Case Name: Dana MASON, Appellant v. Clyde MASON, Jr., Appellee
Court: Mississippi Court of Appeals
Jurisdiction: Mississippi
Decision Date: 2005-06-07
Citations: 919 So. 2d 200
Docket Number: No. 2002-CA-00509-COA
Parties: Dana MASON, Appellant v. Clyde MASON, Jr., Appellee.
Judges: KING, C.J., LEE, P.J., MYERS, CHANDLER, BARNES AND ISHEE, JJ., CONCUR. IRVING, J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY GRIFFIS, J.
Reporter: Southern Reporter, Second Series
Volume: 919
Pages: 200–208

Head Matter:
Dana MASON, Appellant v. Clyde MASON, Jr., Appellee.
No. 2002-CA-00509-COA.
Court of Appeals of Mississippi.
June 7, 2005.
Marc E. Brand, Jackson, attorney for appellant.
W. Jeffrey Collier, William Larry La-tham, Ridgeland, attorneys for appellee.

Opinion:
BRIDGES, P.J.,
for the Court.
¶ 1. Clyde and Dana Mason divorced by order of the Madison County Chancery Court. Incident to their divorce, Clyde and Dana entered - a child custody and property settlement agreement. On February 20, 2001, the Madison County Chancery Court made the property settlement agreement part of the judgment for divorce. In December of 2001, Clyde filed a motion to interpret agreement and specifically asked the Madison County Chancery Court to interpret paragraph sixteen of the property settlement agreement.
¶2. Paragraph sixteen dealt "with the filing and payment of joint state and federal income tax deficiencies or liabilities arising out of joint tax returns for 1998, 1999, and 2000. Specifically, that paragraph stated:
The parties agree that, according to Judge Gail Shaw-Pierson's Order, they will cooperate with one another in filing joint state and federal income tax returns for 1998, 1999 and 2000 with the understanding that they will be equally responsible for any income tax deficiencies and/or liabilities arising out of the said joint returns, but with the Wife's total contribution for all three years not to exceed Thirty Thousand Dollars ($30,-000.00) (this amount includes any accounting fees), with the Husband to pay all of the remainder.
¶ 3. The chancellor determined that Dana had satisfied her obligations under paragraph sixteen. However, the chancellor also determined that Clyde and Dana would have to split equally any penalties and interest that might accrue for filing late tax returns in 2000. The record is not entirely clear as to who bore the responsibility for the late tax return. Portions of the record indicate that Dana was at least partially responsible for the late 2000 tax return because Dana refused to sign the return. For example, the following exchange took place before the chancellor:
Mr. Reeves: The IRS wrote Mr. Mason and told him he owes $6,000 in penalties and interest because the tax return was filed late. It was filed late because she wouldn't sign it, and Ms. Reeves testified to that. She wouldn't come sign it, Judge. Why should he pay the penalties and interest when she wouldn't sign the darned thing until you made her do it?
The Court: Now what's your concern about that?
Mr. Reeves: I want you to make her pay that. Why is it his fault she wouldn't sign the return? She didn't sign it until you make her do it in court that day. You ordered her to sign it in court that day. Now, had she signed it when you told her to several months earlier, we wouldn't have this problem, That's it.
The Court: I do recall the situation regarding the tax, and I do recall the witness on the witness stand saying that the tax payments were ready on that particular day, and I do recall there being some discords as to why things had not been signed prior to — pursuant to notices that had been given.
If there is a tax penalty stemming from failures of these parties on tax obligations for 1998, 1999, 2000, those obligations are to be shared. Anything further?
Mr. Reeves: No, Your Honor.
¶ 4. Unfortunately, the portion of "Ms. Reeves" testimony is not within the record. If that exchange is inconsistent with the facts of this case, Dana's counsel did not object. It appears that the chancellor, having heard the testimony, recalled the relevant events. Where we find substantial evidence in the record supporting the findings of fact, we will seldom reverse, whether those findings be of ultimate fact or evidentiary fact. Sproles v. Sproles, 782 So.2d 742(¶12) (Miss.2001). (citations omitted). Said differently, unless the chancellor's determination of fact in a divorce case is manifestly wrong, this Court will uphold the chancellor's decision. Id. Our deference to the chancellor's findings, coupled with the corresponding portions of the record and the lack of an objection, indicates Dana was at least partially responsible for the late tax return, but for which year?
¶ 5. While the exchange before the chancellor does not specifically refer to the tax return for the year 2000, other portions of the record clarify that the chancellor was referencing the tax return for the year 2000. The chancellor's order on Clyde's motion to pay penalties and interest states that "the 2000 joint- income tax returns were prepared and ready to be signed and filed within the IRS and Mississippi State Tax Commission deadlines for filing without penalties and interest, but said returns were not filed timely." Finally, Dana's appeal brief states that "Clyde's counsel urged the Court to require Dana to pay one-half of any penalty and interest which had accrued as a result of the late filing of the 2000 tax return." Thus, it appears that Dana was at least partially responsible for the late filing of the couple's 2000 tax return.
¶ 6. Dana, aggrieved by the chancellor's ruling, appeals the chancellor's decision to require her to pay one-half of any penalties and interest for filing late tax returns in 2000. Dana asks this Court to resolve the following issue:
I. Whether the chancellor erred in requiring Dana and Clyde to share equally in any penalties and interest assessed by the IRS and Mississippi State Tax Commission as a result of the late filing of the parties' 2000 joint income tax returns.
Finding no error, we affirm the chancellor's decision.
STANDARD OF REVIEW
¶ 7. This Court will not disturb a chancellor's findings unless they are manifestly wrong, unsupported by credible evidence, or the chancellor applied an erroneous legal standard. Bell v. Parker, 563 So.2d 594, 596-7 (Miss.1990). However, this Court reviews questions of law under the de novo standard. Armstrong v. Armstrong, 836 So.2d 794(¶ 10) (Miss.Ct.App.2002) (citations omitted). Contract interpretation involves a question of law. Id.
ANALYSIS
I. Did the chancellor err in requiring Dana and Clyde to share equally in any penalties and interest assessed by the IRS and Mississippi State Tax Commission as a result of the late filing of the parties' 2000 joint income tax returns?
¶ 8. Dana argues that the chancellor had no basis to assess her with penalties and interest that accrued for filing tax returns late in 2000. She argues that, by doing so, the chancellor altered and modified her liability under paragraph sixteen. Clyde argues that the provisions of paragraph sixteen are ambiguous.
¶ 9. Paragraph sixteen contains two clear provisions pertinent to the resolution of this dispute. First, Clyde and Dana are bound to share the tax liabilities for the years 1998, 1999, and 2000 "with the understanding that they will be equally responsible for any income tax deficiencies and/or liabilities arising out of the joint returns." Second, Dana's contribution cannot exceed $30,000.
¶ 10. According to the plain meaning of these two provisions, Dana is obligated to share tax liabilities up to a $30,000 contribution. According to the chancellor's order on Clyde's motion to interpret the agreement, Dana satisfied her obligation under paragraph sixteen of the property settlement agreement. There is no dispute about whether Dana satisfied her contribution obligation. However, this dispute hinges on the chancellor's interpretation of the character of the penalties and interest as a result of the late filing of the 2000 joint income tax returns. The chancellor determined that the tax penalties and interest did not fall within the tax deficiencies or liabilities as contemplated in the property settlement agreement.
¶ 11. It follows that the question before this Court is whether the penalties and interest fall within "any income tax deficiencies and/or liabilities arising out of the joint returns." If the answer is "yes," then the chancellor erred. However, if the answer is "no," then we must affirm the chancellor's decision.
¶ 12. A property settlement agreement is a contract. Armstrong v. Armstrong, 836 So.2d 794(¶ 10) (Miss.Ct. App.2002). Here, Clyde and Dana contracted in contemplation of "deficiencies and/or liabilities arising out of' joint income tax returns. The penalties and interest in question arose because Clyde and Dana filed late income tax returns for 2000. Clyde and Dana entered the property settlement agreement on February 9, 2001 prior to the income tax filing deadline for the 2000 tax year. Paragraph sixteen makes no specific mention of late tax filings. It is possible that the resulting penalties and interest could be included as a "deficiency and/or liability" that arose out of filing the 2000 joint income tax return. Still, it is equally possible that paragraph sixteen, by excluding any mention of a possible late filing, did not presume any penalties and interest. It is impossible to predict what exactly processed in Clyde's or Dana's mind at the time they entered the property settlement agreement. It follows that paragraph sixteen is ambiguous as to whether the penalties and interest for the late 2000 income tax return falls within "deficiencies and/or liabilities." Ambiguities in contracts are construed against the drafter. Banks v. Banks, 648 So.2d 1116, 1121 (Miss.1994). Since Dana's attorney drafted the property settlement agreement, we must construe the ambiguity against Dana. Accordingly, we affirm the decision of the chancellor.
¶ 13. THE JUDGMENT OF THE MADISON COUNTY CHANCERY COURT IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLANT.
KING, C.J., LEE, P.J., MYERS, CHANDLER, BARNES AND ISHEE, JJ., CONCUR. IRVING, J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY GRIFFIS, J.