Source: https://betterchancery.com/2018/08/
Timestamp: 2019-04-25 10:46:50+00:00

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We visited the Ferrell v. Cole case yesterday, dealing with who is entitled to notice to close an estate. Ferrell held that only persons with a direct pecuniary interest in the estate were entitled to notice. If one is not in the class of persons entitled to notice, does one have standing to demand an accounting or to object to an accounting?
To have standing to sue, a party must assert a colorable interest in the subject matter of the litigation or experience an adverse effect from the conduct of the defendant, or as otherwise authorized by law. An interest is deemed colorable if it appears to be true, valid, or right. An individual’s legal interest or entitlement to assert a claim against a defendant must be grounded in some legal right recognized by law, whether by statute or by common law. For a plaintiff to establish standing on grounds of experiencing an adverse effect from the conduct of the defendant/appellee, the adverse effect experienced must be different from the adverse effect experienced by the general public.
SASS Muni-V, 170 So. 3d at 446 (¶13) (internal citations and quotation marks omitted).
¶17. Mississippi precedent clearly establishes that vested remainder beneficiaries of a testamentary trust have standing to file suit and that holders of a shifting executory interest have some limited rights that can provide standing to file suit. See Baumgardner, 82 So. 3d at 600-01 (¶¶27-28); Hemphill, 245 Miss. at 46, 145 So. 2d at 461. [Fn 3] Claire and Jane claim they are vested remainder beneficiaries of their mother’s testamentary trust while Knox asserts his sisters have an unvested executory interest. As previously discussed, the chancellor found Claire and Jane were unvested contingent remainder beneficiaries.
[Fn 3] Cf. Cannon, 59 Miss. at 302-05 (holding that contingent remainder beneficiaries could prevent a life tenant from future waste to the detriment of the inheritance).
569 S.E.2d 385, 387 (S.C. Ct. App. 2002). We now turn to a more specific review of the terms of Brenda’s will and the legal consequences of those terms.
If there are no surviving beneficiaries, descendants of deceased former beneficiaries, former beneficiaries who are living, or descendants of deceased former beneficiaries, then his or her interest shall be distributed share and share alike to the [c]onservatorships for my two daughters[, Claire and Jane;] should either one or both of them not have a [c]onservatorship at the termination of this trust[,] then distribute their portion outright to them.
¶20. Thus, Brenda’s will established that, if D.A. and Knox failed to satisfy the condition of survivorship, they would be divested of their interests, which would then shift and be distributed to Claire and Jane. Accordingly, a review of Brenda’s will reflects that she gave Claire and Jane a shifting executory interest in the assets of the testamentary trust. [Fn 4] As stated, Mississippi precedent reflects that holders of a shifting executory interest enjoy limited rights to enjoin the possessory owner from waste of the inheritance. See Hemphill, 245 Miss. at 38, 145 So. 2d at 457. [Fn 5] We now turn to a review of applicable and instructive Mississippi precedent.
[Fn 4] See Hemphill, 145 So. 2d at 457 (finding that individuals who possessed a shifting executory interest in land taken and allegedly damaged by the Mississippi Highway Commission possessed limited compensable rights in the land); White v. Inman, 212 Miss. 237, 256, 54 So. 2d 375, 381-82 (1951) (finding the testator’s will devised to his daughter an estate in fee simple defeasible subject to an executory limitation). ).
value and significance on future interests, whether ‘vested’ or not.” Id. at 47, 145 So. 2d at 462. The Hemphill court further explained that a contingent remainder interest “has achieved status as a protectable interest for many purposes” when the “contingent remainder is limited to an existing ascertained person[,]” like Claire and Jane in the instant case. Id. at 48, 145 So. 2d at 462. According to the Hemphill court, “[w]hen a contingent remainder is limited to an existing ascertained person[,] there is no question but that the courts will recognize the interest as having present existence.” Id.
¶22. Thus, upon review of relevant caselaw and the record before us, we find the chancellor erred in denying Claire and Jane’s request for an accounting of their mother’s estate and testamentary trust. As holders of a shifting executory interest in their mother’s estate, Claire and Jane possess limited rights to enjoin the possessory owners from future waste of the estate. See id. at 38, 145 So. 2d at 457.6 As a result, we reverse the chancellor’s judgment finding they lack standing to request an accounting, and we remand the case for further proceedings consistent with this opinion.
In all fairness, the COA did not have the benefit of the Ferrell decision when it decided Flowers. So the COA had to rely on tax-sale, eminent-domain, and property cases for the most part in reasoning through to a decision. But after all this, in light of Ferrell, did Claire and Jane have such a “direct pecuniary interest” so as to entitle them to that level of of protection? And isn’t the “colorable interest” test of Sass-Muni-V (a tax-sale case) less restrictive than the “direct pecuniary interest” of Ferrell (an estate case)?
Or are the interests of Claire and Jane so remote that they can’t be said to have that “direct interest” under Ferrell, which is estate law?
Now that the courts have Ferrell as a waypoint, I hope they can give those of us at ground level some clear, practical guidance.
(10) such other and further relief as the Court may deem appropriate and just.
Defendants responded asking that the matter be transferred to circuit court because of the claims for money damages, and because they wanted to protect their right to a jury trial. The State objected.
circuit court. The judge held that the main relief sought was legal, and ordered that the case be transferred to circuit court. The State appealed.
hear equity claims than it is for a chancery court to hear actions at law since circuit courts have general jurisdiction but chancery courts enjoy only limited jurisdiction.” McDonald’s Corp. v. Robinson Indus., Inc., 592 So. 2d 927, 934 (Miss. 1991); see also Hardin, 742 So. 2d at 1090; Union Nat’l Life Ins. Co. v. Crosby, 870 So. 2d 1175, 1182 (Miss. 2004).
¶30. We reiterated this position in Era Franchise Systems, Inc. v. Mathis, 931 So. 2d 1278 (Miss. 2006). There, we noted that “equitable claims are more appropriately brought before a circuit court when they are connected to a contractual relationship or other claims tied to questions of law.” Mathis, 931 So. 2d at 1283 (citing Copiah Med. Assocs. v. Mississippi Baptist Health Sys., 898 So. 2d 656, 661 (Miss. 2005); Crosby, 870 So. 2d at 1175; RE/Max Real Estate Partners v. Lindsley, 840 So. 2d 709 (Miss. 2003)). In Mathis, Venit Mathis filed a complaint against multiple defendants alleging various claims, framed as a derivative action on behalf of REP–an organization in which he alleged to have a fifty-percent stake. Like the State in the matter before us, Mathis pleaded several causes of action and prayed for both legal and equitable relief. After the chancery court determined that it would be best to bifurcate the action, leaving the equitable claims in chancery court and transferring the legal claims to the circuit court, the defendants appealed. This Court reviewed the matter and determined that the chancellor had committed reversible error. Mathis, 931 So. 2d at 1283-1284. Following our holding in Crosby (stating that where a complaint seeks both actual and punitive damages, the “remedy is clearly legal rather than equitable in nature,” Crosby, 870 So. 2d at 1179), we determined that the circuit court’s general jurisdiction is better suited to try a case when doubt exists as to whether the claims are equitable or legal. Mathis, 931 So. 2d at 1282 (citing Burnette v. Hartford Underwriters Ins. Co., 770 So. 2d 948, 952 (Miss. 2000)). Finding that Mathis’s action revolved around issues stemming from contractual obligations not met by the defendants, we reversed the chancellor’s decision denying the defendant’s motion to transfer the matter to the circuit court. Id. at 1283.
¶31. Similarly, in the often-cited Crosby case, the plaintiffs brought an action to recover against the defendants for several common-law and statutory claims arising out of sale of insurance policies and allegedly exorbitant premiums. Crosby, 870 So. 2d 1175 (Miss. 2004). Although the plaintiffs requested a constructive trust, an accounting, and injunctive relief, the defendants claimed that the complaint sounded in tort and contract law–not equity–and requested the case be transferred to circuit court. Reviewing the matter on interlocutory appeal, this Court reversed the chancellor’s denial of the defendant’s motion to transfer, and determined that “each and every one of Crosby’s claims, even the equitable claims of unjust enrichment and constructive trust, arise from the sale and alleged breach of an insurance contract.” Id. at 1182. We noted that an argument alleging otherwise ignores the fact that, unless there was a contractual relationship between Union National and Crosby, she would have no claims arising from the sales, administration and service of the insurance policy. . . .The alleged mismanagement and misappropriation of premium money concerns Crosby’s contractual duty to pay for the insurance policy and Union National to provide her coverage. Id.
¶32. This analysis is directly applicable to the State’s claims against the pharmacies. While it is true that the State’s complaint does not plead the facts necessary to establish a breach-of-contract cause of action, we must look to “the substance, and not the form” of the claims in our resolution of a matter. Copiah Med. Assocs., 898 So. 2d at 661. With the State’s single theory of wrongdoing arising from the defendant’s obligations under the Medicaid provider agreements, the State’s decision to omit a breach-of-contract claim in no way affects the complaint’s substance: the claims asserted and the relief requested present legal arguments and legal remedies. Moreover, much like Crosby and Mathis, the heart of the complaint concerns a provider agreement (a contract), its terms, and the parties who failed to abide by the arrangement. While the equitable issues pleaded are relevant and not to be ignored, the legal issues which flowed from the pharmacies’ alleged inflated reimbursement requests predominate the State’s claims and requests for relief. As a result, jurisdiction properly lies in the circuit court.
¶33. Putting aside the State’s requests for restitution, accountings, constructive trusts, and injunctions, the complaint prays for millions of dollars in actual and punitive damages based on the defendants’ alleged unwillingness to comply with the signed provider agreements. Whether the State disagrees that the basis of these complaints sounds in contract is of no moment. Rather, as most of the claims are legal in nature, the circuit court is the appropriate forum to rule on the matter.
¶34. This decision in no way strips the Attorney General of his constitutional authority to pursue an injunction. Rather, it allows the State fully and fairly to pursue all claims against the defendants, while providing the defendants with an opportunity to have those issues presented to a jury.
The State, therefore, should fully and ably proceed with its complaint in circuit court.
I could quibble all day with the “general jurisdiction” vs. “limited jurisdiction” fiction and how it is so unhelpful to this discussion, but I’ll pass and submit to the principle that if the matter is an action for damages, it should go to circuit.
Having said that … <HERESY ALERT> … my question is, “Why, Mississippi, do we continue to put ourselves through this contortion when we could resolve it easily by merging our law and equity courts into one system?” I know that’s heretical, coming especially from a chancellor, but merger of law and equity has worked handsomely in almost all of the other United States for as many as 150 years without jurisprudential armageddon.
In a merged system, we would not have tug-of-wars between circuit and chancery. As many claims for relief as one has could be joined in a single action to be addressed by the court as appropriate.
Some say that would sacrifice the expertise in minor’s issues, probate, and family law that has been accumulated in chancery over the centuries. That is a somewhat valid concern, but I don’t see that the quality of judicial decisions in merged states is significantly less than Mississippi’s. Also, in some jurisdictions where number of judges and caseload are adequate, judges specialize in certain areas such as family law and criminal law, allowing development of expertise.
Some do not want to sacrifice the jobs of sitting chancellors in a merger, but I don’t think that merger would result in the loss of a single judge slot. We would still have the same number of cases to be handled, requiring at least as many judges as we have now.
Others say, “If it ain’t broke …” etc. To that I concede that it ain’t necessarily broke … but is it functioning as efficiently, justly, and equitably as it can and should?
We ought always be ready and willing to discuss and debate the best ways to fashion our court system.
HB 1566, effective January 1, 2018. increases the income tax credit for adoption expenses from $2,500.00 for each dependent child legally adopted to $5,000.00 for each child legally adopted. An income tax credit is also allowed in the amount of $5,000.00 for each child legally adopted through the Mississippi Department of Child Protection Services.
A taxpayer may claim only one of these credits for each child adopted. The carry forward under current law for the adoption expense credit is three years. The carry forward is increased to five years for the adoption care credit and is five years for the credit for an adoption through the Mississippi Department of Child Protection Services. The credits are repealed effective January 1, 2020.
This is an advantageous benefit since a credit reduces taxes dollar-for-dollar.
The bill was not signed until April, but the January effective date means that it is available for 2018 filings.
If the testator had no fixed place of residence and only personal property is disposed of in the will, then in the county where the testator dies, or where some part of the property may be.
A lawyer talked with me about a problem he ran into with 3, above. In his case, the decedent was a resident of another state, but had money on deposit in Mississippi. The lawyer attempted an ancillary probate to get the money for the beneficiaries, but the chancellor would not admit the will to probate in the county of the deposit because the judge was not satisfied that the funds met the definition of personal property within the meaning of the statute.
The term “personal property,” when used in any statute, shall include goods, chattels, effects, evidences of rights of action, and all written instruments by which any pecuniary obligation, or any right, title, or interest in any real or personal estate, shall be created, acknowledged, transferred, incurred, defeated, discharged, or diminished.
All that, but no direct mention of cash, deposits, or funds.
This case was before the COA for the second time. The first appeal was dismissed by the COA because the judgment disposed of fewer than all the issues raised in the case (i.e., the will contest), and there was no R54 certification. After the dismissal, the chancellor filed the certification, and the second appeal was not dismissed by the COA.
If you have a judgment from the trial court that disposes of fewer than all of the issues, or grants relief to fewer than all of the parties, you must make sure that the judge certifies per R 54 that there is no just cause to delay an appeal if you plan or anticipate an appeal. If the judge does not do it on his own, file a timely R59 motion asking him to do so. It will save time and expense.
This case is an excellent exposition of the law in this area. A couple of previous posts on the point are here (will contests) and here (inter vivos gifts between spouses).
Again, on lack of findings (mentioned in Fn 6), don’t be afraid to file a R59 motion asking for more specific findings if you fear that you might get a remand based on what the judge did rule. If you want to soften the blow to your already-overworked chancellor, you can offer to prepare proposed findings of fact and conclusions of law.
Undue influence cases have a definite framework of law that you must build your case on, and they are quite fact-intensive. Speculation and supposition will not win the case. It takes strong, definite proof.
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