That Sinking Feeling
May 11, 2015 § 2 Comments
Most old adages stick around for centuries because they have at their heart a kernel of truth. Sayings like “You can’t tell a book by its cover,” and “The early bird gets the worm” ring true because they are true. Trite and true.
Another old saying is, “A boat owner’s two happiest days are (1) the day he buys the boat, and (2) the day he sells it.”
We can now add a corollary to (1) above: “the day he buys the boat … unless the Mississippi Department of Revenue (MDOR) demands payment of use tax.”
Vincent Castigliola, Jr., a Pascagoula lawyer, thought he had had his happiest day when he bought a yacht in Florida from Mark Fallon, an Ohio individual who was not engaged in the boat trade, but who had marketed the boat through a boat marketing service. Vincent undoubtedly was happy until the killjoys from the MDOR showed up and demanded that he fork over another $7,588 in use taxes for the transaction. This, I am sure, made Vincent unhappy, boat and all.
Use taxes, as I am sure you know, are paid on purchases of personal property from a dealer in another state when that personal property is used in Mississippi. A boat bought from a dealer in Florida and brought to Mississippi incurs a use tax. A computer bought from Best Buy in Baton Rouge and brought to Mississippi incurs a use tax. And so on. The rule is that if the transaction would have borne sales tax in Mississippi if it occurred here, it incurs use tax if it took place in another state. Casual sales between individuals not operating as dealers, incur neither sales nor use tax.
Vincent exhausted his administrative remedies and appealed to chancery court. MDOR filed for summary judgment claiming that Vincent could not meet his burden of proof that he was entitled to the exemption, and that the transaction was between a dealer and Vincent.
The chancellor granted summary judgment in favor of MDOR, and Vincent appealed.
In the case of Castigliola v. Mississippi Dept. of Revenue, the MSSC reversed and rendered, the opinion by Chief Justice Waller holding that it was the MDOR’s burden to prove that the transaction was subject to the casual-sale exemption, and that the purchase was not subject to Mississippi use tax. The decision was unanimous, with Justice Randolph not participating.
You can read the opinion for yourself. There is an interesting discussion of the distinction between exclusions and exemptions. In all, it’s an interesting read.
And it’s a victory of sorts for taxpayers, not to mention attorneys who aim to be happy boat owners.
So You Want to be a Judge
May 7, 2015 § 4 Comments
There are vacant chancery judge posts scattered around the state, and lawyers are vying to fill them. If you’re thinking about becoming a chancellor, you might want to give some thought not only to what are the duties of the job, but also what are some of the nuances.
Here are some of my personal, random thoughts on the role of a chancery court judge:
- The judge’s first duty is to the law. The judge has to be blind to who the parties are, and to who represents them, and let the facts lead him to a decision consistent with the applicable law. That sounds obvious, but it can be difficult to do.
- The judge has to be dispassionate, but understanding of the foibles of human nature. A wrathful judge who hurls moralistic thunderbolts at the parties is, in my opinion, an ineffective judge. It’s better to craft an effective solution to a problem than to dispense punishment with judgmental platitudes. People come to court hoping for a pragmatic, wise solution, not another layer of problems laid on by the court.
- What lawyers and the public want most is a judge who is fair and follows the law. Fail on either count, and you fail as a judge. A chancellor can never pick a side or a conclusion and reason back through the facts and law to get to that preconceived notion. The facts and law of the case dictate a ruling, not vice versa.
- It takes a sure, confident, competent command of the rules of evidence to be a judge. If you have tried enough cases, you know what I mean. In fact, if you have little or no trial experience, I really don’t see how you could pull off being a chancellor. Lack of evidentiary skills will show in the work product. A judge who is usually wrong in evidentiary rulings or who waffles on every ruling will lose respect of the lawyers, and probably develop a history of reversals.
- Speaking of reversals, two things apply. One is that a consistent history of reversals is a symptom of not following the law and/or not paying attention to the facts. Two is that the chancellor must rule based on what the facts and law dictate, and never with a concern to avoid reversal. Those two may sound inconsistent, but the common thread is to follow the law and to apply it appropriately to the facts in evidence.
- The judge must always be vigilant to see that justice is done. That may require a sua sponte appointment of a GAL, or inquiring behind a PSA, or scrutinizing actions of executors, guardians, conservators, and lawyers.
- The judge must make sure that probate matters are being handled diligently, and free of any misconduct.
- The chancellor must not let lawyers, particularly old lions, push him around. The judge controls the conduct of the case, and absolutely controls the courtroom. That does not mean that the judge is a tyrant, but firm, assertive behavior is required, and when the lawyers get accustomed to it, respect ensues.
- Ethics are critically important. Even the appearance of impropriety is forbidden. It requires a thorough knowledge and observance of the Canons of Judicial Conduct to be a successful judge.
- One of the side-effects of ethical behavior is isolation. The old comraderie with lawyers comes to an end.
- A crucial thing to remember is that demeanor is vitally important. A judge should be rational, wise, kind, understanding, respectful, and even-handed. A judge should try never to be impatient, rude, sarcastic, or erratic. Lawyers who appear before you are still your colleagues who deserve your respect. The lawyer you mistreat and humiliate in the courtroom may likely be your next opponent.
- Another reason that demeanor is important is that people in the courtroom are observing you closely. There is not a judge’s frown, grimace, smile, nod, sigh, or rolling of the eyes that someone does not note.
- One of the hardest things to do consistently is to be patient. That is not easy when a lawyer is stumbling and fumbling through some routine matter, or must be shown the proper way to handle estate matters time and again.
- Dishonesty can never be tolerated, and must be dealt with swiftly and decisively.
Other judges may have a different take.
Before You Draft that PSA …
May 6, 2015 § 4 Comments
Suzie drops by, writes you a check for your retainer and court costs, and fills you in on the terms of the parties’ agreement to get an irreconcilable differences divorce. She hands you a folded sheet of notebook paper with bullet points that read like, ” … Joe will get his truck and pay for it, and I will get my car and pay for it,” and ” … Joe will pay me $5,000 from his retirement account,” and “Suzie will get 1/2 of Joe’s retirement with Ajax Lightning Rod Corp.”
So, what do you do next?
If your answer was to hand the paper to your secretary to start working on a draft, you are wrong. As in deeply, malpracticedly wrong.
The correct answer is that you need a LOT more information before you commence that draft. Consider:
- What kind of retirement account is the $5,000 going to come from, and when it is it to be paid? If the account is a defined contribution plan, such as IRA or 401(k), a lump sum can be paid if done properly. If, on the other hand, it is a defined benefit plan, such as most pension plans, she could only get the money in the form of an income stream at the time of Joe’s eligibility for retirement.
- If that retirement plan that is going to fund the lump-sum payment is PERS or military retirement, you can’t dip into it to withdraw cash. The only way to access PERS benefits is to retire and begin drawing a monthly benefit, or to leave employment and get a cash payout.
- What are the actual names of the retirement accounts? You are asking for trouble if you don’t use the exact name of the accounts, such as “Ajax Lightning Rod Corp. Employee Benefit Program 51-014,” or “Joe Blow IRA Account no. 700-092108, Skinflint Bank & Trust, Lucedale, MS.” Why? Because people have a tendency years after the fact to lose their memory of exactly what it was they agreed to do, and that detail nails down exactly what that agreement was. Not only that, but later when you draft any necessary QDRO, you will need that exact information.
- Do not lift a finger to draft that PSA until you hold in your hand the most recent statements from all of the retirement accounts. Just because someone tells you they can do something does not mean they can. Also, those statements will have most, if not all, of the information you will need to draft the retirement provisions of the PSA.
- Make sure you specify the exact date of division. For example, “Suzie shall receive an amount equal to one-half of the account balance as of January 15, 2015 …” The date by which the division is to be accomplished is also critical.
- Spell out who has the responsibility to do what. If Joe is to accomplish all of this, make sure the agreement says that. If someone is going to hire a financial advisor or lawyer to draft a QDRO, who will pay the expense? Some plans actually charge fees — as much as several hundred dollars — to process divisions. Who will pay?
- Address who will bear the tax responsibility for his or her share of the division. Remember that IRA and 401(k) divisions are taxed as income, plus a 10% penalty. If that $5,000 payment is made, will Suzie’s share be reduced by 38%, or will Joe bear that burden? Remember that Suzie can avoid any taxes by rolling the money over into her own qualified account.
The most recent object lesson in how not to handle a retirement division is in the case of Miles v. Miles, about which I posted at the link. You don’t want that to happen to you. As I said before, you need to educate yourself about retirement accounts and put some thought into the most effective way to draft a provision that will protect your client and successfully accomplish what she wants to do.
Some of the information in this post is derived from a presentation by Michael D. James of Legacy Wealth Management Group, Hattiesburg, to the Conference of Chancery Judges in April.
New Laws that may Impact Your Chancery Practice
May 5, 2015 § Leave a comment
The legislature enacted some laws in the recently-completed session that might affect your practice in chancery court. I may have comments on some of them later, but for now here is the list:
- HB 153: “MS Uniform Statutory Rule Against Perpetuities.” create. 03/23 Approved by Governor.
- HB 177: Courts; prohibit from applying foreign law under certain circumstances. Approved by Governor.
- HB 272: Bad checks; include electronically converted checks and electronic commercial debits. Approved by Governor.
- HB 405: Commercial Real Estate Broker Lien Act; clarify definition of “commercial real estate” under. Approved by Governor.
- HB 556: Domestic violence; revise procedures related to. Approved by Governor.
- HB 692: Emergency Response and Overdose Prevention Act; create. Approved by Governor.
- HB 700: Estate bond requirement; authorize court or chancellor to waive. Approved by Governor.
- HB 703: Judicial redistricting; revise. Approved by Governor.
- HB 711: Landlord-tenant; provide for disposition of personal property remaining on the premises after removal of the tenant. Approved by Governor.
- HB 959: Minors; clarify appointment of guardian ad litem, enact protections for child witnesses. Approved by Governor
- HB1049: Court reporters; increase salary for those in circuit, chancery and county courts. Approved by Governor.
- SB2105: Children in custody of DHS; require notification of parents of child’s siblings in conformity with federal law. Approved by Governor.
- SB2301: Uniform Interstate Family Support Act; create (corrected). 03/17 Approved by Governor.
- SB2310: Mississippi Uniform Limited Partnership Act; revise and expand. Approved by Governor.
- SB2364: Real property liens; clarify Notice of Contest of Lien form. Approved by Governor.
- SB2390: Service of process; sheriff may retain fee for attempt to serve. Approved by Governor.
Please don’t ask me to comment on these yet. In most cases, I know as much about them as you do. I’ll post on some of them later after I have had an opportunity to read and digest them.
The Expectation of Privacy
May 4, 2015 § 4 Comments
The MSSC last Thursday published a new MRCP 5.1 that imposes some important privacy protections to all filings in chancery court — both electronic and paper. Here is the new rule, which went into effect April 30, 2015:
RULE 5.1. PRIVACY PROTECTION FOR FILINGS MADE WITH THE COURT
(a) Redacted Filings. Unless the court orders otherwise, in an electronic or paper filing with the court that contains an individual’s social-security number, taxpayer-identification number, or birth date, the name of an individual known to be a minor, or a financial-account number, a party or nonparty making the filing may include only:
(1) the last four digits of the social-security number and taxpayer-identification number;
(2) the year of the individual’s birth;
(3) the minor’s initials; and
(4) the last four digits of the financial-account number.
(b) Exemptions from the Redaction Requirement. The redaction requirement does not apply to the following:
(1) a financial-account number that identifies the property allegedly subject to forfeiture in a forfeiture proceeding;
(2) the record of an administrative or agency proceeding; and
(3) the record of a court or tribunal, if that record was not subject to the redaction requirement when originally filed.
(c) Filings Made Under Seal. The court may order that a filing be made under seal without redaction. The court may later unseal the filing or order the person who made the filing to file a redacted version for the public record.
(d) Protective Orders. For good cause, the court may by order in a case:
(1) require redaction of additional information; or
(2) limit or prohibit a nonparty’s remote electronic access to a document filed with the court.
(e) Option for Additional Unredacted Filing Under Seal. A person making a redacted filing may also file an unredacted copy under seal. The court must retain the unredacted copy as part of the record.
(f) Option for Filing a Reference List. A filing that contains redacted information may be filed together with a reference list that identifies each item of redacted information and specifies an appropriate identifier that uniquely corresponds to each item listed. The list must be filed under seal and may be amended as of right. Any reference in the case to a listed identifier will be construed to refer to the corresponding item of information.
(g) Waiver of Protection of Identifiers. A person waives the protection of Rule 5.1(a) as to the person’s own information by filing it without redaction and not under seal.
These same restrictions, in slightly different form, are in Section 9 of the Electronic Courts Administrative Procedures. This amendment to the MRCP extends the existing electronic filing privacy protections to paper, or conventional, filings.
From a practice standpoint:
- Tax returns need to be scrutinized carefully. It’s not enough to redact the taxpayers’ SSN’s at the top of the returns. The children’s names and SSN’s are also on the return. Schedule C may include a taxpayer ID number.
- On 8.05’s, use the initials of the children and their ages rather than their full names and birth dates. As for the parties, again, use their ages and not birthdates. For financial accounts, use only the last four digits. Do not include taxpayer ID numbers anywhere.
- If you slip up and include any of the proscribed information, you will be deemed to have waived the protection of the rule for your client. If that results in any damage due to identity theft or other misuse, you could be called to account.
The obvious purpose of this amendment is to prevent identity thieves from trolling for SSN’s and birthdates. Keeping the children’s names out protects them from predators.
This rule is in effect right now. School your staff in its requirements and begin observing them yourself. Discovery, particularly voluminous discovery, is typically chock full of this kind of private information. You need to be diligent to protect the interest of your clients.
“Quote Unquote”
May 1, 2015 § 1 Comment
“Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around.” — Leo Buscaglia
“This is my simple religion. There is no need for temples; no need for complicated philosophy. Our own brain, our own heart is our temple; the philosophy is kindness.” — Tenzin Gyatso, 14th Dalai Lama
“Deeds of kindness are equal in weight to all the commandments.” — Talmud
Reprise: Better Chancery Practice FAQ
April 30, 2015 § 4 Comments
Reprise replays posts from the past that you may find useful today.
BETTER CHANCERY PRACTICE FAQ
October 8, 2010 § 1 Comment
My 8.05 financial statements stink. How can I improve them?
Here are Ten Tips for More Effective Rule 8.05 Financial Statements.
Is my estate ready to close?
Check out this Checklist for Closing an Estate.
I think I need to file a habeas action. Any tips?
This Habeas Corpus Step by Step should help.
One more time: what are those child custody factors I need to prove at an upcoming trial?
The Albright factors are what you’re looking for.
Help! We need to sell some real property in an estate, and I don’t know where to start?
How to Sell Real Property in an Estate may be just what you need.
I’ve been asked to handle a minor’s settlement for a Jackson firm, and I’ve never done it before. What do I need to do?
This Outline for Handling a Minor’s Settlement will get you started.
My mail has an MRCP 41(d) notice in it this morning. I remember you said something about it, but I don’t have time to look for it. Can you remind me what I am supposed to do?
<Sigh> Here’s a post on what to do When Rule 41(d) Comes Knocking at Your Door.
I need to prove the tax effects of alimony, but my client can’t afford to hire a CPA to come testify. Any ideas on what I should do?
Try looking at Proving Tax Effects of Alimony.
My Chancery Judge is really nitpicky. How can I draft my adoption Complaint to satisfy him?
Are you talking about me? Whatever. Here is a post on pleading Jurisdiction for Adoption.
Every time I go to court in Jackson, the lawyers there snicker about my countryfied attire. Any suggestions? I cannot afford another $100 contempt citation for punching out a lawyer in the courtroom.
You probably need to be charging more so that you can afford either a better wardrobe or more contempt fines. Until you do, try reading “High Waters” and Burlap Suits. It won’t change anything, but it may help you to feel better.
Garbage in, Garbage out
April 29, 2015 § 4 Comments
Output often bears a marked resemblance to input.
One cannot expect to emulate the deep luster and luxe of mahogany with coarse plywood. Nor does ground round yield an acceptable chateaubriand. In either case, the product will look shabbily like the original material.
So why should we expect that the cultural garbage that we daily consume in the form of trash novels (for the few of us who still read), situation comedies, reality dance and bachelor shows, alarmist “news” programs, and television “dramas,” will produce from us any more refined output than the quality of what we have consumed?
What do these rubbish add to our store of wisdom, or our deeper understanding of human nature, or our grasp of how other cultures view the world, or how we can make things better?
This is not to suggest that one should not add a little cultural cotton candy, or broadcast Ben & Jerry’s, or reading Reese’s peanut butter cups to one’s life every now and then. No. What I am saying is that a steady diet of that stuff will transform you from a lithe, supple thinker into a bloated, lazy advocacy short-cutter.
Before I entered law school, a wise judge told me that the more exposure one is able get to the great ideas, to the history behind the way things are, to the principles that influence people in their daily lives, the better one can understand how to use the tools of the legal profession for the benefit of one’s clients. That process takes place over a lifetime, and it does not end when one graduates from law school.
We learn much of what we come to know from our experiences. You decide what you are learning by the experiences you choose.
Anderson made a similar point recently on his blog with reference to writing: the best way to learn the art of persuasive writing is to read persuasive writers.
The quality of what you produce depends on the quality of the raw materials used.
Non-Custodial Dangers
April 28, 2015 § 1 Comment
It’s pretty hard to say “No” to a distraught mother who wants to modify custody or visitation because she is concerned that her 8- and 6-year-old boys are imperiled by the father who is letting the children ride a mini-4-wheeler during his custodial time, and is allowing the children to do things like: running barefoot all over his farm; playing down by the pond where the children might fall in or get swallowed by a water moccasin; or riding a pony; or riding in the back of a pickup or on a trailer across the pasture to and from the chicken houses; or jumping from the hayloft into the hay below.
That’s the fact pattern that a mom alleged against my client back in the 1990’s. A very wise chancellor observed that what town children are allowed to do is quite different than what “our country cousins” experience, and, in the absence of specific evidence that any of the children were actually endangered, he would not change anything.
That same principle came into play in the case of Nurkin v. Nurkin, decided April 7, 2015, in which Caroline Nurkin had complained to the chancellor that her ex-husband Brad was endangering their son during visitation by flying him to and from visitation in a private plane. The chancellor enjoined Brad from transporting the child in a private aircraft, and Brad appealed. Here’s what Judge Lee said for the unanimous court:
¶13. Brad cites to Mord v. Peters, 571 So. 2d 981 (Miss. 1990), to support his position. In Mord, the chancellor restricted the father’s ability to fly his children in his private plane. Id. at 983. The Mississippi Supreme Court reversed the chancellor’s decision and found that absent any showing that flying with the father would be dangerous or that the father was acting without concern for the children’s well being, neither the mother nor the chancellor had the right to restrict the children’s activities during visitation with their father. Id. at 984-85. In this instance, there was no testimony other than Caroline’s unfounded fears that Brad’s operation of a plane would endanger Jake’s life. As the supreme court stated in Mord, “Were we to affirm the chancellor’s position . . . endless litigation possibly would result. We can imagine custodial parents coming to court based on unjustified fears and apprehensions and attempt[ing] to prohibit their children from learning how to drive, fish, hunt[,] or swim when a non-custodial parent is exercising his . . . visitation.” Id. at 986. Furthermore, Brad testified that Jake enjoyed flying with him. There was no testimony that Jake was scared or anxious when flying.
¶14. “A non-custodial parent may determine which extra[]curricular activities the child participates in during visitation, including certain activities of which the custodial parent disapproves.” Givens v. Nicholson, 878 So. 2d 1073, 1076 (¶14) (Miss. Ct. App. 2004). Finding the chancellor’s decision erroneous, we reverse and render on this issue.
Of no particular relevance, but of minor interest, is that the appellant in Mord was and is a practicing attorney in Mississippi.
The main point is that restrictions on visitation, and in particular on the visiting parent’s conduct with the child, are not favored in our law. A few bullet points:
- The overnight boyfriend or girlfriend. Absent some objective proof of adverse effect on the children, the ancient custom of enjoining overnight guests of the opposite gender to whom the parent is not related by blood or marriage is no longer allowed. See, Harrington v. Harrington, 648 So.2d 543, 547 (Miss. 1994); Robinson v. Robinson, 722 So.2d 601, 605 (Miss. 1998).
- Restrictions on religious practices are always suspect and rarely upheld. A visiting father was permitted to take his child to a snake-handling church service, so long as the child was not permitted to touch or get within danger of being bitten. Harris v. Harris, 343 So.2d 762 (Miss. 1977). Even a chancellor’s comment about a parent’s religious beliefs may call a chancellor’s ruling into question. See, e.g., Muhammad v. Muhammad, 622 So.2d 1239 (Miss.1993).
- Professor Bell lists several other categories in which restrictions on visitation have been upheld to a greater or lesser extent: abusive behavior; family or spousal violence; dangerous conduct; emotional abuse; potential kidnapping; imprisonment; mental health issues; poor parenting r household conditions; sexual conduct; and interference with visitation. D. Bell, Bell on Mississippi Familly Law, 2nd Ed. § 12.08[4][a] through [i] and [5].
These can be issues that are fraught with emotion, and it’s not easy to persuade your client that a futile trip to court is not in his or her, or the child’s, best interest. The more you know about this area, the better equipped you’ll be to advise your client.










