DESULTORY THOUGHTS ON JUDGMENT INTEREST
March 7, 2013 § Leave a comment
- It is error, as a matter of law, for a chancellor not to award interest on a judgment for past due support. Caplinger v. Julian, decided February 12, 2013, by the COA, citing Ladner v. Logan, 857 So.2d 764, 772-73 (Miss. 2003).
- MCA 75-17-7:
All judgments or decrees founded on any sale or contract shall bear interest at the same rate as the contract evidencing the debt on which the judgment or decree was rendered. All other judgments or decrees shall bear interest at a per annum rate set by the judge hearing the complaint from a date determined by such judge to be fair but in no event prior to the filing of the complaint.
- Each unpaid child support payment begins to accrue interest from the date it is due, and the chancellor has no authority to abrogate or disallow interest as to each payment for equitable or other reasons. Dorr v. Dorr, 797 So.2d 1008, 1015 (Miss. App. 2001).
- It was not error for the chancellor to set interest on unpaid child support at 8% per annum, even though prevailing interest rates were considerably lower when assessed. The payments were due for a span of years, and interest rates fluctuated during the time that the payments vested. Houck v. Ousterhout, 861 So.2d 1000, 1003 (Miss. 2003).
- 8% interest found to be reasonable. Adams v. Adams, 591 So.2d 431, 436 (Miss. 1991); and Howard v. Howard, 913 So.2d 1030, 1036 (Miss. App. 2005).
- A 3% interest rate was upheld. The COA found no authority to hold that particular rate to be an abuse of discretion or manifestly in error. Brawdy v. Howell, 841 So.2d 1175, 1180 (Miss. App. 2003).
- In Beasnett v. Arlidge, 934 So.2d 345, 349 (Miss. App. 2006), the court upheld an award of 8% per annum assessed on past-due child support in a TPR case.
- MCA 75-17-1 sets legal rates of interest and finance charges on contracts and accounts. As of today, the legal rate on “notes, accounts and contracts” is 8%. The parties may, however, contract for a greater rate within the limits set out in the statute.
Although interest rates of between 3% and 8% have been upheld, it would seem to me a logical argument that 8% is still a reasonable rate, even in these depressed-interest times, since that is the rate that the legislature has set and maintained in effect for “notes, accounts and contracts.”
A UCCJEA TUG-OF-WAR
March 6, 2013 § Leave a comment
Many lawyers believe that the six-month provision of the UCCJEA fixes jurisdiction in the home state of the child. That’s not always the case, though.
Take, for instance, the case of Clifton v. Shannon, decided by the COA June 26, 2012.
Thomas and Dawn Clifton were divorced in DeSoto County in 1999. Dawn was awarded physical custody of their three-year-old daughter, Ashley, and they were to share joint legal custody. Thomas had reasonable visitation.
In December, 2005, Dawn moved to Colorado and remarried. In 2006, they entered into an agreed judgment adjusting visitation to accommodate the move.
In 2010, Thomas filed a petition in the Chancery Court of DeSoto County seeking modification of custody an an adjudication of contempt.
Dawn objected to jurisdiction, pointing out that Ashley’s home had been in Colorado for the preceding four-and-one-half years, and that there were no significant connections to Mississippi that would justify exercise of jurisdiction.
The chancellor took jurisdiction and awarded Thomas custody, based primarily on Ashley’s preference, and Dawn appealed. She challenged both jurisdiction and the chancellor’s substantive ruling.
On the issue of jurisdiction, here’s what Judge Fair’s opinion stated:
¶7. “Whether a court had jurisdiction under the UCCJEA to hear a child-custody dispute is a question of law, which we review de novo.” Miller v. Mills, 64 So. 3d 1023, 1026 (¶11) (Miss. Ct. App. 2011) (citing Yeager v. Kittrell, 35 So. 3d 1221, 1223 (¶¶12, 14) (Miss. Ct. App. 2009)). However, the factual findings underpinning the jurisdiction question are reviewed under the familiar substantial evidence and abuse of discretion standard. See White v. White, 26 So. 3d 342, 346-48 (¶¶10, 14) (Miss. 2010).
¶8. In Yeager, this Court stated “[a] court issuing an initial determination has continuing jurisdiction over the parties; no other court may modify the decree.” Yeager, 35 So. 3d at 1224 (¶16) (citing Miss. Code Ann. § 93-27-201 (Supp. 2009)). However, even if only one party remains in the state, a second state may modify the order if the issuing court finds that neither the child, nor the child and one parent, have a significant connection with the state, and that substantial evidence is no longer available in the issuing state. Only the issuing state may make this determination. Id. (internal citation omitted).
¶9. There was sufficient evidence that Ashley still maintained a significant connection to Mississippi because her father and extended family reside here. In a recent opinion addressing a chancery court’s jurisdiction over a proceeding for modification of custody, the Mississippi Supreme Court held that since the father had continuously resided in Mississippi:
[I]t was within the chancellor’s discretion to determine that both the child and [the father] had a “significant connection with this state.” Therefore, the chancery court properly has retained continuous, exclusive jurisdiction over [the] matter . . . . White v. White, 26 So. 3d 342, 347-48 (¶14) (Miss. 2010).
¶10. The DeSoto County Chancery Court was the court of original jurisdiction. Nothing in the record suggests that the chancellor erred in retaining jurisdiction. In fact, the Colorado court, where Dawn filed another custody action, had declined jurisdiction on the emergency relief that was requested and did not assume jurisdiction.
¶11. Dawn further contends that Mississippi is an inconvenient forum, as “the overwhelming abundance of substantial evidence and witnesses” with regard to the child’s home life are located in Colorado. She cites Mississippi Code Annotated section 93-27-207, which states in pertinent part:
(1) A court of this state which has jurisdiction under this chapter to make a child custody determination may decline to exercise its jurisdiction at any time if it determines that it is an inconvenient forum under the circumstances and that a court of another state is a more appropriate forum. The issue of inconvenient forum may be raised upon motion of a party, the court’s own motion, or request of another court.
(2) Before determining whether it is an inconvenient forum, a court of this state shall consider whether it is appropriate for a court of another state to exercise jurisdiction. For this purpose, the court shall allow the parties to submit information and shall consider all relevant factors, including:
(a) Whether domestic violence has occurred and is likely to continue in the future and which state could best protect the parties and the child;
(b) The length of time the child has resided outside this state;
(c) The distance between the court in this state and the court in the state that would assume jurisdiction;
(d) The relative financial circumstances of the parties;
(e) Any agreement of the parties as to which state should assume jurisdiction;
(f) The nature and location of the evidence required to resolve the pending litigation, including testimony of the child;
(g) The ability of the court of each state to decide the issue expeditiously and the procedures necessary to present the evidence; and
(h) The familiarity of the court of each state with the facts and issues in the pending litigation.
(Emphasis added.)
¶12. While Colorado may have been a more convenient forum for Dawn, the chancery court is endowed with the discretion to make that decision. Prior custody proceedings were conducted in Mississippi, and Ashley spent several weeks in Mississippi during the year visiting her father and family. We find that Mississippi was an appropriate forum and that the chancery court properly retained exclusive jurisdiction.
What you can draw from this aspect of the case is that the chancellor will have broad discretion in making a determination whether as the court of original jurisdiction it should take jurisdiction. You would be wise to make a record invoking as many of the factors set out in 93-27-207 as are applicable and favorable to your client’s side of the case. That discretion is not unfettered; there should be some basis in the record to support it. It seems to me that “The nature and location of the evidence required to resolve the pending litigation …” and “The ability of the court of each state to decide the issue expeditiously and the procedures necessary to present the evidence …” would be the key factors on which to focus your efforts.
Another lesson: don’t stop your analysis with where the home state of the child is located. That’s only one of a number of factors.
Remember that only the issuing state may determine whether it should continue to exercise jurisdiction. And MCA 93-27-202(1) provides that the original state no longer has continuing, exclusive jurisdiction after both parents have moved from the original state.
IF YOU CAN’T TRUST A TRUSTEE, WHO CAN YOU TRUST?
March 5, 2013 § Leave a comment
“In God we trust; all others pay cash.” — Graffiti
A trust is aptly named. Its grantor literally trusts the trustee to carry out his or her wishes with respect to the money or property placed in the trustee’s care.
In the case of Smiley v. Yllander, handed down December 11, 2012, by the COA, the chancellor found at trial that Jeanette Smiley had created a trust when she deeded her home and 140 acres to her nephew, Gary, and his wife, Mary Ann. The deed by which she conveyed the property included this provision:
This conveyance is executed trusting that Gary Lamar Smiley will follow the dictates of my Last Will and Testament with regard to the disposition of the above described property. In the event, however, that said Gary Lamar Smiley should predecease me, then, in that event, his executor/administrator shall follow the dictates and dispose of said property according to my Last Will and Testament.
By her express language, then, Jeanette trusted Gary to deal with her estate as directed in her will.
Alas, as sometimes happens, things did not go as Jeanette had envisioned. Gary and Mary Ann clearcut timber on property specifically reserved in the will for other family members, and the other family members sued, not only for the wrongful timber removal, but also alleging that Mary Ann had misappropriated over $100,000 of Jeanette’s money.
The chancellor found that the deed created a trust and awarded the plaintiffs $292,000 for removal of the timber, and another $44,000 for misappropriation.
Gary and Mary ann appealed.
The COA reversed and remanded the trust issue because the chancellor was unclear about the standard of proof that she applied. Judge Maxwell’s opinion is a good primer on the law of creation of trusts and the burden of proof required for each. Here’s what he wrote:
¶11. Generally, trusts are classified under two broad categories: (1) express trusts and (2) implied trusts. Express trusts arise from a party’s manifestation of an intention to establish such an agreement and are created by a trust instrument. Miss. Code Ann. § 91-9-103(a) (Supp. 2012). If the trust holds real property as an asset, the trust agreement must be in writing and signed by the grantor. Miss. Code Ann. § 91-9-1 (Rev. 2004); Alvarez v. Coleman, 642 So. 2d 361, 366-67 (Miss. 1994).
¶12. While an express trust must be written, implied trusts differ in that they arise by implication of the law or are presumed from the circumstances. Mississippi recognizes two types of implied trusts: (1) resulting trusts and (2) constructive trusts. A resulting trust “is designed to give effect to the unwritten but actual intention of the parties at the time of the acquisition of title to the affected property.” In re Estate of Gates, 876 So. 2d 1059, 1064 (¶17) (Miss. Ct. App. 2004) (quoting Robert E. Williford, Trusts, 8 Encyclopedia of Mississippi Law § 73:2, at 422 (2001)). A constructive trust is a judicially imposed remedy used to prevent unjust enrichment when one party wrongfully retains title to property. McNeil v. Hester, 753 So. 2d 1057, 1064 (¶24) (Miss. 2000). The primary difference between the two is that “in a resulting trust, the acquisition . . . is mutually agreeable[,] and the inequity arises out of the trustee’s subsequent unwillingness to honor the terms of the parties’ original agreement”; whereas a constructive trust may be imposed when “acquisition of title is somehow wrongful as to the purported beneficiary[.]” Simmons v. Simmons, 724 So. 2d 1054, 1057 (¶7) (Miss. Ct. App. 1998).
¶13. Here, the chancellor found a trust existed but did not distinguish the particular type. Though both parties insist the chancellor imposed a constructive trust, or something akin to it, a plain reading of her order shows she likely found Jeanette had intended to create an express trust by executing the deed “trusting” Gary would follow the dictates of her will—which did in fact leave the ninety-acre tract to the plaintiffs. According to the chancellor, the deed “was subject to the terms of the will and did not serve to vest fee title in the Smiley Defendants.” That the chancellor likely believed an express trust, rather than implied trust, arose is further supported by her finding that Gary and Mary Ann had “knowingly and willfully violated the explicit terms of that trust.”
¶14. But regardless of the type of trust implicated, “to establish a trust, the evidence must be more than a mere preponderance. The proof must be clear and convincing.” Lee v. Yeates, 256 So. 2d 371, 372 (Miss. 1976) (emphasis added). And here, it is not at all obvious whether this standard was employed. We note that in the chancellor’s order indicates she found:
Plaintiffs have met their burden of proof by a preponderance of the evidence on all necessary elements and are entitled to recover for the wrongful removal of the timber from the acres devised to them under the terms of the will. Even though the property was conveyed to the Smiley Defendants, such conveyance was specifically subject to a trust for Plaintiffs’ benefit, and the Smiley Defendants knowingly and willfully violated the explicit terms of that trust. (Emphasis added).
While the chancellor may have indeed considered the trust issue separately under the clear-and-convincing-evidence standard, she did not specifically say so in her order. This omission, coupled with the chancellor’s reference to the preponderance standard when describing the burden of proof “on all necessary elements,” supports our decision to remand to ensure the chancellor considers the trust issue under the clear-and-convincing-evidence standard. See Estate of Langston v. Williams, 57 So. 3d 618, 622 (¶17) (Miss. 2011).
Aside from the nifty trust-law-in-a-nutshell aspect of this case, it illustrates what can happen when the trial judge applies the wrong standard of proof or is unclear whether she applied the right standard. You can avoid this kind of result by offering to do proposed findings of fact and conclusions of law that set out and cite authority for the appropriate standard. Or, if you aren’t that industrious, timely file an MRCP 59 motion asking the judge whether she really meant “clear and convincing” rather than preponderance, and cite a supporting case or two. It might just save you a retrial.
WHEN THE JUDGE STICKS HIS NOSE INTO IT
March 4, 2013 § Leave a comment
Judges can be nosy. When no one is asking the question that the judge wants to know the answer to, you might just hear the judge start asking her own questions. I’ve talked about it in a post here before.
In the COA case of Knights’ Piping, Inc. and Knight v. Knight, et al., decided December 11, 2012, the appellant took issue with the chancellor’s frequent and vigorous interrogation of witnesses. The COA, by Judge Irving, found nothing improper in how the judge approached it:
¶14. Benny asserts that the chancery court erred in its interrogation of witnesses during trial. Under Rule 614(b) of the Mississippi Rules of Evidence, “[t]he court may interrogate witnesses, whether called by itself or by a party.” However, “it is grounds for reversal if the trial judge abuses the authority to call or question a witness by abandoning his impartial position as a judge and assuming an adversarial role.” Powell v. Ayars, 792 So. 2d 240, 248 (¶29) (Miss. 2001) (citation omitted).
¶15. While the chancery court interjected numerous times during the trial, we do not find that the court abused its discretion or abandoned its impartial position. Generally, the court’s questions were intended to clear up confusing testimony or encourage testimony from recalcitrant witnesses, which our supreme court has recognized as appropriate circumstances under which a trial judge may question witnesses. See id. at 248-49 (¶30). Additionally, the court gave the attorneys the opportunity to ask further questions of witnesses, if necessary, based on the court’s questions. This issue is without merit.
Lawyers in this district will tell you that I frequently ask questions to clarify or to get the information I feel that I need to make a decision. I always give the attorneys an opportunity to ask questions based on what I asked. Judge Mason, on the other hand, seldom asks questions. It’s a matter of personal discretion and style. In my years of practice, I can say that I saw about every variation on this theme that one could imagine, from active participation in the trial to stony, sweat-inducing silence.
Chancellors will tend also tend to get involved when they become convinced that the witness is being untruthful, or evasive, or that there is some other kind of chicanery taking place. In Knight, the chancellor became so impatient with evasive and non-responsive answers that he began deeming certain answers as admitted. The appellant again took issue, and the COA again rejected his argument:
¶16. Benny argues that the chancery court erred in deeming his alleged non-responsive answers to certain questions as admitted. For example, during cross-examination, the following exchange occurred between Benny and Harold’s attorney:
Q: And, of course, you indicated yesterday that Harold missed 30 days [of work] and so that’s—that’s why you fired him?
A: He also told me—
[THE COURT]: The answer is—for the witness—the witness is being evasive—is that is why he fired him because Harold missed 30 days. That’s the answer. Ask your next question.
Q: When you changed the locks, you denied Harold access to his property, correct?
A: I did not.
Q: Did you give him a key?
A: Couldn’t locate him.
[THE COURT]: The answer is—
[THE WITNESS]: No.
[THE COURT]: —he did not give him a key.
¶17. Based on our review of the record, the chancery court admonished several witnesses regarding non-responsive answers—not just Benny. Furthermore, Benny’s answers to the questions he complains about on appeal were evasive. Therefore, the chancery court did not err in presuming that the true answers would be unfavorable to Benny’s position and deeming his non-responsive answers as admissions. This issue is without merit.
Taking answers as admitted is an extreme measure, but it’s one that can be merited in a situation like the one in Knight, where the witnesses are not forthcoming.
As for the chancellor’s demeanor, it’s a simple fact that judges get exasperated, just like lawyers and parties do. It usually happens after a long, tedious stretch of trial where one frustration accumulates on another until the judge’s patience is exhausted, and he blows a gasket. Yes, it would be better to keep one’s cool, and calmly navigate through the perturbance, but judges are human, and they are focused on getting to the truth of what is the most equitable outcome in the case. Thwarted in that quest, they tend to get testy.
ANOTHER WAY TO FLOP ON APPEAL
February 28, 2013 § 4 Comments
Vinh Nguyen entered into a contract with Dustin and Roslyn Gifford to purchase real estate. When Vinh refused to purchase the property, the Giffords sued for breach of contract.
Vinh filed no responsive pleading to the suit and made no appearance, and the Giffords applied for entry of default. They obtained a default judgment in which the court ruled that the parties had entered into a valid contract, but that Vinh had failed to perform, so that the Giffords were entitled to specific performance, or $375,000, plus $2,000 earnest money, if Vinh failed to perform within thirty days, plus nearly $17,000 in attorney’s fees. The judgment was to be reduced if the Giffords sold the property.
Four months later Vinh filed a motion to set aside the judgment, which the court denied. The court did, however, reduce the judgment by $275,000, because the Giffords had sold the property.
Vinh appealed, raising four issues that certainly appear to have some meat on them:
- Whether Vinh’s contact with the Giffords’ lawyer to tell him that the claim was contested triggered the 3-day notice requirement of MRCP 55(b);
- Whether there was valid service of process on him;
- Whether a lawsuit was proper due to an arbitration agreement; and
- Whether Roslyn Gifford was entitled to a judgment since she never signed the contract.
Some quite pithy points, to be sure. Any of the first three could undoubtedly lead to a reversal and remand if upheld. So how did the appellate court resolve them?
Well, we’ll never know for sure, because Vinh’s brief on appeal cited no authorities at all. Not a single one. The COA, in a 9-1 decision, pointed out that “Failure to cite authority in support of claims of error precludes this Court from considering the specific claim on appeal.” The court found that it was procedurally barred from considering the unsupported issues on appeal, and affirmed the chancellor’s ruling.
It should go without saying that the purpose of an appeal is to persuade the learned appellate judges that the trial judge has made some error of law. To do that, one must cite some supportive case law, statute, regulation, court rule, learned treatise, or other recognized legal authority that bears up one’s position.
Without that authority, your client will go the way of Mr. Vinh, to that dark place where one goes to ponder the burden of a $117,000 judgment, with interest, and without further recourse, except against his own lawyer.
A FEW THOUGHTS ON DISABILITIES OF MINORITY
February 27, 2013 § 4 Comments
In a case before me recently, one of the lawyers filed a motion to set aside an agreed judgment executed by a nineteen-year-old woman by which she had agreed that the father of her child could have custody. The lawyer argued that she was incompetent by virtue of her age to execute and be bound by such a judgment. The motion got me thinking that maybe a few thoughts about disabilities of minority would be in order.
- MCA 93-19-13 provides that all persons 18 years of age or older “shall have the capacity to enter into binding contractual relationships affecting personal property,” unless otherwise disqualified or prohibited by law. It goes on to allow persons 18 or older to sue or be sued in their own right over such contracts.
- “We therefore hold section 93-19-13, (Supp. 1980) effectively removes the disability of minority of all persons 18 years or older for the purpose of entering into contracts affecting personal property including the right to settle a claim for personal injuries, to execute a contract settling the claim, and to accept money in settlement of the claim.” Garrett v. Gay, 394 So.2d 321, 322-23 (Miss. 1981).
- Garrett also stated that an 18-or-older minor has the right to deal with his or her own choses in action, which “is the right of bringing an action, or a right to recover debt or money, or a right of proceeding in a court of law to procure the payment of a sum of money, or a right to recover a personal chattel or a sum of money by action, or, as it is defined by statute, a right to recover money or personal property by a judicial proceeding.”
- The statute pertains to personal property rights only, and does not extend to real estate. MCA 93-19-1 provides for removal of disabilities of minority to authorize the minor “to sell and convey, to mortgage, to lease, and to make deeds of trust and contracts, including promissory notes,” with respect to his or her interest as effectively as if he or she were 21 years or older.
- MCA 93-19-13 provides that a married minor (Note: MCA 1-3-27 defines “minor” as a person under the age of 21) is under no disability with respect to bringing or defending a divorce or separate maintenance action, child support and custody and any other marital issues between the parties. The statute specifies “married” minors, and would not appear to embrace unmarried minors.
- MCA 93-5-9 essentially mirrors 93-19-13.
- Minors may not vote. Article 12, Section 241, Mississippi Constitution, except as provided in the 26th Amendment to the U.S. Constitution.
- Minors may not waive process. Rule 4(e), MRCP.
- Minors may not select their own domicile, but must have that of the parents. Boyle vs. Griffin, 84 Miss.41, 36 So. 141, 142 (Miss. 1904); In re Guardianship of Watson, 317 So.2d 30, 32 (Miss. 1975); Mississippi Band of Choctaw Indians vs. Holyfield, 490 U.S. 30, 40; 109 S.Ct. 1597, 1603 (1989).
- Minors may not enter into binding contracts regarding personal property or sue or be sued in their own right in regard to contracts into which they have entered. Section 93-19-13, MCA.
- Minors may not have an interest in an estate without having a guardian appointed for them. Section 93-13-13, MCA.
- Minors may not be bound by contracts for the sale of land, and may void them at their option. Edmunds vs. Mister, 58 Miss. 765 (1881).
- Minors may not choose the parent with whom they shall live in a divorce or modification; although they may state a preference, their choice is not binding on the Chancellor. Section 93-11-65, MCA; Westbrook vs Oglesbee, 606 So.2d 1142, 1146 (Miss. 1992); Bell vs. Bell, 572 So.2d 841, 846 (Miss. 1990).
- Minors may not after emancipation be bound by or enforce contracts entered into during minority except by following certain statutory procedures. Section 15-3-11, MCA.
- Minors may not legally consent to have sexual intercourse. Section 97-3-65(b).
- Minors may not legally consent to be fondled. Section 97-5-23(1).
- Minors are protected by an extended statute of limitations. Section 15-1-59, MCA.
There may be more, and I have not gone back and checked all of the authority above. Before using any of this, be sure to verify the citations and what they say.
A DOUBLE DIVORCE MISFIRE (OR MISFORE, OR MISFAIR)
February 26, 2013 § 5 Comments
The case of Fore v. Fore, handed down February 19, 2013, by the COA, is one of those cases that leaves you scratching your head in wonderment. Oh, and the Fore decision was written by Judge Fair. Fore by Fair. You can’t make this kind of stuff up.
Anyway, what happened was that Darlene Fore, age 57, filed for divorce charging her husband, Cotton, age 70, with post-separation adultery. Cotton counterclaimed, charging Darlene with post-separation adultery. Darlene added that, if she were to be denied a divorce, she wanted separate maintenance.
As the opinion states, “The divorce was vigorously litigated, as evidenced by the twenty-five single-spaced pages of the trial court docket. For eighteen months the parties enthusiastically pursued all means of discovery allowed by the Mississippi Rules of Civil Procedure. Private investigators were hired. Contempt pleadings, motions for continuances, mediation attempts, amendments of pleadings, and volumes of subpoenas were filed, pursued, and argued.”
The chancellor bifurcated the trial so that the divorce issues would be tried first and separately from the remaining issues.
The trial took five days and produced a trial transcript of more than 800 pages.
The judge rendered a seven-page opinion denying either party a divorce, finding that neither had proven the ground pled by clear and convincing evidence. Oh, and he denied Darlene’s plea for separate maintenance because she testified that she would not return to live with Cotton under any circumstances.
So, after the dust cleared, neither party had a divorce, and Darlene was out in the cold with no support and no Cotton to go home to.
The COA affirmed, deferring to the chancellor’s scope of authority on the facts, and finding that his conclusions of law were correct.
What is the head-scratcher here is that, if both parties wanted a divorce, why did they not just enter into a consent? What would be the down side? If alimony and equitable distribution were issues on trial of the consent, they could still have the satisfaction of putting on proof of how despicable each other were while being assured that there would be a divorce. It’s hard for me to understand, with the consent statute, why this would happen.
It may be that one of the parties out of pure stubbornness refused the idea of a consent. That does happen from time to time. When I practiced I had to cajole and convince more than one divorce client that a consent was the best way to go, and that we were not giving anything up.
After I had written this, I found that Phillip Thomas had a post on his blog on this very case. As a lawyer who does not do divorce work, he found the outcome exceedingly difficult to understand. Join the crowd, Mr. Thomas.
ALIMONY APPLES AND ALIMONY ORANGES
February 25, 2013 § 1 Comment
It was long the rule in Mississippi that only several forms of alimony were available, either by adjudication or agreement, and any variance from those forms was either reversible error or would be charcaterized by the appellate court as what its features dictated. See, e.g., Bowe v. Bowe, 557 So.2d 793, 795 (Miss. 1990). Unless otherwise specified by the trial court or from the context, alimony was presumed to be periodic. Wray v. Wray, 394 So.2d 1341, 1345 (Miss. 1981).
Then the appellate courts began to approve so-called “hybrid” agreements that mixed features of property settlement with alimony features, as in East v. East, 493 So.2d 927, 929 (Miss. 1986), where unmodifiable payments of $5,000 a month to the ex-wife would continue whether husband remarried or dies, but would terminate on wife’s death. The courts continued to affirm an array of such arrangements, but cautioned in McDonald v. McDonald, 683 So.2d 929, 933 (Miss. 1996), that the parties should be careful in drafting agreements with hybrid arrangements, and that, if the agreement is unclear, the payments will be presumed to be periodic alimony.
The problem with “hybrid” alimony is in the drafting. The devil is in the ambiguity.
The latest incarnation is Hollis v. Baker, a COA case decided February 12, 2013, in which the parties had agreed to the following provision:
[Hollis] shall pay [Baker] $500 . . . in alimony per month beginning on the first day of the month after the sale of the marital home is finalized. [Hollis] will increase alimony to $1,000 . . . per month beginning the month after child support ceases, to continue for the life of [Baker]. In the event [Baker] dies, these $1,000 . . . per month payments shall be made to the minor child until the death of [Hollis].
Hollis sued to modify the obligation because Baker had remarried, and Baker took the position that the payments were unmodifiable. The chancellor ruled for Baker because Hollis had agreed to continue making the payments even beyond Baker’s death, which logically would extend beyond her remarriage. Hollis appealed.
The COA reversed, and, since so much of the opinion, written by Judge Roberts, is of some import for practitioners, I quote at length here:
¶11. Over fifteen years ago, the Mississippi Supreme Court urged parties, attorneys, and judges to carefully draft property-settlement agreements to avoid future confusion and litigation over ambiguously drafted provisions. McDonald v. McDonald, 683 So. 2d 929, 932-33 (Miss. 1996). In McDonald, the supreme court stated:
[The] freedom to contract is not absolute, however, and parties and judges should be mindful of the traditional characteristics of lump[-]sum and periodic alimony in drafting their agreements and decrees for alimony payments. When possible, it would be advisable for parties and judges to pattern their alimony agreements and decrees for non-modifiable lump[-]sum alimony according to established precedent of this Court.
Id. at 932. The case before us is illustrative of the need for clear and careful drafting of property-settlement agreement provisions, particularly as these provisions relate to periodic monthly payments being considered by the parties as alimony or as a contractual division of marital property.
¶12. Hollis’s sole issue on appeal involves the chancery court’s finding that the provision in the agreement regarding alimony required him to continue paying Baker alimony even after she remarried. According to Hollis, this alimony provision is permanent periodic alimony, making it subject to termination upon remarriage of the alimony recipient.
¶13. There are four types of alimony available in Mississippi: periodic, lump sum, rehabilitative, and reimbursement. West v. West, 891 So. 2d 203, 212 (¶20) (Miss. 2004). “As a general rule, periodic alimony has no fixed termination date; instead, it automatically terminates at the death of the obligor or the remarriage of the obligee.” Id. at (¶21) (emphasis added). There is no dispute that permanent periodic alimony is modifiable and terminable even within the context of a property-settlement agreement. See Taylor v. Taylor, 392 So. 2d 1145, 1146-47 (Miss. 1981); Stone v. Stone, 385 So. 2d 610, 613 (Miss. 1980); Hughes v. Hughes, 221 Miss. 264, 268, 72 So. 2d 677, 678 (1954). Additionally, it is accepted that there are other provisions of a property-settlement agreement that are not modifiable. See McDonald v. McDonald, 683 So. 2d 929, 932-33 (Miss. 1996). Ultimately, the issue before us is whether the chancery court erred in determining that this provision was a property settlement provision and not permanent periodic alimony subject to termination upon remarriage of the recipient.
¶14. At issue is a portion of the agreement titled Child Custody and Property-Settlement Agreement that was signed by both Hollis and Baker prior to their divorce and incorporated into their divorce decree by the chancery court. Among other things, this agreement detailed the amount of alimony Hollis would pay Baker. Paragraph IV, subsection H of the agreement provides as follows:
[Hollis] shall pay [Baker] $500 . . . in alimony per month beginning on the first day of the month after the sale of the marital home is finalized. [Hollis] will increase alimony to $1,000 . . . per month beginning the month after child support ceases, to continue for the life of [Baker]. In the event [Baker] dies, these $1,000 . . . per month payments shall be made to the minor child until the death of [Hollis].
¶15. This provision was modified by the chancery court on July 17, 2006. The chancery court stated in its July 17, 2006 decree and judgment that “the alimony [Hollis] is currently paying should be reduced from the sum of $500 . . . per month, to $350 . . . [per] month, effective July 1, 2006.” By modifying this provision, the chancery court acknowledged that this alimony was permanent periodic alimony and not some type of hybrid of alimony and property settlement as Baker claims. It is well settled that permanent periodic alimony is subject to modification and ceases upon the recipient’s remarriage or the payor’s death. See McDonald, 683 So. 2d at 931; Hubbard v. Hubbard, 656 So. 2d 124, 129 (Miss. 1995); Bowe v. Bowe, 557 So. 2d 793, 794 (Miss. 1990); Wray v. Wray, 394 So. 2d 1341, 1344 (Miss. 1981).
¶16. In the dissent authored by Judge Fair, he would find that the chancellor was correct in viewing Hollis’s obligation to continue paying alimony as a non-modifiable contract obligation between the parties. To support this position, he cites to In re Kennington’s Estate, 204 So. 2d 444, 445 (Miss. 1967) involving a settlement agreement between husband and wife that he would pay her a monthly sum until she died or was remarried and that it would be a binding obligation upon his estate. The following language was included in the provision:
[Husband] shall pay [wife $750] on June 1, 1954, and [$750] on the first day of each successive month thereafter throughout the lifetime of said [wife], or until she remarries. If she remarries, this [provision] shall thereafter be ineffective but this [provision] shall not be affected by the death of [husband]. [Husband] binds himself, his heirs, executors and assigns, to this covenant and obligation to her even after his death.
Id. at 445-46. In its opinion, the supreme court quoted the following language of the chancery court’s opinion: “The attorneys for the respective parties understood the legal differences between alimony and a property settlement and carefully and skillfully avoided the death of the then husband having any affect on the agreed payment each month. . . . In the [above-quoted provision] of this agreement[,] there is no doubt as to the intention of the parties.” Id. at 447. The supreme court then stated that “[i]t was the manifest intention of the parties that the obligation to make the payment should survive the death of [husband].” Id. at 449. We submit that the facts of the current case are easily distinguishable from the facts in Kennington primarily on the ground that the provision in the current case is completely silent as to whether alimony terminates upon her remarriage. In the above quoted language of Kennington, the provision explicitly states that it is the intent of the parties to have the $750 payments continue beyond the husband’s life. Thus, it was abundantly clear that as long as wife did not remarry, she was entitled to payment by either husband or husband’s estate for the remainder of her life.
¶17. The provision in the current case is simply silent on whether Hollis would continue paying Baker alimony after her remarriage. Moreover, in the present case, a prior judicial determination that the monthly payments for support were alimony subject to modification had been made by the chancellor, a determination from which Baker did not appeal. Such circumstance did not exist in Kennington. Without such an explicit provision requiring Hollis to continue alimony payments beyond Baker’s remarriage, we decline to require Hollis to continue such payments. Baker has a new husband capable of providing adequate spousal support.
¶18. Because this type of alimony terminates upon the subsequent marriage of the recipient, Hollis’s obligation to continue paying Baker alimony was terminated when Baker remarried in April 2010; therefore, we reverse and render the chancery court’s decision on this issue and the finding that Hollis was in contempt for his missed alimony payments after Baker remarried.
Whether you agree or disagree with the COA’s conclusion here, the point is made that, unless you specifically address survivability and modifiability of alimony with respect to remarriage, death and changes in circumstances, the questions arising therefrom will be resolved in favor of holding it to be periodic alimony, with all of the attendant and resulting attributes. In other words, the default setting is periodic alimony, unless you clearly, unequivocally and unambiguously change the setting.
I am sure Ms. Baker was somewhat disappointed with the outcome of this case. She now has no alimony, where before she anticipated that it would continue even beyond the grave for the benefit of her child.
Maybe this is one of those cases where the MSSC will give it another look and another spin. But I would not count on it. Draftsmanship would have made all the difference here.
“QUOTE UNQUOTE”
February 22, 2013 § Leave a comment
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