Practice and Procedure | The Better Chancery Practice Blog

PARING DOWN YOUR LEGAL PROSE

June 23, 2011 § 2 Comments

The importance of being Ernest

Nobel Prize-winning author Ernest Hemingway worked as a reporter for the Kansas City Star newspaper in 1917. The sparse, compact language of journalism proved to be ideally suited to his writing skills, and he adopted it as his style. The minimalist prose that resulted became his trademark.

Here are excerpts from the paper’s style sheet:

Use short sentences. Use short first paragraphs. Use vigorous English. Be positive, not negative.
Eliminate every superfluous word, as “Funeral services will be at 2 o’clock Tuesday,” not “The funeral services will be held at the hour of 2 o’clock on Tuesday.” “He said” is better than “He said in the course of conversation.”
Avoid the use of adjectives, especially such extravagant ones as “splendid,” “gorgeous,” “grand,” “magnificent,” etc.
Be careful of the word “also.” It usually modifies the word it follows closest. “He, also, went” means “He, too, went.” “He went also” means he went in addition to taking some other action.
Be careful of the word “only.” “He only had $10″ means he alone was the possessor of such wealth; “He had only $10″ means the ten was all the cash he possessed.
A long quotation without introducing the speaker makes a poor lead especially and is bad at any time. Break into the quotation as soon as you can, thus: “‘I should prefer,’ the speaker said, ‘to let the reader know who I am as soon as possible.’”

“Those were the best rules I ever learned for the business of writing,” Hemingway told a reporter in 1940. “I’ve never forgotten them. No man with any talent, who feels and writes truly about the thing he is trying to say, can fail to write well if he abides with them.”

There’s something for lawyers to chew on here. Is your writing clear, concise and direct? Does it make your point in the first sentence, or in the first few words, or do you make the reader meander through prolix piles of prose? Does it read like nineteenth-century legal jargon, or does it state your client’s position in easily comprehensible language?

Take a few minutes to read your pleadings. Take a few minutes to review your motions and briefs. Does your writing do the job for your client, or does it get in the way?

When a judge reads your pleadings, motions or briefs, can he or she get right to the point, or does it take laborious digging to get there? And when the judge finally gets to the point, is it clear exactly what the point is?

Do you have a reliable style book you can pull out and check from time to time? I like Strunk and White’s Elements of Style. It’s timeless without being stuffy, and at a mere 85 pages, it’s packed with easy-to-find gems. The chapters include rules of usage, principles of composition, commonly misused expressions, matters of form, and an approach to style. There’s a lot here that is easily digestible and quite useful.

Give your writing a little thought. It’s one of your most potent tools to advance your client’s interest. And consider that muddled writing is symptomatic of muddled thought; if you can’t find a way to express it in writing, you may not be able to say it at all.

Thanks to Futility Closet for the Hemingway material.

TURNER v. ROGERS DECONSTRUCTED

June 22, 2011 § 4 Comments

By Ben McMurtray

Yesterday the United States Supreme Court handed down its decision in the case of Turner v. Rogers. The question before the court was whether a respondent in a civil contempt proceeding, namely someone who was being threatened with jail time for failure to pay child support, has a right to have counsel provided to him. The Court held that “the Due Process Clause does not automatically require the provision of counsel at civil contempt proceedings to an indigent individual who is subject to a child support order, even if that individual faces incarceration (for up to a year).” The Court went on to hold that “in particular, that Clause does not require the provision of counsel where the opposing parent or other custodian (to whom support funds are owed) is not represented by counsel and the State provides alternative procedural safeguards. . . .”

The practical effect of this ruling has actually very little to do with the right to counsel. Instead, the focus of the courts and attorneys should be on the “alternative procedural safeguards” mentioned by the Court. The Supreme Court identified four such safeguards in its opinion, which, if employed together, can “significantly reduce the risk of an erroneous deprivation of liberty” and therefore negate the need to appoint counsel to an indigent civil defendant. These safeguards are:

Notice to the Defendant that his “ability to pay” (the child support) is a critical issue in the contempt proceeding;
The use of a form (or the equivalent) to elicit relevant financial information;
An opportunity at the hearing for the defendant to respond to statements and questions about his financial status (e.g., those triggered by his responses on the form);
An express finding by the court that the defendant has the ability to pay (before finding him in contempt).

This list is not inclusive of all possible safeguards that a state could employ. In fact, the Court stated that past cases “suggest . . . that sometimes assistance other than purely legal assistance (here, say, that of a neutral social worker) can prove constitutionally sufficient.”

Turner, though, is quite limited in its scope. The Court does not address several potential situations in this ruling, so the issue of whether counsel should be provided to indigent civil defendants is far from dead. The Court did not say whether counsel should be provided when the party seeking the child support is represented by an attorney. Instead, it was quite careful to limit the opinion to cases where the person seeking the child support was also represented pro se. Furthermore, the Court explicitly held that this opinion does “not address civil contempt proceedings where the underlying child support payment is owed to the State, for example, for reimbursement of welfare funds paid to the parent with custody.” Also, the Court did not address what due process requires in an “unusually complex” case where a defendant “can fairly be represented only by a trained advocate.” In each of these instances, the holding suggests that the Court would be far more likely to hold that an attorney must be provided to an indigent civil defendant if the other side is represented by counsel.

So how does Turner v. Rogers affect one’s practice? When a defendant is served with process in a child support action, just include something telling him that his ability to pay is an issue at the hearing. Go ahead and attach some kind of a financial disclosure form too so that the court has all the information it needs to determine if the defendant is able to pay. Make sure the defendant has a chance to talk about his financial statement and any testimony deriving therefrom during his hearing. Finally if the court finds him in contempt, ensure that the judge makes a finding that the defendant has the ability to pay.

[Ben McMurtray is an Ole Miss law student who served as an intern in the 12th District this summer. His internship has involved learning about the inner workings of the courts, how lawyers operate out here in the real world, and how different judges handle things. He has observed trials, docket calls, motion hearings, chamber conferences and probate matters in Lauderdale and Clarke Counties, and he has sat in with Judge Clark in Scott County and Judge Fenwick in Neshoba. He even sat at defense counsel’s table in a rape trial in Lauderdale Circuit in which the defendant was acquitted. He observed an adjudicatory hearing in Lauderdale Youth Court. He has helped inventory the probate docket in Clarke County. This is his last week, and we will miss him when he is gone, but we wish him the best in the rest of law school and his legal career.]

FIVE MORE SUGGESTIONS FOR PROPERTY SETTLEMENT AGREEMENTS

June 21, 2011 § 3 Comments

Sometimes the parties want the property settlement part of the PSA to be a final, binding contract regardless whether there is any contest. If you don’t include that provision unequivocally stated, the law is clear that the court can not enforce the contract piecemeal.
If a payment is to be made, such as child support, specify the first payment date and the regular monthly date for payment.
If something is to be done, specify the date by which it is to be done. In the alternative, include a stock provision in all your PSA’s to the effect that “If no specific date is stated by which an action in this Agreement is to be accomplished then it shall be done and completed not later than thirty days from the date of this agreement.
If something is to be done, specify whose responsibility it is to do it. For instance, the provision that “All child support payments due hereunder shall be made pursuant to the Bank Plan,” was held by Judge Mason not to be clear enough that it was the payor’s responsibility to enroll in and make payments under the plan where he had been unrepresented in the divorce. Better to say something like “Husband shall be solely responsible to do all acts and things necessary to enroll in and make all child support payments due on and after August 11, 2011, through the Bank Payment Plan.”
Section 71(b)(1)(B) of the Internal Revenue Code allows the parties to agree that alimony will be neither taxable nor deductible.

COMING TO GRIPS WITH McDONALD

June 20, 2011 § 7 Comments

I don’t think it’s an overstatement that the Mississippi Supreme Court’s decision in McDonald v. McDonald, 39 So.3d 868 (Miss. 2010), set chancery court practice vis a vis guardians ad litem (GAL) on its proverbial ear. And it’s not so much what McDonald held as what it hinted at.

Before McDonald, it was common practice to allow a GAL to investigate, file a report, and testify to the results and findings of the investigation, including hearsay, and make a recommendation. After all, most of what a GAL unearths is based on hearsay: the GAL interviews the children, neighbors, school teachers, parents, relatives, and reviews medical records and school records. In my experience most chancellors allowed the GAL to testify to the facts disclosed in the investigation, and I don’t recall anyone ever objecting to the hearsay. Most lawyers used the GAL’s report as a guide for what evidence would prove or disprove the case. It was a good system that allowed a qualified person as an arm of the court to look behind the positions of the warring parties and to pierce the veil of partisanship. I have observed on more than one occasion in contested child custody cases that the momma and dady are each zealously pursuing their own positions, but no one is looking out for the best interest of the children. The GAL’s role as arm of the court was a perfect complement to the chancellor’s role as superior guardian of the children. Frankly, it worked pretty well when a well-qualified and diligent GAL was involved. When the GAL proved to be less than diligent, the chancellor was free to discount or even disregard the findings and recommendations.

Enter McDonald. In that case, the mother in a child custody modification case objected to the GAL’s oral testimony, ” … stating that if the teachers and others being quoted by the GAL had something to report, they should have been required to be there. The court responded that
GALs are allowed by “historical practice” to offer hearsay testimony, and overruled the objection. ” McDonald at 884.

The Supreme Court disagreed and pointed out without expressly holding that a GAL’s oral hearsay testimony should be excluded. Justice Dickinson’s specially concurring opinion was even more blunt when he stated that MRE 1 expressly states that the evidentiary rules do apply in chancery court. End of dicussion for him.

The court did not extend its hearsay proscription to GAL written reports, however. The following language, beginning on page 882, is instructive:

“Jennifer argues that the GAL exceeded the proper role of a GAL by offering hearsay testimony, as well as taking ‘on a role as a litigant/expert’ by providing a written report to the court, making recommendations, discussing the views of the court-appointed counselor, filing a motion, testifying, examining witnesses, and meeting ex-parte with the chancellor. Other than offering hearsay testimony as discussed below, the GAL was simply following the provisions of the GAL statute and the pronouncements of this Court. This Court dealt recently with a similar issue in S.G. v. D.C., 13 So.3d 269 (Miss.2009), an opinion handed down after the briefs were filed in this appeal. The S.G. Court stated the following regarding the proper role of a GAL:

[A] guardian ad litem appointed to investigate and report to the court is obligated to investigate the allegations before the court, process the information found, report all material information to the court, and (if requested) make a recommendation. However, the guardian ad litem should make recommendations only after providing the court with all material information which weighs on the issue to be decided by the court, including information which does not support the recommendation. The court must be provided all material information the guardian ad litem reviewed in order to make the recommendation. Recommendations of a guardian ad litem must never substitute for the duty of a chancellor. Id. at 282.

The GAL in the case sub judice did not offer the type of testimony criticized in S.G. See id. at 274 n. 5. This GAL reported on matters required by her appointment, and consistent with a GAL’s duties as outlined in S.G. Id. at 282.

The statute’s provision that a GAL “shall have the duty to protect the interest of a child for whom he [or she] has been appointed guardian ad litem. The guardian ad litem shall investigate, make recommendations to the court or enter reports as necessary to hold paramount the child’s best interest,” is consistent with the traditional roles required of a GAL, which predate the enactment of the statutes. Miss.Code Ann. § 43-21-121(3) (Rev.2009). In In the Interest of D.K.L., 652 So.2d 184 (Miss.1995), this Court held that a GAL had failed in his duties by simply deferring to a therapist’s recommendations, and not submitting his own recommendation as to the best interests of a child. Id. at 188. The D.K.L. Court stated that the GAL ‘did not have an option to perform or not perform, rather he had an affirmative duty to zealously represent the child’s best interest.’ Id. In In the Interest of R.D., 658 So.2d 1378 (Miss.1995), this Court held that “children are best served by the presence of a vigorous advocate free to investigate, consult with [the children] at length, marshal evidence, and to subpoena and cross-examine witnesses.” Id. at 1383 (quoting Shainwald v. Shainwald, 302 S.C. 453, 395 S.E.2d 441, 444 (S.C.Ct.App.1990)). See also M.J.S.H.S. v. Yalobusha County Dep’t of Human Serv. ex rel. McDaniel, 782 So.2d 737, 740-42 (Miss.2001)(GAL failed in his duty by relying on DHS records and the recommendations of a therapist and social worker). In D.J.L. v. Bolivar County Department of Human Services ex rel. McDaniel, 824 So.2d 617 (Miss.2002), this Court found no error in a GAL’s cross-examination of witnesses. Id. at 622. The Court also ’emphatically proclaim[ed] to the bench and bar that … the guardian must submit a written report to the court during the hearing, or testify and thereby become available for cross-examination by the natural parent.’ Id. at 623. Therefore, the GAL would have been derelict in her duty to zealously represent the boys’ best interests if she had failed to interview the boys, consider the opinions of experts, marshal evidence, make an independent recommendation, question witnesses, submit reports, and make herself available for cross-examination.

The chancellor did not allow the GAL to usurp his role as the “ultimate finder of fact.” Id. The chancellor heard all witnesses, read all the
reports, and made his own decision based upon independent findings of fact. Thus, we find this portion of Jennifer’s argument to be without merit.”

Footnote 7 on page 884 states:

“Hearsay testimony should not to be confused with a GAL’s written reports, which sometimes, by their very nature, will include statements, which, if offered into evidence at trial to prove the truth of the matter asserted, would be inadmissible hearsay, unless they qualify under one of the exceptions to the rule against hearsay. Any such inadmissible hearsay, however, would not require exclusion of the entire report. This issue is not before the Court this day.”

I have heard reactions to McDonald that just about cover the ball park. One chancellor has said that he and the other judge in his district no longer appoint GAL’s unless they are required by statute because they feel that McDonald has rendered the GAL role ineffective and superfluous. I have heard chancellors confess that they don’t have any idea where to go post McDonald when it comes to GAL’s. And GAL’s have come to me and said they are now quite confused as to what they can and can not do.

The GAL system is far too valuable to chancery court to be relegated to the trash heap. At least for the time being, chancery court maintains its historical distinction from circuit in that the chancellor has a high duty to act in the best interest of a child, and to have a greater role at trial than to be a mere referee blowing the whistle and throwing penalty flags for hearsay transgressions; the chancellor’s duty is to ensure that the best interest of a child is protected, even when the parties themselves do not do so. The GAL has for many years given the chancellor a practical, effective way to meet his or her responsibility.

So how do we reconcile McDonald with the traditional role of the GAL? I think it comes down to the following for the party who will make positive use of the GAL recommendations:

Plan to qualify and tender the GAL as an expert. Ask the court at the outset of trial for leave to allow the GAL to remain in the court room in her role as an expert, if the rule is invoked.
Call every witness identified in the GAL report to establish the substantive facts that support the GAL’s recommendations, and, of course any other witnesses you feel that you need to call.
Finally, call the GAL as an expert witness and offer her report into evidence. She should qualify as an expert because of her legal training and experience, plus the fact that every GAL now must undergo special training and maintain certification. And as for her testimony, remember that, under MRE 703, “The facts or data in the particular case upon which an expert bases an opinion or inference may be those perceived by or made known to him before the hearing. If of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject, the facts or data need not be admissible in evidence.” Moreover, with all of the factual evidence already in the record, the GAL is free to comment on it.

But, you say, this will result in more cumbersome, longer and more expensive trials in custody actions with GAL’s. You are certainly right, but that is what the supreme court is directing us to do.

My understanding is that the GAL in McDonald was qualified as an expert. The opinion in McDonald did not explain why Rule 703 was not an adequate basis for her hearsay testimony that ” … need not be admissible in evidence.” So until the MSSC takes another shot at the issue, I interpret McDonald to mean that the GAL may include hearsay in his report, and may testify to it NOT to establish the truth of the matter asserted, but to establish the basis for his recommendations. In other words, you will have to call the witnesses and have them testify, and put the documents, photos and records in via competent testimony if you want or need those facts to be established in the record.

For now that is the way I will approach McDonald.

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).

FIVE SUGGESTIONS FOR PROPERTY SETTLEMENT AGREEMENTS

June 15, 2011 § 5 Comments

I’ve had these suggestions on the stockpile for a little while, waiting for an opportune time to post them. Considering Randy Wallace’s post about a less-than-perfect PSA yesterday, I thought now was a good time to float these. I’ll have more later.

If you don’t address allocation of the tax exemptions for the children as dependents, the IRS takes the position that it remains with the custodial parent. If the non-custodial parent will get the exemption, or it will be split, you should include language that the parties agree that they will promptly complete and timely execute and deliver IRS Form 8332 in order to give effect to the provision. That form is the one that the IRS requires to claim the exemption.
Stick with the traditional terms. The IRS understands the terms periodic alimony, lump sum alimony, rehabilitative periodic alimony, and child support. If you try to disguise those terms as spousal support or family/spousal support, or family maintenance, or something similar, you are likely sending your client off onto a collision course with the IRS. William Wright, an attorney in Jackson, told of a case he had where opposing counsel insisted on applying the term family support to a substantial payment that William’s doctor-client was having to pay each month. William complied, and his client later took the position with IRS that the payments met all the requirements for alimony, so that he should be able to deduct it, and it should be alimony to the recipient. IRS agreed, costing the recipient a whopping tax bill, and no doubt improving William’s standing in his client’s estimation. Had the payments been allocated between child support, which is not taxable, and alimony, which is, the result would have been far different for the recipient spouse.
If the other party is not represented, have you made it clear in the agreement which party you do represent, and have you added language to the effect that the other party acknowledges that you have not given him or her any legal advice?
Name the children in the agreement. It affects them directly. I have read agreements that refer only to “the minor children,” without identifying them, or stating their ages or birthdates, or even how many there are.
Have you bothered to read the agreement? Does it make any sense? Here’s an actual sentence from a property settlement agreement I was presented: “Husband to have his title and car, and wife hers. Each to pay and hold harmless.” I think I know what that means. But that doesn’t make it an enforceable contract.

HIDDEN COSTS OF DIVORCE

June 13, 2011 § 4 Comments

John and Marsha have decided that they are tired of living in their own, personal soap opera, and they have agreed to an irreconcilable differences divorce. It looks pretty simple:

Marsha will get the former marital residence. It’s paid for and Marsha intends to stay there. The house sustained some damage in a wind storm a couple of years ago, and the parties got $10,000 for repairs from insurance, but they spent it on a Hawaiian vacation, with a few days in Vegas on the way out, in an unsuccessful attempt at refreshing their marriage. Marsha says she can get the repairs done or not because they don’t affect its habitability. The roof needs replacing, but it’s been patched and doesn’t leak. She says she’ll fix it if and when it leaks or when she sells the house, but she does not have the $6,000 it will cost right now.

The parties own two adjoining commercial lots worth about $15,000 each. Marsha has agreed to take the lot they purchased in John’s name in 1990 for $1,500 before Wal-Mart located down the street. John will get the jointly-titled lot they purchased for $12,500 several years ago. A car lot is expanding and has expressed an interest. Marsha would like to settle the divorce as soon as possible so as to cash in. Marsha owes $14,000 on her credit cards, and she’s behind in her payments, so she needs as much cash as she can get out of sale of the lot.

The parties will split the 1,000 shares of Wal-Mart stock that they accumulated through the years. Marsha really doesn’t know much about stock, so John has generously agreed to divide the shares.

Marsha has enjoyed driving the 2008 Jaguar that John bought her several years ago in an attempt to make up after she caught him in a questionable situation with a waitress from the Waffle House. The car is paid for, and Marsha loves it because she has never had a nice car before. She will get it in the divorce.

John has agreed to pay Marsha $1,000 a month in rehabilitative alimony for 36 months. Even with the alimony, it will be a tight squeeze financially for Marsha, so she doesn’t need any unpleasant financial surprises after the divorce is final.

Marsha is in a hurry. She wants you to do up the papers and she will pick them up to go over with John tomorrow, so she can get them filed right away.

It’ll be a snap to prep the PSA, and you are tempted to just hand the notes over to your secretary so they can be done while you hit the golf course.

Before you jump on this, though, ask yourself whether Marsha will really be getting what she thinks she is bargaining for. Consider:

The divorce will be a transaction effecting a change of ownership in the former marital residence, triggering a re-rating of the homeowner’s insurance. Because the hurricane repairs have never been done and approved by the insurance company, Marsha’s homeowner’s insurance premium is likely to skyrocket. Not only that, but there are other factors that can adversely affect Marsha’s insurance premium, including her credit rating, which is questionable due to the credit cards. In order to get her homeowner’s insurance premium back with a reasonable range, she will have to spend that $6,000 on the roof and complete the other repairs. How can she find out in advance whether she will have a problem? Marsha can get a free insurance C.L.U.E. (Comprehensive Loss Underwriting Exchange) report by writing CLUE, Inc. Consumer Disclosure Center, P. O. Box 105295, Atlanta, GA, 30348-5295, or by calling 1-866-312-8076. An insurance agent can help her decipher the report. And, as you probably know, she can get a free credit report once a year.
When the commercial lots are sold, Marsha will be paying capital gains taxes, currenty 15%, on $13,500. John will be paying capital gains on just $2,500. Marsha’s tax bite will be $2,025, leaving her $12,975. John’s taxes will be a mere $375, allowing him to pocket $14,625, or $1,650 more than Marsha.
Also, has Marsha gotten a title opinion on the commercial lot titled in John’s name? It would be a bitter pill indeed to discover when she goes to sell it that John borrowed money against it without her knowledge.
The stock has the same pitfall as the commercial lots. Stock purchased for $25 a share years ago will carry a much heftier capital gains burden than will the shares purchased for $65 a few years ago. Moreover, John can allocate himself the shares that have sustained losses in the recent downturn. Yet the parties are treating all the shares the same, and, to make it worse, John will call the shots.
As for her ride, Marsha needs to look at it as a cash drain. How much is she willing to let it drain her? The insurance alone is more than $1,500 a year, and this year’s tag, which is now due, is $862. Not only that, it uses exclusively premium gas, and has never gotten the 21 miles to the gallon that the dealer promised. Yes, it is paid for, but would she do better selling it and taking the cash to buy something more economical? Can she even afford this car?
Finally, the alimony is taxable income to Marsha unless the parties agree that it will not be taxable. John will not likely agree due to the fact that he will get to claim it as a deduction. Is Marsha aware of this? Can you negotiate an extra $300 or so a month for Marsha to use to pay her income taxes?

You can do the papers exactly as Marsha dictated, or you can sit her down and bring all these matters to her attention. It’s the difference between acting as Marsha’s clerk-typist and acting as her lawyer. You get to decide.

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.

IN LOCO PARENTIS TAKES ANOTHER HIT

June 6, 2011 § Leave a comment

In the COA case of Wells v. Smith, decided May 31, 2011, the appellate court was again confronted with a painful reality that chancellors are seeing more and more frequently: the situation where a child is raised by the grandparents because one or both of the natural parents has chosen to be absent from the child’s life, and the natural parent awakens one day to assert his or her parental rights.

In this most recent case, Tara Wells had given birth to a son, Jason, out of wedlock in 2003. Robert Johnson was Jason’s natural father. Tara and Jason lived with her mother, Sarah Smith, and her husband, William, for a time after the birth while she attended college. Tara’s college education spanned three years, and her time spent with Jason tapered off the longer she was in school. In April, 2006, Tara and Robert were married, and they moved to Washington, DC, where Robert was stationed with the military. Tara took Jason with her to live in DC, but returned him to live with the Smiths a short time later. After three months of marriage, Tara and Robert separated. Tara stayed in the DC area and Jason split time between there and Mississippi until November, 2006, when he returned to Mississippi for good.

In May, 2007, Tara signed over medical guardianship of Jason to the Smiths. Tara’s contact with Jason grew less and less. She allowed Jason to live with the Smiths, never asking to take him to live with her. In the meantime, Robert Johnson had been incarcerated in Virginia. In June, 2008, the Smiths filed pleadings in Mississippi seeking permanent custody of Jason. On October 1, 2008, they filed a petition for adoption and termination of Tara’s and Robert’s parental rights.

In December, 2008, Tara began living with another man, Neil Baker, and they were engaged in March, 2009, despite the fact that Tara was still married to Robert Johnson. Tara and Neil moved to Arizona. She was financially dependent on Neil, and he had never met Jason.

Also in December, 2008, Robert Johnson joined in the Smiths’ pleading for custody and consented to their being granted custody; he also consented to and joined in the petition for adoption.

In April, 2009, the court appointed a GAL. The GAL report recommended that the child stay with the Smiths. The GAL report, as well as the weight of proof at trial, established that the Smiths were the only mother and father Jason had ever known, and that their home was the only home he had ever had.

The chancellor relied on the doctrine of in loco parentis, in part on the GAL’s recommendation, to overcome the natural parent presumption and to find, applying the Albright factors, that Jason’s best interest would best be served by staying with the Smiths rather than his mother.

On appeal, the court analogized the case to the recent supreme court decision in Vaughn v. Davis, 36 So.3d 1261 (Miss. 2010), in which the court reversed and remanded for the chancellor to determine whether the father had relinquished the natural-parent presumption for reasons other than forfeiture by agreeing to a temporary custody order. The supreme court did not want to extend Grant v. Martin, 757 So.2d 264, 266 (Miss. 2000), which held that a parent’s agreement to a guardianship or custody judgment in a third party does create a forfeiture of the natural-parent presumption, to temporary orders, and wanted the chancellor to evaluate the proof to determine whether there was some other basis upon which to proceed.

The Vaughn decision pointed out the case of In re Leverock, 23 So.3d 424 (Miss. 2009), in which the natural father was found to have deserted his child by avoiding his moral and legal duties and parental obligations for in excess of two years.

The COA said in Wells:

“Although Vaughn was a case where the chancery court improperly found relinquishment of the natural-parent presumption due to the signing of a temporary custody order, it is analogous to this case. Here, the chancellor improperly relied on the doctrine of in loco parentis to find that the natural-parent presumption had been relinquished. We have been able to find no precedent for using that doctrine to overcome the natural-parent presumption. However, given the similarity of the facts in this case to Leverock and Vaughn, this case should be remanded to the chancery court to determine whether Tara deserted Jason, thus relinquishing her right to the natural-parent presumption. On remand, the chancery court should consider Jason’s circumstances at the time of remand.” [Emphasis added]

As in Davis, then, the Wells court directed the chancellor to find a basis other than the one he originally asserted as a basis to accomplish the best interest of the child. In Wells, the rejected basis was in loco parentis. I would guess that the definition of desertion to be applied by the trial judge will be MCA § 93-15-103(3).

The bottom line is that if you’re still barking up the in loco parentis tree, you are barking up the wrong tree. It simply won’t form the basis to overcome the presumption in favor of the natural parent. You’ll have to find another way to go in these very difficult, gut-wrenching cases.

CREDITING “UNPAID” CHILD SUPPORT

June 1, 2011 § 2 Comments

Lawyers and the courts are often called upon to clean up the mess made by the parties when they make a handshake deal to modify a judgment. Here’s a fairly common setting …

The custodial mom and son aren’t getting along. The child is a rebellious teenager who is not interested in school. He has fallen in with the wrong crowd and appears headed for trouble. Non-custodial dad agrees for the child to come live with him to finish out the school year and get him straightened out. Junior lives with dad for 10 months, does better in school, gets his head right, and returns to live with mom. During the 10 months Junior was with his father, dad did not pay the $300 a month child support ordered by the court in the divorce judgment. As soon as Junior returns home, mom files a contempt action against dad, wanting her $3,000 in child support arrearage, plus interest and attorney’s fees.

Mom claims that the law of Mississippi is that the court can not enforce a modification by the parties, and that if dad had wanted to be relieved of child support he should have gotten a court order.

Dad points to the fact that he supported the child 100% during the 10 months Junior was with him, and the money would be an unjust enrichment for mom.

Who’s right?

In the case of Varner v. Varner, 588 So.2d 428, 434 (Miss. 1991), the parties had three children with a “global” child support obligation of $600. One of the children came to live with the father for a number of years. The court said:

The law remains firm that court-ordered child support payments vest in the child as they accrue and may not thereafter be modified or forgiven, only paid. But this does not mean that equity may not at times suggest ex post facto approval of extra-judicial adjustments in the manner and form in which payments have been made.

The court went on to find that the father had, indeed, made the child support payments ordered by the court for Junior’s benefit. He just did not make the payments to the mom. The court cited the case of Alexander v. Alexander, 494 So.2d 365, 368 (Miss. 1986), quoting it as follows:

If we affirm the chamcellor’s back award of child support to Mrs. Alexander, we will create a situation of unjust enrichment in Mrs. Alexander. This is true because nduring the entire period of time for which Mrs. Alexander claimed support Mr. Alexander had the child in his custody, was supporting the child, and furthermore, was paying the child the $200 a month child support called for by the decree.

Under these circumstances Mrs. Alexander would have no claim to the back child support except to accept it as a conduit to pass directly to the child or back to Mrs. Alexander for the use and benefit of the child. We consider this a vain and foolish act. In our opinion, when the custodial parent received full child support during the time she had custody of the child, did not complain when the child moved in with the other parent, and accepted this arrangement for 20 months with the child support being paid directly to the child, the parent paying the child support is entitled to full credit for all child support paid to the child. He is also entitled to [credit for] any additional support which he has evinced by satisfactory proof to the trial court.

The court went on to say that the father may receive credit for having paid child support where the child lived with him for a time and he paid the support directly to, or for the benefit of, the child. The effect of Varner is that the paying parent is granted a pro rata credit for child support. In Varner (at page 434), that meant that the father received a $200 a month credit against his “global” child support obligation of $600 a month for three children; in other words, since 1/3 of the children lived with him for a time, he is entitled to a pro rata reduction of 1/3.

The decision also includes the familiar admonishment that parties who modify a court judgment without court approval do so at their peril, and they encouraged parties to obtain a judgment incorporating their agreement before embarking on it.

A similar issue arose in Dorr v. Dorr, 797 So. 2d 1008, 1012-1015 (Miss. App. 2001), in which Houston Dorr was ordered to pay child support to his former wife, Susanne Dorr. In return, Houston was given the right to claim the child as a dependent for tax purposes. Houston failed to make consistent child-support payments from 1985 to 1994. In 1988, Houston and Susanne made an extra-judicial agreement whereby Houston relinquished his right to claim the child as a dependent for tax purposes. Susanne claimed the tax exemption from 1988 through 1994 and received a $4,300 tax benefit from doing so. Then, in 1998, Susanne filed suit against Houston for the back child support. The COA found that, although the chancellor had no authority to enforce the extra-judicial agreement, the chancellor erred by not giving Houston credit for giving up his right to the exemption. The court held:

In our view, this financial benefit to [Susanne] for the child’s benefit, though not directly derived from [Houston]’s own income, in equity ought to be considered as a credit towards [Houston]’s recurring child support obligations accruing during the same period, much in the same manner that such indirect payments as social security payments to dependent children derived through the efforts of the obligee have been allowed as credit toward child support. See , e.g., Bradley v. Holmes, 561 So. 2d 1034, 1035 (Miss. 1990).

Dorr was followed in the COA case of Potts v. Windham, decided March 1, 2011, at ¶ 8. The trial court had denied credit to the father for the amount of the mother’s income tax refund because his income was such that he would not have paid any income taxes had he filed, whether or not he claimed the child as a dependent. In reversing, the COA noted that the mother had realized a $4,300 credit by claiming the child, and that the benefit to her, not to the father, was the relevant yardstick to determine whether there would be unjust enrichment.

In the Bolton v. Bolton, decided May 24, 2011, by the COA, at ¶ 47, the following language appears:

Courts award child-support to the custodial parent for the benefit and protection of the child. Smith v. Smith, 20 So. 3d 670, 674 (¶13) (Miss. 2009). “Such benefits belong to the child, and the custodial parent has a fiduciary duty to hold them for the use of the child.” Id. “The law remains firm that court-ordered child-support payments vest in the child as they accrue and may not thereafter be modified or forgiven, only paid.” Id. “But this does not mean that equity may not at times suggest ex post facto approval of extra judicial adjustments in the manner and form in which support payments have been made.” Id. “The noncustodial parent may be entitled to credit for any additional support which he/she has evinced by satisfactory proof to the trial court.” Id.

In Bolton, the parties had resumed cohabitation after the divorce for a time, and the father was given credit for around $10,000 in payments that he was able to prove he had made for the benefit of the child during the time that the parties lived together. The credit reduced his arrearage in child support from around $14,000 to around $4,000.

To sum it up, your client may just be entitled to some credit for payments made for the benefit of the child in lieu of child support. The result appears to rely on a situation where there is either an actual live-in situation or an actual intended exchange of value in place of child support. Don’t expect your client, though, to get credit for birthday presents, new shoes, school supplies, or toys purchased in the ordinary course of being a non-custodial parent.

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