposed on the agency by law.
To prove the balance in the PERS account and its balance on a past date, get a certified copy of a report from PERS itself showing that information.
The hail storm on May 15, 2008, can be proven through a certified report from the National Weather Service.
The U.S. Department of Commerce can give you a certified copy of a report showing the CPI information you need.
MRE 902(1) and (2) say that those documents are self-authenticating.
The late Lawrence Rabb, who was a respected lawyer in Meridian, often astonished me with the proof he was able to marshal using certified reports he obtained from state and federal agencies. Many times he was able to prove critical elements of a case with a simple, self-authenticating document. With a little imagination, I am sure that you can come up with dozens of ways you can put Rules 803(3) and 901(1) and (2) to use for you.
PROVING THE VALUES OF VEHICLES
March 15, 2011 § Leave a comment
You’re the judge. Which values do you think will have more credibility:
- Financial statement 1 has the family vehicles valued by the party at $800 (the car he wants) and $35,000 (the car that he wants the other party to have), unsupported by any authority; and
- Financial statement 2 that has Kelly Blue Book or NADA printouts from the internet showing values of $12,000 and $16,500?
Financial statement 2 will win the credibility battle every time.
When you are doing your responses to discovery, go to the Kelly Blue Book site or the N.A.D.A. site and enter the make, year model, mileage, condition and options for your client’s car. Use the “Used Car – Private Sale” figures, and print out the results. Include the printout with your discovery response as an attachment to the Rule 8.05 financial statement or in any other appropriate place. Then, when you are preparing for trial, make sure the printout is attached to the financial statement you are going to offer into evidence.
FIVE MORE TIPS FOR MORE EFFECTIVE RULE 8.05 FINANCIAL STATEMENTS
March 14, 2011 § 9 Comments
I posted here ten tips for more effective financial statements.
Here are a handful more to use in your quest for financial statement perfection:
- Number the pages. It saves the fumbling around as the witness and the court are trying to orient themselves to your questioning. And use the page numbers in questioning the witness: “Ms. Smith, look with me at page 3, line 6.” That’s a lot clearer and easier for a witness to follow than asking “Now you say you spend $200 a month on clothes for yourself; how did you come up with that?”
- Add or delete categories to meet your needs. Your client spends $65 a month buying yarn and other materials to feed her knitting habit. Why not replace an unused catergory like “Transportation (other than automobile)” with “Hobby Expenses.” It would be a whole lot clearer than lumping it in with household expenses or something else, and will make it easier for your nervous client to understand while testifying.
- Don’t list a deduction as “mandatory” when it is not. Deductions required by law, such as taxes and social security are excluded from adjusted gross income for calculation of child support. Voluntary contributions, such as 401(k) deductions, health insurance premiums, and the like are not excluded from income. When you list voluntary deductions as “mandatory,” you are at worst planting false information in the record, and at best confusing the record. Your client does not know the distinction. This is part of practicing law: advising your client how to properly fill out his or her 8.05.
- Attach a current pay stub. Pay stubs are a marvelous source of information. Quite often clients (and attorneys, I am sad to report) miscalculate income. A current pay stub, preferably with year-to-date (YTD) info is a great tool to check the income figures. Pay stubs also show the true amounts of overtime, bonuses, deductions for insurance and other items, andd retirement contributions.
- Tailor your 8.05 to the case you are trying. In a divorce case, you can have one column of figures showing your client’s current expenses, one showing the household expenses before the separation (to show standard of living), and a third column showing her anticipated expenses following the divorce. In a modification case, add a column on both the income and expense side showing what your client’s income and expenses were at the time of the judgment you are seeking to modify.
Of all the documents you admit into evidence at trial, the 8.05 is the one that the judge will study the closest and spend the most time poring over. Make it a workhorse for your case.
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