DRINKING YOUR OWN TOXIC COCKTAIL
January 28, 2013 § Leave a comment
When you pursue litigation that you know is not meritorious, and you learn in discovery that you have no possible hope of prevailing, and you file an improper motion for recusal with false allegations against the court, you have concocted a toxic cocktail that, when consumed, will burn a deep hole in your pocketbook by way of sanctions. Need proof?
Consider the case of Sullivan and Stubbs v. Maddox, decided by the COA on January 22, 2013.
Sullivan, represented by his attorney, Stubbs (both collectively referred to as “Sullivan” in the COA opinion), filed suit in 2005 to confirm and quiet title to some property, based on a claim of adverse possession. His suit was prompted by the Maddoxes’ claim to the same property. When he initiated the suit, he obtained an injunction to keep the Maddoxes off of the property.
The suit apparently languished for years.
In April, 2011, the Maddoxes filed a motion for summary judgment taking the position that title to the property was vested in the United States, and that neither Sullivan nor Maddox had any claim to it by adverse possession because federal law prohibits adverse possession against the federal government.
Five days later Sullivan filed a motion asking the chancellor to recuse himself. The Maddoxes responded that the motion was untimely filed and was fatally defective for failure to include an affidavit setting forth the factual basis, both as set out in UCCR 1.11.
On May 3, 2011, the parties appeared before the court for a hearing on both motions, and the recusal motion was taken up first. Sullivan took the position that the chancellor should recuse because one of the Maddoxes’ attorneys had represented the judge’s court administrator’s husband in a criminal matter. The judge acknowledged the fact, as well as that Stubbs had represented the court administrator in a divorce action. He rejected both bases as causes to recuse, because neither would cause a reasonable person, knowing the pertinent facts, to doubt the court’s impartiality. The judge also found that the recusal motion failed to comply with UCCR 1.11 for the reasons assigned by the Maddoxes.
In the course of presenting the motion, Stubbs attempted to make a proffer alleging an unreported campaign contribution to the chancellor. The charge had not been included in the motion to recuse, and there was no affidavit to support it.
The court went on to hear the motion for summary judgment. In his ruling, the judge granted summary judgment in favor of the Maddoxes. He stated in his opinion that Stubbs had disclosed to the court that he had warned Sullivan before he filed the suit that it was a weak case, that there was no government survey or patent out of the US to support his claim, and that there was no color of title. The judge also found that the unsubstantiated accusation against him was made as a threat by counsel, and he set a hearing date for possible sanctions.
The Maddoxes filed a motion for sanctions under MRCP 11 and the Litigation Accountability Act. Based on all of the proceedings to that point, as well as the record made on the motion, the chancellor assessed sanctions against Sullivan and Stubbs jointly, in the amount of $42,922.91. As the COA opinion, by Judge Carlton, stated at ¶11:
In sanctioning Sullivan and Stubbs, the chancellor specifically found that the following actions demonstrated frivolous pleadings had been filed and frivolous arguments had been made for the purposes of harassment and delay, without substantial justification, and with disrespect for the integrity of the court: (1) Stubbs’s admission that before commencement of the action he had advised Sullivan of the weakness of his claim to confirm and quiet title; (2) Sullivan and Stubbs’s failure to abandon the claim after their expert witness testified in his deposition that the United States had issued no patent for the subject property; (3) Sullivan and Stubbs’s failure to make any effort to determine the validity of the claim before raising it; and (4) the filing of an improper motion for recusal and false allegations against the court. The chancellor held that these various actions constituted a willful violation of Rule 11 and the Litigation Accountability Act, as well as Rule 8.2(a) of the Rules of Professional Conduct (prohibiting a lawyer from making a statement that he knows to be false or making a statement with reckless disregard as to its truth or falsity concerning the qualifications or integrity of a judge).
The COA affirmed the chancellor on all points.
The serious lesson to take from this case is that Rule 11 and the Litigation Accountability Act have bite. So do the Rules of Professional Conduct. MRCP 11 specifically states that an attorney’s signature on a pleading (and that includes not only initial complaints, but also all motions) “” … constitutes a certificate that … to the best of the attorney’s knowledge, information and belief there is good ground to support it, and it is not interposed for delay,” and goes on to provide for sanctions for its enforcement.
When in the course of a hearing you recklessly throw out unsubstantiated charges against the court, you are giving the judge no alterntive but to sanction you. To do otherwise the chancellor would be derelict in her duty to preserve the dignity and respect of the court, as provided in UCCR 1.01.
When you learn in the course of a lawsuit that it is not meritorious, and that there is no hope of prevailing, counsel your client to dismiss it. If your client will not cooperate, file a motion to withdraw, and do not put it off, because the judge can deny your motion if it would delay the trial, and you would then be at risk for sharing your client’s sanctions, if the court assesses them.
Don’t put yourself in a position where you have to drink that toxic cocktail that you yourself concocted.
THE GREAT RESERVOIR OF EQUITABLE POWER
January 24, 2013 § Leave a comment
We talked here about the COA decision in Brown v. Weatherspoon, handed down November 6, 2012. That earlier post dealt with attorney’s fees.
There is another aspect of the case that warrants your attention. It has to do with MRCP 60(b)(6).
In the case at the trial level, Kenyader Weatherspoon had agreed to a court order, entered in 2002, adjudicating him to be the father of a child born to Serhonda Brown. In 2008, the opinion tells us, Weatherspoon agreed to DNA testing to determine parentage (the opinion is silent as to who prompted the testing, and why he agreed to it). The test results came in showing zero probability that he was the father, and five months later he filed a pleading seeking to set aside the prior judgment under MRCP 60(b)(6), which allows a court to relieve a party from a judgment for “any other reason justifying relief from judgment.” The chancellor set aside the judgment, and Brown appealed.
Judge Roberts’ opinion succinctly states the law that applies in this instance:
¶12. The chancellor granted Weatherspoon’s motion under Rule 60(b)(6). “Relief under Rule 60(b)(6) is reserved for extraordinary and compelling circumstances.” [MAS v. Miss. DHS, 842 So.2d 527.] at 530 (¶12). Rule 60(b)(6) has also been described as “grand reservoir of equitable power to do justice in a particular case.” Id. But it “is not an escape hatch for litigants who had procedural opportunities afforded under other rules and who without cause failed to pursue those procedural remedies.” Id.
¶13. In M.A.S., a man had consented to paternity of a child, but through DNA testing he later learned that he was not the child’s biological father. M.A.S., 842 So. 2d at 528 (¶1). M.A.S. successfully moved to set aside the prior order of filiation. Id. at 529 (¶5). The Mississippi Supreme Court affirmed the decision to set aside an order of filiation and stated that M.A.S. was “the archetype for the application of Rule 60(b)(6).” Id. at (¶18). Despite the fact that the movant in M.A.S. had paid child support for ten years, the supreme court held that he had filed his Rule 60(b) motion within a reasonable time after he learned that he was not the child’s father. Id. at 530 (¶15). Brown notes that the movant in M.A.S. was seventeen years old when he signed a stipulated paternity agreement. Id. at 528 (¶3). Brown argues that this case is distinguished from M.A.S. because Weatherspoon was twenty-four when he signed the stipulated paternity agreement. But the M.A.S. court did not base any part of its rationale on the movant’s age.
¶14. Brown also claims Weatherspoon’s motion was untimely. A Rule 60(b)(6) motion is timely if it is filed “within a reasonable time.” M.R.C.P. 60(b)(6). “What constitutes reasonable time must of necessity depend upon the facts in each individual case.” M.A.S., 842 So. 2d at 530 (¶14) (citation omitted). Relevant factors include whether the movant’s delay prejudiced the nonmoving party and whether there is a good reason for the movant’s delay. Id. According to Brown, Weatherspoon’s Rule 60(b)(6) motion was untimely because he filed it more than six years after he signed the stipulated paternity order. But the supreme court has held that the movant in M.A.S. timely filed his Rule 60(b)(6) motion even though he did so approximately nine years after he signed a stipulated paternity order. Id. at (¶13).
¶15. Weatherspoon did not definitively learn that M.B. was not his child until shortly after DNA testing was completed on March 19, 2008. The record does not indicate that Weatherspoon had earlier opportunities to seek DNA testing. He filed his Rule 60(b)(6) motion approximately five months later. Under the circumstances, the chancellor did not abuse her discretion when she implicitly found good cause for Weatherspoon’s delay. Moreover, Brown was not prejudiced by Weatherspoon’s delay. Although he had accrued unpaid child support, Weatherspoon paid Brown a significant amount of child support for a child who was not his.
¶16. “Consideration of a Rule 60(b) motion does require that a balance be struck between granting a litigant a hearing on the merits with the need and desire to achieve finality.” M.A.S., 842 So. 2d at 531 (¶17) (citation and internal quotation omitted). Weatherspoon has been obligated to pay and has paid child support for someone else’s child. As the supreme court stated in M.A.S., “finality should yield to fairness here.” Id. Following M.A.S., we find that the chancellor did not abuse her discretion when she granted Weatherspoon’s Rule 60(b) motion. There is no merit to this issue.
“Finality should yield to fairness here.” Indeed.
When no other avenue for relief appears viable, consider Rule 60. There might just be a way to get what your client wants by using that rule, particularly (b)(6).
Remember, though, that the motion must be filed within a reasonable time, and it will not work where your client esszentially slept on his or her rights. You can read a dramatic example at this previous post, which did not involve Rule 60 per se, but which illustrates the ruinous effect of slumbering on one’s rights.
RECUSAL MERRY-GO-ROUND
January 17, 2013 § Leave a comment
I started to do a post to call your attention to the entertaining COA decision in the case of Boatwright v. Boatwright, but Lost Gap does such a good job expounding on it that I will simply defer and let you read about it there in a post titled, “MRCP 63 – Have you ever wondered what happens when a judge recuses after judgment but before ruling on post-trial motions?”
Enjoy.
FINALITY OF JUDGMENTS AND THE OPINION
January 16, 2013 § Leave a comment
Can a chancellor order alimony in an opinion to take effect before entry of the judgment?
That was the question in McCarrell v. McCarrell, 19 So.3d 168, 171 (Miss.App. 2009). In that divorce case, the chancellor had rendered a written opinion on December 20, 2007, concluding that Billy McCarrell should pay Janie McCarrell $1,800 a month in rehabilitative alimony, commencing January 5, 2008, and continuing for five years. The judgment corresponding to the court’s opinion was not filed and docketed by the clerk until January 18, 2008, thirteen days after the date of the first ordered payment. The judgment did incorporate the judge’s opinion.
Billy took the position that he was required only to comply with the final judgment, and not with the opinion. Since the final judgment was not entered until after the initial payment date was passed, he argued that the alimony obligation did not go into effect until after the date of the judgment.
On the face of it, Billy’s position makes some sense, because MRCP 58 states that “A judgment shall be effective only when entered as provided in MRCP 79(a),” and 79(a) defines entry as docketing on the General Docket showing the date of entry and a brief description, followed by filing in the court file.
What Billy overlooked, though, was the power of the chancellor to order interlocutory and temporary relief. The court said, beginning at ¶12:
… our jurisprudence recognizes that the chancellor possesses the statutory authority to order temporary alimony and make proper orders and judgments thereon. Miss.Code Ann. § 93-5-17(2) (Miss.2004). Moreover, courts are always deemed open for purposes of making and directing all interlocutory motions, orders, and rules. See also M.R.C.P. 77(a). * * *
¶ 14. Certainly, the chancellor possesses the authority to order temporary alimony and make all proper orders and judgments thereon. Miss.Code Ann. § 93-5-17(2); M.R.C.P. 77(a); see also Langdon v. Langdon, 854 So.2d 485, 496(¶ 44) (Miss.Ct.App.2003). The duty to pay temporary support terminates upon entry of the final judgment of divorce, but the judgment does not eliminate the obligation to pay temporary alimony arrearages which accrued before the entry of the final decree. Prescott v. Prescott, 736 So.2d 409, 416(¶ 35) (Miss.Ct.App.1999) (citing Lewis v. Lewis, 586 So.2d 740, 741 (Miss.1991)). Stated differently, a temporary order is not a final order; however, arrearages accrue on unpaid temporary support payments. Id. Further, temporary support orders are enforceable through contempt actions. [McCardle v.] McCardle, 862 So.2d at 1292(¶ 9); see also Bell on Mississippi Family Law § 9.01[5][c], at 236 (2005).
In this district, more often than not in more complicated cases I render a detailed opinion making findings of fact and conclusions of law, and I direct one of the attorneys to draft a judgment corresponding to the opinion, with instructions to present it to the court after it has been approved as to form by counsel opposite. Every now and then, a judgment will be delayed for one reason or another. McCarrell addresses what happens to the relief granted in that situation.
COURTROOM CONFIDENTIAL
January 9, 2013 § Leave a comment
Parties to minor’s settlements sometimes come to court asking for the proceedings to be confidential and sealed. The requests in my court have ranged from asking that the courtroom be cleared and the transcript sealed to asking that the judgment alone be sealed. I have generally resisted on the basis that the public has a right to know what is transpiring in the courts. The procedure I follow is described below.
The MSSC on December 6, 2012, addressed the issue in the case of Ford Motor Co. v. Ferrell, et al. You can read the decision for yourself to get a grasp of the facts. The case involved a fee dispute arising out of a personal injury settlement. Ford requested that the terms of the settlement, which had been confidential by agreement, not be disclosed in the course of the fee-dispute proceedings.
Chancellor David Clark refused Ford Motor Company’s request to keep the settlement documents and trial proceedings sealed, based on his concern that court proceedings be transparent to the public. On appeal, Ford raised three issues: (1) Whether the settlement agreement is a public, judicial record or a private contract, which should be enforced; (2) Whether the state’s policy encouraging settlement agreements and the parties’ interest in abiding by the terms of that agreement are sufficient grounds to protect the settlement from public scrutiny; and (3) Whether there is any overriding public interest which would require disclosure of the terms of the settlement agreement.
A 5-4 majority of the supreme court, by Justice King, concluded that the terms of the agreement should be kept confidential — to an extent. Here’s what the court said, beginning in ¶32:
To continue to preserve the confidentiality of this agreement, the chancery court should seal the order approving the settlement agreement and should seal the settlement agreement itself (if it is admitted into evidence for any reason). The chancery court should also redact any mention of the settlement amount from future documents and prohibit the parties from mentioning the settlement amount in its proceedings. However, the chancery court may keep the fee-dispute trial’s transcript and proceedings open to the public, which addresses the chancellor’s concern regarding transparency in judicial proceedings.
* * *
¶33. The chancery court abused its discretion by denying Ford’s request to preserve the settlement agreement’s confidentiality. Although the public has a right of access to public records, Mississippi law also favors the settlement of litigants’ disputes and respects confidentiality agreements when practical. The law allows courts to determine when information should be declared confidential or privileged, exempting it from the Public Records Act. Because this settlement agreement is between private parties, does not involve matters of public concern, and is not necessary to resolve the fee-dispute claim, its confidentiality should be preserved. Thus, we reverse the chancellor’s denial of Ford’s motion to preserve the confidentiality of the settlement agreement. However, the fee-dispute trial’s transcript and proceedings should remain open to the public, so we affirm the chancellor’s denial of Ford’s motion to close the proceedings. The Court remands this case to the chancery court for further proceedings consistent with this opinion.
The procedure I have followed in minor’s settlements is to require proof of the terms of the agreement via an exhibit, which I will seal on request. That way, the terms of the settlement are of record and document what I considered in determining whether the settlement is in the best interest of the minor.
I have also steadfastly refused to seal or otherwise make confidential settlement agreements with public agencies, a position which appears to be consistent with the MSSC’s in this case.
The court’s decision distinguished its holding in Williamson v. Edmonds, 880 So.2d 313-314 (Miss. 2004), in which the court ruled that a confidential agreement must be disclosed in a fee dispute because, contrary to the situation in Ford, evidence of its terms was central to resolution of the claims involved.
SOME THINGS YOU NEED TO KNOW ABOUT CHILD DEPENDENCY EXEMPTIONS
January 8, 2013 § 4 Comments
Many property settlement agreements (PSA) involving children have a provision like this:
Husband shall claim the minor children as dependents for tax purposes in even-numbered years, and Wife shall claim the minor children as dependents for tax purposes in odd-numbered years.
What happens, though, where, despite the language of the agreement, the mom claims the children in an even-numbered year, and the father does, too? Is the language above enough to satisfy the IRS that the dad, and not the mom, was entitled to claim the exemption in that year?
The answer is no.
IRS regs require that if you are trying to base a claim for exemption on a writing that is not an IRS-designated form, the writing must conform to the substance of the IRS form and must be a document executed for the sole purpose of serving as a written declaration within the meaning of the IRS regs. A court order, PSA, handwritten note or any other document not meeting those requirements will not suffice. The claiming party must attach to the tax return a completed IRS form 8332 or a document including every element of it.
In the case of Armstrong v. Commissioner of Internal Revenue, decided December 19, 2012, by the US Tax Court (I do not have a cite for you) involved the scenario above. The court said:
The IRS’s Form 8332 provides an effective and uniform way for a custodial parent to make the declaration required in section 152(e)(2)(A) for the benefit of the noncustodial parent. But a noncustodial parent like Mr. Armstrong may also rely on an alternative document, provided that it “conform[s] to the substance” of Form 8332.5 See 26 C.F.R. sec. 1.152-4T(a), Q&A-3, Temporary Income Tax Regs., supra. In particular, for tax years including the year at issue here, a court order that has been signed by the custodial parent may satisfy section 152(e)(2)(A) as the noncustodial parent’s declaration if the document “conform[s] to the substance” of Form 8332.6 See Briscoe v. Commissioner, T.C. Memo. 2011-165 (concluding that the court order attached with the return did not conform with the substance of Form 8332); cf. Boltinghouse v. Commissioner, T.C. Memo. 2003-134 (holding a separation agreement conformed with the substance of Form 8332).
A basic element necessary for satisfying section 152(e)(2)(A) is a custodial parent’s declaration that she “will not claim” the child as a dependent for a taxable year. A custodial parent accomplishes this on a Form 8332 with the following statement: “I agree not to claim * * * for the tax year”. This statement is unconditional; and in order for a document to comply with the substance of Form 8332 and ultimately section 152(e)(2)(A), the declaration on the document must also be unconditional. See Gessic v. Commissioner, T.C. Memo. 2010-88; Thomas v. Commissioner, T.C. Memo. 2010-11; Boltinghouse v. Commissioner, T.C. Memo. 2003-134; Horn v. Commissioner, T.C. Memo. 2002-290.
The opinion points out that there are four considerations in determining whether a party is entitled to claim the dependency exemption: (1) Whether the “child receives over one-half of the child’s support during the calendar year from the child’s parents … who are divorced … under a decree of divorce”, sec. 152(e)(1)(A); (2) whether the child was “in the custody of one or both of the child’s parents for more than one-half of the calendar year”, sec. 152(e)(1)(B); or (3) whether “the custodial parent signs a written declaration (in such a manner and form as the Secretary may by regulations prescribe) that such custodial parent will not claim such child as a dependent for any taxable year beginning in such calendar year”, sec. 152(e)(2)(A); and (4) whether “the noncustodial parent attaches such written declaration to the noncustodial parent’s return” for the appropriate taxable year, sec. 152(e)(2)(B).
To rub a little salt in the wound, the Tax Court held that, since Mr. Armstrong had been ruled not to be entitled to claim the dependency exemption, the children were not “qualifying” within the regulations, so he could not claim the child credit, either. Ouch.
For drafting purposes, at a minimum you should include language that the non-claiming parent will timely execute IRS form 8332 for every tax year covered in the agreement. At least in that way you can ask the court for relief under MRCP 70(a). I have no idea whether a form executed by another party per the rule would satisfy the IRS, but it’s better than nothing. It would have the added benefit of documenting that you have made your client aware of the requirement of the form.
If I were practicing today, I would confer with my favorite CPA for advice about how best to avoid problems with this situation. Can you get the other party to sign ten years’ worth of forms in advance, each for the specific year in which your client will be claiming the exemption? I don’t know, but a CPA will know.
Of course, Mr. Armstrong could seek relief via contempt from the fomer Mrs. Armstrong. Contempt is a dish best served cold, as they say. But it has the disadvantages that one has to hire an attorney and try to collect money that may no longer be there. Yes, you can put that ex in jail, which may provide a measure of comfort and satisfaction, but it may not make you whole financially.
NOTE: Armstrong involves tax returns filed before the above-cited regs were adopted, and the language of the parties’ divorce decree included a clause that made claiming the exemption conditional upon payment of child support, but I believe my interpretation of the law above is accurate.
A BANKRUPTCY BUGABOO
November 1, 2012 § 1 Comment
Bankruptcy, particularly Chapter 7 liquidation, used to be such a complicating factor in chancery court. Divorce trials were held up for years while one or both parties pursued their arcane remedies in the alchemy of bankruptcy. Contempts and modifications were brought to a screeching halt. Everyone knew and feared the “automatic stay,” even if most did not even understand its scope and reach.
And so it was that Ian Garcino, attempting to collect a divorce-related debt from his ex-wife, Amanda Noel, encountered the buzzsaw of bankruptcy and unwittingly suffered its bite.
In 2008, the chancery court awarded Ian a judgment against Amanda in the sum of $16,278, which the court ordered her to pay within 60 days. Amanda not only did not pay, but she filed a Chapter 7 bankruptcy petition.
Now, 11 USC § 523(a)(5), (15) excludes debts to spouses, ex-spouses, and children from the list of dischargeable matters. So Ian, no doubt out of an abundance of caution, penned a handwritten letter to the bankruptcy court advising the court that the debt in question arose out of a divorce property settlement between him and Amanda, and concluding that “Under applicable present bankruptcy laws this debt should not be discharged.”
The bankruptcy court treated Ian’s letter as a pleading initiating an adversary proceeding. That’s because, since 2005, the bankruptcy laws no longer require a party in Ian’s position to do anything, since the debt is in and of itself not dischargeable. When Ian filed his letter, he in essence put something into controversy that would have been beyond controversy had he done nothing.
Belatedly, Ian learned from a bankruptcy lawyer (who might have been able to give Ian some advice before he wrote the ill-fated letter) the folly of what he had done, but before Ian could take any action the bankruptcy court entered its order dismissing Ian’s proceeding due to his inaction.
Later, when Ian tried to execute on the judgment in chancery court, the chancellor granted a stay of execution finding that the debt was adjudicated to be discharged in bankruptcy court. Ian appealed.
In response to the appeal, Amanda raised two issues: One, that the chancery court lacked jurisdiction to adjudicate dischargeablility; and Two, that the bankruptcy court’s decision was res judicata on the issue of dischargeability, and was binding on the chancery court.
Judge Maxwell’s opinion in Garcino v. Noel, decided by the COA October 23, 2012, is one you should read for its exposition on the law of Chapter 7 bankruptcy vis a vis chancery practice. Here’s how the court disposed of the jurisdictional argument:
¶22. [Amanda’s] first suggested reason—that the chancery court lacked jurisdiction to make such a determination—is clearly wrong. “It is well established . . . that ‘bankruptcy courts and state courts maintain concurrent jurisdiction to decide exceptions to discharge arising under [section] 523(a)[.]’” Marvin v. Marvin, 659 S.E.2d 579, 581 (Va. Ct. App. 2008) (quoting Monsour v. Monsour (In re Monsour), 372 B.R. 272, 278 (Bankr. W.D. Va. 2007)). “Although only the bankruptcy court can decide whether to grant a discharge in bankruptcy, the effect of such a discharge may be determined by any court in which the issue is properly raised.” Burns v. Burns, 164 S.W.3d 99, 103 (Mo. Ct. App. 2005) (citing Timmons v. Timmons, 132 S.W.3d 906, 915 (Mo. Ct. App. 2004)); see also Rogers v. McGahee, 602 S.E.2d 582, 586 (Ga. 2004) (holding that “a general discharge in bankruptcy does not deprive the state court of its jurisdiction to determine whether certain debts of the debtor former spouse are exempt”) (citations omitted). [Footnote omitted]
The COA found, however, that the res judicata argument was dispositive. The court held that the four identities required for res judicata were present because Ian brought the same claim, that the debt had not been discharged, against the same party in both the chancery court and in the bankruptcy court. The court held at ¶ 26 that the bankruptcy court’s adjudication was one on the merits, making it binding on other courts.
There are several lessons you can take from this case: One is that you don’t need to blunder into bankruptcy court unless you know what you are doing and know the possible effects of your actions; Two, the burden now is on the Chapter 7 bankruptcy petitioner to convince the bankruptcy court to stay the judgment, not vice versa, so you may proceed in chancery as if there were no impediments; and Three, res judicata has teeth.
PS … as Judge Maxwell’s opinion points out, this post is relevant to Chapter 7 bankruptcy, but it has limited applicability, if at all, to Chapter 13 and other forms of bankruptcy.
WHAT DOES IT TAKE TO TRIGGER RELIEF FROM FRAUD ON THE COURT?
October 10, 2012 § 4 Comments
Basically, all you have to do is bring it to the court’s attention, and the judge can do the rest. That’s what the COA decision in Finch v. Finch, handed down October 2, 2012, says.
But before we talk about Finch, let me remind you of the MSSC decision in Trim v. Trim, which held that “the intentional filing of a substantially false Rule 8.05 statement is misconduct that rises above mere nondisclosure of material facts to an adverse party,” and constitutes fraud upon the court. There is no time limit to when that issue can be raised. So to allow your client to submit a false 8.05 is to allow the judgment always and forever to be vulnerable to possibly fatal attack, as was the case in Trim.
Only two months ago the COA held in Rogers v. Rogers that if you are going to claim fraud on the court, you will have to prove all of the classic elements of fraud, or you will fall short.
Now we have Finch, further defining the scope of fraud on the court. In Finch, Rosemary and Stewart, no longer love birds, got an irreconcilable differences divorce in which the special chancellor awarded Rosemary alimony based on financial proof submitted by the parties, including Rosemary’s claim that she was paying certain marital debts that she claimed she had been paying throughout the marriage.
The special chancellor’s appointment expired, and a newly-elected chancellor took the bench and assumed responsibility for the case.
In post-divorce litigation, Stewart asked the court to find Rosemary in contempt and to modify the alimony to take into consideration that Rosemary had “falsely represented” to the court that she had been paying the marital bills. He claimed and proved that she had failed to pay an American Express account, forcing Stewart to borrow some $38,000 to pay it. Also, she had not disclosed other family debt in the divorce that affected Stewart.
The chancellor found that Rosemary’s actions were a fraud on the court, and she decided that the fraud permitted her to reduce the alimony under MRCP 60(b). Stewart had not filed a 60(b) motion, had not specifically requested any 60(b) relief, and did not specifically plead or charge fraud. Rosemary appealed, claiming that it was error for the chancellor to grant 60(b) relief sua sponte, which had the effect of setting aside and doing away with issues to which the parties had agreed and settled before the original trial.
Judge Ishee’s opinion for the court states:
¶18. While Stewart did not file a Rule 60(b) motion, he did allege fraud in the petition for contempt and modification. Furthermore, “[t]he chancery court is vested with broad equitable powers with which it is able to decide if the original order was entered by mistake, fraud of a party, or for another reason justifying relief from the judgment under Rule 60(b) and may do so upon its own motion.” Tirouda v. State, 919 So. 2d 211, 214 (¶7) (Miss. Ct. App. 2005) (citing Edwards v. Roberts, 771 So. 2d 378, 386 (¶28) (Miss. Ct. App. 2000)).
Rule 60(b) even states: “This rule does not limit the power of a court to entertain an independent action to relieve a party from a judgment, order, or proceeding, or to set aside a judgment for fraud upon the court.” Accordingly, the chancery court did not err by finding fraud upon the court and altering the final divorce decree without Stewart filing a Rule 60(b) motion.
Rosemary also tried to claim that the fraud, if any, was on Stewart and not on the court, which argument the COA rejected, based on Trim. She argued in addition that there was inadequate proof in the record of the elements of fraud, which the COA likewise rejected, based on the proof in the record and the findings of the chancellor.
To return to my initial point: all that was necessary in this case was to give the chancellor a suggestion that there may have been a fraud on the court, and she picked it up and ran with it. The chancellor has broad, equitable power when it comes to relief under MRCP 60(b), which the court can exercise on its own motion. In this particular case the problem was fraud, but 60(b) vests the court with the same equitable powers to address mistake, “or any other reason justifying relief from judgment …”
THE EFFECT OF AN APPEAL ON A JUDGMENT
September 11, 2012 § 2 Comments
After Van and Myria Strickland were divorced on October 15, 2010, and after Van had filed an appeal, the chancellor entered an “Order Clarifying Judgment” on December 20, 2010. The order awarded the parties the passive-growth increase in the value of asset accounts that had been divided in equitable distribution and had the effect of adjusting and changing the parties’ respective shares.
In the case of Strickland v. Strickland, decided by the COA August 28, 2012, the court vacated the order, holding that the chancery court lacked jurisdiction to enter the December order. The court said:
“Filing a notice of appeal transfers jurisdiction from the trial court to an appellate court, thereby removing the trial court’s authority to amend, modify, or reconsider its judgment.” Corp. Mgmt. v. Green County, 23 So. 3d 454, 460 (¶13) (Miss. 2009). “In other words, the appeal removes the case ipso facto to the appellate courts.” Id. A party may execute on the judgment if an appeal has no supersedeas bond; however, “the [chancery] court cannot ‘broaden, amend, modify, vacate, clarify, or rehear the decree.’” Id. (citation omitted). “On the other hand, when an appeal has a supersedeas bond it effectively suspends the judgment.” Id. (citing In re Estate of Moreland v. Riley, 537 So. 2d 1345, 1348 (Miss. 1989)). As such, “enforcement of the rights declared by the decree are suspended until the appeal is determined.” Id. “When a trial court’s order broadens, amends, modifies, vacates, clarifies, or rehears a decree, ‘it must be vacated as null and void because it exceeds the subject matter jurisdiction of the lower court.’” Id. (citation omitted). See generally M.R.C.P. 59(e) (“A motion to alter or amend the judgment shall be filed not later than ten days after entry of the judgment.”). See also McNeil v. Hester, 753 So. 2d 1057, 1075 (¶68) (Miss. 2000); Bert Allen Toyota, Inc. v. Grasz, 947 So. 2d 358, 362-63 (¶7) (Miss. Ct. App. 2007).
¶20. Van filed his notice of appeal on November 9, 2010. Myria responded by filing her notice of appeal on November 23, 2010. On December 20, 2010, the chancery court entered an order that altered the judgment of divorce by changing the division of the property regarding the increase in value of the asset accounts to the date of the distribution, rather than the date of the temporary order. Because the chancery court’s December 20, 2010 order impermissibly broadened and amended the previous judgments of the court, subsequent to the filing of Van’s notice of appeal, we find that the December 20, 2010 order must be vacated as null and void. See Corp. Mgmt., 23 So. 3d at 460 (¶13) (“When a trial court’s order broadens, amends, modifies, vacates, clarifies, or rehears a decree, ‘it must be vacated as null and void because it exceeds the subject matter jurisdiction of the lower court.’” (citation omitted)). The chancery court lacked jurisdiction to enter such an order. See id. We further find that the May 27, 2011 order, which was before the chancery court on the motion of Myria seeking to enforce the December 20, 2010 order, is also null and void.
I read the authority to mean that, after the time for reconsideration has passed under the MRCP, and once jurisdiction has been acquired by the appellate court, the chancery court can take no action to alter, amend, clarify, modify, or even enforce the judgment. I have had modification cases and contempts filed on judgments that were appealed. The authority cited by Judge Carlton in Strickland makes it clear that as long as the appellate court has not disposed of the appeal the trial court has no jurisdiction to entertain those kinds of actions.
So this is something you need to factor in when deciding whether to appeal. Can your client wait two to two-and-a-half years for a modification or to enforce the judgment while judgment wends its way through the appellate courts?
WHEN IS A JUDGMENT ENTERED?
September 4, 2012 § Leave a comment
When is a judgment entered?
It’s an important question to ponder because some drop-dead deadlines start ticking away on entry of a judgment. MRCP 59 and 60 are two rules that have those kinds of provisions. MRAP 4(a) says that the notice of appeal to the MSSC must be filed ” … within 30 days after the date of entry of the judgment or ordered appealed from.” There are other rules with similar deadlines tied to entry of the judgment.
The last sentence of MRCP 58 says “A judgment shall be effective only when entered as provided in MRCP 79(a).”
MRCP 79(a) directs that the chancery clerk shall keep a General Docket in which shall be recorded all papers filed with the clerk, all process issued and returns, appearances, orders, judgments. Each entry is to show the date the entry is made.
In the case of Univ. of So. Miss. v. Gillis, 872 So.2d 60, 63 (Miss.App. 2003), the court held that a judgment becomes effective on the date it is entered on the docket.
When that judgment is entered can have a big effect on when your clock starts ticking for post-trial and appellate proceedings.
So here is my opinion about what are not final judgments:
- A document styled Final Judgment that has been file-stamped by the clerk, but is not entered on the docket.
- A document signed by the judge but not docketed.
- Even if the judge endorses the judgment “filed,” per MRCP 5(e), it is still not effective until entered on the docket by the clerk. MRCP 5(e) allows the judge to endorse a pleading or other document “filed,” but I believe that is only an effective date as to the filing of a pleading. It does not make a judgment effective because there is no entry on the General Docket. To me, the judge’s endorsement has no more effect than the clerk’s file stamp. It shows when it was received by the clerk, but does not render the judgment effective.
- If the judge renders an order or judgment from the bench and signs it, it is still not effective until docketed. It is the act of docketing that makes the judgment final and effective.
Of course, a decision or opinion is not the same thing as a judgment. There is case law that says that the court’s bench opinion does not have the finality of a judgment. Banks v. Banks, 511 So.2d 933, 935 (Miss. 1987); Hinson v. Hinson, 877 So.2d 547, 548 (Miss.App. 2004).
On a related point, in 2004, Rule 58 was amended to add the language that even if a final judgment is improperly titled, unless prejudice can be shown, it will be afforded the effect of a final judgment if its language clearly indicates it is so. The amendment effectively overrules a line of Mississippi Supreme Court cases that held that if a court order did not include the word “judgment,” it would not be treated as one even where no prejudice could be shown: Thompson v. City of Vicksburg, 813 So.2d 717 (Miss.2002); Mullen v. Green Tree Financial Corp., 730 So.2d 9 (Miss.1998); and Roberts v. Grafe Auto Co., Inc., 653 So.2d 250 (Miss.1994).
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