APPROACHING ZERO TOLERANCE
October 2, 2012 § 7 Comments
If you have gotten the impression that many chancellors are tightening down on the handling of fiduciary matters, it’s not just your imagination or overactive paranoia glands. More and more chancellors across the state are approaching zero tolerance for sloppy handling of estates, guardianships and conservatorships.
There are several reasons for this. One, and perhaps paramount, is that it is the judge’s job. But here are several others:
- There is the case of attorney Michael J. Brown, of Hinds County, who helped fritter away hundreds of thousands of dollars of a ward’s account.
- There is the case of the lawyer in jail in Rankin County who has been unable to account for fiduciary funds, and who will begin serving federal and state sentences therefor as soon as Judge Grant releases him from his civil contempt sentence — which is contingent on his accounting.
- There is the case of another lawyer in Rankin County who refuses to account for fiduciary funds, and who is likewise cooling his heels in the county bastille until he complies.
- There is the case of the lawyer on the coast who committed suicide when the questions started floating about how fiduciary matters in his charge were handled, and the last I heard the missing funds are more than $1.2 million.
The genius of our fiduciary system in Mississippi is that it creates a three-tiered system of protection for the ward or beneficiaries. The fiduciary is bonded (in most cases) and is accountable to the court; the lawyer works with the fiduciary, providing advice, guidance and oversight to see that the law is followed; and the court authorizes actions, demands and approves accounts and inventories, and scrutinizes the actions of both the fiduciary and the ward. Whenever any one tier fails, it is up to the other two to catch and fix the failed part. When judges wink at incompetent legal work in fiduciary matters we are shirking our duty to innocent beneficiaries, creditors and people who are unable to protect their own interests.
It’s not the stuff of movies and detective novels that money is stolen from fiduciary accounts. I have seen it right here in our little backwater, and I am sure it is happening and has happened in yours (not meaning that you live in a backwater).
Fraud and mishandling of funds thrive in the sloppy handling of fiduciary matters. When you leave it up to the fiduciary to go about unaccounted for and unadvised and unsupervised, you are inviting trouble. And chancellors are becoming ever more vigilant and intolerant.
IS THERE AN INDEPENDENT CAUSE OF ACTION FOR TPR?
October 1, 2012 § 5 Comments
Termination of parental rights pursuant to MCA 93-15-103 has long been treated, at least in this chancery district, as an independent cause of action that may be invoked whenever the criteria of 93-15-103(3) are met.
The COA decision in LePori v. Welch (discussed here in a previous post dealing with other points), decided June 26, 2012, though, calls that theory into question.
In his opinion for the court, Judge Maxwell addresses the appellant’s argument that the chancellor failed to address the “substantial erosion” factor set out in 93-15-103(3)(f). He said, beginning in ¶5:
But the grounds for termination in section 93-15-103(3) are to be considered only when the circumstances of section 93-15-103(1) are met:
When a child has been removed from the home of its natural parents and cannot be returned to the home of his natural parents within a reasonable length of time because returning to the home would be damaging to the child or the parent is unable or unwilling to care for the child, relatives are not appropriate or are unavailable, and when adoption is in the best interest of the child, taking into account whether the adoption is needed to secure a stable placement for the child and the strength of the child’s bonds to his natural parents and the effect of future contacts between them, the grounds listed in subsections (2) and (3) of this section shall be considered as grounds for the termination of parental rights. The grounds may apply singly or in combination in any given case.
Miss. Code Ann. § 93-15-103(1).
¶6. It is clear from the plain language of section 93-15-103—as well as the cases that have applied this section—the concern of the statute is when a parent’s rights may be terminated in order for the child to be adopted. E.g., S.R.B.R. v. Harrison County Dep’t of Human Servs., 798 So. 2d 437, 445 (¶32) (Miss. 2001) … [Emphasis in original text]
The above language is not the actual holding of the case, but it is about as clear a statement that you will find interpreting the intent and purpose of 93-15-103(1), which is the threshold statute for TPR. What Judge Maxwell is saying, in my opinion, is that there is no cause of action for TPR that is independent of an adoption. TPR is done ” … in order for the child to be adopted … ,” in Judge Maxwell’s own words.
I wonder, though, what this language of the statute means in light of that interpretation: ” … and when adoption is in the best interest of the child, taking into account whether the adoption is needed to secure a stable placement for the child and the strength of the child’s bonds to his natural parents and the effect of future contacts between them …” What about where the court finds that adoption is not needed to secure a stable placement? Does that cancel out the TPR action if all the criteria are proven?
My emphatic answer is … I don’t know. What I do know is that nine judges of the COA joined in Judge Maxwell’s opinion, and that one concurred ” … in part and in the result without separate written opinion,” making it 99% unanimous. So the mind of the COA on the subject would appear to be clear.
I also know that this would appear to change the way we have done business in this district, and maybe in yours, too. Stay tuned for further developments.
ADOPTION IS FOREVER
September 27, 2012 § Leave a comment
Most attorneys who have been in practice any appreciable length of time have been confronted with this scenario: maternal grandma and grandpa want to adopt junior because momma and daddy are only 19 years old, prefer meth and weekend partying to raising the tad and are willing to “sign the papers,” and everyone agrees it would be best for junior, all things considered.
That’s pretty much what happened in the case of D.M. v. D.R., 62 So.3d 920 (Miss. 2011). The young parents relinquished their parental rights, and the maternal grandparents adopted the child by decree entered December 25, 2005. Unfortunately, the adoptive father (maternal grandfather) died four months to the day after the adoption, and the adoptive mother (maternal grandmother) died eight months to the day after the adoption. The adoptive mother had named her son as testamentary guardian of the child, but he renounced the appointment.
The court appointed a guardian ad litem, who recommended that the child be placed in the custody of the paternal grandparents. The natural mother attempted through various pleadings and proceedings to get custody of the child, but the chancellor ruled that she had abandoned the child by virtue of her consent to the adoption, and that she no longer was entitled to the natural parent presumption.
In upholding the chancellor’s ruling, the court quoted from its decision in Griffith v. Pell, 881 So.2d 184, 187-188 (Miss. 2004):
A parent has a constitutionally protected liberty interest in the “companionship, care, custody and management of his or her children.” Stanley v. Illinois, 405 U.S. 645, 651, 92 S.Ct. 1208, 31 L.Ed.2d 551 (1972). However, parental status that rises to the level of a constitutionally protected liberty interest does not rest solely on biological factors, but rather, is dependent upon an actual relationship with the child where the parent assumes responsibility for the child’s emotional and financial needs. As Justice Stewart observed in Caban v. Mohammed, 441 U.S. 380, 99 S.Ct. 1760, 60 L.Ed.2d 297 (1979) [Stewart, J., dissenting]: “Parental rights do not spring full-blown from the biological connection between parent and child. They require relationships more enduring.”
The court went on to hold that the mother had voluntarily relinquished her parental rightt when she consented to the adoption, and that act surrendered the natural parent presumption. Grant v. Martin, 744 So.2d 817, 820 (Miss.App. 1999). The court rejected the mother’s argument that she was entitled to reinstatement of the natural parent presumption on death of the adoptive parents. In conclusion, the court stated:
An adoption, once entered, acts as an irrevocable surrender of all rights, obligations and privileges of the natural parent with and to the child. This surrender is not invalidated upon the deaths of the adoptive parents, and the natural parent is not entitled to resume the parent-child relationship, including the right to assert the natural parent presumption, upon the occurrence of that event.
You would do well to explain to all the parties at the table, including the natural parents, what they are giving up and what they are getting in such an arrangement. If I were doing it, I would get the natural parents to sign a paper for my file indicating that they understand they are giving up all rights, including the natural parent presumption and the right to regain custody in the future.
THE INS AND OUTS OF CONTEMPT
September 26, 2012 § 7 Comments
Last week’s Corr v. State decision from the MSSC is a reminder that there are some intricacies to contempt that we should all be aware of as we go about our business in chancery court.
Contempt can be either civil, or criminal, or a combination of both.
- Civil contempt is for the benefit of the complaining party, and its purpose is remedial. An example is where the respondent owes child support and is jailed until he can come up with what he owes. The remedy is coercive and is intended to produce compliance. The burden of proof is by a preponderance of evidence.
- Criminal contempt is intended to vindicate the authority of the court. The sentence is punitive.
- The two types of contempt may be used in combination, as where the court orders the respondent jailed until he pays the amount due, and the court sentences him to thirty days as a punishment for non-compliance.
Civil contempt may be tried on seven days’ notice by Rule 81 summons.
Criminal contempt under Mississippi law may be either direct or indirect. The distinction determines what kind of due process notice is required.
- Direct criminal contempt involves words or actions in the presence of the court that are an affront to the authority or dignity of the court. Conduct such as insulting language or behavior, resistance to the court’s authority, disruption of the proceedings and the like may be treated as direct contempt. The court may act instantly to punish the contemnor because no evidence other than the judge’s own perception is necessary to sustain sanctions. In the alternative, the court may wait until later in the proceedings, at a break or at the end of a hearing, to address the misconduct.
- Indirect, or constructive, criminal contempt is contemptuous conduct that takes place outside the presence of the court which resists the court’s authority and tends to obstruct, interrupt or embarrass the administration of justice.
Direct contempt may be dealt with immediately, summarily, and without further notice to the contemnor. Some authorities suggest that, if the court delays action, the judge should recuse herself if the contempt is based on personal attacks.
In cases of indirect, or constructive, criminal contempt, the defendant: (1) is presumed innocent until proven guilty beyond a reasonable doubt; (2) is entitled to resonable notice of the nature and cause of the accusation; (3) has a right to be heard; (4) has a right to retain counsel; (5) has the right to call and cross-examine witnesses; (6) has the right to an unbiased judge; (7) has the right to a jury trial; and (8) has the right against self-incrimination. Dennis v. Dennis, 824 So.2d 604, 609 (Miss. 2002). If the judge, as in Corr, is substantially involved in the prosecution, as where he is instrumental in initiating the proceeding, or where he acts as prosecutor and judge, he should recuse himself and have the actual contempt hearing conducted by another judge.
When you draft contempt pleadings, give some thought to what it is you are trying to accomplish. If all you are trying to do is to get the ex-husband to pay his child support, civil contempt may do the job for you. It only requires a preponderance of evidence, as opposed to the heavier burden for criminal contempt. If you insist on criminal contempt, look carefully at Dennis and its requirements. Do you really want to strap them on? Are they really in your client’s best interest? When you insist on criminal contempt, you are affording the defendant Fifth Amendment self-incrimination protection, the higher burden of proof, and even right to a jury trial (this applies in cases where the aggregation of penalties would result in a sentence that would require Sixth Amendment protection. McGowan v. State, 258 So.2d 810, 802 (Miss. 1972); Purvis v. Purvis, 657 So.2d 794, 798 (Miss. 1995); Walls v. Spell, 722 so.2d 566, 574 (Miss. 1998)).
If you simply can not resist the urge to rattle the incarceration saber, be sure to acquaint yourself with the US Supreme Court decision in Turner v. Rogers.
WINNING THE EXPERT BATTLE AND LOSING THE WAR
September 25, 2012 § Leave a comment
You fight like the devil to get the trial judge to rule that your experts are qualified, and that they meet the criteria of MRCP 702 and Miss. Transportation Commission v. McLemore, 863 So.2d 31, 38 (Miss. 2003). The judge has done her job as gatekeeper, has found all to be well, and has let you get that expert testimony into the record. So you’re home free, right? Smooth sailing from here on out, right?
Not so fast, my friend (apologies, if any due, to Lee Corso).
Your little lawsuit sloop may still run aground.
That’s what happened in Ballard Realty, et al. v. Ohazurike, et al., decided by the MSSC on September 6, 2012. There, the court reversed the trial court’s ruling that allowed three different experts to offer testimony that quantified damages. The appellate court’s ruling found that one expert based her testimony on ” … insufficient and faux facts and data, not the product of reliable principles and methods, properly applied … ” and found that the trial judge had abused his discretion in admitting her testimony. Another expert was found by the MSSC not to be qualified, and his testimony was improper and irrelevant to damages. The third expert’s testimony was found to be unreliable. While they were at it, the MSSC also threw out the unqualified lay opinion testimony of another witness, characterizing his testimony as ” … not a fact, but an inadmisssible opinion based on wishful thinking.”
The ouch factor in this case, as we have posted about it before, is that it reversed a jury verdict in excess of $3.5 million.
The lesson here is to keep in mind that as much as you want to win your case, you have to make sure that the experts you use are qualified, that their testimony is, indeed, relevant, that it is based on sufficient facts and data, that it is based on reliably certain principles and methods, and that the experts have applied the methods and principles reliably to the facts in your case. It’s your job to make sure that all of these factors are established without fail in the record. The mere fact that you convince the trial judge to let you proceed without satisfying all the criteria may win you the (trial) battle, but it will more than likely lose you the (appeal) war.
TRIAL BY CHECKLIST: UPDATED ALIMONY FACTORS
September 24, 2012 § Leave a comment
The 12 Armstrong factors have long been the decisive authority to be applied by the court in making its determination as to the type, amount, and reasonability of alimony. In the recent COA case of Pecanty v. Pecanty, decided September 18, 2012, however, Judge Fair’s opinion cited (at ¶25) to the 2002 Davis v. Davis case, 832 So.2d 492, 497, where the MSSC laid out 17 factors. Here’s the pertinent language from Davis:
In determining whether to make an award of periodic alimony, the following factors must be considered: (1) the health of the husband and his earning capacity; (2) the health of the wife and her earning capacity; (3) the entire sources of income and expenses of both parties; (4) the reasonable needs of the wife; (5) the reasonable needs of the child; (6) the necessary living expenses of the husband; (7) the estimated amount of income taxes the respective parties must pay on their incomes; (8) the fact that the wife has the free use of the home, furnishings and automobile; (9) the length of the marriage; (10) the presence or absence of minor children in the home; (11) the standard of living of the parties, both during the marriage and at the time of the support determination; (12) fault or misconduct; (13) wasteful dissipation of assets; (14) the obligations and assets of each party; (15) the age of the parties; (16) the tax consequences of the spousal support order; and (17) such other facts and circumstances bearing on the subject that might be shown by the evidence. Hemsley v. Hemsley, 639 So.2d 909, 912 (Miss.1994); Armstrong v. Armstrong, 618 So.2d 1278, 1280 (Miss.1993); Hammonds v. Hammonds, 597 So.2d 653, 655 (Miss.1992); Brabham v. Brabham, 226 Miss. 165, 84 So.2d 147, 153 (1955). In determining the amount of support payable to the wife, a chancellor must consider “not only reasonable needs of wife but also right of husband to lead as normal a life as reasonably possible with a decent standard of living.” Massey v. Massey, 475 So.2d 802, 803 (Miss.1985); Hopton v. Hopton, 342 So.2d 1298, 1300 (Miss.1977) (quoting Nichols v. Nichols, 254 So.2d 726, 727 (Miss.1971)).
The Davis factors expand on the Armstrong factors in several significant ways:
- In addition to “the reasonable needs of the parties,” the court is to consider the reasonable needs of the child. This is significant because it opens the door to evidence about the impact that a child has not only on the expense and availability of child care, as set out in Armstrong, but also to the other needs of the child above and beyond child support, and how those needs impact the alimony recipient’s living expenses.
- In addition to the Armstrong “tax consequences of the spousal support order,” Davis directs the court to consider the amount of income taxes the respective parties must pay on their incomes. Under Davis, the trial court must address not only the tax consequences, such as deductability, but also the availability of refunds, deductions, exemptions and other factors that influence income taxes upward or downward.
- The fact that “the wife” (read “payee”) has free use of the home, furnishings and automobile is included as a factor. Granted, it has long been the law in Mississippi that those items are considered as part of the spousal support package, but the inclusion as a factor to be considered promotes it to a higher level of consideration.
It can be argued that Davis does not really add anything new to Armstrong. That may be so, and most attorneys, in presenting their Armstrong proof cover the same bases (except for income tax proof, which lawyers rarely touch on) for the most part. Still, I think it’s worth adding these to your portfolio of useful checklists. After all, in affirming the chancellor in Pecanty, Judge Fair noted with favor that she ” … addressed the seventeen factors set out in Davis … ” If he (and the rest of the COA) considered them noteworthy, we would be wise to do the same.
“QUOTE UNQUOTE”
September 21, 2012 § Leave a comment
“The Constitution is not an instrument for the government to restrain the people, it is an instrument for the people to restrain the government – lest it come to dominate our lives and interests.” – Patrick Henry
“If there is any principle of the Constitution that more imperatively calls for attachment than any other it is the principle of free thought, not free thought for those who agree with us but freedom for the thought that we hate.” – Oliver Wendell Holmes
“Liberty cannot be caged into a charter or handed on ready-made to the next generation. Each generation must recreate liberty for its own times. Whether or not we establish freedom rests with ourselves.” – Florence Ellinwood Allen
THE PRICE OF FAILING TO GIVE A COMPLETE ANSWER TO THE EXPERT INTERROGATORY: $3,603,712
September 20, 2012 § 4 Comments
What is the price of numerous discovery violations, including failure to make timely disclosure of the substance of the expert’s expected testimony and failure to supplement seasonably?
In Ballard Realty, et al. v. Ohazurike, et al., decided September 6, 2012, the MSSC reversed a jury verdict of $3,602,712 for those very failures on the part of the plaintiffs to designate their expert properly and give a complete answer to the expert witness interrogatory.
The Ohazurikes had designated a witness, Dr. Glover, and answered the rest of the usual expert interrogatory that their expert was …
expected . . . to testify to all things in her evaluations and opinions regarding the valuation of the lost income of the Plaintiffs and as to other things regarding the present value calculations and potential economic value and profitability of Plaintiffs company Upstart Games and the lost value of Plaintiff’s damages intellectual property board games.
The Ohazurikes attached a copy of the expert’s curriculum vitae (CV) as an exhibit to their designation of experts and added that “[a] copy of Dr. Glover’s report will be forwarded once it is received.” It was not until only five days before trial, on morning of the day that the expert was to be deposed that the report was received by opposing counsel. That report for the first time disclosed that the expert expected to project damages in excess of $15 million.
The defendants did file various motions with the court to try to get the expert testimony excluded, and they did object at trial based on the discovery violations, all to no avail. There was no other evidentiary basis in the record other than this particular expert’s testimony to support the $3 million-plus verdict, which the supreme court reversed.
Justice Randolph’s opinion explained:
¶14. We find that the trial court abused its discretion by allowing Glover to testify despite numerous discovery violations, including failure to timely disclose the substance of Glover’s expected testimony and to seasonably supplement discovery responses, and allowing the witness to give previously undisclosed testimony at trial. Mississippi Rule of Civil Procedure 26(b)(4) provides that “[a] party may through interrogatories require any other party to [1] identify each person whom the other party expects to call as an expert witness at trial, [2] to state the subject matter on which the expert is expected to testify, and [3] to state the substance of the facts and opinions to which the expert is expected to testify and [4] a summary of the grounds for each opinion.” Miss. R. Civ. Proc. 26(b)(4)(A)(i). Additionally, Rule 26(f) provides that “a party who has responded to a request for discovery with a response that was complete when made . . . is under a duty seasonably to supplement that party’s response with respect to any question addressed to . . . the subject matter on which [a person expected to be called as an expert witness] is expected to testify, and the substance of the testimony.” Miss. R. Civ. Proc. 26(f). We have provided that “[t]he failure seasonably to supplement or amend a response is a discovery violation that may warrant sanctions, including exclusion of evidence.” Hyundai Motor Am. v. Applewhite, 53 So. 3d 749 (Miss. 2011) (citation omitted)
¶15. The Ohazurikes failed to comply with Rule 26. In their original designation of experts, they named Glover as an expert witness and identified the subject matter of her opinions, but failed to state the substance of the facts and opinions to which she was expected to testify or to provide a summary of the grounds for her opinions. Ohazurikes did not provide the Defendants with the substance of Glover’s opinion until the morning of her deposition, five days prior to trial. The Ohazurikes’ disregard for the rules of discovery continued to trial, when they violated Rule 26(f) by introducing for the first time a new opinion without having amended or supplemented their discovery responses. In Hyundai Motor America v. Applewhite, 53 So. 3d 749 (Miss. 2011), we provided that, where a party had failed to amend or supplement its discovery responses with material changes to an expert’s opinion, the trial court’s refusal to grant any relief was an abuse of discretion warranting reversal, because “[w]e do not condone trial by ambush. [The defendant] was entitled to full and complete disclosure of the plaintiffs’ expert testimony. . . .” Hyundai, 53 So. 3d at 759. The introduction of an entirely new lost-profits estimate clearly was a material change to Glover’s opinion, of which the Defendants were entitled to full and complete disclosure seasonably before trial. We refuse to condone the Ohazurikes’ failure to comply with discovery requirements. Accordingly, we find that the trial court’s refusal to grant the Defendants any relief for the Ohazurikes’ failure to comply with the mandates of Rule 26 was an abuse of discretion and, combined with other errors to be discussed infra, warrants reversal.
Those “other errors” will find their way into another post.
Experts appear often in chancery. They testify to the matters like the best interest of children, parties’ and children’s mental and physical health, land lines, valuations, damages, surveys, handwriting, water flow, investments, and on and on. Usually, when an expert is involved, there is a lot at stake, either emotionally or financially, or both.
I have not seen many disputes over the adequacy and/or timing of the expert disclosures. When they happen, though, the results can be cataclysmic. And when they are not cataclysmic at trial, they can turn out to be up the line, as the Ohazurikes learned.
I have refused to allow an expert to testify who was not timely designated 60 days before trial per UCCR 1.10. I even refused to allow an expert to testify where there was no answer at all to the expert interrogatory (the actual answer was to the effect that “None at this time. Timely supplementation will be made.” It wasn’t). But I have not yet had to weigh the adequacy of the substantive questions.
Read this case closely for what it can teach you about what won’t cut it as an expert-witness response, as well as what it can teach you about how to make a record of objections that will do the job on appeal.
BREAKING NEWS ON MEDICAID CLAIMS
September 19, 2012 § 2 Comments
In a recent estate in this district, the Medicaid Commission took the position that if the decedent claimed homestead on a parcel of property, and was survived by a spouse, one or more children or one or more grandchildren, then Medicaid would release its entire claim, regardless whether the property is worth more than the $75,000 statutory exemption.
In this particular case, the estate’s only asset was the homestead property. The lawyer representing the administrator called the Medicaid Commission to try to negotiate a reduction of its $110,000 claim and advised the commission’s staff attorney that the value of the homestead exceeded $75,000. The staff attorney replied that if the decedent was survived as set out above then Medicaid would release its claim, regardless of the value of the homestead.
Up to now, I had understood that Medicaid would release its claim only to the first $75,000, and would pursue its claim above that amount. In the situation cited above, I would have thought that Medicaid would try to pursue its claim to the $35,000 above the homestead exemption.
If this case does, indeed, indicate a shift in policy, you can be in a position to save your clients in estate matters considerable money simply by making a telephone call to the Medicaid Commission.
CAVEAT: Don’t take this post as authority to do anything. Call the Medicaid Commission yourself and get it from them what their position is with respect to your client’s situation.
If you handle any probate matters at all, you need to be familiar with the exemption statutes and understand how they affect the matters you handle. A helpful post on the topic is here. Not claiming exemptions can cost your clients thousands. Clients love lawyers who can save them thousands.
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