Something for Judicial Candidates to Ponder
September 10, 2018 § 2 Comments
The National Judicial College’s Judicial Edge publication in July included some insights from around the country into common missteps by new judges. Judge Griffis posted this on his blog in July.
10 common mistakes new judges make—and how to avoid them
Earlier this month we emailed current and past NJC faculty asking for the most common mistakes they see new judges make and advice on how to avoid them. Submissions began pouring in almost as soon as we hit send.
We had so many, in fact, that we’re going to break them up into installments, in this month’s issue and next. Here are the first 10:
- They shy away from making decisions
“I have been a judge for 25 years. Over the years I have noticed many new judges have a difficult time making decisions. New judges come from the community and hear cases with their community lawyers. They sometimes are afraid of ruling against community lawyers. They have a hard time coming to grips with a judge’s responsibility to decide, as opposed to not ruling and hoping the case settles if the judge drags his/her feet too long.”
Judge John Lenderman
St. Petersburg, FL
- They accept every agreed order
“It is very, very tempting to new judges to sign off on agreed orders. For example, the parties will present agreed trial continuances, agreed protective orders that give them carte blanche to seal and redact, agreed briefing schedules, agreed expansions of page limits, plea bargains, and more. The solution to this problem is to not be afraid to say no. Trial date certainty is crucial to justice, and it can only be achieved if the court makes it clear that only good cause will warrant a continuance, and (usually) only once. Similarly, the court has an obligation to provide transparency: sealing and redaction defeats this goal. Nor does the court want to cede control of its calendar, including burying itself in long, late-filed reading, by signing off on parties’ agreement to change the court rules on briefing dates and page limits. And, of course, sentencing discretion is meaningless if the court simply signs off on plea agreements.”
Judge Catherine Shaffer
President, American Judges Association
Seattle
- They forget to complete the record
“You have three best friends in the courtroom. They are: the record, the record, the record. Your best friends will never turn on you unless you lose your cool. The moral is, keep your cool. It is your courtroom and you get the last say. As long as you make the record, you will be fine.”
Judge Lee Sinclair
Canton, OH
- They forget about … other important things
“Make sure your robe is on before taking the bench (I’ve been so engaged in thought I marched right into court forgetting my robe.) If you don’t have a court reporter, always double-check to make sure the recorder is on. No one likes to recreate a record.”
Judge Lin Billings Vela
Cripple Creek, CO
- They don’t go to judge school, and they don’t cut the cord
“I know this will seem self-serving, but many new judges do not take advantage of judicial education programs that will help them get started with the right mindset and skills. It also helps to sever the business and social links between a new judge and his/her former law firm. I remember my presiding judge telling me to get to the NJC during my first year on the bench. I attended General Jurisdiction. After returning, I felt better informed than ever before, and the local attorneys knew I had been through courses that would benefit everyone, including their clients. The professional distance between a new judge and those with whom a law firm connection existed is an important break, and I’ll never regret doing it through the NJC. I’m sure that all of the local lawyers appreciated knowing I was completely independent in my decision-making.”
Judge Jess Clanton
Langley, OK
- They forget they aren’t a trial attorney anymore
“Stepping into the advocate role is a big mistake for new judges. Another mistake is failing to understand the need to create a full record and the importance of being the “conductor” of the proceedings. Those are just some of the issues we see.”
Judge Susan L. Formaker
Los Angeles
- They place too much faith in court-appointed experts
“Newly appointed family law judges are often afraid of making mistakes that might harm children – which is important, of course. However, before relying on expert opinions, it is important to understand whether the expert has done a thorough and sufficient job of gathering data. Too often experts seem merely like stenographers who fail to get sufficient depth/breadth in their data gathering. The experts may not have not tested or considered multiple hypotheses before reaching conclusions. They may not have an adequate basis for their opinions or may be otherwise influenced by some type of cognitive or other bias(es). This is especially true when allegations of domestic violence exist in a case, in very high-conflict cases with children who refuse/resist contact with a parent, or in relocation cases.”
Forensic psychologist Philip M. Stahl
Queen Creek, AZ
- They try too hard to look dignified
“I believe many new judges are so concerned about appearing dignified that they can seem very remote and even uncaring. The solution to this is to learn and apply the lessons of procedural fairness. In reality, there is nothing undignified about being a good listener, a person who explains the neutral principles they are applying, someone who treats each party equally, or someone who speaks in plain language.”
Judge Catherine Shaffer
President, American Judges Association
Seattle
- They don’t realize that…
1. “It is impossible to have equally talented and prepared attorneys on each side of every case.
2. There will be someone who will file a complaint against a judge, whether justified or not.
3. You will have no privacy. Attorneys as well as citizens expect to know where you are and what you’re doing IF YOU AREN’T IN THE COURTROOM.
4. Depending on type of judgeship, the amount of work will be unexpected. You will be placed on committees and asked to do assignments outside the description of the job.
5. There will rarely be enough time to sit and ponder the law quietly at your desk.
6. There will not be enough money to take a judicial training course outside your state. You should nonetheless volunteer to teach at Continuing Legal Ed classes. And you should know that judges are improved by taking Continuing Judicial Education courses, wherever they are held.”
Judge Cynthia L. Brewer
Canton, MS
- They misunderstand their position
“Stay away from the phrase ‘In my court…’ It is not your court, it belongs to the people, it will always belong to the people, and you can be replaced.”
So…
“Understand that the case before you is the most important case on the planet, and treat the people before you in that manner. Treat people the way you would want a family member to be treated if they were in court. Do not have ‘POLICIES.’ Have trust in your in-court staff. Listen more than speak. Do not rush your docket, no matter how busy it is. Take frequent breaks. Smile. Dress like a judge. Be humble. Be kind. Never show anger. Never assume anything before asking questions. Do not be afraid to say, ‘I do not know.’”
Judge Louis Schiff
Deerfield Beach, FL
“Quote Unquote”
September 7, 2018 § Leave a comment
“And this I believe: that the free, exploring mind of the individual human is the most valuable thing in the world. And this I would fight for: the freedom of the mind to take any direction it wishes, undirected. And this I must fight against: any idea, religion, or government which limits or destroys the individual.” — John Steinbeck
“We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time.” — T.S. Eliot
“Perhaps one day men will no longer be interested in the unknown, no longer tantalized by mystery. This is possible, but when man loses his curiosity one feels he will have lost most of the other things that make him human.” — Arthur C. Clarke
All Medical is not Major
September 5, 2018 § Leave a comment
I’ve seen a few agreed judgments and PSA’s lately that have provisions along these lines:
“[Father] shall maintain major medical, optical, and dental insurance covering the minor child … “
When I inquire, I am told that what the parties intended was actually a standard health-insurance policy along with the optical and dental insurance.
There’s a huge difference between a “major medical policy” and a “health insurance” or “medical insurance” policy.
The term “major medical” is a term of art in the insurance industry to specify insurance designed to cover medical expenses due to severe or prolonged illness by paying all or most of the bills above a set amount. Many major medical policies are cheaper than a regular health or medical policy. They are designed to kick in over and above what regular health and medical insurance covers.
So a major medical policy would kick in, for example, after your health insurance has paid out, say, $50,000 for cancer treatment, and only then would major medical start paying up to some contracted limit.
A health or medical insurance policy, by contrast, pays a percentage (usually 80%) of covered medical, hospital and surgical expenses. It is not limited to severe or prolonged illness, and there is no threshold coverage amount other than a deductible or co-pays.
Remember that the judge is bound by the language you use in that agreed judgment or PSA. If it says “major medical,” it doesn’t matter what the parties thought they were getting; they are bound by the terms they used.
Consider what could happen if Junior breaks his arm and spends the night in the hospital with only a major medical policy in force. The bill is $8,000. But the major medical policy covers only catastrophic illness, such as cancer, and only after the expenses are in excess of $20,000. Problem? You betcha.
And don’t expect any relief from the judge. That’s what the parties agreed to get.
Be careful with your terminology. Your client will have to live with it.
Ore Tenus: When is it Allowable?
September 4, 2018 § Leave a comment
Lawyers come before us with agreed orders that read something like this: “On motion of the plaintiff ore tenus, the parties agree that …” and the order goes on to spell out some relief.
Ore tenus, of course is Latin for “by word of mouth,” which means that the motion is made orally, and not in writing.
MRCP 7(b)(1) speaks directly to this:
An application to the court for an order shall be by motion which, unless made during a hearing or trial, shall be made in writing, shall state with particularity the grounds therefor, and shall set forth the relief or order sought. The requirement of a writing is fulfilled if the motion is stated in a written notice of the hearing of the motion.
The rule could not be any clearer. You must file a motion in writing asking for particular relief, and you may then follow it up with that agreed order. As I tell lawyers all the time: “Give me an agreed order signed off on by everyone, or set it for hearing.”
There are all kinds of reasons why this is the best practice. The chief one in my opinion is that it makes for a clear record. A motion is filed, and later there is a corresponding order. In fiduciary matters that motion signed and sworn by the fiduciary may be what stands between you and an inquiry by a reviewing court as to whether you have done something improper, as in the case at this link. The written motion also documents for the record exactly what it was that the court was called upon to do and that notice was given.
The one and only exception to the writing requirement is that the motion may be made orally in the course of a hearing or trial. The significance of that exception is that there is a record of what the court is being called upon to do, followed by the court’s immediate or even later ruling. My thinking is that the rule refers to hearings on the record, as opposed to informal hearings or discussions in chambers or even in the courtroom without a record. In those situations, the court should direct someone to file a written motion complying with R7(b)(1) and set it for hearing.
Reprise: Estate Resources
August 31, 2018 § 1 Comment
Reprise replays posts from the past that you may find useful today.
A COMPENDIUM OF ESTATE POSTS
July 5, 2011 § 5 Comments
- Before you file the pleadings, ask yourself whether it is necessary to open an estate in this case.
- And here’s some more info on how to pass assets without an estate.
- Exempt property is not a part of the estate. Here’s a guide to what is exempt and what is not.
- The original will must be probated and retained by the clerk.
- Bonds in testate and intestate estates.
- Probating a will in common form.
- How to probate a copy or a lost will.
- Administering an intestate estate.
- Determining the heirs in an intestate estate.
- When can inventory and appraisement be waived?
- Oops, you filed that estate in the wrong county. Here’s why it can not be transferred.
- What happens when a testator leaves a bequest that can not be satisfied? It’s called ademption.
- And here’s how to handle lapsed legacies.
- Can you set aside an inter vivos gift between spouses? Here’s the rule.
- Contesting probated claims.
- Will contests: Undue Influence.
- Will contests: Lack of testamentary capacity.
- Five tips to improve your probate practice.
- A few random estate matters.
- What you need to know before trying to sell real property in an estate.
- Navigating your way through an insolvent estate.
- You need to know how to deal with this wrinkle in publishing process to close an estate.
- Waiving accounting.
- A checklist for an accounting.
- Reading the duties of an attorney in a probate matter might give you second thoughts about taking that case.
- Sure, you want to get paid. Here’s what you need to prove to get an award of an attorney’s fee in a probate matter.
- A checklist for closing an estate.
- Handling estate matters in District 12, Place 2
Standing to Demand an Accounting
August 29, 2018 § Leave a comment
We visited the Ferrell v. Cole case yesterday, dealing with who is entitled to notice to close an estate. Ferrell held that only persons with a direct pecuniary interest in the estate were entitled to notice. If one is not in the class of persons entitled to notice, does one have standing to demand an accounting or to object to an accounting?
That was the question in Flowers v. Estate of Flowers, decided February 6, 2018, by the COA. At the trial level the Special Chancellor had denied the request of Claire and Jane, daughters of the decedent, for an accounting, finding that they had no current interest in their mother’s estate. Their interest was described by the COA this way:
¶4 … The will also established a trust that named D.A. [a minor] and his descendants as the income beneficiaries. The will provided for the trust’s termination either at the time of D.A.’s thirtieth birthday or his death, whichever event occurred first. The will further stated that, at the time of termination, the trust’s assets were to be divided evenly between D.A. and Knox [the decedent’s son]. The will then granted Claire and Jane a shifting executory interest by providing that, if both D.A. and Knox passed away without any descendants before the trust’s termination, the trust’s assets were to be distributed to Claire and Jane as beneficiaries, either directly or through conservatorships. While the will relieved the trustees from having to render a periodic accounting to any court, it stated that the trustees “shall . . . account fully and completely annually, throughout the term of this [t]rust, to such income and/or corpus beneficiaries as there may be or[,] in the event such beneficiary is a minor or a ward, then to such beneficiary’s guardian.”
So, in that situation, did Claire and Jane have standing to demand an accounting? Here’s how the COA dealt with the question:
¶16. On appeal, the parties disagree as to whether Claire and Jane have standing to request an accounting of their mother’s estate and testamentary trust. Since standing is a jurisdictional issue, we review it de novo. SASS Muni-V LLC v. DeSoto Cty., 170 So. 3d 441, 445 (¶12) (Miss. 2015). Standing is to be determined at the commencement of a lawsuit. In re Estate of Baumgardner, 82 So. 3d 592, 599 (¶21) (Miss. 2012). Regarding the applicable caselaw on standing, the Mississippi Supreme Court has stated the following:
To have standing to sue, a party must assert a colorable interest in the subject matter of the litigation or experience an adverse effect from the conduct of the defendant, or as otherwise authorized by law. An interest is deemed colorable if it appears to be true, valid, or right. An individual’s legal interest or entitlement to assert a claim against a defendant must be grounded in some legal right recognized by law, whether by statute or by common law. For a plaintiff to establish standing on grounds of experiencing an adverse effect from the conduct of the defendant/appellee, the adverse effect experienced must be different from the adverse effect experienced by the general public.
SASS Muni-V, 170 So. 3d at 446 (¶13) (internal citations and quotation marks omitted).
¶17. Mississippi precedent clearly establishes that vested remainder beneficiaries of a testamentary trust have standing to file suit and that holders of a shifting executory interest have some limited rights that can provide standing to file suit. See Baumgardner, 82 So. 3d at 600-01 (¶¶27-28); Hemphill, 245 Miss. at 46, 145 So. 2d at 461. [Fn 3] Claire and Jane claim they are vested remainder beneficiaries of their mother’s testamentary trust while Knox asserts his sisters have an unvested executory interest. As previously discussed, the chancellor found Claire and Jane were unvested contingent remainder beneficiaries.
[Fn 3] Cf. Cannon, 59 Miss. at 302-05 (holding that contingent remainder beneficiaries could prevent a life tenant from future waste to the detriment of the inheritance).
¶18. In applying precedent to the instant case, we find that Claire and Jane possess a shifting executory interest in their mother’s testamentary trust. A review of the will’s terms reflects that Brenda’s estate vests in D.A. and Knox, but that D.A. and Knox inherit subject to a condition of survivorship. See Hemphill, 245 Miss. at 46, 145 So. 2d at 461. D.A. and Knox may be divested if the condition of survivorship is not fulfilled. If the survivorship condition is not fulfilled, D.A. and Knox are then divested of their interests, which shift to Claire and Jane as beneficiaries. Precedent establishes that, as the owners of a shifting executory interest, Jane and Claire possess limited rights to prevent future waste. See id. See also Columbus & Greenville Ry. Co. v. City of Greenwood, 390 So. 2d 588, 592 (Miss. 1980) (applying the Hemphill holding to find that the heirs of original land grantors possessed a reversionary interest capable of evaluation). “An executory interest is a future interest, which is held by a third person, that either terminates another’s interest before its natural termination, or begins after the natural termination of a preceding estate.” K.F. Boackle, Real Property—Deeds and Conveyances, 7 Encyclopedia of Mississippi Law § 62:29 (2d. ed. Jeffrey Jackson et al. eds.). “A shifting executory interest occurs when ownership shifts from one transferee to another upon the occurrence of the subsequent event.” Scott v. Brunson,
569 S.E.2d 385, 387 (S.C. Ct. App. 2002). We now turn to a more specific review of the terms of Brenda’s will and the legal consequences of those terms.
¶19. In applying caselaw to the terms of Brenda’s will, we find the will’s terms reflect that, in creating the testamentary trust, Brenda named D.A. the income beneficiary with the principal to be placed in trust until the earliest of either D.A.’s thirtieth birthday or his death. At either D.A.’s thirtieth birthday or his death, Brenda’s will directed that the trust’s principal be evenly divided between D.A. and Knox “per stirpes to include adopted children.” The terms of the will next discussed disbursement of trust assets to beneficiaries who were under the age of twenty-one at the time of the trust’s termination, or who died before the trust’s termination. Finally, in establishing that D.A. and Knox inherit subject to a condition
subsequent of survivorship, the will stated as follows:
If there are no surviving beneficiaries, descendants of deceased former beneficiaries, former beneficiaries who are living, or descendants of deceased former beneficiaries, then his or her interest shall be distributed share and share alike to the [c]onservatorships for my two daughters[, Claire and Jane;] should either one or both of them not have a [c]onservatorship at the termination of this trust[,] then distribute their portion outright to them.
¶20. Thus, Brenda’s will established that, if D.A. and Knox failed to satisfy the condition of survivorship, they would be divested of their interests, which would then shift and be distributed to Claire and Jane. Accordingly, a review of Brenda’s will reflects that she gave Claire and Jane a shifting executory interest in the assets of the testamentary trust. [Fn 4] As stated, Mississippi precedent reflects that holders of a shifting executory interest enjoy limited rights to enjoin the possessory owner from waste of the inheritance. See Hemphill, 245 Miss. at 38, 145 So. 2d at 457. [Fn 5] We now turn to a review of applicable and instructive Mississippi precedent.
[Fn 4] See Hemphill, 145 So. 2d at 457 (finding that individuals who possessed a shifting executory interest in land taken and allegedly damaged by the Mississippi Highway Commission possessed limited compensable rights in the land); White v. Inman, 212 Miss. 237, 256, 54 So. 2d 375, 381-82 (1951) (finding the testator’s will devised to his daughter an estate in fee simple defeasible subject to an executory limitation). ).
[Fn 5] 5 Cf. Cannon, 59 Miss. at 302-05 (holding that contingent remainder beneficiaries could not recover damages from a life tenant for past waste but could enjoin the life tenant from future waste to the inheritance’s detriment
¶21. In Hemphill, the supreme court explained that an executory-interest owner’s limited right rests upon the constitutional provision for due process. Id. at 46, 145 So. 2d at 461. The Hemphill court found that Mississippi precedent and statutory law “place an independent
value and significance on future interests, whether ‘vested’ or not.” Id. at 47, 145 So. 2d at 462. The Hemphill court further explained that a contingent remainder interest “has achieved status as a protectable interest for many purposes” when the “contingent remainder is limited to an existing ascertained person[,]” like Claire and Jane in the instant case. Id. at 48, 145 So. 2d at 462. According to the Hemphill court, “[w]hen a contingent remainder is limited to an existing ascertained person[,] there is no question but that the courts will recognize the interest as having present existence.” Id.
¶22. Thus, upon review of relevant caselaw and the record before us, we find the chancellor erred in denying Claire and Jane’s request for an accounting of their mother’s estate and testamentary trust. As holders of a shifting executory interest in their mother’s estate, Claire and Jane possess limited rights to enjoin the possessory owners from future waste of the estate. See id. at 38, 145 So. 2d at 457.6 As a result, we reverse the chancellor’s judgment finding they lack standing to request an accounting, and we remand the case for further proceedings consistent with this opinion.
In all fairness, the COA did not have the benefit of the Ferrell decision when it decided Flowers. So the COA had to rely on tax-sale, eminent-domain, and property cases for the most part in reasoning through to a decision. But after all this, in light of Ferrell, did Claire and Jane have such a “direct pecuniary interest” so as to entitle them to that level of of protection? And isn’t the “colorable interest” test of Sass-Muni-V (a tax-sale case) less restrictive than the “direct pecuniary interest” of Ferrell (an estate case)?
Or are the interests of Claire and Jane so remote that they can’t be said to have that “direct interest” under Ferrell, which is estate law?
Now that the courts have Ferrell as a waypoint, I hope they can give those of us at ground level some clear, practical guidance.
Who’s Interested?
August 28, 2018 § Leave a comment
MCA § 91-7-295 provides that, to close an estate, “Summons shall be issued or publication be made for all parties interested.” The interested parties have the opportunity to contest the final account.
Only thing is, the statute does not define who is an interested party. And, to compound matters, neither has case law. Until August 23, 2018.
On that date the MSSC handed down Ferrell v. Cole, which looked to the will contest statute to help define who would constitute interested parties under Section 295. The unanimous decision (Randolph not partcipating) by Justice King said this:
¶10. The statute regarding will contests provides that all interested parties must be made parties to a will contest. Miss. Code Ann. § 91-7-25 (Rev. 2013). This Court has noted that interested parties under the will contest statute are those whose direct pecuniary interests will be affected by the will. Garrett v. Bohannon, 621 So. 2d 935, 937 (Miss. 1993). Interested parties includes heirs-at-law, beneficiaries under earlier wills, and beneficiaries under the will being contested. Id. The Mississippi Court of Appeals has noted that interested parties in a will contest may also include creditors, as they may have a direct pecuniary interest in the estate. See In re Estate of Necaise, 126 So. 3d 49, 56 (Miss. Ct. App. 2013). A similar standard should be used to define interested parties regarding the final accounting under Section 91-7-295. To be an interested party under the statute, the party must have some legal tie to the estate in the fashion of a direct pecuniary interest. …
In this case, Tullos, an attorney, had gotten the chancery court to approve a contingent fee contract for wrongful death litigation on behalf of the estate. When he went to close the estate, the Ferrell Group, attorneys, objected claiming a dispute with Tullos over fees. Ferrell had never probated a claim against the estate, and there was no mention of Ferrell in the contract pre-approved by the court. The MSSC affirmed the chancellor’s conclusion that Ferrell was not an interested party within the meaning of the statute.
Closely related to the issue of notice is the issue of who is an interested party for the purpose of standing. It would seem that a person would have to be an interested party within the meaning of the statute in order to have standing to intervene or to sue to demand an accounting, and that interested party ” … must have some legal tie to the estate in the fashion of a direct pecuniary interest.”
So, what constitutes that kind of “direct pecuniary interest?” We’ll look at a case tomorrow that raises some questions in an attempt to answer that question.
Circuit or Chancery?
August 27, 2018 § 4 Comments
The State of Mississippi filed suit in chancery court against a number of pharmacies for fraud and deceptive trade practices in connection with Medicaid reimbursements. The complaint sought the following relief:
(1) an order enjoining the Defendants from continuing the fraudulent, deceptive and/or unfair acts or practices complained of herein, and requiring correcting measures;
(2) an award of compensatory damages to the State in such amount as is
proved at trial;
(3) an award of actual damages;
(4) an award of all civil penalties provided for by statute;
(5) an award of punitive damages;
(6) an accounting of all profits or gains derived in whole or in part by the Defendants through their fraudulent, unfair and/or deceptive acts or practices complained of herein;
(7) a constructive trust of the moneys illegally and impermissibly obtained from the Defendants’ scheme;
(8) an order imposing a constructive trust on and/or requiring disgorgement by the Defendants of all profits and gains earned in whole or in part through the fraudulent, unfair and/or deceptive acts or practices complained of herein;
(9) an award of attorney fees, costs, and prejudgment interest; and
(10) such other and further relief as the Court may deem appropriate and just.
Defendants responded asking that the matter be transferred to circuit court because of the claims for money damages, and because they wanted to protect their right to a jury trial. The State objected.
The chancellor agreed with the defendants
In his order, the chancellor found that, although the State prayed for some equitable relief, the claims primarily involved recovery of actual and punitive damages. In deference to the Mississippi Constitution’s right to a trial by jury, the judge ruled that, when claims are connected to a contractual relationship or are otherwise involve a question of law, the questions of both law and equity are more appropriately presented in
circuit court. The judge held that the main relief sought was legal, and ordered that the case be transferred to circuit court. The State appealed.
In State of Mississippi v. Walgreen Co., et al., the MSSC affirmed. Justice Beam wrote the August 8, 2018, opinion for a unanimous court. The court first addressed and rejected the State’s argument that an injunction sought under MCA § 75-24-9 must be brought in chancery court. It then went on to deal with the transfer from the equity court to the law court. This is the portion of the opinion addressing chancery vs. circuit jurisdiction:
¶29. We recognize the importance of the State’s request for remedies, including an accounting and a constructive trust, which typically require the chancellor’s equitable review, and we certainly do not intend to devalue that importance here. But an application of the State’s equitable claims is not enough to limit jurisdiction to the chancery court; not even through the application of Section 75-24-9. We have held that chancery courts maintain “the discretion to award legal and even punitive damages as long as” their jurisdiction has attached. Southern Leisure Homes, Inc. v. Hardin, 742 So. 2d 1088, 1090 (Miss. 1999). Though, in matters like the one before us today, “it is more appropriate for a circuit court to
hear equity claims than it is for a chancery court to hear actions at law since circuit courts have general jurisdiction but chancery courts enjoy only limited jurisdiction.” McDonald’s Corp. v. Robinson Indus., Inc., 592 So. 2d 927, 934 (Miss. 1991); see also Hardin, 742 So. 2d at 1090; Union Nat’l Life Ins. Co. v. Crosby, 870 So. 2d 1175, 1182 (Miss. 2004).
¶30. We reiterated this position in Era Franchise Systems, Inc. v. Mathis, 931 So. 2d 1278 (Miss. 2006). There, we noted that “equitable claims are more appropriately brought before a circuit court when they are connected to a contractual relationship or other claims tied to questions of law.” Mathis, 931 So. 2d at 1283 (citing Copiah Med. Assocs. v. Mississippi Baptist Health Sys., 898 So. 2d 656, 661 (Miss. 2005); Crosby, 870 So. 2d at 1175; RE/Max Real Estate Partners v. Lindsley, 840 So. 2d 709 (Miss. 2003)). In Mathis, Venit Mathis filed a complaint against multiple defendants alleging various claims, framed as a derivative action on behalf of REP–an organization in which he alleged to have a fifty-percent stake. Like the State in the matter before us, Mathis pleaded several causes of action and prayed for both legal and equitable relief. After the chancery court determined that it would be best to bifurcate the action, leaving the equitable claims in chancery court and transferring the legal claims to the circuit court, the defendants appealed. This Court reviewed the matter and determined that the chancellor had committed reversible error. Mathis, 931 So. 2d at 1283-1284. Following our holding in Crosby (stating that where a complaint seeks both actual and punitive damages, the “remedy is clearly legal rather than equitable in nature,” Crosby, 870 So. 2d at 1179), we determined that the circuit court’s general jurisdiction is better suited to try a case when doubt exists as to whether the claims are equitable or legal. Mathis, 931 So. 2d at 1282 (citing Burnette v. Hartford Underwriters Ins. Co., 770 So. 2d 948, 952 (Miss. 2000)). Finding that Mathis’s action revolved around issues stemming from contractual obligations not met by the defendants, we reversed the chancellor’s decision denying the defendant’s motion to transfer the matter to the circuit court. Id. at 1283.
¶31. Similarly, in the often-cited Crosby case, the plaintiffs brought an action to recover against the defendants for several common-law and statutory claims arising out of sale of insurance policies and allegedly exorbitant premiums. Crosby, 870 So. 2d 1175 (Miss. 2004). Although the plaintiffs requested a constructive trust, an accounting, and injunctive relief, the defendants claimed that the complaint sounded in tort and contract law–not equity–and requested the case be transferred to circuit court. Reviewing the matter on interlocutory appeal, this Court reversed the chancellor’s denial of the defendant’s motion to transfer, and determined that “each and every one of Crosby’s claims, even the equitable claims of unjust enrichment and constructive trust, arise from the sale and alleged breach of an insurance contract.” Id. at 1182. We noted that an argument alleging otherwise ignores the fact that, unless there was a contractual relationship between Union National and Crosby, she would have no claims arising from the sales, administration and service of the insurance policy. . . .The alleged mismanagement and misappropriation of premium money concerns Crosby’s contractual duty to pay for the insurance policy and Union National to provide her coverage. Id.
¶32. This analysis is directly applicable to the State’s claims against the pharmacies. While it is true that the State’s complaint does not plead the facts necessary to establish a breach-of-contract cause of action, we must look to “the substance, and not the form” of the claims in our resolution of a matter. Copiah Med. Assocs., 898 So. 2d at 661. With the State’s single theory of wrongdoing arising from the defendant’s obligations under the Medicaid provider agreements, the State’s decision to omit a breach-of-contract claim in no way affects the complaint’s substance: the claims asserted and the relief requested present legal arguments and legal remedies. Moreover, much like Crosby and Mathis, the heart of the complaint concerns a provider agreement (a contract), its terms, and the parties who failed to abide by the arrangement. While the equitable issues pleaded are relevant and not to be ignored, the legal issues which flowed from the pharmacies’ alleged inflated reimbursement requests predominate the State’s claims and requests for relief. As a result, jurisdiction properly lies in the circuit court.
¶33. Putting aside the State’s requests for restitution, accountings, constructive trusts, and injunctions, the complaint prays for millions of dollars in actual and punitive damages based on the defendants’ alleged unwillingness to comply with the signed provider agreements. Whether the State disagrees that the basis of these complaints sounds in contract is of no moment. Rather, as most of the claims are legal in nature, the circuit court is the appropriate forum to rule on the matter.
¶34. This decision in no way strips the Attorney General of his constitutional authority to pursue an injunction. Rather, it allows the State fully and fairly to pursue all claims against the defendants, while providing the defendants with an opportunity to have those issues presented to a jury.
The State, therefore, should fully and ably proceed with its complaint in circuit court.
I could quibble all day with the “general jurisdiction” vs. “limited jurisdiction” fiction and how it is so unhelpful to this discussion, but I’ll pass and submit to the principle that if the matter is an action for damages, it should go to circuit.
Having said that … <HERESY ALERT> … my question is, “Why, Mississippi, do we continue to put ourselves through this contortion when we could resolve it easily by merging our law and equity courts into one system?” I know that’s heretical, coming especially from a chancellor, but merger of law and equity has worked handsomely in almost all of the other United States for as many as 150 years without jurisprudential armageddon.
In a merged system, we would not have tug-of-wars between circuit and chancery. As many claims for relief as one has could be joined in a single action to be addressed by the court as appropriate.
Some say that would sacrifice the expertise in minor’s issues, probate, and family law that has been accumulated in chancery over the centuries. That is a somewhat valid concern, but I don’t see that the quality of judicial decisions in merged states is significantly less than Mississippi’s. Also, in some jurisdictions where number of judges and caseload are adequate, judges specialize in certain areas such as family law and criminal law, allowing development of expertise.
Some do not want to sacrifice the jobs of sitting chancellors in a merger, but I don’t think that merger would result in the loss of a single judge slot. We would still have the same number of cases to be handled, requiring at least as many judges as we have now.
Others say, “If it ain’t broke …” etc. To that I concede that it ain’t necessarily broke … but is it functioning as efficiently, justly, and equitably as it can and should?
We ought always be ready and willing to discuss and debate the best ways to fashion our court system.
The Better Chancery Practice Blog 