Ernest Edwin Norton, Jr. v. Glenda F. Norton ( 1997 )

IN THE SUPREME COURT OF MISSISSIPPI
NO. 97-CA-01442-SCT
ERNEST EDWIN NORTON, JR.
v.
GLENDA F. NORTON
DATE OF JUDGMENT: 06/16/1997
TRIAL JUDGE: HON. DONALD PATTERSON
COURT FROM WHICH LINCOLN COUNTY CHANCERY COURT
APPEALED:
ATTORNEY FOR APPELLANT: DOUG DOUGLAS WADE
ATTORNEY FOR APPELLEE: DAN H. FAIRLY
NATURE OF THE CASE: CIVIL - DOMESTIC RELATIONS
DISPOSITION: AFFIRMED IN PART; REVERSED AND RENDERED IN PART
- 6/3/1999
MOTION FOR REHEARING
FILED:
MANDATE ISSUED: 6/24/99
EN BANC.
MILLS, JUSTICE, FOR THE COURT:
STATEMENT OF THE CASE
¶1. Ernest Edwin Norton, Jr. appeals from the judgment of the Lincoln County Chancery Court dismissing
his motion for modification of his final judgment of divorce. With the exception of the imposition of
sanctions, we find no error and affirm the decision of the Lincoln County Chancery Court.
STATEMENT OF THE FACTS
¶2. Glenda F. Norton and Ernest Edwin Norton, Jr. were divorced on the grounds of irreconcilable
differences on July 27, 1994, by a judgment of the Lincoln County Chancery Court. On February 4, 1997,
Ernest filed a motion for modification due to a change in circumstances.
¶3. The divorce decree provided that Ernest would pay Glenda $800 per month for ten years for consulting
services to Ernest's company, Brookwood Gifts and Antiques, Inc. The payments were to commence July
1, 1994. Both Glenda and Ernest specifically agreed that the payments would not be subject to
modification and would not be construed as alimony. On the same day as the divorce decree, Glenda
entered into a professional services contract with Brookwood Gifts wherein she agreed to provide
consulting services to Brookwood in exchange for a fee of $800 per month for ten years. The agreement
provided that the payments would be "in lieu of, in exchange of, and relinquishment of a claim of alimony by
Glenda F. Norton against Ernest Edwin Norton, Jr. . . . ." Additionally, Ernest personally guaranteed all
payments due under the agreement even if the business ceased operation.
¶4. During the hearing on the motion for modification, Ernest's attorney explained that the reason the parties
formed the divorce settlement with the divorce decree and the additional professional services contract was
to ensure that there could be no modification of the obligations, as well as providing tax benefits to Ernest.
¶5. On February 4, 1997, Ernest filed a motion to modify the Final Judgment of Divorce and to have the
professional services contract nullified. He claims that since the entry of the Final Judgment of Divorce there
has been a material change in circumstances between the parties which justifies modification of the Final
Judgment of Divorce. He also claims that as well as securing employment with a business in direct
competition with Brookwood, Glenda Norton has failed to perform any consulting services as contemplated
by the Final Judgment of Divorce and outlined in the Professional Services Contract. He claims that such
failure to perform constitutes a breach of contract and failure of consideration. He asked that the court
remove his obligation to pay the $800 per month "consulting fee" and to order all money paid pursuant to
this agreement returned to him as damages. In the alternative, he asked that the court consider the payments
made to Glenda "payments made in lieu of periodic alimony and that [Glenda] remarried in or about
December 1995; thus terminating periodic alimony." As in his first argument, he again asked that the
professional services contract be ordered a nullity and Glenda Norton be ordered to return all payments
made pursuant to the contract as damages.
¶6. The Chancellor found that the obligation was not subject to modification or termination because the
payments constituted either a property settlement or lump sum alimony, neither of which can be modified.
Before granting the motion to dismiss the motion for modification, he noted the language in the divorce
decree which specifically stated that the payments were not subject to modification. As well as dismissing
the case the Chancellor imposed sanctions and attorney's fees against Ernest Norton and his attorney, Doug
Wade in the amount of $1,823.97.
¶7. On June 25, 1997, Ernest filed a motion for reconsideration. On October 10, 1997, the Chancellor
denied Ernest's motion and assessed his counsel an additional $364.48 for the filing of the additional motion.
Aggrieved, Ernest Norton appeals the judgment of the Lincoln County Chancery Court and raises the
following assignments of error for consideration by this Court:
I. DID THE COURT ERR IN CONSIDERING THE LETTER FROM GLENDA TO
ERNEST RECOMMENDING THAT HE WITHDRAW HIS MOTION FOR
MODIFICATION?
II. DID THE CHANCERY COURT ERR IN DISMISSING THE MOTION FOR
MODIFICATION OF FINAL JUDGMENT OF DIVORCE AS TO BROOKWOOD GIFTS
& ANTIQUES FOR NON-JOINDER OF PARTIES?
III. DID THE CHANCERY COURT ERR IN DISMISSING THE MOTION FOR
MODIFICATION AND THE MOTION FOR RECONSIDERATION AS BEING
FRIVOLOUS AN WITHOUT SUBSTANTIAL MERIT?
IV. DID THE CHANCELLOR ERR IN DENYING ERNEST NORTON'S MOTION FOR
RECONSIDERATION?
V. DID THE CHANCERY COURT EXHIBIT BIAS OR PREJUDICE AGAINST THE
APPELLANT AND APPELLANT'S ATTORNEY AND DID THE CHANCERY COURT
PREJUDICE THE CASE PRIOR TO HEARING THE MOTION?
VI. DID THE CHANCERY COURT ERR IN ASSESSING SANCTIONS AGAINST
APPELLANT AND APPELLANT'S ATTORNEY? STANDARD OF REVIEW
¶8. When reviewing a chancellor's decision, this Court will accept the chancellor's findings of fact as long as
the evidence in the record reasonably supports those findings. In re Estate of Taylor v. Thompson, 609
So.2d 390, 393 (Miss. 1992). In other words, we will not disturb the findings of a chancellor unless those
findings are clearly erroneous or an erroneous legal standard was applied. Hill v. Southeastern Floor
Covering Co., 596 So.2d 874, 877 (Miss. 1992). Where the factual findings of the chancellor are
supported by substantial credible evidence, they are insulated from disturbance on appellate review. Jones
v. Jones, 532 So.2d 574, 581 (Miss. 1988) (citing Norris v. Norris, 498 So.2d 809, 814 (Miss. 1986);
Carr v. Carr, 480 So.2d 1120, 1122 (Miss. 1985).
ANALYSIS
I. DID THE COURT ERR IN CONSIDERING THE LETTER FROM GLENDA TO
ERNEST RECOMMENDING THAT HE WITHDRAW HIS MOTION FOR
MODIFICATION?
¶9. Prior to the hearing of this matter on June 3, 1997, Glenda Norton through her attorney, wrote Ernest
Norton and recommended that he withdraw his motion for modification in light of East v. East, 493 So.2d
927 (Miss. 1986). At the hearing, the Chancellor held that "legal obligations arising out of that contract
[between Brookwood Gifts & Antiques, Inc. and Glenda Norton] are not here justiciable because
Brookwood Gifts & Antiques is not a party to this motion."
¶10. Ernest first argues that the chancellor erred in considering the letter from Glenda, which recommended
that he withdraw the motion for modification in light of current precedent. Ernest argues that the letter was
not properly introduced into the record. The letter was made an exhibit to Glenda's motion to dismiss and
was relevant to her request for sanctions. Documents which are made exhibits to motions are properly
before the court for its consideration. See Barlow v. Serio, 129 Miss. 432, 433, 91 So. 573, 574 (1922).
Additionally, the legal analysis contained in the letter was, for the most part, also included in the motion to
dismiss. Therefore, this assignment of error is without merit.
II. DID THE CHANCERY COURT ERR IN DISMISSING THE MOTION FOR
MODIFICATION OF FINAL JUDGMENT OF DIVORCE AS TO BROOKWOOD GIFTS
& ANTIQUES FOR NON-JOINDER OF PARTIES?
¶11. The motion to modify the final judgment of divorce was filed by Ernest and Brookwood. The
chancellor was correct in dismissing Brookwood as a party because Brookwood was not a party to the
divorce and thus, has no standing to seek a modificaiton.
III. DID THE CHANCERY COURT ERR IN DISMISSING THE MOTION FOR
MODIFICATION AND THE MOTION FOR RECONSIDERATION AS BEING
FRIVOLOUS AN WITHOUT SUBSTANTIAL MERIT?
IV. DID THE CHANCELLOR ERR IN DENYING ERNEST NORTON'S MOTION FOR
RECONSIDERATION?
¶12. Absent fraud or a contractual provision stating otherwise, neither a property settlement nor lump sum
alimony may be modified. Mount v. Mount, 624 So.2d 1001, 1005 (Miss. 1993). The agreement
between Ernest and Glenda explicitly stated that the $800 per month was not alimony and that the
agreement was not modifiable by either party.
¶13. The pertinent part of the divorce decree states as follows:
(c) Defendant shall pay unto Plaintiff the sum of $800.00 per month for 120 consecutive months
commencing July 1, 1994, for consulting services to Brookwood Gifts & Antiques, Inc. Plaintiff and
Defendant both acknowledge that these payments are not subject to modification, not shall they be
construed as alimony.
¶14. In the hearing of this matter, Mrs. Norton's attorney appeared and specifically stated the intent of the
parties in drafting the divorce decree as follows:
It was my intention and Mr. Patten's and Mr. And Mrs. Norton's intention at the time that that
agreement be written in such a way so that (1) Mr. Norton and Mrs. Norton could not come back in
court and seek an increase, (2) he wanted to be able to deduct the payments fixed if they were not -
when you call it periodic alimony he would have lost the benefit. He would have the benefit of being
able to deduct it, but he would run the risk that she could come back and seek an increase. The idea
was that she wanted some assurance, not only from his personal pocketbook, but from the business
pocketbook, that she would be paid and Mr. Patten and I tried, as best we could , to draft not only
to make the announcement to the court which became their written agreement, that's now in
transcript, prepare the judgment of divorce in a way, prepare an agreement and a release, four
different documents, in a way so that what's happening today would never happen, so that the parties
would understand that this was a locked-in $800 per month for ten years period, not subject to
modification.
¶15. It is apparent, from the above unchallenged explanation of the parties' intent, that the purpose of the
"contract" was to label the alimony under a different name so that Ernest could gain tax benefits and so that
Glenda could not petition for an increase. The agreement was clearly the accomplishment of lump-sum
alimony through a legal fiction in the form of an employment contract. The agreement was envisioned by
Ernest to prohibit his ex-wife from securing an increase in payment and to secure tax advantages for himself
or his corporation by payment to his ex-wife of "salary" through his corporation instead of the payment of
alimony.
¶16. Brookwood's grounds for complaint stem from the contract and not the alimony agreement found in
the judgment of divorce. If Brookwood believed that Glenda was not performing her obligations under the
contract, its remedy is to file a breach of contract action in the appropriate court.
¶17. The agreement is vague in that it fails to state what duties Glenda's consulting services entail. It is also
apparent that the $800 per month for ten years payment was not in exchange for Glenda's services but
rather paid as partial consideration for Glenda "releasing any claims she has in the business lawsuit and the
settling of any claims for alimony."
¶18. "This Court has consistently held that periodic alimony is subject to modification and ceases upon the
wife's remarriage or the husband's death. With regard to lump sum alimony, however, this Court has
historically held that such alimony constitutes a fixed liability of the husband and his estate and is not subject
to modification." McDonald v. McDonald, 683 So.2d 929, 931 (Miss. 1996) (citations omitted).
¶19. The payments in this case were not subject to modification and were not made terminable upon the
death or remarriage of Mrs. Norton. Additionally, the agreement between the parties specifically states that
the payments were "in lieu of, in exchange of, and relinquishment of a claim of alimony by Glenda F. Norton
against Ernest Edwin Norton, Jr., in a certain divorce action filed in the Chancery Court of Lincoln County,
Mississippi." We will not permit Mr. Norton to mislead the Court and benefit himself at the expense of Mrs.
Norton.
¶20. It is clear that Ernest agreed to pay Glenda $800 a month for 10 years if she forewent her claims to
alimony and litigation against the business. At all times, Ernest was fully competent and represented by
counsel. The contested provision is simply an alimony agreement wherein Ernest agreed to pay Glenda a set
sum for a definite period. As such, Ernest has no grounds to modify the agreement nor to bring a contempt
action because his is the only obligation left to be performed. Similarly, Brookwood cannot complain
because Glenda has performed her obligations under the contract: to abstain from demanding alimony and
suing the business.
¶21. The payments Mr. Norton made to Mrs. Norton are clearly lump-sum alimony payments disguised in
terms of salary for the benefit of Mr. Norton and his corporation. Because lump-sum alimony is not subject
to modification, we affirm the decision of the trial court.
V. DID THE CHANCERY COURT EXHIBIT BIAS OR PREJUDICE AGAINST THE
APPELLANT AND APPELLANT'S ATTORNEY AND DID THE CHANCERY COURT
PREJUDICE THE CASE PRIOR TO HEARING THE MOTION?
¶22. This Court has held that "[u]nder the appropriate standard, the judge is presumed qualified and
unbiased. This presumption may only be overcome by evidence showing beyond a reasonable doubt that
the judge was biased or not qualified." Collins v. Joshi, 611 So.2d 898, 901 (Miss. 1992).
¶23. Ernest argues that the chancellor had already decided the case prior to his arrival at the hearing on
June 3, 1997, that he was antagonistic toward Ernest and his attorney, he became an advocate for Glenda,
and he would not allow Ernest's attorney to respond to the arguments made by Glenda's attorney.
Additionally, Ernest argues that the fact that the chancellor sanctioned his attorney, Doug Wade, solely for
filing a motion for reconsideration is clear evidence of bias. Finally, Ernest argues that the excessive amount
of sanctions levied against him and his attorney, a total sum of $2,193.23, indicates bias and prejudice. On
these facts alone, we cannot say that the chancellor was biased beyond a reasonable doubt as is required to
overcome the presumption that he was not. Therefore, this issue is without merit.
VI. DID THE CHANCERY COURT ERR IN ASSESSING SANCTIONS AGAINST
APPELLANT AND APPELLANT'S ATTORNEY?
¶24. The chancellor in the case at bar imposed sanctions upon Ernest Norton and his attorney, Mr. Wade,
for filing a frivolous law suit. Upon filing a motion for reconsideration, the chancellor again sanctioned
Wade. The sanctions were imposed in the form of attorney's fees. We will discuss the validity of the
imposition of attorney's fees upon Norton and Wade separately.
A. Sanctions upon Ernest Norton
¶25. This Court will not reverse the chancellor on an award of attorney fees unless manifest error is
revealed by the record. Setser v. Piazza, 644 So. 2d 1211, 1216 (Miss. 1994). In Voda v. Voda, 1999
WL 22361, *4 (Miss., Jan. 21, 1999) (NO. 97-CA-00247-SCT), we held that "[t]he party seeking
attorney's fees is required to clear some evidentiary hurdles before fees may be awarded. If the record is
insufficient to show an inability by the requesting party to pay attorney's fees, it would be an abuse of
discretion to award them." "The standard for an award of attorney fees on a motion for modification of child
support is basically the same as that applied in an original divorce action. Attorney fees are not awarded in
child support modification cases unless the party requesting fees is financially unable to pay them." Setser,
644 So. 2d at 1216 (citations omitted). However, we have also addressed the situation where the motion
for modification is unsuccessful due to lack of justification for the motion. Generally, in such a case, the
husband is assessed with attorney's fees. Shipley v. Ferguson, 638 So. 2d 1295, 1301 (Miss. 1994)
(citing Cumberland v. Cumberland, 564 So. 2d 839, 845 (Miss. 1990)). In Shipley, we held that
where the husband had no basis on which to bring the claim that he was entitled to a reduction in child
support payments, the wife was entitled to an award of attorney's fees. However, the wife in Shipley was
able to show that she was unable to pay the attorney's fees. Shipley, 638 So. 2d at 1301. See also,
Adams v. Adams, 591 So. 2d 431 (Miss. 1991) (holding that where wife was brought in by husband and
wife was largely successful, she was not required to take from the corpus of her investment or from her
teacher's salary to pay full attorney fees). Cumberland v. Cumberland, 564 So. 2d 839, 845 (Miss.
1990), is determinative on this issue. In Cumberland, this Court held that the wife was not entitled to
attorney's fees for her husband's post-divorce plea. The Court denied his plea, but found that an award of
attorney's fees was not proper where his demand was based on legitimate reasons and the wife was able to
pay her own fees. Id.
¶26. In the present case, although there is room for disagreement, it appears that Ernest Norton had a
good-faith belief that he was pursuing his legal right to a modification of the agreement between Glenda
Norton and himself. Additionally, the record is devoid of evidence that Glenda is unable to pay her fees.
Therefore, the chancellor was in error in awarding attorney's fees to Glenda Norton against Ernest Norton.
B. Sanctions against Doug Wade
¶27. We have stated:
Miss. Code Ann. § 11-55-3(a) provides that a claim is without substantial justification when it is
"frivolous, groundless in fact or in law, or vexatious, as determined by the court." To determine
whether a claim is frivolous pursuant to the statute, this Court looks to the definition of "frivolous"
found in M.R.C.P. 11. Leaf River Forest Products, Inc. v. Deakle, 661 So.2d 188, 197
(Miss.1995). For purposes of Rule 11, a claim is frivolous "only when, objectively speaking, the
pleader or movant has no hope of success." Stevens v. Lake, 615 So.2d 1177, 1184 (Miss.1993),
quoting Tricon Metals & Services, Inc. v. Topp, 537 So.2d 1331, 1335 (Miss.1989); Smith v.
Malouf, 597 So.2d 1299, 1303 (Miss.1992)(applying Rule 11 definition to Litigation Accountability
Act context). "Though a case may be weak or 'light-headed,' that is not sufficient to label it frivolous."
Deakle, 661 So.2d at 195; Nichols v. Munn, 565 So.2d 1132, 1137 (Miss.1990).
Scruggs v. Saterfiel, 693 So.2d 924, 927 (Miss. 1997).
¶28. As previously discussed Ernest had substantial justification in presenting the motion for modification.
Therefore, the chancellor erred in imposing sanctions upon Ernest Norton's attorney. Clearly, this is not the
type of case warranting sanctions under Mississippi law. See Scruggs v. Saterfiel, 693 So. 2d at 927;
Stevens v. Lake, 615 So.2d 1177, 1184 (Miss. 1993); Tricon Metals & Services, Inc. v. Topp, 537
So.2d 1331, 1335 (Miss. 1989). Therefore, as to the chancellor's imposition of sanctions, both as to the
motion for modification and the motion for reconsideration, we reverse and render.
CONCLUSION
¶29. We find the payments made to Glenda Norton by Ernest Edwin Norton are lump- sum alimony
payments, the modification of which is not allowed absent fraud or a contractual provision stating otherwise.
We affirm the chancellor's dismissal of the motion to modify. We reverse and render, however, the
chancellor's award of attorney's fees.
¶30. AFFIRMED IN PART; REVERSED AND RENDERED IN PART.
PRATHER, C.J., PITTMAN, P.J., SMITH AND WALLER, JJ., CONCUR. BANKS, J.,
CONCURS IN PART AND DISSENTS IN PART WITH SEPARATE WRITTEN OPINION
JOINED BY SULLIVAN, P.J. McRAE, J., JOINS IN PART. COBB, J., NOT
PARTICIPATING.
BANKS, JUSTICE, CONCURRING IN PART AND DISSENTING IN PART:
¶31. In my view, both the payments to be made by Ernest and the consulting services to be performed by
Glenda are a part of the divorce decree, and the failure of either to perform may be grounds for some relief
under that decree. Accordingly, I dissent from the Court's affirming the dismissal of Ernest's petition.
I.
a.
¶32. In my opinion, the chancellor abused his discretion by dismissing the motion for modification of final
judgment of divorce as to Brookwood Gifts for non-joinder of a party. This Court has held on a number of
occasions that in divorce actions the rights and obligations of a corporation can not be decided without
joining the corporation as a party. Skinner v. Skinner, 509 So. 2d 867, 870 (Miss. 1987); East v. East,
493 So. 2d 927, 933 (Miss. 1986). Additionally, Miss. R. Civ. P. 21 dictates that Ernest should have been
given an opportunity to join the absent party. The failure to join a necessary party to an action is a curable
defect, and an action should not be dismissed for a failure to join. Id. "Parties may be dropped or added by
order of the court on motion of any party or of its own initiative at any stage of the action and on such terms
as are just." Id.b.
¶33. The chancellor also erred, in my opinion, by summarily dismissing Ernest's motion for modification as
frivolous and without substantial merit. The chancellor relied on East v. East, 493 So. 2d 927 (Miss. 1986)
, in finding that the non-modification provision of the property settlement agreement was binding and
prevented Ernest from requesting the modification of the payments. In East this Court held that the husband
was bound by his property settlement agreement to pay his ex-wife a specified amount, without
modification, for the rest of her life. East, 493 So. 2d at 932. Here, unlike the property settlement
agreement in East, the $800 monthly payments were expressly conditioned on Glenda providing consulting
services for Brookwood Gifts for a period of ten (10) years or until such time as it should cease to be a
going concern. Should Brookwood Gifts cease to be a going concern before the expiration of ten (10)
years, Glenda's obligation to provide consulting services would extinguish but Ernest's obligation to pay
would continue for the balance of the ten (10) year period.
¶34. In Holloman v. Holloman, 691 So. 2d 897, 899 (Miss. 1996), it was held as follows:
This Court, in Cherry v. Anthony, Gibbs, Sage, 501 So.2d 416, 419 (Miss.1987), stated, "It has
long been the law in Mississippi that in construing particular provisions in a contract, a court will look
to the document as a whole." Id. Here, the Hollomans have expressed their clear intent from a fair
reading of the settlement agreement as a whole. * * * * This Court, in Newell v. Hinton, 556 So.2d
1037 (Miss.1990), citing Roberts v. Roberts, 381 So.2d 1333, 1335 (Miss.1980), stated:
Intent of the parties is crucial in contract interpretation. Of course, it must be understood that the
words employed in a contract are "by far the best resource for ascertaining intent and assigning
meaning with fairness and accuracy."
Newell, 556 So. 2d at 1042.
The pertinent part of the divorce decree, as quoted by the majority, clearly states that the payments were in
exchange for consulting services and were not to be construed as alimony. In finding that the payments were
actually lump-sum alimony, the majority relies on the argument by Glenda's attorney at the modification
hearing as to the parties' intent and ignores the plain language of the decree itself.
¶35. The agreement between the parties herein, which was incorporated into the decree, formed a contract
separate and distinct from the professional services contract between Glenda and Brookwood Gifts. "A
property settlement agreement is no different from any other contract." East, 493 So. 2d at 931-32. When
parties form a contract for the benefit of a third party, either of the contracting parties may seek to enforce
the contract on the grounds that the other party has not lived up to his or her end of the bargain. Rogers v.
Rogers, 662 So. 2d 1111, 1114 n.1 (Miss. 1995). Certainly, if Ernest or the corporation had failed to
make the payments, Glenda would have been able to come into court and prosecute that issue. I am of the
view that Glenda's obligation to provide services is equally enforceable.
¶36. For the foregoing reasons, I would reverse the judgment of the chancery court and remand for further
proceedings on the issue of whether Ernest was entitled to modification. It follows, of course, that I agree
that sanctions were improperly imposed upon Ernest and his attorney.
SULLIVAN, P.J., JOINS THIS OPINION. McRAE, J., JOINS IN PART.