Some Useful Equitable Distribution Points

September 18, 2019 § Leave a comment

Last year’s Pettersen case caused somewhat of a ruffle among many attorneys when it affirmed a chancellor’s findings that pre-marriage assets were marital or converted to marital, and passive appreciation of pre-marital securities was also marital. One lawyer told me that he was still scratching his head over the latter.

Lost in the consternation is that the opinion by Judge Barnes includes some jewels of authority that you might find useful:

Frederick Pettersen claimed that the chancellor erred when he announced that he would not consider child support, but he never objected at trial. In ¶10, the court said, “Furthermore, this issue was not asserted in Frederick’s motion for reconsideration.” Aside from the fact that there is no such thing as a motion for reconsideration, this is a remarkable statement because it assumes that you must assert the bases for your R59 motion in the motion. In my experience, few attorneys recite more than that they want a new trial or an amendment of judgment without detailing the reasons why. R7(b) specifically states that a motion “shall state with particularity the grounds therefor, and shall set forth the relief or order sought.” That “grounds therefor” language is pretty important, but sometimes overlooked.

As for the proper demarcation date, the court said at ¶12:

Our Court has held:

“The law in Mississippi is that the date on which assets cease to be marital and become separate assets—what we refer to as the point of demarcation—can be either the date of separation (at the earliest) or the date of divorce (at the latest).” Collins v. Collins, 112 So. 3d 428, 431-32 (¶9) (Miss. 2013). [However, a] chancellor may consider a temporary order as the line of demarcation between marital and separate property. Id. Ultimately, however, the chancellor has the discretion to draw the line of demarcation. Id. at (¶10).

Randolph v. Randolph, 199 So. 3d 1282, 1285 (¶9) (Miss. Ct. App. 2016).

At ¶18, the opinion discussed classification of assets:

¶18. Furthermore, when determining whether certain property is marital, a chancery court “must inquire whether any income or appreciation resulted from either spouse’s active efforts during the marriage.” Rhodes v. Rhodes, 52 So. 3d 430, 436 (¶20) (Miss. Ct. App. 2011). “If so, that income or appreciation becomes part of the marital estate.” Id.

In ¶19, the court rejected Frederick’s argument that his wife, Audrey, was not entitled to any of his retirement funds because of an extra-marital affair:

Moreover, a spouse’s misconduct is only one factor to consider in the division of marital assets. A chancery court “should not view equitable distribution as a means to punish the offending spouse for marital misconduct. Rather, ‘marital misconduct is a viable factor entitled to be given weight by the chancellor when the misconduct places a burden on the stability and harmony of the marital and family relationship.’” Bond v. Bond, 69 So. 3d 771, 773 (¶6) (Miss. Ct. App. 2011) (quoting Carrow v. Carrow, 642 So. 2d 901, 904-05 (Miss. 1994)).

In discussing whether pre-marital properties were properly classified, the court said at ¶23:

¶23. “Marital property is ‘anyand all property acquired or accumulated during the marriage and is subject to an equitable distribution by the chancellor.’” Mamiaro v. Mamiaro, 179 So. 3d 51, 53 (¶7) (Miss. Ct. App. 2015) (quoting Hemsley v. Hemsley, 639 So. 2d 909, 915 (Miss. 1994)). There is no dispute that these properties were acquired before the marriage. But, in discussing Ferguson, the Mississippi Supreme Court held:

Instead of looking to the bare title of a marital asset, this Court, as should the trial courts, will continue to consider all of the facts and circumstances surrounding the accumulation of the marital assets, including noneconomic contributions and factors, when deciding how the marital property should be divided under our system of equitable distribution.

Carnathan v. Carnathan, 722 So. 2d 1248, 1253 (Miss. 1998). Although Frederick argues that Audrey made no economic contribution to these properties, he acknowledges that Audrey helped prepare balance sheets with respect to the rental properties for a period of time during their marriage. We find, therefore, that the chancery court’s awarding her ten percent of the properties’ value was not an abuse of discretion.

And the court reminded us of the definition of commingling:

¶26. “Commingled property is a combination of marital and non-marital property[,] which loses its status as non-marital property as a result.” Maslowski v. Maslowski, 655 So. 2d 18, 20 (Miss. 1995).

Finally, the opinion considered Frederick’s argument that he used non-marital funds to purchase an asset, so it should be a “mixed asset” with greatly reduced equitable distribution to Audrey:

¶29. “[A] presumption of marital property arises to any property acquired during the marriage.” Maslowski, 655 So. 2d at 20. The chancellor properly considered the applicable Ferguson factors, finding: (1) the property was acquired during the marriage; (2) Audrey had “substantially contributed to this property by serving as bookkeeper”; and (3) Frederick had managed the subject property during the separation and continues to do so. Therefore, we find no merit to this issue.

The Scope of Rule 59

April 8, 2019 § Leave a comment

MRCP 59 allows the chancellor to grant a new trial as to all or some issues in a case “for any of the reasons for which rehearings have heretofore been granted in suits in equity in the courts of Mississippi.”

When granted, the chancellor may open the judgment “if one has been entered, take additional testimony, amend findings of fact and conclusions of law or make new findings and conclusions, and direct the entry of a new judgment.”

The COA discussed the scope of a R59 ruling in its March 19, 2019, ruling in Warner v. Thomas. Judge McDonald wrote for the unanimous court:

¶28. With respect to the trial court’s ruling under Rule 59, we have stated that the chancery court’s authority to modify the final judgment is “limited” by Rule 59, and it is a “higher” standard than under Rule 54(b), which allows a trial court to set aside interlocutory decisions for any reason it sees just. Dissolution of Pevey v. Pevey, 2017-CA-01144-COA, 2018 WL 4089685, at *1 (¶5) (Miss. Ct. App. Aug. 28, 2018); Maness [v. K&A Enters. of Miss. LLC], 250 So. 3d [402] at 419 (¶¶69, 71) [(Miss. 2018)]. A party may only obtain relief on a motion for new trial upon showing: (1) an intervening change in controlling law, (2) availability of new evidence not previously available, or (3) the need to correct a clear error of law or to prevent manifest injustice. Miller v. Smith, 229 So. 3d 148, 154-55 (¶28) (Miss. Ct. App. 2016). To grant the motion under Rule 59, the chancery court need only be “convinced that a mistake of law or fact has been made, or that injustice would attend allowing the judgment to stand.” See Pevey, 2018 WL 4089685, at *2 (¶6); Maness, 250 So. 3d at 419 (¶69).

¶29. The appellate court reviews a trial court’s denial of a motion for a new trial for abuse of discretion. Miller, 229 So. 3d at 154 (¶27); McLaughlin [v. N. Drew Freight, Inc.], 249 So. 3d [1081] at 1084 (¶8) [(Miss Ct. App. 2018)]  . . .

The portion of R54 referred to above reads this way:

(b) . . . any order or other form of decision, however designated, which adjudicates fewer than all of the claims[,] or rights and liabilities of fewer than all the parties[,] shall not terminate the action as to any of the claims or parties[,] and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.

So an R59 motion requires more than just asking the judge for a do-over. You have to have evidence or law that would have changed the outcome were it known at the time of hearing, and it was not known either because the law changed or evidence previously unknown after due diligence has come to light. You may also prevail by convincing the judge that she made a mistake of law or fact, or that the judgment creates an injustice; good luck with that.

The COA casts the issue thus: “Did the trial court err in denying the motion for reconsideration and/or motion for new trial [My emphasis]. The term “reconsideration” has been linked to R59 so often that, in my opinion, it has risen from the level of colloquialism to the point that we should seriously consider inserting it into the rule. Lawyers almost unanimously refer to the motion as one for “reconsideration.” The COA, as it did in this case, frequently uses that nomenclature for the motion. I have not searched carefully, but I believe the MSSC did also in a decision handed down last year. You can search the term in my Search box above and see how I have pushed against it. Even the Advisory Committee Notes point out that there is no such thing as a motion for consideration. Yet, the beat goes on. Maybe it’s just time to add it in and live with it.

What You May Get with a Motion for Reconsideration

April 25, 2018 § Leave a comment

Continuing with yesterday’s R59 theme, we turn to the question of what, exactly, are you asking for when you make a R59 motion, and how does what you ask for shape what you’re likely to get?

It wound up being an issue for one Tracy Dixon. After the chancellor denied his request for modification, Tracy filed a “Motion for Reconsideration, Correction of Judgment, or in the Alternative for a New Trial.” The chancellor entered an order granting a new trial without ruling on the merits of any issues in the case. Without holding a new trial or hearing any further evidence, the chancellor entered a revised opinion and amended final judgment unfavorable to Tracy. He appealed.

The COA affirmed in Dixon v. Dixon, handed down February 6, 2018. Judge Wilson expounded for the 5-4 majority:

¶29. In his final issue on appeal, Tracy argues that the chancellor exceeded his authority under the Mississippi Rules of Civil Procedure by entering a revised opinion and amended final judgment. As discussed above, after the initial final judgment was entered (on February 10, 2016, nunc pro tunc January 26, 2016), Tracy filed a “Motion for Reconsideration, Correction of Judgment, Or In The Alternative For New Trial.” The chancellor then entered an order granting a “new trial,” which did not address or rule on the merits of any of the issues in the case. Finally, without holding a “new trial” or hearing any additional testimony or evidence, the chancellor entered a revised opinion and amended final judgment, which is the subject of this appeal. Tracy argues that the chancellor’s entry of a revised opinion and
amended final judgment violated Rule 59(d), which provides as follows:

Not later than ten days after entry of judgment the court may on its own initiative order a new trial for any reason for which it might have granted a new trial on motion of a party. After giving the parties notice and an opportunity to be heard on the matter, the court may grant a timely motion for a new trial for a reason not stated in the motion. In either case, the court shall specify in the order the grounds therefor.

M.R.C.P. 59(d). Specifically, Tracy argues that the chancellor effectively ordered a “new trial”—either sua sponte or “for a reason not stated in [Tracy’s timely] motion” for a new trial. Id. If the former, Tracy says that the chancellor violated Rule 59(d) by acting more than “ten days after entry of judgment.” Id. If the latter, Tracy says that the chancellor violated Rule 59(d) by not “giving [him] notice and an opportunity to be heard.” Id.

¶30. We conclude that Tracy has misinterpreted the case’s procedural history and the chancellor’s rulings. Tracy’s “Motion for Reconsideration” primarily sought to alter or amend the judgment in various respects—he sought to change the final judgment based on the evidence already presented, not a “new trial.” In fact, the motion’s prayer for relief did not even mention a “new trial.” Rule 59(a)-(d) governs a motion for a new trial. However, Rule 59(e) governs a motion to alter or amend the judgment.

¶31. Rule 59(e) simply provides that “[a] motion to alter or amend the judgment shall be filed not later than ten days after entry of judgment.” M.R.C.P. 59(e). Interpreting the nearly identical federal rule, [Fn omitted] federal courts have held that “[a] judge may enlarge the issues to be
considered in acting on a timely motion under Rule [59(e)].” Charles v. Daley, 799 F.2d 343, 347 (7th Cir. 1986). The court may amend any part of the judgment, and the court is not limited to the grounds raised in the motion. EEOC v. United Ass’n of Journeymen & Apprentices of the Plumbing & Pipefitting Indus. of the U.S. & Canada, Local No. 120, 235 F.3d 244, 250 (6th Cir. 2000). “The salient fact is that a motion to amend judgment was timely filed. Such gave the [trial] court the power and jurisdiction to amend the judgment for any reason, if it chose to do so, and it was not limited to the ground set forth in the motion itself.” Varley v. Tampax Inc., 855 F.2d 696, 699 (10th Cir. 1988); accord Bullock v. Buck,
611 F. App’x 744, 746 n.2 (3d Cir. 2015) (“In ruling on a Rule 59(e) motion, a District Court is not limited to the grounds set forth in the motion itself.”); Walker v. Walker, 216 So. 3d 1262, 1272-74 (Ala. Ct. Civ. App. 2016).

¶32. We conclude that these decisions are consistent with our Supreme Court’s recognition of a trial court’s “broad[] discretionary authority under Rule 59(e) to grant relief.” Bruce v. Bruce, 587 So. 2d 898, 904 (Miss. 1991). Our Supreme Court has held that “[w]hen hearing a motion under Rule 59(e), a trial court proceeds de novo, if not ab initio.” Id. “Rule 59(e) provides the trial court the proverbial chance to correct its own error . . . .” Id.

¶33. Tracy’s filing of a timely motion to alter or amend the judgment under Rule 59(e) suspended the finality of the judgment and permitted the chancellor to consider the various issues in this case “de novo, if not ab initio.” Id. At that point, the chancellor had “the power and jurisdiction to amend the judgment for any reason, if it chose to do so, and it was not limited to the ground set forth in the motion itself.” Varley, 855 F.2d at 699. On appeal, we review the chancellor’s amended final judgment on its own merits.

So R 59(e) is one of those proverbial two-edged swords, kind of like asking your law-school professor to look back over your paper to see whether she could possibly find that extra point on the exam to get you that 3.0; the search might take the result in the opposite direction.

NEWLY DISCOVERED EVIDENCE, NOT NEWLY MANUFACTURED EVIDENCE

December 19, 2011 § Leave a comment

MRCP 60(b)(3) provides that a court may grant relief from judgment based on “newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b).”

The Mississippi Supreme Court in the case of Moore v. Jacobs, 752 So.2d 1013, 1017 (Miss. 1999), pointed out that “A motion for a new trial based on new evidence is an extraordinary motion, and the requirements of the rule must be strictly met.” The decision set out five criteria that must me met in order for the trial court to grant relief:

  1. The evidence was discovered following the trial;
  2. There is proof, or it may be inferred, that the movant exercised due diligence to discover the new evidence;
  3. The evidence is not merely cumulative or impeachment;
  4. The evidence is material;
  5. The evidence is such that a new trial would probably produce a new result.

“A party asking for a new trial on the ground of newly discovered evidence must satisfy the [trial] court that the evidence has come to his knowledge since the trial, and that it was not owing to a want of diligence on his part that it was not discovered sooner.” Sullivan v. Heal, 571 So.2d 278, 281 (Miss. 1990). “[F]acts implying reasonable diligence must be proved by the movant.” NLRB v. Decker & Sons, 569 F.2d 357, 363-4 (5th Cir 1978).

The decision of the chancellor to deny such a motion may only be reversed if the appellate court finds abuse of discretion. United Serv. Auto Assoc. v. Lisanby, 47 So.3d 1172, 1176 (Miss. 2010).

All of the authority cited above is extracted from Judge Griffis’s opinion in the COA case of Smullins v. Smullins, decided on rehearing November 29, 2011.

Shellie and Bradley Smullins battled over a divorce and custody of their son Devinn, who was age seven at the time. Neither party was an all-star parent. There was substantial evidence that each of them engaged in behaviors that called their parenting skills into question.

On August 8, 2008, following the trial, the chancellor issued a fifty-page opinion that included a detailed Albright analysis. He awarded Bradley sole physical custody of Devinn and granted the parties joint legal custody.

On August 9, 2008, Shellie and Devinn submitted to a DNA test, and on August 12, 2008, Wendle Hunt did the same. The test result established a 99.999996% probability that Hunt was the natural father.

On September 6, 2008, the chancellor entered the judgment of divorce, which was approved as to form by Shellie’s attorney.

On September 26, 2008, Shellie filed a motion for a new trial (reconsideration under MRCP 59) on the basis of newly discovered evidence. The motion included the following assertions: Devinn was conceived prior to the parties’ marriage, and they knew before the marriage that it was possible that Bradley was not the father; the DNA test shows that Wendle Hunt is the natural father; Wendle Hunt is ready, willing and able to act as the child’s father; and Wendle is “disturbed to learn that his son is being raised by a second generation alcoholic drug addict.”

At hearing, Shellie testified that she always knew that there was a possibility that Bradley was not Devinn’s natural father. She had offered a DNA test before the marriage, but Bradley had refused. Wendle did not know that he had fathered a child by Shellie.

The chancellor overruled the motion, and said:

“The new evidence regarding the paternity of [Devinn] was not discovered until after the trial but was known to [Shellie] prior to entry of the judgment. [MRCP] 58 states that, “a judgment shall be effective only when entered.” Therefore, the paternity of Devinn Wayne Smullins was known prior to the divorce being final but was not disclosed to this court.

Due diligence on the part of the movant to discover the new evidence is required. ‘A party can not fail to investigate important information and then attempt to assert that information as new evidence at the end of the trial.’ [citing Goode v. Synergy Corp., 852 So.2d 661, 664 (¶12) (Miss. Ct. App. 2003) …]”

The judge found that Shellie had failed to exercise due diligence and overruled her motion for reconsideration.

The COA affirmed, saying at ¶35:

Just like the chancellor, we fail to see how the paternity test results can be newly discovered evidence if she knew of the possibility of that very fact prior to the commencement of this legal action. Had Shellie alleged that, upon information and belief, Bradley was not Devinn’s biological father, then that very issue could have [been] tried to the chancellor and considered in the final judgment. But she failed to do so.

Another avenue that Shellie could have taken to try to avoid running into this brick wall would have been to file a motion to reopen her case before the judge entered the judgment. It’s still unlikely she would have been granted any relief given what she testified that she knew, but that would have given her another shot.

So here is an important distinction to draw from this case: Although it is true that the DNA test results did not exist until after the trial, Shellie and Bradley both knew, or had strong reason to believe, that Bradley was not the father. Thus, the DNA results were mere verification of evidence that the parties knew of and could have developed at trial.

Genuine cases of newly discovered evidence that come within the rule are indeed rare. When the situation does arise, however, you have to analyze it within the express requirements of the rule.

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