January 7, 2020 § Leave a comment
Effective yesterday, MEC will allow you to file a combined guardianship/conservatorship. And the civil cover sheet has been amended to add that category for both MEC and non-MEC filers.
Also, MEC does not allow a petition to approve a minor’s settlement to be filed in a conservatorship (reminder: GAP Act term for guardianship of the estate). When the order or judgment approving the settlement is filed, MEC wants to close the file, which can not be done because the conservatorship must remain open. If the order or judgment is filed and the case is not closed, then the order or judgment is not final according to MEC, which means that the clerk can not collect the fee, and the case is not final in the district’s stats. So, you need to file two separate actions with two separate filing fees.
June 4, 2019 § Leave a comment
Stacy, age 8, is injured in an automobile accident. Her medical bills are $17,000 for the hospital, $800 for ambulance and EMT, and $1,200 for miscellaneous doctors and other medical. Total is $19,000.
Whom should the judge order to pay the bills? Stacy? Her parents? Leave them unpaid? The questions seem almost absurd. Sould an 8-year-old child be expected to pay her own medical bills? Aren’t medical bills the kind of thing that parents provide for their children? But what if the parents don’t have the ability to pay? And if we leave the bills unpaid, what impact will that have on the ability of the parents to access medical care for Stacy in the future?
All of those questions are what the judge needs answered in the course of a minor’s settlement. But often those kinds of questions are left unasked. Worse … when I try to ask the petitioners (usually parents) why they want the bills to be paid out of the proceeds of a minor’s settlement, they have no clue about what I am asking. It’s obvious that the issue has never been discussed between attorney and client.
It’s been the expectation for a long time that medical bills for the child will be paid out of the child’s settlement proceeds. But that came into question after Gulfport Memorial Hospital v. Proulx, which you can read about at this link, which held essentially that medical providers do not have a statutory lien against settlement proceeds, and, therefore, they do not have the right to collect from them.
So when you ask the court to pay medical bills out of the minor’s settlement proceeds, you are asking the court to order the minor (or her guardian) to pay her own expenses. To accomplish that you have to put some evidence in the record that it is in the child’s best interest to order that. My suggestion is that you offer proof that: (1) the parents do not have the financial ability to pay; (2) ordering the parents to pay will impose undue financial hardship on the family; (3) the bills can not be left unpaid because those medical providers may refuse service in the future because of the unpaid balances.
I usually ask questions to elicit that information if the lawyers do not because I want justification in the record. Instead, what I get is blank stares. It doesn’t have to be that way. Prepare your witness. Be ready to put justification in the record for ordering the child to pay her own expenses.
July 13, 2015 § Leave a comment
In Mississippi, an insurer is not entitled to equitable subrogation unless and until the insured has been fully compensated. It’s known as the “made-whole” rule. Hare v. State, 733 So.2d 277, 284 (¶26) (Miss. 1999).
Can a chancellor rely on the made-whole rule to deny Medicaid’s claim of subrogation in a minor’s settlement?
A chancellor did deny Medicaid’s right of subrogation that would have left Javas Pittman, a minor, with only $6,000 from a $25,000 settlement. Javas had been seriously injured when he was riding on the hood of a car that was involved in a crash. There is no explanation in the record for the reason why the child was on the hood of a moving automobile. If his medical bills are any indication of the gravity of his injuries, they must have been severe, because they totaled more than $170,000, of which Medicaid paid around $66,000. The judge relied on Hare to deny Medicaid’s claim.
The COA reversed the trial court ruling in the case of Medicaid v. Pittman, handed down June 30, 2014. Judge Maxwell wrote for the court:
¶14. Unlike Hare, here there are no “issues of unilateral contracts and bargaining power in negotiations.” Miss. Ins. Guar. Ass’n v. Brewer, 922 So. 2d 807, 812 (¶23) (Miss. Ct. App. 2005). Instead, we are faced with a statute creating a clear right to reimbursement. Miss. Code Ann. § 43-13-125. [Footnote omitted] And according to the supreme court, when the “right of reimbursement ‘exists by virtue of statute,’” the equitable made-whole rule does not apply. Federated Mut. Ins. v. McNeal, 943 So. 2d 658, 661 (¶¶13-14) (Miss. 2006) (quoting Miss.Food & Fuel Workers’ Comp. Trust v. Tackett, 778 So. 2d 136, 143 (¶27) (Miss. Ct. App. 2000)). Instead, the existence of this right “must rise or fall strictly as a matter of statutory interpretation.” Id. at (¶13).
¶15. Melissa [Javas’s guardian] argues McNeal’s holding is narrow and only applies to the specific statute addressed in that case, Mississippi Code Annotated section 71-3-71 (Rev. 2011), which is part of the workers’ compensation act. But what distinguished the subrogation rights in McNeal from the rights in Hare was not workers’ compensation. Rather, the key distinction in McNeal was the fact the insurer’s subrogation rights “do not spring from a contractual agreement as in Hare, but rather are conferred by [s]ection 71-3-71.” McNeal, 943 So. 2d at 661 (¶13); see also Brewer, 922 So. 2d at 812 (¶23) (distinguishing legislatively established subrogation rights from the contractual rights subject to the made-whole rule in Hare). In other words, it was the source of the subrogation right—statute versus contract—that made the equitable made-whole doctrine inapplicable. McNeal, 943 So. 2d at 661 (¶¶13-14); see also Proulx, 121 So. 3d at 223-24 n.1 (acknowledging Medicaid’s statutory right to impose a lien on a settlement that did not make the injured party whole).
¶16. Here, Medicaid’s right to reimbursement did “not spring from a contractual agreement” but rather was conferred by section 43-13-125. McNeal, 943 So. 2d at 661 (¶13). Thus, the chancellor “erred when [he] applied the equitable made-whole doctrine to [this] statutory right[.]” Id. Like section 71-3-71,7 section 43-13-125(2) “unambiguously provides the method for distributing proceeds when, as here, an injured [Medicaid recipient] recovers from a third party.” McNeal, 943 So. 2d at 661 (¶14). So like section 71-3-71, the clear directive of section 43-13-125(2) could not be disregarded. See McNeal, 943 So. 2d at 661 (¶¶13-14).
¶17. Under section 43-13-125(2), “Any amount recovered by a recipient or his or her legal representative shall be applied,” first, to the recipient’s attorney’s fees and legal costs of recovery, second, to the amount of Medicaid’s interest, and, last, to the recipient, should there be “any excess.” While the chancellor recognized Javas’s attorney’s right to a priority payment of $8,640.89 for legal fees and expenses, the chancellor improperly ordered that Melissa could receive the excess on Javas’s behalf without first reimbursing Medicaid $10,308.40.
¶18. The chancellor based his decision not to follow section 43-13-125(2)’s directive by asserting Medicaid’s $10,308.40 recovery would unfairly leave Javas with a little over $6,000—a “neglible [sic] sum,” as he put it. While this may be true, “a chancellor, despite his broad equitable powers, is not free to disregard the clear guidance of a pertinent statute simply because he concludes that it would be unfair on the particular facts of the case to apply the statute according to its terms.” McNeal, 943 So. 2d at 661 (¶13) (quoting Tackett, 778 So. 2d at 143 (¶27)). Further, were Melissa to comply with the order and receive the settlement proceeds without first reimbursing Medicaid, she would be in clear violation of section 43-11-125(2), which in turn would jeopardize her and Javas’s Medicaid-eligibility status. See Miss. Code Ann. § 43-13-307 (Rev. 2009). [Footnote omitted]
¶19. Though the Mississippi Constitution vests chancery courts with subject-matter jurisdiction over equitable matters involving minors [Footnote omitted], such jurisdiction does not permit exceptions to clear statutes because they apply to minors. “[E]quity follows the law,” and “courts of equity cannot modify or ignore an unambiguous statutory principle in an effort to shape relief.” In re Estate of Smith, 891 So. 2d 811, 813 (¶5) (Miss. 2005) (citing In re Estate of Miller, 840 So. 2d 703, 708 (¶14) (Miss. 2003)). Because the order approving the minor’s settlement contained a condition that conflicts with the clear statutory principle that Medicaid shall recover its interest from the settlement, the order cannot stand. We have no option but to reverse the chancellor’s judgment and remand this case back to the chancery court to oversee a settlement that both takes into account Javas’s best interest and Medicaid’s unambiguous statutory right to reimbursement from the settlement.
Don’t forget that Medicaid will negotiate the amount of its lien. I have seen cases in which Medicaid has foregone its claim altogether, although I understand from one of the participants in this case that Medicaid refused to reduce its claim for some reason.
Always make sure you inquire about whether the minor for whom the settlement is sought is a Medicaid recipient. Carefully study the medical bills to see whether Medicaid paid anything. If it did, you must notify it of the settlement and get a letter specifying the amount of the lien it is claiming, and make that letter a part of the record.
August 14, 2014 § 4 Comments
Minors can not act for themselves. That creates some obstacles when a minor is injured in an accident, and the insurance company or some other paying party needs a signature on a release to settle the claim.
In Matter of Wilhite: Woolbright v. Wilhite, handed down September 10, 2013, by the COA, 18-year-old Lacey Wilhite had been severely injured in a catastrophic collision with a drunk driver. Her mother, Celeste Sloan, who had custody, filed a petition to be appointed guardian. Lacey’s father, Rodford, with whom Lacey had been living for several years before the accident, in response filed a petition to be appointed guardian and for custody.
The chancellor appointed Rodford as guardian, and authorized him to accept the insurance company’s tender of policy limits in the amount of $100,000. The judge also approved the contract of the attorney for Rodford for a 25% contingent fee. More about that attorney’s fee in a bit.
On appeal, Sloan’s lawyer argued that, even though her contract with Sloan had not been approved by the court, she had a reasonable expectation of compensation from the child’s estate, based on quantum meruit. The COA disagreed. Beginning at ¶11, Judge Fair explained:
Sloan may have been a “natural guardian” of Lacey under Mississippi Code Annotated section 93-13-1 (Rev. 2004), but the chancery court is the “superior guardian.” See Carpenter v. Berry, 58 So. 3d 1158, 1163 (¶19) (Miss. 2011). As the Mississippi Supreme Court detailed in Mississippi State Bar Association v. Moyo, 525 So. 2d 1289, 1293-96 (Miss. 1988), there are three ways to bind a minor in a settlement: (1) removal of the disability of minority, (2) the formal appointment of a guardian, and (3) the chancery court’s approval, without a guardianship, when the claim is worth $25,000 or less (Mississippi Code Annotated section 93-13-211 (Supp. 2012)). It stands to reason that a parent who has no authority to bind her daughter’s estate in a settlement cannot bind the estate to an attorney’s fee contract, particularly when such a contract would have to be, but was not, approved by the chancery court. See UCCR 6.12. In Carpenter, 58 So. 3d at 1163 (¶19) (citation omitted & emphasis added), the supreme court reiterated its longtime holding that:
Infants and persons of unsound mind are disabled under the law to act for themselves. Long ago it became the established rule for the court of chancery to act as the superior guardian for all persons under such disability. This inherent and traditional power and protective duty is made complete and irrefragable by the provisions of our present state constitution. It is not competent for the Legislature to abate the said powers and duties or for the said court to omit or neglect them. It is the inescapable duty of the said court and[/]or the chancellor to act with constant care and solicitude towards the preservation and protection of the rights of infants and persons non compos mentis. The court will take nothing as confessed against them; will make for them every valuable election; will rescue them from faithless guardians, designing strangers, and even from unnatural parents, and in general will and must take all necessary steps to conserve and protect the best interest of these wards of the court. The court will not and cannot permit the rights of an infant to be prejudiced by a waiver, or omission or neglect or design of a guardian, or of any other person, so far as within the power of the court to prevent or correct. All persons who deal with guardians or with courts in respect to the rights of infants are charged with the knowledge of the above principles, and act to the contrary thereof at their peril.
See also Union Chevrolet Co. v. Arrington, 162 Miss. 816, 826-27, 138 So. 593, 595 (1932) (original source) …
You can take away from that that there are no shortcuts in obtaining a release that is binding on a minor. You can either: (1) get the disabilities of minority removed, which you will likely find to be a hard sell; or (2) have a guardian appointed, who can petition the court to approve an on-the-record minor’s settlement; or (3) present the matter as a minor’s settlement not requiring a guardianship, if the settlement amount is below the statutory amount and the chancellor finds it to be in the child’s best interest. That’s it. The parents can not bind the child acting in their capacities as parents without court approval.
Another feature of this case is that both parents hired their own attorneys to take legal action for the benefit of Lacey before a guardianship was established, and neither had their contract approved in advance by the court. The trial court rejected Ms. Sloan’s attorney’s contract, which called for 33 1/3% of the settlement, and approved that of Mr. Wilhite for 25% The chancellor also reduced Sloan’s attorney’s quantum meruit claim to $2,500, despite that she claimed to have invested 125 hours in the case. The COA affirmed
You can read the COA’s rationale for yourself. What is important here is that you appreciate that when you go out on a limb without court approval in a case such as this, you run the risk of recovering nothing or a greatly reduced fee. UCCR 6.12 clearly lays out what is required. Here it is, broken down point by point for clarity:
- Every petition by a fiduciary or attorney for the allowance of attorney’s fees for services rendered shall set forth the same facts as required in Rule 6.11, touching his compensation, and if so, the nature and effect thereof.
- If the petition be for the allowance of fees for recovering damages for wrongful death or injury, or other claim due the estate, the petition shall show the total amount recovered, the nature and extent of the service rendered and expense incurred by the attorney, and the amount if any, offered in compromise before the attorney was employed in the matter.
- In such cases, the amount allowed as attorney’s fees will be fixed by the Chancellor at such sum as will be reasonable compensation for the service rendered and expense incurred without being bound by any contract made with any unauthorized persons.
- If the parties make an agreement for a contingent fee the contract or agreement of the fiduciary with the attorney must be approved by the Chancellor.
- Fees on structured settlements shall be based on the “present cash value” of the claim. [Emphasis added]
Before you go crashing off into a case involving a minor’s interest, think through what you are being called on to do, and cover your bases. If you don’t, you might find, much to your chagrin, that you have donated a lot of free work to the youngster.
March 6, 2014 § 3 Comments
If you are going to do any wrongful death practice at all, you must familiarize yourself with the MSSC’s decision in the seminal case of Long v. McKinney, 897 So.2d 160 (Miss. 2004), reh den. April 7, 2005.
The decision clarifies many important concepts involved in wrongful death claims, including priority of jurisdiction, the distinction between heirs and wrongful death beneficiaries, allocation of attorneys fees, costs and expenses, representation, conflicts of interest, and control of litigation.
What is important in this case to the chancery practitioner, however, is Justice Dickinson’s exposition on the role of chancery court.
There is much confusion in the bar, and perhaps the bench as well, about exactly what is the proper role of chancery court in wrongful death. Justice Dickinson expounds:
¶59. Perhaps no aspect of wrongful death litigation is more misunderstood and misapplied than the role of the chancery court.[Fn 13] With respect to a wrongful death suit to be pursued in circuit court, chancery jurisdiction should be invoked for the following purposes:
Fn 13. The misunderstanding can be partly attributed to the Uniform Chancery Court Rules, which address petitions for authority to compromise, and petitions for allowance of attorney fees, in wrongful death suits. U.C.C.R. 6.10, 6.12. These rules apply only to wrongful death suits which require chancery jurisdiction. See discussion infra.
¶60. In the event the litigants wish to pursue a claim on behalf of the estate of the deceased, [Fn 14] such estate must, of course, be opened and administered through the chancery court. As is true in all estates administered through the chancery court, chancery approval is required for the appointment of the personal representative of the estate, whether executor, executrix, administrator or administratrix.
Fn 14. We recognize that, because of the limited recovery available to the estate in many cases, litigants may choose, with advice of counsel, to proceed without including a claim on behalf of the personal representative or the estate. As discussed infra, such decision should be made only after full disclosure to all who might benefit from the estate.
¶61. There is no general requirement under law that the personal representative obtain chancery approval to pursue the claims of the estate in the litigation. Nor is there a general requirement that counsel representing the personal representative and the estate in the litigation obtain prior chancery approval of such representation or the agreement for compensation of counsel. However, obtaining such prior approval is a widely accepted and wise practice.[Fn15] Such prior approval will, in most instances, avoid difficulty when the chancellor is approached for an order approving the accountings and the final distribution of estate proceeds, where such payments include compensation to counsel.
Fn 15. This is especially true where counsel representing the estate in the wrongful death litigation has not agreed, and does not intend, to represent the estate generally.
¶62. Where a recovery is had by the estate in the litigation, the proceeds must be administered and distributed though the chancery court in the same manner as other assets of the estate, and counsel for the estate must be paid from estate proceeds or assets, upon approval of the chancery court in the same manner as other debts and obligations of the estate. * * *
¶66. Frequently, wrongful death litigation will involve a minor, either as an heir of the estate, a wrongful death beneficiary, or both. In such cases, the representation of the minor’s interests, and any agreement for the payment of attorney fees from the minor’s share of proceeds, must be approved by a chancellor, as in other cases. [BCP Note: settlement of the minor’s claim must also be approved by the chncellor, in the same manner as any other minor’s settlement.]
Determination of wrongful death beneficiaries.
¶67. Section 11-7-13 provides that wrongful death litigation may be brought by the personal representative of the deceased or by any one or more of several statutory beneficiaries, for the benefit of all entitled to recover. Unless all persons entitled to recover join in the suit, those who do have a fiduciary obligation to those do not. Miss. Code Ann § 91-1-27 (Rev. 2004) provides for a chancery determination of the heirs at law of a decedent; that is, those who inherit in the absence of a will. Although our statutes mandate no specific procedure for the identification of wrongful death beneficiaries, a chancery court may make such determinations. Those bringing the action, together with their counsel, have a duty to identify the beneficiaries, and they should do so early in the proceedings. [Fn 16]
Fn 16. Recognizing that the lack of a specific procedural framework for determining wrongful death beneficiaries is a handicap for practitioners, this Court – in its continuing review of procedural rules – will address this need.
One of the biggest sources of confusion, in my experience, is the disconnect between the status of persons as heirs and as wrongful death beneficiaries. The categories overlap, but they are not the same. A person may be a wrongful death beneficiary, and yet not be an heir. You need to read and stidy the statutes to learn the difference and to be able to identify all of the individuals who must be included. Merely filing an action to determine and discover unknown heirs at law will not identify all the wrongful death beneficiaries.
From a chancellor’s perspective, I think the most important aspect of all is that of the minor’s settlement. You can make any agreement in circuit court about how to settle the wrongful death action, but you can not tie the hands of the chancellor as to whether the settlement is reasonable or adequate for the child(ren), or as the amount of fees to which it is subject, or to its amount.
November 25, 2013 § Leave a comment
The Litigation Section of the Mississippi Bar publishes a newsletter for its members. The November, 2013, issue includes a superb article by Nick Thompson, Esq., an associate at Copeland, Cook, Taylor & Bush in Hattiesburg, entitled “Best Practices for Minors’ Settlements.” Click on the link, and then click on the link to the November, 2013, newsletter.
This is the kind of resource that is extremely useful to lawyers who deal with these matters regularly. I recommend that you print it out and use it.
October 9, 2013 § 5 Comments
For those of you who handle minor’s settlements, here is what should be a familiar scenario:
Minor’s arm broken in a car wreck. Insurance company is to pay policy limits of $25,000. Medical bills to the local hospital in amount of $17,500 are to be paid from the proceeds. Minor is to receive balance of $7,500.
Not much to it, right?
Well, there just might be quite a lot to think about after you read Memorial Hospital at Gulfport vs. Guardianship of Proulx, decided by the MSSC on September 12, 2013.
In that case, the minor was injured in a car wreck and the parents were appointed his guardians. They petitioned the court to approve a policy-limits settlement of $50,000. They also petitioned the court to disapprove claims against the proceeds asserted by several medical providers, including Memorial, that totalled more than $80,000. Memorial’s claims alone were $71,000. The chancellor disapproved the claims, and Memorial appealed.
Justice Chandler wrote for a unanimous court, beginning in ¶ 7:
… Memorial has no lien against the funds. Unlike some other states, Mississippi has no statutory hospital lien, nor has this Court recognized a common-law lien under these facts. Indeed, Memorial does not argue that it has a lien, or does it assert a right to recovery through a contract or under an implied-contract theory. It does not assert that it is the beneficiary of an assignment of the settlement proceeds. Memorial cited no authority for its argument at the hearing that it has a right to a pro rata share of the settlement proceeds.
¶8. Memorial’s position in this case is comparable to that of the hospitals that sought payment of medical bills in McCoy v. Preferred Risk Ins. Co., 471 So. 2d 396 (Miss. 1985), and Methodist Hospital of Memphis v. Guardianship of Marsh, 518 So. 2d 1227 (Miss. 1988). In McCoy, a minor, David James McCoy, was hospitalized after a car accident, and his parents executed an assignment of all liability insurance benefits in favor of the hospital. Id. at 397. Later, the parents disputed the validity of the assignment, and the insurer interpleaded the benefits, which consisted of $20,000 in uninsured-motorist liability benefits and $4,000 in medical benefits. Id. The Court held that the parents had lacked authority to assign the uninsured-motorist benefits due to David. Id. at 397-98. However, because the medical-expense benefits under the policy authorized Preferred to pay all reasonable medical expenses to the entity rendering medical services, the Court permitted the hospital’s recovery of the $4,000 in medical benefits. Id. at 397.
¶9. In Methodist, another minor, Stephen B. Marsh, was injured in a car accident. Methodist, 518 So. 2d at 1228. At the hospital, his mother signed a document entitled “Hospital Lien” in which she agreed to pay Stephen’s medical expenses from any insurance settlement or judgment she recovered. Id. The insurer settled for the policy limits of $25,000 in liability coverage and $2,000 in medical-payments coverage, and the hospital claimed a lien on those funds. Id. This Court rejected the claimed lien on the liability coverage because the mother had no legal authority to execute any document binding Stephen’s estate without prior chancery court approval. Id. (citing McCoy, 471 So. 2d at 396). The Court remanded for a determination of whether the hospital was a direct beneficiary under the medicalpayments coverage and “due these benefits irrespective of any lien or assignment.” Methodist, 518 So. 2d at 1228.
¶10. In McCoy and Methodist, once the assignment or lien was found to be invalid, the hospitals had no further rights against the liability insurance proceeds due the minor, and the claims were denied. McCoy, 471 So. 2d at 399; Methodist, 518 So. 2d at 1228. Memorial does not claim that it has a right to recovery under a lien, an assignment, or a contractual theory. Memorial’s sole argument supporting its claim of a right to the settlement proceeds is that it has a legal duty to seek recovery from any legally liable third party prior to billing Medicaid. This argument does not avail Memorial. The third-party insurers were not legally liable to pay Memorial for the medical bills. McCoy, 471 So. 2d at 397-98; Methodist, 518 So. 2d at 1228. The third-party coverage at issue here was general liability coverage, not medical-pay coverage that reimburses the hospital for medical bills. See McCoy, 471 So. 2d at 397; Methodist, 518 So. 2d at 1228. Memorial does not dispute this basic fact. Because no law entitled Memorial to payment from the settlement proceeds, we affirm the chancery court’s dismissal of Memorial’s claim.
If your minor’s settlements don’t look like what happened in Proulx, you might read it carefully several times and start trying to figure out whether you need to do anything differently.
There are lots of ramifications flowing from this opinion. A few you might want to consider:
- Shouldn’t you open a guardianship and publish notice to creditors before presenting the final settlement proposal to the chancellor? I sent some lawyers back to the drawing board several weeks ago to do that very thing in a case remarkably close to what happened in Proulx. Why? Well, it just didn’t seem right to me that the parents could negotiate away their children’s money like that.
- If you represent the insurance company in a case where the settlement amount is under the statutory amount required to present to a chancellor, how are you going to advise the parents about all of this when (a) you don’t represent them, and (b) you have an insurmountable conflict of interest that precludes you from advising them?
- Why should children be required to pay their own medical bills? And if they should not, don’t the parents have a built-in conflict of interest in serviing as guardians, since they will likely be held responsible via guaranty?
- Would Memorial have been successful in its argument if the third-party coverage in this case was med-pay (¶ 10)?
You need to read this case and be ready to discuss it with the next chancellor you go before on a minor’s settlement. That chancellor will likely be ready to discuss it, too.
January 17, 2012 § Leave a comment
Consider this scenario …
You have represented Betty Sue in several matters, including a contentious divorce, contempts, and closing on her new home. Betty Sue was so satisfied that you have ended up doing legal work for many of her family and friends. She has been quite the bonanza in terms of clientelle. One day she comes into your office with her ex and asks you to do an agreed modification so that Junior can go live with his dad in Simpson County to play football. You draft a joint petition and an agreed judgment, have everyone sign off, present it to the chancellor, and Voila! Another minor miracle to impress Betty Sue and her wide circle of family and friends.
As often happens, though, things fall apart. Junior gets into trouble and is kicked off of the football team. He is not getting along with dad, and he decides he wants to return to mom. Dad refuses. Betty Sue returns once again to your office, and you take a retainer, prep pleadings, and file for modification, fully expecting another feather in your cap. So far so good. Until …
In the mail comes a motion to disqualify you in the case on the basis that you represented both parties in that joint motion and agreed judgment. You dig up the file and to your dismay you see that nowhere on the pleading or the judgment is it indicated that you represented Betty Sue alone. The chancellor sees it the other side’s way, and you are out on your ear. Betty Sue and her family, being country folk who don’t have time for subtleties and nuances, feel that you are dropping her and maybe even have gotten in league with her ex. Ouch. To try to make amends you refund Betty Sue’s retainer so she can hire another attorney. But the damage is done.
The problem could have been avoided if you had simply included a paragraph in the pleading that spelled out that you represent Betty Sue alone in the modification, that you have given no legal advice to the ex, and that he signifies by signing that he understands that he may consult with any attorney of his choice; you should also have spelled out at your signature line “Attorney for Betty Sue _____ only,” and added pro se, after the ex’s name. That would have been plenty for the chancellor to refuse to disqualify you.
The same principle applies any time the other party is unrepresented. Be especially aware when you have a joint complaint for irreconcilable differences (ID) divorce that, since it is unethical for an attorney to represent both parties in an ID divorce, your pleading must spell out which party you represent.
And always, in your property settlement agreement (PSA), add a paragraph identifying which spouse you represent, that you have provided the unrepresented party no advice, and that the unrepresented party has had the opportunity to confer with the attorney of his or her choice. That way, when the pro se party signs the PSA, future quibbling over who you represented is effectively sealed off.
Another source of confusion over who represents whom arises in minor’s settlements. Insurance companies often hire attorneys to file the petition and have it approved by the court. Too often, though, that petition does not specify whom the attorney represents. It would seem to be a simple matter for some language like that set out above to be included in the petition and even in the judgment approving the settlement. Leaving the point ambiguous would seem to be an invitation to a fly-specking attorney to try later to get the settlement set aside. If you would like to read about how and why that might happen, check out Carpenter v. Berry, et al.
Finally, confusion over who represents whom can arise when a lawyer lets his or her name slip into the court file. That happened in my court recently when a lawyer showed up in response to an MRCP 81 summons and allowed as how she “might be hired to represent the respondent,” and signed off on an agreed order resetting the hearing. She later tried to take the position that she had never been hired and so was not in the case. Sorry, but she is in the case until the judge signs an order letting her out. Another post on when appearances can lock you into a case is here.
March 8, 2011 § 1 Comment
Tangela Berry and Ricky Banks were guardians of their son Ryheim Banks. In June, 2004, they filed suit in circuit court against several medical defendants alleging negligence.
They reached a settlement with one of the defendants, Laura Carpenter, for $25,000, to be apportioned 1/3 each to Berry, Banks and Ryheim, after deduction of a $10,000 attorney’s fee.
When the settlement was presented to the chancellor, the guardians’ attorney did not call any witnesses. Instead, he made an announcement to the court that Carpenter’s involvement was “negligible,” and that the settlement was “appropriate.” He did, apparently, question Berry and Banks about whether they understood they were releasing their claims against the defendant, which they did, and whether the were following the advice of their attorneys in settling Ryheim’s claim, which they also did. There was no testimony regarding the nature or extent of the injuries, or the substance of the claims, or the damages incurred. The chancellor signed a judgment approving the settlement on August 5, 2005, including the language that the settlement was a “fair and reasonable settlement of a doubtful claim and it is in the best interest of the minor and all others.”
In July 2008, the guardians again appeared in court with new counsel asking the chancellor to set aside the prior settlement because the former attorney had not prosecuted the claim and had done no discovery. They said that they had learned that Carpenter had a $1,000,000 insurance policy that would have afforded coverage that was not disclosed to them at the time of the settlement. Their motion was brought under MRCP 60(b).
The chancellor did set aside the 2005 judgment pursuant to MRCP 60(b), finding that there was insufficient evidence at the 2005 hearing to establish that the settlement was fair and reasonable and in the best interest of the minor.
Carpenter appealed, charging that the trial court erred: in not including specific findings of fact and conclusions of law in his order; and that it was an abuse of discretion to set aside a judgment under MRCP 60 after three years had elapsed from the date of the judgment.
In the case of Carpenter v. Berry, et al., decided February 10, 2011, the Mississippi Supreme Court upheld the chancellor’s ruling.
As for the claim that the conclusions were unsupported, the appellate court found that the chancellor’s findings were sufficient, considering that the matter was not complex.
With respect to the abuse of discretion claim, the court noted that the chancellor did not specify that part of MRCP 60 under which he proceeded. The court found MRCP 60(b)(5) applicable since that rule allows a judgment to be set aside where “it is no longer equitable that the judgment have prospective application.”
The court also found MRCP 60(b)(6) applicable, since it provides that the chancellor may grant relief “for any other reason justifying relief from the judgment.” MRCP 60(b)(6) “is reserved for extraordinary circumstances,” and is “a grand reservoir of equitable power to do justice in a particular case. Briney v. USF & G, 714 So.2d 962, 966 (Miss. 1998).
The Supreme Court noted that the trial judge must consider several factors in determining whether to grant 60(b)(6) relief:
- That final judgments should not lightly be disturbed;
- That a 60(b)(6) motion is not to be used as a substitute for an appeal;
- That the rule should be liberally construed so as to achieve substantial justice;
- Whether the motion was made within a reasonable time;
- Whether the movant had been afforded a fair opportunity to present claims or defenses, if the judgment was rendered after a trial on the merits;
- Whether there are any intervening equities that would make it inequitable to grant relief; and
- Any other factors relevant to the justice of the judgment under attack.
[Note: one factor relating solely to dafault judgments was omitted by the court, with a reference] M.A.S. v. Miss. Department of Human Services, 842 So.2d 527, 530 (Miss. 2003).
In this particular case, the Supreme Court found that this was no ordinary 60(b) case because it involved the rights of a minor under a guardianship. The court said:
“It is the inescapable duty of [chancery] court and or the chancellor to act with constant care and solicitude towards the preservation and protection of the rights of infants and persons non compos mentis. The court will take nothing as confessed against them; will make for them every valuable election; will rescue them from faithless guardians, designing strangers and even unnatrual parents, and in general will and must take all necessary steps to conserve and protect the best interest of these wards of the court. The court will not and can not permit the rights of an infant to be prejudiced by a waiver, or omission or neglect or design of a guardian, or of any other person, so far as within the to prevent or correct. Griffin, Chancery Practice, §§ 45, 360, 530, 533. All persons who deal with guardians or with courts in respect to the rights of infants are charged with the knowledge of the above principles, and to act contrary thereof at their peril.”
The court also noted that the procedures prescribed for settling a minor’s claims as set out in MCA § 93-13-59 and UCCR 6.10 had not been followed in the original proceeding before the court.
The timeliness claim was disposed of by finding that timeliness under 60(b)(6) depends on the facts of the case, and that the chancellor did not abuse his diecretion in this one.
Finally the Supreme Court at ¶ 22 held that “The chancellor properly exercised the discretion afforded by Rule 60(b)(6) by finding that the need to fairly protect the ward’s interests outweighed the need for finality.”
Moral of the story: Don’t take shortcuts; faithfully follow the rules and the statutes. It only takes a little more effort and time to do it right. If a proper record had been made originally, that order might have been a lot more difficult to attack. You can find an outline for how to handle a minor’s settlement here.