December 21, 2015 § 4 Comments
Taking a holiday break.
I wish all of you a Merry Christmas, Happy Hannukah, Joyous Kwanzaa, or just a few days off work.
Next post December 28, 2015.
How Will You Measure Your Life?
December 18, 2015 § 2 Comments
Lawyers are driven to accomplish. We are ambitious and goal-driven. Sometimes in pursuing lofty goals, though, we can lose sight of the opportunities we have to make a difference. The importance of making a difference in your own little slice of the universe is something about which I have posted here previously.
Here is a Ted Talk with Harvard Business School Professor Clay Christensen that offers some insight into what really counts and what will ultimately be the measure of your life.
Thanks to Attorney Michael Grace
Equity Shines Through
December 16, 2015 § 9 Comments
Just when you thought equity was moribund (okay, I confess that it’s more me than you), along comes a case where the appellate court looks over the masterful equitable remedy crafted by a thoughtful chancellor and says, “Job well done.”
That’s what happened in the MSSC case Scafidi, et al. v. Hille, decided December 10, 2015, which involved division of the parties’ interests in several businesses inherited jointly by siblings Gerald Scafidi and Jo Ann Scafidi Hille. The facts are complicated, and the proceedings were convoluted, but the gist of it is that the chancellor ordered what amounted to an equitable distribution of the corporations and real property so as to divide them fairly between the brother and sister. Gerald appealed raising many issues that were addressed in detail in the 44-page opinion by Justice Waller. For our purposes, though, we will look at how the court dealt with Gerald’s argument that the relief granted by the chancellor was improper:
¶60. We now turn to the relief granted by the chancellor. In an action to judicially dissolve a corporation, a chancellor does not have to order a dissolution, even if grounds such as oppression or deadlock are met. This is because the general view in Mississippi is that “[d]issolution is an extraordinary remedy to be sparingly administered in exceptional cases only.” Capitol Toyota, Inc. v. Gervin, 381 So. 2d 1038, 1039 (Miss. 1980). However, “if the strife among the participants has been so long and bitter that the former relationships of congeniality and trust cannot be re-established [like Jo Ann and Gerald’s case], there is little left that an unhappy shareholder can do except . . . bring about the dissolution of the business.” F.H. O’Neal & R. Thompson, O’Neal’s Close Corporations § 9.04 (3d ed. 1971). “But the more common relief in modern cases . . . is to provide relief alternative to dissolution.” Id. at § 9.25. Mississippi’s corporate dissolution statute states that “[n]othing contained in this section shall diminish the inherent equity powers of the court to fashion alternative remedies to judicial dissolution.” Miss. Code Ann. § 79-4-14.34 (i) (emphasis added).
¶61. Contrary to Gerald’s assertion, the chancellor did not dissolve the corporations. Instead, he fashioned an alternative remedy to this problem. The chancellor found that the source of funds for the $180,000 Gerald used to purchase the minority shareholders’ interest in the Trailer Park and the Restaurant corporations came from the corporations themselves. Those shares were purchased with funds equitably owned by both Jo Ann and Gerald. So Gerald’s purchase was for the benefit of both parties. The chancellor then disregarded the shares purchased by Gerald and considered Jo Ann and Gerald to be equal shareholders in the Restaurant and the Trailer Park. After equalizing their interests in the corporations, the chancellor ordered that the property lines be modified by survey to reflect that Jo Ann and Gerald owned fifty-percent of the land upon which the Trailer Park and the Campground were situated.
¶62. The Amended Final Judgment from which Gerald appeals states “that the Court divides, partites, and equitably separates the parties by granting each full ownership of separate companies . . . .” He then granted Jo Ann full ownership of the Trailer Park, and Gerald full ownership of the Campground. The chancellor ordered “that each of the parties is to execute the necessary documents, including deeds, bills of sale and stock certificates to accomplish the directions of the court.” Nowhere in the Amended Final Judgment does the chancellor mention “dissolution.” The chancellor did quite the opposite when he fashioned an alternative remedy to dissolution, which he had full authority to do under Section 79-4-14.34 (i) of the Mississippi Code.
¶63. Since the chancellor did not order a direct dissolution of the corporations, Gerald’s argument that this “equitable distribution” method violates the method provided by the Mississippi Legislature in Section 79-4-14.05 to dissolve a corporation and distribute its assets among its shareholders according to their interests is without merit.
¶64. We cannot locate any precedent in which a chancellor has granted this exact, or even similar, relief. However, we note that “[i]t is not necessary that some exact precedent be found for extending relief in a given situation.” Griffith’s Mississippi Chancery Practice § 35 (2000 ed.) (citing Miller v. Doxey, 1 Miss. 329, 333 (1829)). If a certain form of “relief is clearly requisite and a practical remedy may be applied, such remedy is not to be denied because that remedy has never been applied in just that manner to that exact state of case.” Id. The question for this Court to decide, then, is whether the relief granted here is an appropriate remedy under Mississippi Code Section 79-4-14.34(i), which states “[n]othing contained in this section shall diminish the inherent equity powers of the court to fashion alternative remedies to judicial dissolution.” Although little caselaw addresses Mississippi’s alternative-remedy provision, substantial precedent supports the chancellor’s broad powers to provide an equitable solution in cases such as this. See, e.g., In re Hardin, 158 So. 3d at 346.
¶65. Other jurisdictions offer guidance as to appropriate remedies to resolve disputes among dissenting shareholders in a close corporation. Some courts have resorted to remedies listed by statute, while others have fashioned remedies not specifically mentioned in a statute. O’Neal’s Close Corporations at § 9.35 …
After reviewing some of those statutory provisions from other states, the court concluded:
¶67. After reviewing these alternative remedies, and in light of all the particular factual circumstances of this case, we find that granting full ownership in the respective separate corporations operated individually by Gerald and Jo Ann was a practical, fair, and just remedy to resolve the dispute. A chancellor’s remedial powers have long been “marked by plasticity.” Griffith’s Mississippi Chancery Practice § 35 (citing Hall v. Wood, 443 So. 2d 834, 843 (Miss. 1983)). “Equity jurisdiction permits innovation that justice may be done.” Id. If ever a case needed the innovation allowed by equity jurisdiction, it is this one. Considering that nothing “shall diminish the inherent equity powers of the court to fashion alternative remedies to judicial dissolution,” Miss. Code Ann. § 79-4-14.34 (i), we find that the chancellor did not abuse his discretion in fashioning this alternative remedy.
I’m proud to see the high court recognizing the unique problem-solving capability of chancery court. Innovation and flexibility to achieve a just, equitable outcome are what equity is all about.
Justice Pierce to MJC
December 15, 2015 § 1 Comment
MSSC Justice Randy Pierce is stepping down from his Mississippi Supreme Court seat to take on directorship of the Mississippi Judicial College (MJC). The appointment is effective February 1, 2016.
MJC is the body that is responsible for training and continuing education of Mississippi judges at all levels, court clerks, and court reporters. It also compiles data on the judicial branch for the Mississippi Legislature. MJC is a division of the University of Mississippi, and has its offices on campus in Oxford.
Justice Pierce stated that he had already made the decision not to seek another term when his current one expires in 2017. Justice Pierce is a resident of Greene County, and was elected from MSSC District 2, which is the southernmost district of the state.
The official MSSC announcement is at this link. An article from Mississippi Press-News at Gulflive.com is at this link.
Only yesterday Phillip Thomas had a post on his blog about Justice David Chandler’s decision to leave the court to take over the state’s troubled foster-care program, and how other contested seats in upcoming elections will change the face of the court over the next few years. Looks like that is already happening.
What You Need To Prove for Homemaker Services
December 14, 2015 § Leave a comment
In equitable distribution, one of the factors the court is required to consider is “Substantial contribution to the accumulation of the property … ” by … “Direct or indirect economic contribution …” Ferguson vs. Ferguson, 639 So.2d 921, 928-9 (Miss. 1994).
Over the years since Ferguson the courts have recognized that a homemaker’s contribution is to be recognized as an indirect contribution. In doing that, I think most of us have accepted a modicum of evidence on the point to support a finding. But is that enough?
In the divorce trial between Rodney and Courtney Williams the chancellor made this finding that:
“the wife was the homemaker of the parties[ and] that the husband earned the majority of the financial income. This is reflected by the domestic services rendered by [the wife] shown during the periods of time in which the grandchildren lived in the home, and she, as well as the husband, took care of them. I find that both have contributed equally toward the acquisition of property[—]he directly financial[] and she through domestic and in-kind services. Accordingly, I find that both are entitled to an equal distribution of those properties.”
To be honest, I think most chancellors make similar findings and conclusions. On appeal, Rodney took issue with the chancellor’s statements, arguing that Courtney had made only meager contributions.
In the case of Williams v. Williams, handed down November 17, 2015, the COA found that the chancellor’s findings were not supported by substantial evidence on homemaker services, and remanded for further proceedings. Judge Irving wrote for the majority:
¶35. In Lowrey v. Lowrey, 25 So. 3d 274, 287 (¶31) (Miss. 2009) (citation omitted), the Mississippi Supreme Court explained:
[T]he concept of homemaker services rests on a showing that the homemaker has contributed to the economic well-being of the family unit through the performance of the myriad of household and child-rearing tasks. In valuing this service[,] consideration should be given to the quality of the services. For example, a homemaker who, over the course of the marriage, has been frugal in the handling of homemaker expenditures and has thereby enhanced the family assets is entitled to a more equitable return than one who has been extravagant.
¶36. In this case, the record does not establish the extent of Courtney’s contribution toward the acquisition of the marital property. It appears that the chancellor mistakenly thought Courtney was a stay-home spouse and grandmother. As noted, Courtney worked during the course of the marriage, working eleven of the twelve years of marriage at one place, where her net income was approximately $1,600 per month. The record does not inform us where Courtney worked during the first year of the marriage or how much she earned during that year. The parties had no children together, and there is no testimony in the record regarding the division of the household duties. Although Courtney took care of the grandchildren in the home for some period of time, we note that the grandchildren were her grandchildren, but not Rodney’s grandchildren. It appears that the chancellor placed some weight on this fact in determining that Courtney was a homemaker and that her grandchild-caring duties contributed to the acquisition of the marital estate. The record reflects that Rodney paid the majority of the household expenses and the entire mortgage note on the marital home. It further reflects that Courtney deposited only $250 biweekly in a joint bank account to help with the household expenses but routinely withdrew money from that account for other purposes unrelated to household expenses. And the record is silent as to any other financial contributions that Courtney may have made during the marriage. Therefore, there is not substantial evidence in the record supporting the chancellor’s finding that the parties “both have contributed equally toward the acquisition of property[—]he directly financial[] and she through domestic and in-kind services.”
A few takeaways:
- The chancellor here believed that Courtney’s contribution to the household should have been recognized, but there was simply not enough evidence to support his conclusion. Unless you really want your case to be reversed and remanded, it’s up to you to develop the evidence on the record that will support the judge’s findings. Here, the chancellor could just as easily have found against Courtney on the factor, which could have adversely impacted her equitable distribution. Read Lowrey and take it to heart. Use it as a template in your next equitable distribution case.
- If you represent the homemaker and your case is weak on this factor, make sure you bulk up your proof on the other factors, and try to convince the judge that this is not the key factor to consider in making a division. Remember that all of the factors do not have equal weight; the weight to be accorded to each varies from case to case, depending on the facts.
- The converse is true if you represent the direct contributor. Emphasize the direct contribution in terms of its role in the acquisition and appreciation in value of the marital estate.
- Never assume that the judge’s findings will make up for gaps in your case. If the judge stretches to make an assumption, you could find the case ricocheting back to you because those findings are not supported by substantial evidence. Client’s don’t like having to pay for a do-over.
Elvis in Meridian …. More
December 11, 2015 § 1 Comment
Before his epochal appearance on Ed Sullivan’s TV show in February, 1956, Elvis appeared in Meridian in 1955 with his first pink Caddy in a Fall Festival parade. Here’s the video.
Here’s a post I made previously on Elvis in Meridisn.
The Defrauded Father and Custody
December 9, 2015 § Leave a comment
It is axiomatic that a natural parent is presumed to have the first right against all the world to have custody of his or her own offspring. But this so-called “natural parent presumption” does have some exceptions.
In the oft-cited case, Griffith v. Pell, 881 So.2d 184 (Miss. 2001), the MSSC held that a husband who had acted in all respects as the father of a child, and who learned in the course of divorce proceedings that he was not the father of that child, could be granted visitation, and even custody, over the objections of the mother. The father’s status, of course is what we know as “in loco parentis” — literally “in the place of the parent.”
In JPM v. TDM, 932 So.2d 760 (Miss. 2006), the court held in scenario similar to Pell that the husband was the “father in fact,” and so was not required to submit additional evidence to rebut the natural parent presumption. But the MSSC has made it clear that Pell and JPM are limited to their unique facts:
[I]n loco parentis can—in very limited, unique situations—sometimes be used to help rebut the natural-parent presumption. In both Pell and J.P.M., a husband learned during the pendency of divorce proceedings that he was not the biological father of a child born of, or just prior to, the marriage. In those cases, we reasoned that the natural-parent presumption had been overcome based on several facts: (1) the husbands stood in loco parentis; (2) they had supported, cared for, and treated the child as their own; (3) they could have been required to pay child support (“with the burden should go the benefit”); and (4) the biological fathers were not really in the picture: the one in Pell had disclaimed any interest in the child and had agreed to relinquish his parental rights, while the one in J.P.M. could not even be determined conclusively.
In re Waites, 152 So.3d 306, 314 (¶¶15-16)(Miss. 2014).
In the recent COA case, Welton v. Westmoreland, handed down November 17, 2015, the court affirmed a chancellor’s conclusion that Daniel Westmoreland stood in loco parentis to his step-daughter, Justice, and affirmed the chancellor’s modification of the parties’ divorce judgment to award him custody of her, over the objection of his ex-wife, Sabrina. Some of the pertinent facts from the court’s opinion at ¶1, penned by Judge Wilson:
Daniel is not Justice’s biological father, but until she was twelve years old, she believed that he was. Justice’s biological father abandoned her and has never made an attempt to see her since her birth. Although Daniel knew that he was not Justice’s biological father, he and Sabrina raised her together from the time she was four months old, and in 2004 Sabrina petitioned a court to change Justice’s surname to Westmoreland. Justice learned that Daniel was not her biological father only when, in the lead-up to the instant litigation, Sabrina made a unilateral—and, the chancellor found, “very hurtful”—decision to tell her. After a hearing, the chancellor modified custody and awarded Daniel physical custody of both children.
Daniel and Sabrina had lived together before they married, and during that cohabitation Daniel was led to believe that he was father of Justice. After they married, he learned the truth, but nonetheless acted in every respect as the child’s true father. When Sabrina petitioned a Missouri court to change the child’s surname to Daniel’s, she averred that the natural father had abandoned the child, and the proof was that the natural father had never participated in the child’s life. In their divorce, Sabrina and Daniel included the following language in a PSA: ” … Justice … is not the biological or adopted daughter of [Daniel], but … Justice … has developed a strong bond with [Daniel] and it is in [Justice’s] best interest that [she] … have visitation with [Daniel] … ”
That latter language, establishing visitation, was crucial in the trial court’s determination that it had jurisdiction per the UCCJEA. And the COA affirmed the chancellor’s decision that he had jurisdiction.
There are plenty of other facts in this case that supported the chancellor’s decision. The majority concluded that the chancellor had properly applied and followed the law in this case. In essence, the COA majority agreed with the chancellor that this case was governed by Pell.
You can read the full facts, along with the strong dissent by Barnes, joined by Irving and James, for yourself.
What this case highlights for us down here at ground level is that there are still circumstances where in loco parentis is a viable basis to seek modification, but the circumstances have to be quite particularly akin to those in Pell if your client hopes to succeed.
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
Don’t Forget The MRCP Revision Project
December 7, 2015 § Leave a comment
The MSSC has invited all members of the Bar to submit comments and suggestions for revisions to the MRCP. You can access the page where submissions to date are posted at this link.
Send your suggestions to P. O. Box 249, Jackson, MS, 39205. Deadline is December 31, 2015.
So far there are only two submissions.
“Quote Unquote”
December 4, 2015 § Leave a comment
“Though boys throw stones at frogs in sport, yet the frogs do not die in sport but in earnest.” — Bion of Borysthenes
“If you want to discover just what there is in a man — give him power.” — Francis Trevelyan Miller
“When strength is yoked with justice, where is a mightier pair than they?” — Aeschylus
