A CD Pitfall
January 26, 2016 § 5 Comments
A 2015 COA case reveals a feature of CD’s that could cause problems for some of your clients, and could impact estates you handle.
In 1990, Audie Bell English and several other relatives purchased a $75,000 CD at Sunburst Bank, which later was acquired by Regions Bank. The CD automatically renewed every 6 months at the then-prevailing rate. Under its terms, any of the purchasers could cash out the CD without participation of the others, but to do so the original CD was required to be presented. There was a policy in place, however, for issuance of a replacement original in the event that the initial original certificate became lost.
All of the other purchasers died, and Audie Bell, the sole survivor, presented the original certificate to Regions for payment. The bank refused to honor it, however, because it could not locate any records, which it took to mean that the CD had already been redeemed.
After Audie Bell died, the executrix of her estate filed suit against Regions for breach of contract, seeking damages in the face value of the $75,000 CD, plus a little more than $247,000 in accrued interest.
Both the estate and the bank filed motions for summary judgment.
The chancellor granted Regions summary judgment, relying on a New York case that held, in essence, that there is a legal presumption of payment arising out of the fact of a long delay between the right to enforce an obligation and the attempt to do so. He found no genuine issue of material fact, and that Regions was entitled to a judgment as a matter of law.
In the case of Estate of English v. Regions Bank, decided August 25, 2015, the COA reversed, noting that Mississippi did not recognize the same presumption as in the New York case. The court remanded for a hearing on the fact issue whether the CD had been redeemed, or whether it should be paid.
It should be emphasized here that what was reversed here was the finding that there was no genuine issue of material fact. The chancellor may well resolve the fact issue against the estate at trial, but that will depend on presentation of evidence by both sides.
What I think merits your attention is that, more and more, it seems to me, the rules of banking are tilting in favor of the banks and against “small” depositors [to a bank, $75,000 is a piddling deposit; to most of us, it is a fortune]. You might want to factor this in when advising your clients about record-keeping and protecting assets. Some of your may have some comments about how your clients can protect themselves from an adverse outcome in a scenario such as this, and how to avoid litigation. I just think most of us believe that when we have in hand an original negotiable instrument such as a CD, we expect it to be honored, and that the burden of its own record-keeping should be on the bank.
Chancery Court and the Family Feud
January 25, 2016 § 3 Comments
You will not find it in the Mississippi Constitution or in any statute, but chancery courts in Mississippi have long exercised original subject-matter jurisdiction over family feuds that may not exactly invoke any legally cognizable cause of action.
You can find a recent example in the COA’s McGriggs v. McGriggs, et al., decided December 15, 2015. In that case, after Alfred McGriggs died, one faction of his family buried him on family land in Claiborne County. Soon after, another faction filed a petition to have the body exhumed and reinterred somewhere else, alleging that (a) the burial violated the cemetery laws of the state, and (b) having a body buried on the land impaired its value for the survivors, of whom there are apparently many.
You can read Judge Wilson’s opinion for yourself. It will enlighten you about the legality of burial on private property and who gets to make the call about where and how to dispose of a dead body. Oh, and the appellant and the appellees were all pro se. [Spoiler alert: the COA affirmed the chancellor’s decision to deny the petition.]
What I want to inspect here is how chancellors handle these family disputes.
In McGriggs, the chancellor was confronted with pro se litigants who insisted on trying to air out decades-old family disagreements, misunderstandings, and slights. With the patience of a saint, the chancellor gave them wide latitude to air their grievances, reeling them back in when they went too far afield.
That really is the key in handling a case like this: to allow the airing of grievances without letting it turn into a rabbit hunt.
I once had a suit styled “Complaint for Partition of Real Property,” called for trial. Other than the fact that it included no deraignment of title, the pleading was professional-looking and set out all of the required averments. When I called the case, the two named plaintiffs answered for themselves. They were proceeding pro se. When I called the defendant, he was pro se also. I told the plaintiffs they could present their case, and they asked me what they were supposed to do. I explained that I could not help either side, but that they could call witnesses of they liked. One of the plaintiffs took the stand and explained that the defendant had moved into momma’s house after she died, and the rest of the family insisted that he move out or pay rent. He left in a huff, but when he did he dismantled the fireplace and took it with him. They wanted him to replace it or pay for a new one. The defendant did not have any cross-examination, and the plaintiffs said that was all the proof they had. I dismissed the case and pointed out this was really a lawsuit that should have been brought in county court. There was no way I could stretch this into a partition suit. But before they were shown out of chancery, the family was able to make a record of how irresponsible and low-down was the defendant.
In another case, brothers had been fighting for years over a pond that straddled their property lines. When the case came before me in 2007, I noticed that this was their fourth trip to court. All three previous cases had been settled by agreed orders, which apparently did not fix the real problem. When the lawyers came in with an agreed order this time, I told them I would not approve their settlement, but that we would give them both a chance to be heard. In two days of testimony we heard a little about a drainage problem with the pond, but we heard a lot about: rude behavior; how one brother did not attend the funeral or even send a card when the other’s son died; name-calling; hurt feelings; and a litany of petty grievances that had piled up into a family dispute. I ordered some remedial work on the drainage system and enjoined putting up of signs and other provocative acts. They have not been back since. I don’t know whether the airing of grievances helped, but I like to think it did.
Sometimes what people need is just the chance to tell someone what a no-good so and so the other party is. If it keeps people from killing and maiming each other to make that point, then I suppose that’s a legitimate function of chancery court. As McGriggs illustrates, though, it requires the chancellor to have the wisdom and insight to understand that, and the patience to let it proceed.
A Few Comments on McGrew
January 21, 2016 § Leave a comment
Following up on our post yesterday about McGrew v. McGrew, here are some comments:
- First of all, let me say that none of my comments here pertain to the lawyers or judge in McGrew. I do not know enough about everything that transpired to comment on what was done or not done, and why. These comments are general.
- As a general proposition, the longer you delay to get a final judgment entered, or to get that QDRO done, or to close that estate, the more problems will crop up. I have never understood, and still do not understand, lawyers who procrastinate in tending to their clients’ business. Do those lawyers have unlimited malpractice insurance, or are they somehow bulletproof? Get it done, get it entered, get it final, and move on. That’s what your clients are paying you for.
- If you think the particular lightning bolt of a litigant dying amidst your particular litigation is far-fetched, think again. Baby-boomers, who have inherited more wealth than any previous generation, are entering their 70’s and 80’s. So within the next 20 years, you can expect to see lots of litigation involving them (us), and mortality being what it is, odds are it will claim some of the parties in your cases in mid-lawsuit.
- When the judge directs a lawyer to prepare a judgment or order, the responsibility is on that lawyer, not on the judge or opposing counsel. If the judge says “10 days,” do it in that time-span.
- As I said yesterday, White was my case. Luther “Luke” White was my client. He was 71 when the divorce was filed, and Johnnie was 77. On record this was their fourth divorce from each other; however, at the conclusion of the trial a local attorney approached me and said that there had been yet another case some years before in which the chancellor ordered the couple to retire to a witness room and see whether they could settle the case. They emerged holding hands, he said, and went downstairs to the clerk’s office and dismissed the divorce. Shannon Clark was the chancellor in my case. When he rendered his bench opinion for the small audience gathered in the courtroom, he began something like this: “In my years as a chancellor, and as a practicing attorney, I have seen many divorces. A good number have involved couples getting their second divorce from the same spouse as previously. And you might be surprised to know that a number of cases have involved couples getting their third divorce from each other. But never, in all my years as a chancellor or lawyer, have I ever seen the same couple get their fourth divorce from each other. Never.”
‘Til Death Do Us Part
January 20, 2016 § 1 Comment
It should be pretty clear that one party’s death during pendency of a divorce proceeding puts a stop to the divorce and leaves the parties right where they were before the divorce action was filed.
What is less clear is what happens to the divorce when one party dies after trial but before a judgment is entered.
That scenario has actually been played out in appellate cases several times, as we shall see.
The most recent example is the case of McGrew v. McGrew, decided by the COA December 15, 2015.
A trial in the divorce case of Peggy and Charles McGrew was held on November 22, 2013. The chancellor ruled from the bench that Peggy was entitled to a divorce from Charles on the grounds of adultery and imprisonment. The chancellor also ordered that Peggy have use and possession of the former marital residence until Charles was released from prison, at which time it would be sold and the equity divided. The chancellor ordered that a judgment be prepared based on his oral rulings.
Peggy was dissatisfied with the ruling on the residence, however, and she filed a R59 motion on December 2, 2013. No judgment of divorce had been entered.
On March 25, 2014, following a hearing on the R59 motion, the judge directed Peggy’s attorney to prepare and present a judgment granting a divorce, based on the previous bench ruling, within ten days, but took the rehearing motion under advisement.
Charles died on June 10, 2014. No judgment of divorce had yet been entered. Peggy immediately filed to withdraw her divorce action. Charles’s attorney filed a motion contending that the bench ruling was final and binding, and that the equitable distribution should be enforced.
On July 18, 2014, the chancellor entered a judgment granting the divorce nunc pro tunc to November 22, 2013, including the terms adjudicated that day.
The COA reversed and rendered. The rationale by Judge Barnes is a lengthy quote by the standards of this blog, but it’s worth your attention:
¶16. Peggy argues the divorce action abated on Charles’s death, and the chancellor had no authority to enter the final judgment nunc pro tunc after Charles’s death.
¶17. Generally, a pure divorce action abates upon the death of one spouse prior to the final decree. Pittman v. Pittman, 375 So. 2d 415, 416 (Miss. 1979). Once a spouse dies, “there is then no status of marriage upon which the final decree of divorce may operate.” Id. (quoting Caprita v. Caprita, 60 N.E.2d 483, 485 (Ohio 1945)). Our supreme court, quoting the American Law Reports, has stated:
It is well settled by practically all of the authorities that, upon the death of one of the parties to a purely divorce action, before the entry of a final decree therein, whether before or after the entry of an interlocutory decree or a decree nisi, the action abates with the consequence that the action may not be continued and no final decree of divorce may be entered thereafter, since the object sought to be accomplished by the final decree, that is, the dissolution of the marriage relation, is already accomplished by the prior death of one of the parties, and there is then no status of marriage upon which the final decree of divorce may operate. The result is that, notwithstanding the pending divorce action and the fact that a divorce might have been granted had no death occurred, the wife is regarded as the widow of the deceased husband, or the husband is regarded as the widower of the deceased wife, as the case may be. Id. (quoting 104 A.L.R. 654).
¶18. Like the request for a divorce, when one spouse dies, “all issues . . . incidental to the request for a divorce and the contest thereon . . . die[].” Id. at 417. This is consistent with the general rule that “[l]itigation is not to be carried on by or against any deceased person.” Billy G. Bridges & James W. Shelson, Griffith Mississippi Chancery Practice § 591 (2000). As explained in Griffith Mississippi Chancery Practice § 620:
A valid judgment cannot be rendered in favor of two persons, one of whom at the time is dead. Such a judgment is void. And likewise a judgment rendered against a defendant after his death is void if he was the sole defendant or was an indispensable party to the action, although the interlocutory or temporary judgment was rendered while he was alive.
¶19. If, however, all issues have been formally adjudicated prior to one spouse’s death, the entry of the divorce judgment postmortem may be permissible under limited circumstances. The rule in such a situation is as follows:
[I]f the facts justifying the entry of a decree were adjudicated during the lifetime of the parties to a divorce action, so that a decree was rendered or could or should have been rendered thereon immediately, but for some reason was not entered as such on the judgment record, the death of one of the parties to the action subsequently to the rendition thereof, but before it is in fact entered upon the record, does not prevent the entry of a decree nunc pro tunc to take effect as of a time prior to the death of the party. But if no such final adjudication was made during the lifetime of the parties, a decree nunc pro tunc may not be entered after the death of one of the parties, to take effect as of a prior date.
Thrash v. Thrash, 385 So. 2d 961, 962-63 (Miss. 1980) (internal citations omitted) (quoting 104 A.L.R. 654, 664 (1936)).
¶20. Here, the chancellor found that because he intended the bench ruling to be final, the entry of the nunc pro tunc order was permissible. Nunc pro tunc means “now for then.” White v. Smith, 645 So. 2d 875, 880 (Miss. 1994). A nunc pro tunc order is used to “supply omissions in the record of what had previously been done, and by mistake or neglect not entered.” Id. (quoting Green v. Myrick, 177 Miss. 778, 171 So. 774 (1937)). A judgment entered nunc pro tunc “normally does not refer to a new or fresh (de novo) decision, as when a decision is made after the death of a party, but relates to a ruling or action actually previously made or done but concerning which for some reason the record thereof is defective or omitted.” Id. (quoting Thrash, 385 So. 2d at 963). The entry of a nunc pro tunc order “does not itself have a retroactive effect[,] but it constitutes the later evidence of a prior effectual act.” Id. (quoting Thrash, 385 So. 2d at 963).
¶21. The chancellor relied on White in support of his decision that the entry of the nunc pro tunc order was permissible. In White, the wife, Johnnie White, filed a complaint for divorce from her husband, Luther White. Id. at 876. The parties later consented to an irreconcilable difference divorce. Id. at 879. A hearing was held, and the chancellor orally granted the divorce. Id. However, before the oral ruling was reduced to writing, Luther died. Id. at 877. Upon Luther’s death, Johnnie moved to dismiss the divorce action. The motion was denied. The chancellor then entered the divorce judgment nunc pro tunc to the date of the bench ruling. The supreme court found the nunc pro tunc judgment permissible, as all matters had been finally adjudicated prior to Luther’s death. Id. at 881. The supreme court reasoned:
[F]rom a technical standpoint, Luther died while married, since his death was prior to the entry of the decree. However, the record clearly indicates that all submitted issues had been litigated and ruled upon by the chancellor on [the date of the bench ruling]. Nothing more was to be accomplished in the interim between the ruling and formal filing of the judgment.
Id.; see also Thrash, 385 So. 2d at 964 (finding divorce judgment proper where all matters were resolved and the judgment was signed by the chancellor one day prior to the husband’s death, but the judgment was not filed by the clerk until one day after the husband’s death).
¶22. Although not discussed by the chancellor, we find it important to note a key distinction between this case and White. White involved a consent divorce, whereas Peggy sought a fault-based divorce. The parties in White had entered into an “irrevocable consent to divorce” prior to Luther’s death. White, 645 So. 2d at 879. Because the parties had signed the irrevocable consent to divorce, the parties were statutorily bound by this contractual agreement, and they were estopped from arguing otherwise. Id. Thus, there was no decision for the chancellor to make regarding the grant or denial of the divorce. Oral factual findings were made regarding the division of property not previously agreed upon. These findings were incorporated into the final judgment. However, it was undisputed these matters were adjudicated as of the date of the bench ruling. Id. at 881.
¶23. Because of this distinction, we find the chancellor’s reliance on White was misplaced. We agree with Peggy’s assertion that the facts here are analogous to those in Pittman, 375 So. 2d at 415, where no final adjudication was found. In Pittman, the wife, Ella Mae Pittman, died between the chancellor’s bench ruling and final divorce judgment. Id. at 415-16. Two weeks prior to her death, the chancellor sent a letter to both sides, setting out his findings and stating that a divorce would be granted in favor of Ella Mae. Id. He instructed the attorneys to prepare a judgment consistent with the letter. After negotiations, the attorneys agreed to the form of a final judgment and sent it to the chancellor. Id. at 416. The chancellor executed the judgment ten days after Ella Mae’s death. Id. The supreme court reversed, finding that the chancellor had no authority to enter the final judgment after Ella Mae’s death, because “all issues in the cause were incidental to the request for a divorce and the contest thereon, and the entire cause died with the complainant.” Id. at 417. In finding the action abated upon Ella Mae’s death, the supreme court stated:
The authorities are clear that the death of [a party] in the divorce action prior to the execution and entry of the final decree by the lower court ended the marriage of the parties and cancelled fully the bill of complaint for divorce and incidental property relief. This is so even though testimony had been heard in the cause and the court had issued what might be termed an “interlocutory order” in the form of a letter.
Id. at 416. The supreme court emphasized “that every decree is in the breast of the court until entered, and a decree has no validity until written out and signed by the chancellor.” Id. (quoting Orr v. Myers, 223 Miss. 856, 862, 79 So. 2d 277, 278 (1955)).
¶24. Although the chancellor in Pittman did not enter the judgment nunc pro tunc to a date prior to Ella Mae’s death, we find this of no consequence. The fact remains that the divorce was not finally adjudicated prior to Ella Mae’s death. A nunc pro tunc judgment is meant to supply omissions in the record, not to set forth a new or fresh decision. White, 645 So. 2d at 880. Thus, a nunc pro tunc judgment would not have been permissible.
¶25. Like Pittman, we find the record here does not support a finding of finality prior to Charles’s death. First, in his bench ruling, the chancellor left the record open for the parties to resolve certain property disputes, stating:
I want to give those things to each of the parties in accordance with its emotional value to either of the parties. . . . So y’all try [to] work those out in that manner so that I don’t have to try to do it myself after this trial is over. And if I have to reconvene the trial to deal with those, I will. But I don’t want the parties to have to get buried in that stuff. And we’ll get back to that.
. . . .
Now, I’m going to leave the record open for you all to divide those personal items.
¶26. Next, Peggy’s motion for reconsideration was not ruled upon during Charles’s lifetime. While the hearing on this motion occurred during Charles’s lifetime, on March 14, 2014, no oral ruling was made. Instead, at the conclusion of the arguments, the chancellor stated:
All right. . . . What I’m going to do is take that under advisement and I’ll give you a decision within 30 days. . . . If you want to submit any law, either side may do so within 10 days.
There is no indication that law was submitted, or that the chancellor reached a decision in thirty days. The next mention of the motion for reconsideration appears in the chancellor’s findings of fact and conclusion of law, which were not drafted or entered until after Charles’s death.
¶27. Also at the hearing on the motion for reconsideration, the following exchange took place regarding the lack of a final judgment:
[CHARLES’S COUNSEL]: . . . Because of Mr. Crosby’s filing this motion [for reconsideration], we have not yet supplied the Court with an order and I hope we’re not negligent in doing so.
THE COURT: Okay. Well, you probably are. It’s been awhile.
[CHARLES’S COUNSEL]: I was saying I might wait another 30 days if you’re giving something consideration.
THE COURT: I would rather see at least the form of the order — if I’m going to reconsider something, I would like to see what I’m reconsidering.
[PEGGY’S COUNSEL]: Yes, sir.
[CHARLES’S COUNSEL]: We’ll have it next week, Your Honor.
THE COURT: Okay.
[PEGGY’S COUNSEL]: In the meantime, would it be appropriate if I gave you the divorce itself, the divorce of the parties, or should we wait?
THE COURT: No. I want to do it all at one time. The supreme court likes it better that way.
(Emphasis added).
¶28. Although Peggy’s counsel requested the chancellor to enter an order solely granting the divorce, the chancellor chose not to do so.[FN 2]
[Fn 2] Had the chancellor entered such an order of divorce, it would not have been “final” without a Mississippi Rule of Civil Procedure 54(b) certification. See M.W.F. v. D.D.F., 926 So. 2d 897, 899-900 (¶¶4-6) (Miss. 2006) (judgment of divorce not final where custody and division of assets not yet adjudicated).
Rather, the chancellor again left the matter open pending resolution of all issues. On March 25, 2014, the chancellor wrote the attorneys and requested that Peggy’s counsel submit a proposed final judgment consistent with the bench ruling. Both sides submitted proposed judgments. However, the judgments differed in (1) who was granted the divorce and upon what grounds, (2) who was awarded a generator that was wired into the marital home, and (3) the disposition of one of the vehicles. Because of the discrepancies, the chancellor ordered a transcript of the bench ruling. The transcript was received six days after Charles’s death, on June 16, 2014. The judgment was then drafted and entered on July 18, 2014.
¶29. Finally, although the judgment states it is consistent with the bench ruling, there are differences. For example, in the final judgment, Charles is awarded the 1992 Jeep Wrangler and Yamaha jet ski. However, in his bench ruling, the chancellor ordered these same vehicles sold and the proceeds divided. Adding to the inconsistency, these same two vehicles were awarded to Peggy pretrial, for her to liquidate and keep the proceeds. Also, there is no indication of an agreement regarding the disputed personal property, as ordered by the chancellor at the bench hearing. Although the chancellor states in his findings of fact and conclusions of law that all disputes were resolved, the divorce judgment does not reflect such a resolution. Rather, the divorce judgment states: “[T]he personal property in the home shall be divided . . . . If the parties cannot agree on a division of said personal property, then each party shall submit a list to the other party.”
¶30. Because all issues were not finally adjudicated prior to Charles’s death on June 10, 2014, the chancellor’s entry of the nunc pro tunc divorce judgment was improper. The chancellor had no authority to enter the divorce judgment. A chancellor may not circumvent the general rule that “a decree rendered against a defendant after his death is void” by entering a judgment nunc pro tunc. Bridges & Shelson, Griffith Mississippi Chancery Practice § 620. Consequently, the divorce judgment is void. See Pittman, 375 So. 2d at 416-17. Consistent with the supreme court’s ruling in Pittman, we “reverse[] and render[] [this cause] without prejudice to the rights of any person affected by [Charles’s] death[.]” See id. at 417.
Don’t assume the lag-time between entry of the final judgment and the death was as long in the cited cases as it was in McGrew. In White, for instance, the trial was concluded mid-afternoon on Tuesday, and the final judgment was put in the mail to Johnnie’s lawyer that day (this was in the pre-email era). It was received by Johnnie’s lawyer (50 miles distant from Luther’s lawyer) on Thursday. Luther was admitted to the hospital on Friday, and he died the following Monday. That’s how fast things can spin out of control. And how do I know all this? White was my case.
More comments on McGrew tomorrow.
Lamar Won’t Run Again
January 19, 2016 § Leave a comment
Turnover on the MSSC continues with Justice Ann Lamar’s announcement that she will not seek re-election. Her position is up for re-election in November, 2016. Her term ends on December 31, 2016.
Lamar, from Senatobia, was elected to an 8-year term in November, 2008, from the Northern District. She had been appointed in 2007.
Change in judicial positions, particularly appellate posts, sometimes seems to occur at a glacial pace, but that is certainly not the case this year and last. Lamar’s is the third MSSC position to turn over since December, 2015. This one will be filled by election. The other two — Justices Beam and Maxwell — were filled by Governor Bryant’s appointment. There is still a vacant COA post in the Southern District awaiting appointment.
Partiting the Former Marital Residence
January 14, 2016 § 2 Comments
Robert and Betty Coleman were divorced in 2002. Under the terms of the divorce judgment, Beverly got exclusive use and possession of the former marital residence, which was situated on family land deeded to the couple by Beverly’s mother, until the parties’ minor child attained majority age. Beverly was responsible to pay the mortgage debt, taxes, and insurance on the property, and the parties were to split equally any maintenance expenses. The judgment did not spell out what was to be done when the child turned 21.
In the years following the divorce, Beverly lived in the home and dutifully paid the sums assigned to her. Robert never paid any of the maintenance expenses.
When the child turned 21 in 2013, Beverly filed an action, apparently for modification of the divorce judgment, seeking possession, title to, and ownership of the home.
Robert counterclaimed for partition, and he filed a motion for a summary judgment that partition, rather than modification, was the proper avenue to accomplish the division. The chancellor agreed with Robert, ruling that “the parties are not married, the property is no longer the marital homestead and the property is subject by law to a division by partition as provided by statute.” That’s a neat, pinpoint ruling that avoids the problem that property division may not be modified.
A hearing was held on the petition, and the chancellor ruled that Betty should have title. He adjusted the equities by ordering Beverly to pay Robert $34,103.70, which amounted to his half-equity in the property at the time of the divorce adjusted upward for appreciation over time.
Robert appealed, arguing that the trial court impermissibly modified the divorce judgment and unfairly partited the property.
In Coleman v. Coleman, handed down January 12, 2016, the COA, by Judge Griffis, affirmed.
So, did the chancellor improperly modify the divorce judgment? Judge Griffis responds:
¶7. “A cotenant wishing to partite real property subject to a divorce decree is not required to file suit to modify the decree, but may exercise her statutory right to partition by filing a petition for partition.” Mosby v. Mosby, 962 So. 2d 119, 123 (¶12) (Miss. Ct. App. 2007) (citing Blackmon v. Blackmon, 350 So. 2d 44, 46 (Miss. 1977)). Robert argues that the chancellor essentially modified the divorce decree and that this modification was improper.
¶8. “This argument is without merit because the chancellor clearly granted the petition for partition and did not, in fact, modify the decree.” Id. Robert requested a partition, and the chancellor stated in his judgment that “the parties are no longer married, the equities need to be adjusted[,] and the partition statutes provide a sound method of arriving at a just and equitable result.” The court “proceeded accordingly under partition.” As the chancellor’s decision was based upon the partition statutes and he did not modify the divorce decree, the Court finds this issue without merit.
And did the chancellor abuse his discretion in how he awarded title and adjusted the equities? Again, Judge Griffis:
¶9. When parties seek a partition of land, “the question of title shall be tried and determined in the suit and the court shall have power to determine all questions of title.” Miss. Code Ann. § 11-21-9. In doing so, “[t]he court may adjust the equities between and determine all claims of the several cotenants . . . .” Id.
¶10. Generally, “a partition in kind, rather than a partition by sale, is the preferred method of dividing property in Mississippi.” Cathey v. McPhail & Assocs., 989 So. 2d 494, 495 (¶4) (Miss. Ct. App. 2008) (citing Fuller v. Chimento, 824 So. 2d 599, 601 (¶8) (Miss. 2002)). Robert and Beverly agreed that the home could not be divided in kind and that it should be sold under statute. They also agreed to a private sale to allow Beverly to purchase the home. A chancellor may order the sale of property and “a division of the proceeds among the cotenants according to their respective interests.” Miss. Code Ann. § 11-21-11 (Rev. 2004). As both parties agreed to a sale, the chancellor essentially needed to “adjust the equities between and determine all claims” of Robert and Beverly and divide “the proceeds” between Beverly and Robert “according to their respective interests.” Miss. Code Ann. §§ 11-21-9 & 11-21-11.
As for how the chancellor adjusted the equities, the COA went through the court’s analysis, and found it proper that Robert was awarded his equity at the time of the divorce plus its appreciation, and Beverly was awarded her equity at the time of the divorce, plus its appreciation, plus the additional equity that accrued over the years due to her payment of the mortgage debt. The COA found no merit in Robert’s argument.
Most crucially, the trial judge’s findings were supported by substantial evidence:
¶15. Keeping in mind the appropriate standard of review, this Court holds that the chancellor’s findings of fact and conclusions of law are supported by substantial evidence and are not an abuse of discretion. Robert did not provide any alternatives to the findings of the chancellor. Furthermore, the parties both agreed that a sale to Beverly was ideal. The chancellor’s well-reasoned conclusions are supported by the record and the briefs of the parties. The partition statutes allow for the chancellor to divide the proceeds among the cotenants according to their interests in the property. Miss. Code Ann. § 11-21-11. After inspecting the record, this Court is unable to see that Robert was denied any of his rights as a cotenant in the chancellor’s final decree. Finding no error, this Court affirms.
This is not one of those spectacular, keeper cases that one whips out every few trials. It’s just a workaday, nuts-and-bolts decision that provides a glimpse into the quotidian matters that stream steadily through the chancery courts every day, and how the chancellors are called upon to fashion common-sense, practical solutions.
A Return to Basics in Third-Party Custody
January 12, 2016 § Leave a comment
If you’ve done any amount of third-party child custody work in the past several years, you can’t be blamed for scratching your head in bewilderment over how to advise your client about the limits and parameters of the natural-parent presumption.
The presumption is that the best interest of the child is served by being in the custody of a natural parent, rather than a third party. The presumption may be overcome by clear and convincing evidence that: (1) the parent has abandoned the child; (2) the parent has deserted the child; (3) the parent’s conduct is so immoral as to be detrimental to the child; or (4) the parent is unfit, mentally or otherwise to have custody. Davis v. Vaughn, 126 So.3d 33, 37 (Miss. 2013).
The problem is defining exactly what kind of conduct satisfies the Davis v. Vaughn test. A recent MSSC case defines that for us.
Concetter Davis and James Wilson had a child, Sha, born April 20, 2003. James filed a paternity and custody action in which he was determined to be the father, and Concetter was awarded custody. Concetter died in 2011, and her family refused to turn Sha over to James. He filed an action in chancery Court, and the chancellor awarded custody to Concetter’s mother, Perlean Davis. James appealed, and the COA reversed and remanded for a finding whether the natural-parent presumption had been rebutted. On remand, the chancellor did not take further evidence, but rather made new findings of fact based on the existing record, again awarding custody to Perlean. James again appealed, and the COA affirmed. On cert, the MSSC reversed and remanded.
In the case of Wilson v. Davis, handed down January 7, 2016, the MSSC laid out in particular what is required to be shown in order to overcome the natural-parent presumption. Justice King wrote for the court (several lengthy footnotes omitted):
¶8. Requiring clear and convincing evidence to rebut the natural parent presumption in one of the four manners listed is important to “honor[] and protect[] the fundamental right of natural parents to rear their children.” Id. However, this Court takes the opportunity to note that the rigid adherence to proving one of the four precise factors to rebut the natural parent presumption may, in very limited and exceptional circumstances, place a child in a circumstance that is clearly not in his or her best interests. And, as is clearly established, the best interests of the child is the lodestar in custody cases. This Court has recognized this principle in the past, stating that “[i]n order to overcome this presumption, there must be a clear showing that the parent is unfit by reason of immoral conduct, abandonment, or other circumstances which clearly indicate that the best interest of the child will be served in the custody of another.” Moody [v. Moody], 211 So. 2d [842] at 844 [(Miss. 1968)] (emphasis added). With this decision, we mark a return to that principle. The natural parent presumption may be rebutted by clear and convincing evidence that actual or probable, serious physical or psychological harm or detriment will occur to the child if custody is placed with the natural parent, such that granting custody to the third party is substantially necessary to prevent such probable harm. In other words, if demonstrable, clear and convincing evidence exists that the child will suffer probable harm and detriment in the custody of the natural parent, the court may find that the natural parent presumption is rebutted, and consequently proceed to a determination of whether a custody award to the challenging party will be in the child’s best interests. Such a finding must prevent probable harm to the child, and not simply find that the third party can provide the child with different or arguably “better” things. See Moody, 211 So. 2d at 844 (“The fact that someone else may be in a better position to furnish the child a larger and more convenient home in which to live does not necessarily mean it would be in the best interest of the child to take it from a parent who is otherwise fit to have the custody of the child.”). This “exceptional circumstances” finding means more than that a child’s bests interests may be served by third party custody; it “requires proof of serious physical or psychological harm or a substantial likelihood of such harm.” Watkins v. Nelson, 748 A.2d 558, 565 (N.J. 2000). More than simply best interests is required, because if that “is the only criterion, then a judge may take children from their parents because the judge personally disproves of the parents’ limited means.” Id. at 567 (internal quotations and alterations omitted). By requiring a much higher threshold than simply best interests, the exceptional circumstances finding “is designed to reduce or minimize judicial opportunity to engage in social engineering in custody cases involving third parties.” Id. It is important not to devolve into a less stringent standard because such would easily “evolve into a ‘fitness contest’ whose outcome will depend on the whims of the trial court.” Id. at 568. “The standard that we adopt has as its benchmark the welfare of the child while at the same time protecting parental rights.” Id. [Emphasis added]
¶9. If the court finds that custody should be granted to the third party under this standard, it is required to make very specific findings of fact on the record. We again emphasize that this is a high threshold. However, we believe this standard will allow chancery courts to reconcile the fundamental rights of natural parents to raise their own children with the primary concern in a custody case, the best interests of the child. See Davis, 126 So. 3d at 38 (“Judges often are faced with the difficult task of removing a child from a loving home in deference to a natural parent’s custodial rights. Even so, the law does not allow parental rights to supercede [sic] the best interests of the child.”).
¶10. Turning to this case, we find that the chancellor erred for several reasons. The original hearing, conducted in the vein of a modification of custody, was held in January 2012. In April 2013, the Court of Appeals reversed the chancery court, finding that it had applied the incorrect standard and had not determined whether the natural parent presumption was rebutted. In July 2013, after a year and a half had passed with a great potential for changed circumstances, and without holding a hearing in which both parties were on notice of the issue of rebutting the natural parent presumption, the chancery court simply amended its original order. The chancery court should have held a hearing and received and considered evidence regarding whether the natural parent presumption was rebutted. See Yelverton, 26 So. 3d at 1055, 1057.
¶11. Furthermore, the evidence found by the chancellor was clearly insufficient to rebut the natural parent presumption. First, the court relied on evidence that James dates and marries women much younger than himself, and that these relationships overlap and include adultery. This Court has noted that marital fault, including adultery, may not be used as a sanction in custody awards. Brekeen v. Brekeen, 880 So. 2d 280, 287 (Miss. 2004). While this is not a divorce action, if adultery may not be sanctioned by denial of custody in a divorce action, it certainly follows that such behavior will be difficult to justify as sufficient to rebut the natural parent presumption. While some of James’s relationship behavior may cause concern, no evidence whatsover was adduced that such behavior has had any actual detrimental effect on Sha, thus the evidence does not show that James’s conduct “is so immoral as to be detrimental to the child.” See Davis, 126 So. 3d at 37 (emphasis added). Additionally, James married his current wife before Concetter passed away and was still married and living with her at the time of the hearing. Indeed, the last extramarital affair and relationship with a younger woman noted by the chancellor were with James’s current wife, and began in approximately 2009, more than two years prior to the hearing. The chancellor made no findings that James was currently engaged in adulterous or immoral relationships, and moreover, made no findings that he was involved in any extramarital relationships that harmed or influenced Sha in any way. See Westbrook v. Oglesbee, 606 So. 2d 1142 (Miss. 1992) (where father and his wife drank alcohol, father used to take drugs but had passed random drug tests by his employer for the past six years, a paternal relative smoked marijuana in front of the child once, and father only had minimal contact with child prior to mother’s death, the Court found “a stronger case must be made against [the father] and matters of more current nature need to be shown to establish that he is unfit as a parent.”).
¶12. The chancellor also cited animosity between Concetter and Annette and James, including physical altercations, as reason to deny James custody. While certainly noteworthy, as it appears in the best interests of Sha to have her mother’s memory and her grief for her mother honored, Concetter has passed away, and there is thus no present danger of such animosity or confrontations. These facts are not sufficient to rebut the natural parent presumption, as they do not bear on James’s fitness or detrimental immorality, but they may be a consideration in a best interests analysis.
¶13. The chancellor also cited the anger issues of Annette’s two sons as a reason to rebut the natural parent presumption. Again, such issues are certainly of concern. Yet, the evidence indicated that neither Sha nor her stepsister had been injured or harmed by the boys. The evidence also showed that the parents were seeking intensive therapy to address the issues. Anger issues in the home of a natural parent that pose a potential danger to a child are certainly something a chancellor should examine in detail. However, in this case, the determination of harm was not based on any proof of actual or probable harm to Sha, but rather, based upon pure speculation on the part of the court. Thus, this is not an appropriate reason to find James unfit or so immoral as to rebut the natural parent presumption.
¶14. Because none of the facts found by the chancery court are sufficient to rebut the natural parent presumption, we must reverse the chancery court on this issue.
So, it takes clear and convincing evidence of probable serious harm or detriment to the child if placed with the natural parent, and placement with the third party is necessary to prevent that probable harm.
The footnotes in this case are chock-full of authority on third-party custody. The only reason I did not include them is that this post would have rivalled Gone With the Wind in length if I had.
This is the case I commented on previously for the proposition that on remand the trial court may rely on the previous record, or may take more evidence. That take, apparently, does not apply any longer in contested child custody cases, particularly third-party custody cases.
Mopping Up After the Divorce
January 11, 2016 § 2 Comments
What do you do when the divorce trial is concluded, the final judgment has been entered, and the post-trial motions have been disposed of? If there’s not going to be an appeal, you just make sure your bill is paid, shake your client’s hand, usher him to the door, wish him luck, say farewell, and shut the door behind him, right?
Well, not exactly.
Do you know whether your client still has his ex-wife named in his will? What about as beneficiary of his life insurance, or survivor on his IRA or 401(k)? Does he still have his ex as POD or survivor on any checking or securities accounts?
I read an article written by a financial advisor recently in which she related an encounter with a newly-married couple, both of whom had been divorced several years before. Both husband and wife had wills that still named ex-spouses as beneficiaries, and the same with life insurance and retirement accounts. When she asked them why they had not been changed, both replied that no one had advised them that they should.
A case in my court recently brought up a similar problem. The wife in the divorce case insisted that she owned the marital residence because the PSA in her 2007 divorce (more than 8 years ago) provided that her ex would execute a special warranty deed conveying his interest to her. Only problem: he never did. So, since May of 2007 she has remained a joint tenant with right of survivorship with that man. If she had died before he tended to that little bit of finish-work, her estate would have to pay another lawyer to do what her divorce lawyer should have done in the first place, and it probably would have involved courtroom billable hours.
Years ago, a man hired me to obtain a QDRO to divide his 401(k) account. He had represented himself in the divorce that took place nearly ten years before. When the divorce was final, he had asked the lawyer who represented his wife how to go about getting the retirement account divided. The lawyer pointed out that he did not represent him, and virtually slammed the door in his face. When the client at last decided to get remarried, he thought that it was time to get the matter tended to, so he hired me. Here is how the PSA read:
The parties agree that wife shall receive the sum of $60,000 from Husband’s 401(k) account.
That was all it said. [For a post on what that 401(k) language should have included, click here]
So we filed a petition for the court to enter a QDRO for her to receive exactly that — $60,000. After being served with process, she went back to her divorce lawyer, who called me and pounded the table, insisting that she was entitled to ten years’ worth of interest. I pointed out that the agreement he had drafted did not have a time frame for payment, that neither party was obligated by the agreement to prepare a QDRO, that there was no interest provision, and that the only definite thing about it was the amount. He called me back a few days later and said his client was willing to settle for the $60,000, and they signed the QDRO, which was entered and the matter finalized. For ten years my client earned money using his ex’s money. Had her lawyer acted in her best interest, he would have gotten that QDRO entered immediately after the divorce judgment.
You might well ask, as I did when my client first hired me, why was his ex not screaming for her money? Well, in the ten years after the divorce she asked him about once a year if he still had her money. She was satisfied with his answers, but apparently no one ever advised her what she was losing by not getting that QDRO entered.
You might also inquire whether my client was unjustly enriched. I would agree that he was, indeed, enriched, but not unjustly so. He did not sleep on his rights. He did not draft the agreement. It was not his obligation to calculate her separate interest. She was wise to want to settle for the principal sim, because if she had wanted to obtain a court ruling that he had been unjustly enriched, and directing him to disgorge any interest received on her money, she would have had to pay the attorney to pursue it, and likely would have had to pay a CPA to calculate the interest and testify as an expert. After paying those folks, she would be lucky if she got to walk away with the $60,000.
Another nightmare scenario involves credit cards. I represented a man in a routine irreconcilable differences divorce. The PSA provided that each would pay the debts in his or her own name, as well as debts incurred in the name of or against the credit of the other. Thank goodness for that specific language, because he came in a year or so later with a letter from a credit card company reporting that an account in joint ownership was in default and making demand on him to pay more than $10,000. Turns out that shortly before the separation his wife had opened one of those accounts the company had solicited by mail, signing her husband’s name, and kept the account concealed from him. Then, after the divorce, she used it to supplement her income. We notified her that she had so many days to pay the account in full or we would sue. She borrowed money from her family, paid it off, and the account was closed. My client’s credit rating took a hit, but that and a modest legal fee were his total damages.
Lesson learned: it might not be a bad idea in the course of a divorce case to have your client run a credit check.
All of this boils down to a simple professional consideration that I have mentioned many times here: When the case is concluded, your client wants to be finally done with it, and she does not want to have to pay another attorney to clean up after you.
Actually, many of these things can be tended to before the divorce is concluded. That deed can be prepared, joint accounts closed, wills changed, bills of sale signed, agreed QDRO signed by the parties, and so on, with the originals held in the lawyer’s file until the judgment is entered.
When you are through with the divorce, help your client through the aftermath. Make sure she revokes all wills naming the ex as a beneficiary. Make sure there are no financial assets not covered by the divorce judgment that are joint, or have survivorship provisions. Make sure that there are no outstanding joint debts not addressed in the divorce. If a QDRO or deed is required for your client’s benefit, get it done ASAP. People are dying every day. You don’t want one of them to be the person you need to finish up your work.





