Lump-Sum Alimony Without a Lump

March 7, 2017 § Leave a comment

In the divorce judgment between Herman and Lillie Scott, the chancellor equitably divided the marital estate, awarding Herman most of the unencumbered real property and one small debt, and awarding Lillie the encumbered real property and the bulk of the marital debt. There was a large disparity in income in favor of Lillie.

In his judgment the chancellor said:

“All of the Armstrong factors mentioned above which suggest the appropriateness of an award of alimony to Herman have been considered by the Court to entitle him to a modest award of lump sum alimony. The Court considers that the division of the marital estate outlined below incorporates an equitable division of the estate and an award of such lump sum alimony.”

The chancellor’s ruling, however, did not state an amount or otherwise describe of what the lump-sum award consisted.

Herman appealed, complaining that the chancellor erred in not awarding him periodic alimony. In Scott v. Scott, handed down December 13, 2016, the COA affirmed with an opinion by Judge Greenlee. It’s a routine opinion that you will not likely find very useful.

The special concurring opinion by Judge Lee, however, makes some good points about how a trial judge should address alimony:

¶17. I concur in result with the majority’s decision to affirm; however, I find that the chancellor’s decision to categorize a portion of the equitable division of the marital assets as lump-sum alimony was incorrect.

¶18. First, the chancellor did not provide for a specific amount of lump-sum alimony. Whether lump-sum alimony is “used either as alimony or as part of property division,” it must be a “fixed and irrevocable sum.” Beezley v. Beezley, 917 So. 2d 803, 806 (¶10) (Miss. Ct. App. 2005) (citing Wray v. Wray, 394 So. 2d 1341, 1345 (Miss. 1981)). The chancellor did not designate a specific amount of lump-sum alimony; rather, he divided the marital assets, giving Herman the majority of the unencumbered assets. The chancellor simply stated that “the division of the marital estate . . . incorporates an equitable division of the estate and an award of such lump sum alimony.”

¶19. Second, the nature of the award is, in reality, equitable distribution. This Court in East v. East, 775 So. 2d 741, 745 (¶9) (Miss. Ct. App. 2000), determined that the chancellor incorrectly labeled an equity transfer from the husband to the wife as lump-sum alimony, when, “in effect, it is a portion of the . . . equitable distribution of the estate.” We affirmed the transfer but corrected the labeling error. Id. Here, I would affirm the equitable distribution award but decline to accept the chancellor’s decision to label any amount thereof as lump-sum alimony.

Judge Lee’s opinion was joined by Judge Wilson and by Judge Fair, who is the sole former chancellor on the court.

Lump Sum Alimony and Child Support

February 13, 2017 § Leave a comment

When Suzann and Greg Davis went to court on modification issues, the chancellor ruled that Suzann had to pay Greg a sum of child support. In calculating the amount, the chancellor included lump-sum alimony payments she was receiving as part of her adjusted gross income. Suzann appealed.

In the case of Davis v. Davis, decided January 24, 2017, the COA affirmed.

¶13. Suzann also argues that the chancellor erred in including lump-sum alimony as part of her income when calculating her child-support obligation, because lump-sum alimony is not the type of alimony contemplated in the statute. [Fn 1] She points to Neville v. Neville, 734 So. 2d 352 (Miss. Ct. App. 1999), and Dickerson v. Dickerson, 34 So. 3d 637 (Miss. Ct. App. 2010), to support her argument. In Neville, this Court held that lump-sum alimony payable in installments is not “‘alimony’ necessarily includable” when calculating a parent’s adjusted gross income. Neville, 734 So. 3d at 359 (¶31). In Dickerson, this Court simply detailed the connection between lump-sum alimony and the division of property. Dickerson, 34 So. 3d at 645 (¶32). Neither of these cases prohibits a chancellor from considering lump-sum alimony as income under section 43-19-101(3)(a). Thus, we find that a chancellor retains the discretion to classify lump-sum alimony as income when calculating child support. We find no abuse of discretion in the present case.

[Fn 1] Section 43-19-101(3)(a) provides that alimony is a potential source of income that may be considered when determining a parent’s adjusted gross income.

Not much to comment on. I thought this was something useful to have in your arsenal when you have a similar case.

Can You Garnish SS Benefits for Child Support and Alimony?

January 5, 2017 § 7 Comments

Conventional wisdom is what is generally accepted as the truth when no one has bothered to research the actual truth. Conventional wisdom has long dictated that you can’t garnish Social Security benefits to collect child support or alimony.

But here’s a direct quote from the Social Security Administration (SSA) FAQ site on the point:

Can my Social Security benefits be garnished for alimony, child support or restitution?

We can withhold Social Security benefits to enforce your legal obligation to pay child support, alimony or restitution. State laws determine a valid garnishment order. By law, we garnish current and continuing monthly benefits. We do not make retroactive adjustments.

You cannot appeal to Social Security for implementing garnishment orders. If you disagree with the garnishment, contact an attorney or representative where the court issued the order.

From that, I take it that: (1) the garnishment is limited to current benefits, and lump-sum payments for past benefits are apparently not garnishable; (2) the garnishment is done according to state law, and is subject to the federally-imposed limits (which are high for child support, as pointed out below); and (3) if you think the garnishment order is wrong procedurally or substantively, your remedy is in the state court that issued it, and Social Security will decline to help you with that.

Side note: I wonder whether a lump-sum benefit expected but not yet received is subject to garnishment? In other words, SSA will not reach back and retroactively “adjust” a lump-sum benefit already paid, which is understandable; but if that lump-sum payment is in process but has not yet been paid, may it, too, be garnished?

It’s not stated above, but I understand that neither alimony nor child support may be taken from an SSI check.

Federal law limits garnishment in most cases to 25% of disposable income. When it comes to child support, though, garnishment may be as much as 50-60%. A previous post discussing child-support garnishment is at this link.

In a recent case in another district, the ex-husband did not appear for his divorce hearing, and was ordered by the chancellor in the divorce judgment to pay $200 a month alimony to his ex. The wife’s attorney had the court enter an “Order for Withholding” contemporaneously with the judgment. The withholding order specifically directed that the alimony be withheld from the husband’s SS benefits. It also directed withholding by “any payer of the obligor.” A certified copy of the order was sent to SSA.

Two weeks later SSA sent a letter to the attorney documenting that the amount directed was to be withheld from the husband’s SS benefits, effective in the following month. Although the SSA did agree to withhold the amount directed by the court, it did point out that the amount withheld is limited by federal law. What that means to you is that the 25% limitation for alimony, and 50-60% limitation for child support, may mean a smaller recovery for you in relatively big-dollar cases.

Note that the lawyer in this case prepared and presented a withholding order rather than a formal writ of garnishment, and SSA honored it. That tells me that if you obtain a court-ordered withholding order in any form SSA will honor it. It’s up to the obligor to complain to the state court about the procedure that was used.

Oh, and for those of you who haven’t dealt with SSA recently, their response time in my experience is lightning-fast in all but disability cases, and accurate. It’s a far cry from even 10 years ago when SSA took forever to respond with inaccurate and confusing information that would take months to correct. Your experience may vary.

Here is yet another avenue available to you to make your clients happy. Remember: when you save or make your clients money, they love you; when you cost them money, they hate you. Whether they love or hate you, they will tell all their friends and relatives about it. You get to decide what kind of news they spread around about you.

Thanks to Attorney Christopher Tabb of Brandon for the factual information; the editorial comments are my own

When Alimony is Like an Elephant

November 28, 2016 § Leave a comment

Most of you, I am sure, are familiar with the fable of the blind men and the elephant. Six different blind men, for some reason, are asked to feel an elephant and to describe what the creature is like based on their experience. Of course, each one can offer a description based only on his limited groping. One surmises a rope-like creature based on feeling the trunk, another guesses a tree-like creature after feeling the leg, and yet another posits an umbrella-like critter from feeling the ear. And so on. The point being that perception based on limited evidence can be misleading and incomplete.

That takes us to the COA’s decision in Kittrell v. Kittrell, decided October 4, 2016, in which the court was called upon to determine whether the special chancellor erred in concluding that an alimony provision in a PSA was periodic. To set the stage, Judge Lee recited the legal standard and went on to describe the court’s chore:

¶9. “Although a court order imposing alimony must, in general, clearly identify what type of alimony is being awarded and adhere to its traditional characteristics, our ‘Supreme Court has not required consensual support agreements to follow the same terms as for court imposed alimony.’” Id. at 918 (¶30) (quoting Elliott v. Rogers, 775 So. 2d 1285, 1289 (¶15) (Miss. Ct. App. 2000)). “Rather, the Supreme Court has emphasized divorcing parties’ freedom and ‘broad latitude’ to settle the financial aspects of their separation by contract as they see fit[.]” Id.

¶10. It is because of this broad latitude that this Court is faced with the hopeless task of determining whether the alimony provision in Stan and Stephanie’s property-settlement agreement provided for lump-sum or periodic alimony. [Emphasis added]

Hopeless task? Hyperbole, you think? Well, judge for yourself; here’s the PSA provision in question:

Both parties do hereby agree that Stan Kittrell each month shall deposit his monthly retirement check from the Public Employees Retirement System (PERS) into Stephanie Kittrell’s bank account via direct deposit with the monthly amount of $250.00 considered child support and the remainder as alimony. The child support will continue to be deposited monthly until the child’s [twenty-first] birthday or until the child no longer lives with the mother. The remainder of the check shall be considered alimony and shall continue to be paid until the child reaches the age of [twenty-one] or until Stephanie Kittrell remarries. Stan Kittrell shall receive sixty percent (60%) of the [thirteenth] PERS check and Stephanie Kittrell shall receive forty-percent (40%) of the same until such time as the child reaches the age of [twenty-one] or until the child no longer lives with the mother. Stephanie Kittrell by signing this document agrees to pay the house note on the marital home out of the PERS money she receives from Stan Kittrell.

Stan Kittrell hereby relinquishes all rights and benefits to Stephanie Kittrell’s 401k retirement funds. Both parties relinquish any right to bonuses, rewards, or financial settlements of any kind.

Hyperbole? I think not. Here’s how the COA addressed it:

¶18. We also reverse the chancery court’s finding that the alimony provision in Stan and Stephanie’s property-settlement agreement provided for periodic alimony. The alimony provision does not strictly adhere to the traditional characteristics of either periodic or lump sum alimony. See Lowrey [v. Simmons], 186 So. 3d [907] at 919 (¶33) [(Miss. App. 2000)]. Accordingly, we will enforce the provision as it is written. See id. Because Stephanie did not remarry, Stan was obligated to pay alimony until Dylan reached the age of twenty-one on September 17, 2014. And Stan’s thirteenth PERS check would have terminated when Stan was granted custody of Dylan. We remand this case to the chancery court for a calculation of the specific amount of alimony owed as well as costs and attorney’s fees.

I am guessing that this was not the outcome Stan expected when he signed that PSA back in 2005.

When you draft an agreement such as a PSA, keep in mind that it not only has to reflect the parties’ agreement and make sense to them and counsel involved, it most importantly must be clear enough to make sense to others not involved, and particularly to any judge who will later be called upon to construe it. Again : Draft it, and set it aside for a day or so. Then pick it up and read it over again carefully. Does it say what needs to be said? Then re-read it pretending that you know nothing about the negotiations (like a judge has to do). Is it clear from its plain language just what is intended and what is to occur? If it is intended to be periodic alimony, then say so in plain, unmistakable terms. When you leave it to a judge to figure it out later, your client might not get what she thought she bargained for.

This case also involved a claim for termination of alimony for cohabitation. That’s for another day.

Cohabitation and Termination of Alimony

July 5, 2016 § 2 Comments

If you have been looking for a history of Mississippi law on termination of alimony due to cohabitation, you need look no further than the MSSC’s decision in Heiter v. Heiter, by Sheffield, handed down June 9, 2016.

Patrick and Lindalyn Heiter were divorced in 2001. At the time of the divorce, Lindalyn had been diagnosed with several cognitive conditions that impaired her ability to perform simple tasks such as counting money or writing checks. Her ability to hold a job was impacted by her inability to coordinate or manage time properly. She could complete small tasks, but lacked organizational skills. Dr. Koch, a professional who examined her, opined that she would need to reside in an assisted-living situation; she had attempted living on her own after the separation, but those attempts ended poorly. Patrick agreed to pay Lindalyn $650 a month in periodic alimony.

Soon after the divorce, the court appointed co-guardians, one for her person, and the other for her estate. Sheffield, an attorney whose name appears in the style of the case, was appointed guardian of her estate, and Stepro was appointed guardian of the person.

In 2007, Patrick filed a petition for modification to terminate alimony, alleging that Lindlyn was cohabiting with a male, Curtis Cole. Patrick also claimed that she was receiving SSI, but that proved to be untrue.

Following a trial, the chancellor found that Lindalyn’s only income was the $650 alimony, and that she was drawing down some retirement funds she received in the divorce to make up the nearly $300 deficit between those sums and her expenses. The chancellor also found:

. . . [I]t is clear that Lindalyn is also unable to maintain employment. . . .

There is ample evidence that both Curtis and Lindalyn are supporting each other financially, and that Lindalyn would not be able to survive if she did not share finances with him. . . . Lindalyn only pays half of the rent and utilities on the house, while Curtis picks up the remaining expenses. . . . Curtis is currently on disability and does not work. . . .

The chancellor denied Patrick’s request to terminate alimony, and he appealed.

Justice Randolph addressed Patrick’s for a unanimous court:

¶5. Patrick sought to be relieved from paying alimony to Lindalyn. Patrick alleged that Lindalyn was cohabiting with a male and was receiving SSI benefits. Patrick further averred that there had been “a substantial and material change in circumstances since the original decree was entered,” and that the original decree should be modified to terminate or reduce his alimony obligation. Traditionally, alimony payments cease only if the receiving party remarries or either party dies. McDonald v. McDonald, 683 So. 2d 929, 931 (Miss. 1996). However, a chancellor has authority to modify alimony “upon a finding of a substantial change in circumstances, regardless of any intent expressed by the parties to the contrary.” Id.

¶6. In 1961, this Court was first faced with whether “a chancery court [could] divest a wife of future alimony payments on the ground of misconduct of the wife after the divorce.” Rubisoff v. Rubisoff, 242 Miss. 225, 233, 133 So. 2d 534, 536 (1961). Citing Bunkley and Morse’s Amis on Divorce and Separation in Mississippi [Fn 4] and 17 American Jurisprudence, Divorce and Separation, the Rubisoff Court concluded that a chancery court could exercise its powers by modifying or revoking its prior alimony award. Rubisoff, 242 Miss. at 236, 133 So. 2d at 538. The Court further determined that “it was the duty of the trier of facts to determine whether or not the alleged misconduct . . . was of such nature as to forfeit [the] right to future alimony.” Rubisoff, 242 Miss. at 236, 133 So. 2d at 538.

[Fn 4] 4 J.W. Bunkley Jr. & W.E. Morse, Bunkley and Morse’s Amis on Divorce and Separation in Mississippi, § 6.12 (1957); 17 Am. Jur. Divorce and Separation, § 755.

¶7. Twenty years later, the issue arose again in McRae v. McRae, 381 So. 2d 1052 (Miss. 1980). The Court held that “[n]o hard and fast rule or mold may be laid down to fit at once all of the spectrum of misconduct. The question must be faced and determined on a case-by-case basis.” McRae, 381 So. 2d at 1055.

¶8. Relying on Rubisoff and McRae, the Court later affirmed the judgment of a chancellor who found that a recipient spouse “had forfeited her right to future support from appellee because her admitted adultery during the period following her divorce was of sufficient duration and frequency to justify the holding of the chancellor.” McHann v. McHann, 383 So. 2d 823, 826 (Miss. 1980). The Court stated that “[t]o hold otherwise would be to condone adultery and in effect would penalize a divorcee for marrying but reward her for cohabitation without benefit of marriage.” Id.

¶9. Our law further evolved in Hammonds v. Hammonds, 641 So. 2d 1211 (Miss. 1994), in which the Court held that Rubisoff and its progeny “clearly reflect a moral judgment that a divorced woman should not engage in sexual relations; the penalty for such activity is forfeiture of her right to support from her ex-husband.” Hammonds, 641 So. 2d at 1216. The Hammonds Court departed from the prior line of cases and remanded the case for the chancellor to consider the “financial, rather than moral aspect[] of cohabitation” and further held there is a “presumption that the divorced woman’s partner/cohabitant is providing financial support, thereby eliminating or reducing her need for support from her ex-husband” unless the unique facts of the case direct otherwise. Id. at 1216-17. The Hammonds Court adopted a two-prong test which requires chancellors to consider whether a third party provides support to the recipient spouse and whether the recipient spouse contributes to the support of the third party. Id.

¶10. In Ellis v. Ellis, 651 So. 2d 1068 (Miss. 1995), the Court again remanded a case for a chancellor to determine (1) if there was cohabitation, (2) if the ex-wife was being supported by or was supporting her suitor, and (3) if her financial needs had changed due to the cohabitation and/or support. Ellis, 651 So. 2d at 1074. The Ellis Court cited a Florida [Fn 5]case which stated that cohabitation will raise a presumption of a material change in circumstances, but cohabitation alone does not require an automatic reduction or termination of alimony. Id. at 1072.

[Fn 5] DePoorter v. DePoorter, 509 So. 2d 1141 (Fla. App. 1 Dist.1987).

¶11. In Scharwath, this Court officially adopted the Florida rule and held “that proof of cohabitation creates a presumption that a material change in circumstances has occurred.” Scharwath v. Scharwath, 702 So. 2d 1210, 1211 (Miss. 1997). This presumption shifts the burden to the recipient spouse to produce evidence contradicting mutual financial support. Id. However, the paying spouse still must show that the cohabitation results in “a situation of mutual support between the recipient spouse and another individual which alters the recipient spouse’s financial needs” before alimony can be modified. Id.

¶12. At the conclusion of the presentation of evidence by Patrick, the chancellor denied Lindalyn’s motion to dismiss, satisfied that Patrick had offered sufficient evidence of cohabitation and mutual support, which required Lindalyn to offer evidence related to mutual financial support. Lindalyn admitted that she lived with Curtis, but without sexual relations, and that they mutually supported one another. However, she denied that her financial needs had been altered due to the cohabitation and mutual support. After the parties concluded presentation of their proof, the chancellor announced she would take the case under advisement and would issue a written opinion.

¶13. The chancellor reviewed the evidence, considered the law, and issued an extensive, nine-page Findings of Fact and Conclusions of Law. The chancellor found that Patrick had failed to prove that Lindalyn’s financial needs were altered by her cohabitation with Curtis or the mutual support provided by Curtis. The chancellor found that there was no doubt that Lindalyn was receiving mutual financial support from Curtis. However, the chancellor noted that this was a “factually unique scenario . . . in which [Lindalyn] has no choice but to cohabit[] with another individual in order to survive.” The testimony presented by Brenda Stepro and Haidee Sheffield, Dr. Koch’s psychological report, and evidence of Lindalyn’s prior living arrangements all support the chancellor’s finding that Lindalyn must live with another person.

¶14. The chancellor held that “[w]ithout the $650.00 she receives from Patrick, Lindalyn would not be able to meet her financial obligations each month without accruing . . . penalties from withdrawals on the retirement account.” Reviewing the evidence submitted to the chancellor, there is sufficient proof that the support provided by Curtis to Lindalyn was not enough to justify eliminating or reducing Lindalyn’s support from Patrick. We find that the chancellor did not abuse her discretion in denying Patrick’s motion to terminate or modify alimony.

That’s about as concise a statement as you will find on the evolution of Mississippi law in this area.

Oh, and the court also affirmed the chancellor’s award of an attorney’s fee to Lindlyn based on testimony of her inability to pay. That’s some authority you might want to file away for future use, because getting an award of attorney’s fees in a modification such as this is not something you see every day.

Rehabilitative Alimony vis a vis Equitable Distribution

May 25, 2016 § Leave a comment

In a recent case, the COA reversed a chancellor’s calculation of equitable distribution because she counted the mortgage balance both as a liability and as a reduction of the value of the mortgage property. The chancellor had also awarded rehabilitative alimony.

The appellant, Tony Hearn, argued that the chancellor was in error in awarding rehabilitative alimony to his ex, Varena, and that the COA’s reversal of equitable distribution mandated reversal of the rehabilitative alimony award. That’s because as equitable distribution expands, periodic alimony contracts, and vice versa. So, when equitable distribution is thrown out for recalculation, it’s back to the drawing board for periodic alimony recalculation.

Does that rule apply to rehabilitative alimony, though?

In the COA case Hearn v. Hearn, handed down May 10, 2016, the court answered, “no,” and affirmed the chancellor’s award. Judge Lee’s opinion explained:

¶16. In his other issue on appeal, Tony contends the chancellor erred in awarding Varena rehabilitative alimony. “Rehabilitative alimony provides for a party who is trying to become self-supporting and prevents that party from becoming destitute while searching for a means of income. Moreover, ‘the primary purpose of rehabilitative alimony is to give the former spouse the opportunity to enter the work force.’” McCarrell v. McCarrell, 19 So. 3d 168, 170 (¶8) (Miss. Ct. App. 2009) (quoting Alexis v. Tarver, 879 So. 2d 1078, 1080 (¶7) (Miss. Ct. App. 2004)) (internal citation omitted).

¶17. Ordinarily, the reversal of a chancellor’s division of marital property requires reversal of an alimony award. Mace v. Mace, 818 So. 2d 1130, 1134 (¶16) (Miss. 2002). However, the decision to award rehabilitative alimony “is not considered during equitable distribution.” Lauro v. Lauro, 847 So. 2d 843, 849 (¶15) (Miss. 2003); see also Hensarling v. Hensarling, 824 So. 2d 583, 595 (¶39) (Miss. 2002) (court affirmed award of rehabilitative alimony even though it reversed for chancellor to reevaluate value of marital estate); Rhodes v. Rhodes, 52 So. 3d 430, 447 (¶72) (Miss. Ct. App. 2011) (“[A]n award of rehabilitative alimony is exempted from the general proposition that reversal of one financial award requires reversal of all.”); Lauro v. Lauro, 924 So. 2d 584, 588 (¶14) (Miss. Ct. App. 2006) (“Periodic alimony is to be reconsidered when the marital estate is redistributed under principles of equitable distribution. However, rehabilitative alimony is not considered during equitable distribution.”). “Rehabilitative periodic alimony is an equitable mechanism which allows a party needing assistance to become self-supporting without becoming destitute in the interim.” Hubbard v. Hubbard, 656 So. 2d 124, 130 (Miss. 1995).

¶18. In this instance, the chancellor evaluated the award of alimony under the factors enunciated in Armstrong v. Armstrong, 618 So. 2d 1278, 1280 (Miss. 1993). The chancellor divided the marital estate in order to adequately provide for Varena, eliminating the need for periodic alimony. In her amended judgment, the chancellor noted that Varena was employed and working towards self-sufficiency but her monthly expenses still exceeded her monthly income. The chancellor stated that “[c]learly, the award of rehabilitative alimony was intended to . . . allow [Varena] to start anew without becoming destitute.” The chancellor reduced the award of rehabilitative alimony from $650 per month for three years to $600 per month for six months, finding that six months was “a reasonable amount of time to allow [Varena] to address the financial issues involved in her becoming self-sufficient in her living conditions.” We can find no abuse of discretion by the chancellor in awarding Varena rehabilitative alimony. This issue is without merit.

The mention of an amended judgment must refer either to a post-R59(a) ruling by the judge, or to a change in her ruling within ten days per R59(d)..

 

Another Unsuccessful Attempt to Modify Periodic Alimony

April 25, 2016 § Leave a comment

Do after-acquired debt and other personal expenses justify downward modification or termination of alimony? That was the central question in the COA case, Hardin v. Grantham, decided March 1, 2016.

Robert Hardin was ordered in 1991 to pay periodic alimony in the sum of $750 a month to his ex-wife, Betty Grantham. In the 1991 judgment, the chancellor projected that Robert’s business could not sustain his then-$80,000 annual income, and based alimony on an assumed $40,000 annual income. In 2013, Robert filed a petition to modify or terminate the payments, claiming that there had been a material change in circumstances so that he could no longer afford to pay Betty.

At trial, Robert claimed that his business had declined, and his income with it. He reported income of $5,562 per month, personal expenses of $4,822 a month, which included the alimony, and business expenses of $8,351.  The chancellor found Robert lacked candor and provided evasive and inconsistent answers to questions in his testimony. The chancellor declined to modify, and Robert appealed.

In her opinion for the court, Judge Carlton first spelled out the familiar rules that govern modification of alimony: the chancellor must (1) determine whether an unforeseeable and material change occurred since entry of the original alimony order; and (2) if so, then consider the Armstrong factors relative to the parties’ financial positions at the time of the original order, and (3) consider the ex-wife’s accustomed standard of living, less her own resources, and the husband’s ability to pay. If no (1), then no modification.

She then turned to the question whether the after-acquired expenses could be a basis to modify:

¶13. Despite Robert’s assertions, the Mississippi Supreme Court has previously rejected “the idea that alimony or child[-]support obligations should be reduced because of the obligor’s other financial commitments[.]” Yancey v. Yancey, 752 So. 2d 1006, 1010 (¶12) (Miss. 1999) (citing Varner v. Varner, 666 So. 2d 493, 497 (Miss. 1995)). See also N. Shelton Hand, Mississippi Divorce, Alimony, and Child Custody § 14–10 (6th ed. 2012) (“Obligations of child and[/]or spousal support are not generally to be considered as or equated with any other debt known to and collectible under the law. There is more to these obligations than mere debt.”).

¶14. In Varner, a husband argued that the chancellor should reduce his child-support and alimony obligations in light of his other financial obligations. Varner, 666 So. 2d at 497. After the parties’ divorce, the husband opened his own veterinary practice. Id. He also filed for bankruptcy, and he claimed that he had been forced to borrow money from friends and family to pay his child-support and alimony obligations. Id. at 495-97.

¶15. On appeal, the supreme court found no merit to the husband’s argument that his child support and alimony obligations should be modified. Id. at 497. In fact, the supreme court stated:

Personal bills cannot be used as a factor to reduce support payments. Furthermore, simply alleging, as does [the husband], that one is subsisting on borrowed funds does not show with the required particularity that he is unable to pay.

In this case, the chancellor properly found that there had been no material change in circumstances. [The husband’s] income apparently decreased between the time of his divorce and the hearing. However, that decrease was directly related to his decision to open a solo practice and a voluntary move which caused him to give up his supplemental income. [The husband] filed for bankruptcy on July 7, 1993, two weeks after the chancellor denied his request for modification. His bankruptcy petition was dismissed and the case closed on April 18, 1995.

A debtor is prohibited from discharging debt to a former spouse for alimony or support to a child in connection with a separation agreement. Furthermore, simply filing for bankruptcy does not rise to the level of a substantial change without a finding by the chancellor that the filing was made in good faith. The law is well-settled that, if an obligor, acting in bad faith, voluntarily worsens his financial position so that he cannot meet his obligations, he cannot obtain a modification of support. Id. (internal citations and quotation marks omitted).

¶16. Citing Mississippi precedent, including the supreme court’s holding in Varner, the chancellor here found no merit to Robert’s claim that his alimony payments should be modified or terminated because he had incurred other debts and financial obligations. Instead, the chancellor found that he must compare the parties’ relative positions at the time of the divorce with their positions at the time of the requested modification to determine whether an unforeseeable and material change occurred. In looking at the facts of the present litigation, the chancellor ultimately concluded that the only material postdivorce change occurred when Robert’s business became very successful and afforded him many opportunities and luxuries.

The COA affirmed.

We have recently dealt with other cases denying modification or termination of alimony here and here.

 

Some Thoughts About Modification of Alimony

February 29, 2016 § 1 Comment

Last week I posted about the COA’s decision in Hughes v. Hughes, affirming the chancellor’s conclusion that the petitioner at trial had failed to prove cohabitation, mutual financial support, or de facto marriage so as to terminate his ex-wife’s periodic alimony.

Here are a few thoughts:

  • Before you pocket the fee and set off on a quest to terminate or reduce alimony, be sure you are up to date on the law. Many of the old, moralistic rules that we older lawyers recall are long gone. Hughes includes a nice recap of the evolution of our present rules.
  • Hughes illustrates just how difficult it can be to terminate alimony. Make sure you have proof that invokes every factor. These cases are extremely fact-intensive; they warrant careful and extensive discovery. You will lose if you file your pleadings, set the case for trial, and expect to win simply because the ex told someone that she and her new boyfriend have a romantic relationship.
  • In Hughes, these facts were not enough to tote the load: Muriel and Darrell had a monogamous romantic relationship for more than four years; Darrell stayed overnight at Muriel’s home around once a week, and she occasionally spent the night at his; the two travelled together, and Muriel is a member of Darrell’s barbecue competition team; they travel together to Corvette car shows; they attend family events together; when travelling they stay in the same hotel room or in the barbecue trailer; Darrell gave Muriel valuable jewelry; Darrell stored a Corvette in Muriel’s garage; Darrell displayed one of his Corvettes in Kentucky with a plaque that read, “On loan from Darrell Hill & Muriel Hughes.”
  • You just have to love the facts recited from Burrus at ¶24: Jolee spent more than $7,500 on her boyfriend’s criminal defense and paid for “his motel rooms while he was attempting to evade arrest; and she got a tattoo that said, “James’ girl.” You can’t make that kind of stuff up.

Termination or Modification of Alimony Today

February 25, 2016 § 2 Comments

Timothy and Mariel Hughes were divorced in 2008. Tim was ordered to pay Mariel $2,500 a month in periodic alimony.

Tim filed pleadings in 2011 to terminate alimony based on cohabitation and de facto marriage.

The case was set for a two-day trial in May, 2013, but could not be concluded in that time, so a date was set four months later for the third day. Then the original chancellor recused himself, and the case was reassigned to another chancellor. The third day of trial was scheduled for a date ten months after the first day. Following a hearing, the chancellor ruled that Tim had failed to prove either cohabitation or a de facto marriage. Tim appealed.

In Hughes v. Hughes, handed down February 16, 2016, the COA affirmed.

Judge Wilson’s opinion includes a helpful exposition on the law. Here’s how he addressed the law of cohabitation vis a vis alimony:

¶7. In an earlier time, a divorced woman risked forfeiture of her right to alimony payments if she engaged in a sexual relationship with another man subsequent to the divorce. See, e.g., Owen v. Gerity, 422 So. 2d 284, 287-88 (Miss. 1982); McHann v. McHann, 383 So. 2d 823, 826 (Miss. 1980). Such forfeitures were based at least in part on “a moral judgment that a divorced woman should not engage in sexual relations.” Hammonds [v. Hammonds], 641 So. 2d [1211,] at 1216[(Miss. 1994)]; see also McHann, 383 So. 2d at 826 (“To hold otherwise would be to condone adultery . . . .”). However, in Hammonds, the Supreme Court limited this forfeiture doctrine to cases in which the alimony recipient is “cohabitating” with another and receiving support from, or providing support to, that person such that the financial need for alimony is reduced or eliminated. Hammonds, 641 So. 2d at 1217. Per Hammonds, the “moral aspects of the cohabitation” are no longer a basis for terminating alimony. Id. In a subsequent decision, the Court clarified that “proof of cohabitation creates a presumption that a material change in circumstances has occurred” and “shift[s] the burden to the recipient spouse to come forward with evidence suggesting that there is no mutual support.” Scharwath v. Scharwath, 702 So. 2d 1210, 1211 (¶7) (Miss. 1997).

¶8. In Scharwath, after Frank and Dianna divorced, Dianna commenced a relationship and cohabited with Jim Burns. Id. at (¶5). She allowed Burns to live in her home rent-free and provided him with a truck for use in his carpentry business. Id. at (¶6). In turn, Burns made improvements to the home, including re-flooring the basement and building a deck; he regularly mowed the yard; and he took on various other tasks and responsibilities around the house. Id. “He even moved furniture into the home[.]” Id. On these facts, the chancellor found that Dianna and Burns were cohabiting but denied Frank’s petition to modify alimony because he found that the cohabitation did not involve substantial mutual support. Id. at (¶5). On appeal, the Supreme Court held that the chancellor erred by relying on “the lack of direct financial evidence” of mutual support. Id. at (¶7). The Court observed that “parties who live in cohabitation can easily and purposely keep their condition of mutual financial support concealed” if “only financial documentation” will suffice to support such a finding. Id. For this reason, the Court adopted—and remanded to the chancellor with instructions to apply—a “rule that proof of cohabitation creates a presumption that a material change in circumstances has occurred.” Id.

¶9. In a more recent case, Bill alleged that his ex-wife, Alicia, had forfeited her right to alimony by cohabiting with her boyfriend and enjoying his support. Coggins [v. Coggins] , 132 So. 3d [636,] at 643 (¶26) [(Miss. App. 2014)]. “Bill’s main evidence of cohabitation” was that the boyfriend’s car was often at Alicia’s house late at night and early in the morning. Id. at (¶28). Alicia and her boyfriend admitted that he stayed at her house one or two nights a week, but both denied that he lived there permanently. Id. The boyfriend had his own residence, kept no personal items at Alicia’s house, and did not contribute to her household financially or in kind. Id. The chancellor found that “Bill failed to prove Alicia cohabited with her boyfriend, so the mutual support presumption did not arise.” Id. at (¶27). The chancellor also found that even if Alicia and her boyfriend were deemed to be cohabiting, she had rebutted the presumption of mutual support. Id. Emphasizing that a “chancellor’s findings of fact about cohabitation, de facto marriage, and mutual support ‘are entitled to substantial deference when reviewed on appeal,’” we affirmed. Id. at (¶29) (quoting Pritchard v. Pritchard, 99 So. 3d 1174, 1177 (¶19) (Miss. Ct. App. 2012)).

¶10. In another recent case, we affirmed the denial of a motion to modify alimony on the following facts:

Sharon [(the ex-wife)] had a sexual relationship with Rooks, regularly stayed overnight weekends and several days during the week, and went on vacations with him and his family. Sharon and Rooks testified that Sharon did not receive any financial help from him to pay her bills or contribute to her everyday expenses. Sharon also maintained a separate residence and stated that she and Rooks had no plans to marry. Keith [(the ex-husband)] testified that he observed Sharon’s car at Rooks’s house several times a week. McMinn, 171 So. 3d at 518 (¶26). We agreed with the chancellor that a “relationship accompanied by sexual activity, alone, does not rise to the level necessary to forfeit alimony.” Id. Indeed, the Supreme Court made this point clear twenty years earlier in Hammonds. We reemphasized that the chancellor’s findings on these issues are entitled to “substantial deference when reviewed on appeal,” and we found nothing “manifestly wrong” in the chancellor’s determination that Keith failed to prove cohabitation or mutual support. Id. at (¶27) (quoting Coggins, 132 So. 3d at 643 (¶29)).

The court went on to analyze the proof, the court held that the chancellor properly declined to apply the presumption of mutual support.

As for the issue of de facto marriage, the court explained the law this way:

¶18. In the absence of cohabitation, alimony can be terminated based on proof of what has been termed a “de facto marriage.” A de facto marriage may be proven in two ways. See Deborah H. Bell, Mississippi Family Law § 9.10[2] (2005). First, a chancellor may find a de facto marriage if the alimony recipient is deliberately avoiding remarriage merely to continue receiving alimony. See Martin v. Martin, 751 So. 2d 1132, 1136 (¶16) (Miss. Ct. App. 1999). Second, a de facto marriage can be found absent cohabitation if the alimony recipient and another person have “so fashioned their relationship, to include their physical living arrangements and financial affairs, that they could reasonably be considered as having entered into a de facto marriage.” Pope v. Pope, 803 So. 2d 499, 504 (¶12) (Miss. Ct. App. 2002) (citing Scharwath, 702 So. 2d at 1211 (¶¶6-7)). We discuss these two theories of de facto marriage below.

A. Avoiding Remarriage

¶19. In Martin, Ben and Linda’s divorce judgment required Ben to pay Linda periodic alimony of $5,000 per month. Martin, 751 So. 2d at 1133 (¶3). After the divorce, Linda became involved in a long-term relationship with Norm Anderson. Id. at (¶5). Linda wore a diamond engagement ring that Anderson gave her, and the couple told friends that they planned to marry “next year,” but then testified that they had no immediate plans to marry. Id. However, on cross-examination, Linda “admitted . . . that she and Anderson had not to go on excursions they [might] not otherwise be able to enjoy.” The chancellor did not clearly or manifestly err by concluding that the mere sharing of travel expenses with a boyfriend is not “mutual support” sufficient to warrant the termination of alimony. married because she need[ed] the financial support provided by the alimony received from [Ben].” Id. Linda and Anderson maintained separate homes, though Anderson did have a key to Linda’s home. Id. at 1133-34 (¶6). Anderson spent the night at Linda’s home only a few times a month, but he ate meals there regularly, ran errands for her, and did yard work and other household chores. Id. at 1134 (¶6). Linda and Anderson vacationed together and admitted to a sexual relationship. Id. They spent holidays together and bought gifts for each other, and Linda had written Anderson checks totaling over $11,000 over a three-year period. Id. Anderson also provided Linda with substantial discounts on clothing and cosmetics from the department store where he worked. Id. Based on this evidence, the chancellor found that Linda and Anderson had entered into a “de facto marriage” and terminated Ben’s alimony obligations. Id. at 1134-35 (¶¶10, 14).

¶20. On appeal, we concluded that there was “substantial evidence in the record to support the chancellor’s finding that [Linda] and Anderson [had] provided ‘mutual support’ to one another.” Id. at 1136 (¶15). Anderson provided discounts and domestic services to Linda, and Linda wrote him checks and allowed him use of her “luxurious home.” Id. Thus, we found that it was “clear from the record that Anderson benefit from [Ben’s] largesse and [Linda] benefit financially from her relationship with Anderson.” Id.

¶21. We also affirmed the chancellor’s termination of alimony on the ground that Linda had “structured her relationship with Anderson in an attempt to circumvent the appearance of cohabitation so as to continue her alimony.” Id. at (¶16). We did so based on Linda’s admission under oath “that she and Anderson had not married because she need[ed] the financial support provided by [her] alimony.” Id. We held that when “an alimony recipient spouse purposefully avoids marriage merely to continue receiving alimony, equity should not require the paying spouse to endure supporting such misconduct.” Id. (quoting Anderson v. Anderson, 692 So. 2d 65, 72 (Miss. 1997)). [Fn omitted]    *   *   *

B. Living Arrangements and Financial Affairs

¶23. As noted previously, a de facto marriage may exist where an alimony recipient and a third party have “so fashioned their relationship, to include their physical living arrangements and financial affairs, that they could reasonably be considered as having entered into a de facto marriage.” Pope, 803 So. 2d at 504 (¶12) (citing Scharwath, 702 So. 2d at 1211 (¶¶6-7)). In Pope, the chancellor found that no material change in circumstances had occurred where the ex-wife became “romantically involved with another man,” she “spent a number of weekends in his company” at his expense, and “on five or six occasions [he] stayed overnight in her home.” Id. at (¶11). There was also evidence that he “helped her buy groceries” when he visited and loaned her $4,000, which she later repaid. Id. We affirmed, concluding that the chancellor did not abuse his discretion by finding “that the relationship . . . had never risen to the level . . . [of] a de facto marriage relationship.” Id. at (¶13).

¶24. Conversely, in Burrus, we affirmed a chancellor’s finding of a de facto marriage between the alimony recipient, Jolee, and James, who regularly stayed at her house. James had a key to Jolee’s home and kept his clothes there.” Burrus [v. Burrus], 962 So. 2d [618,] at 622 (¶18) [(Miss. App. 2006)]. Jolee also gave James an ATM card for her bank account and authority to use it. She spent more than $7,500 on, among other things, James’s attorneys’ fees and other costs of his defense on criminal charges, his motel rooms while he was attempting to evade arrest, and his clothes, cell phone, and cell phone bills. Id. “In return, James . . . continually performed and provided ‘in kind’ household services and chores in Jolee’s home, including maintenance and repair of the home.” Id. “Additionally, Jolee testified, as did her children, that she had recently gotten a tattoo that [said], ‘James’ girl.’” Id. [Fn omitted]

A few comments to follow in a later post.

When Separate Maintenance Morphs into Alimony

December 8, 2015 § 2 Comments

After William Lane’s wife, Stella, obtained a Mississippi separate maintenance judgment, William moved to Texas and obtained a divorce from Stella there. He then petitioned the Mississippi court to terminate alimony because he was no longer married to Stella.

The chancellor refused William’s request, ruling apparently that the separate maintenance would continue as alimony, and William appealed. In Lane v. Lane, decided December 1, 2015, the COA affirmed. Judge Fair, writing for the majority, laid out the rationale:

¶8. “[A] divorce action involving one resident party and one foreign party may or may not be able to adjudicate personal rights, though it can sever a marriage as long as at least one party is a resident of that state.” [Lofton v. Lofton, 924 So.2d 596, 601 (Miss. App. 2006)]. William personally appeared before the Texas court. At the time the suit was filed, he had been a domiciliary of Texas for six months. Stella entered a general appearance through local counsel, ultimately signing the divorce decree along with William as to “form and substance.” The divorce decree specifically did not litigate the issues of support and property division. In fact, the decree declined jurisdiction over all but the divorce itself, deferring to the chancery court and its separate-maintenance judgment for “all issues involving the division of the property and debt of the parties.”

¶9. In Weiss v. Weiss, 579 So. 2d 539, 540-41 (Miss. 1991), the Mississippi Supreme Court reaffirmed that Mississippi law allows for separate litigation of divorce and alimony. Thomas and Barbara Weiss married in Mississippi. Id. at 540. Thomas later moved to Louisiana and filed for divorce. Id. That same year, Barbara filed a request for separate maintenance in Mississippi. Id. The Louisiana court granted the divorce but reserved the issue of alimony for the Mississippi court. Fn2 Id. Our supreme court held that the Mississippi court had jurisdiction to determine alimony because the parties’ foreign divorce decree did not litigate the issue of alimony. Id. at 541.

Fn2 Barbara’s claim for separate maintenance was no longer proper since a divorce had been granted but was convertible to a claim for alimony. Weiss, 579 So. 2d at 541. Separate maintenance and alimony may both result in payments for a short period of time or an extended period of time (the period of time for separate maintenance is more uncertain). Id. at 542.

¶10. The supreme court dealt with a similar issue in [Chapel v. Chapel, 876 So.2d 290 (Miss. 2004)]. In that case, the Jackson County Chancery Court awarded Grace Chapel separate maintenance in 1996. Id. at 292 (¶5). Mr. Chapel was granted a divorce in Virginia in 1997. Chapel, 876 So. 2d at 292 (¶6). The Mississippi chancellor modified the separate-maintenance agreement in 1998 and 2001. Id. at 294 (¶13). Grace argued that the chancellor lacked subject-matter jurisdiction because the Virginia divorce decree terminated the original separate-maintenance agreement. Id. at 293 (¶10). The supreme court held that “the . . . chancery court continues to have jurisdiction in what originally was the separate-maintenance case, but which converted to one for alimony and other claims compatible with divorce actions[] after the date of the foreign divorce.” Id. at 295 (¶15). Fn3 In her treatise, Bell on Mississippi Family Law (2d Edition 2011), Professor Deborah Bell refers to this as a “recharacterization” of separate maintenance as alimony.

Fn3 The supreme court also stated that because “neither party . . . made formal objections to the chancellor’s authority to modify the original separate-maintenance judgment after the Virginia divorce was granted, it is not necessary for the Court to reach the issue of whether . . . a foreign divorce decree[] terminates a domestic court’s order of separate maintenance.” Chapel, 876 So. 2d at 294 (¶11).

¶11. Like the divorce decree in Weiss, the Texas divorce decree in the present case expressly reserved Stella’s rights to enforce the separate-maintenance order. And, similar to the wife in Chapel, Stella was awarded separate maintenance prior to the entry of a foreign divorce decree, and the foreign decree did not address the issue of separate maintenance. We do not find, like the dissent, that Stella’s failure to expressly petition for alimony prohibits the chancellor’s sua sponte “recharacterization” of separate maintenance as alimony. As stated in Weiss, “‘[a]limony’ and ‘maintenance’ are merely different words used in differing situations to describe the same thing.” 579 So. 2d at 541 (citation and quotation omitted) (emphasis added). Mississippi law clearly provides that the chancery court retained jurisdiction over William and Stella’s separate-maintenance agreement, as acknowledged by the Texas court with the consent and agreement of the parties. [Emphasis in original]

It did not help William’s cause that the parties’ divorce agreement in Texas included language specifically acknowledging the continuing jurisdiction of the Mississippi court, and the Texas judgment afforded the Mississippi judgment full faith and credit and recognized its continuing jurisdiction. Any different language in Texas, however, would not have changed the outcome. Once Mississippi’s courts have acquired jurisdiction over the property and support (maintenance) issues, a subsequent divorce in another state is not effective to deprive the Mississippi court of jurisdiction over those issues.

The dissent would have held that by failing to request “recharacterization” of the separate maintenance award as alimony Stella deprived the chancellor of authority, making it erroneous for him to do so. The majority rejected that approach.

The MSSC dealt with a similar set of issues last year in Pierce v. Pierce, about which I posted here.

Oh, and before I leave the subject, here are three quotes you might find helpful next time you have to deal with an alimony case:

  • “Alimony — the ransom that the happy pay to the devil.”  —  H.L. Mencken
  • “Alimony is like buying oats for a dead horse.”  —  Arthur Baer
  • “Judges, as a class, display, in the matter of arranging alimony, that reckless generosity which is found only in men who are giving away someone else’s cash.” —  P.G. Wodehouse

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