Dissolution of the Marriage of Hanlin v. Hanlin

IN THE SUPREME COURT OF MISSISSIPPI
NO. 2013-CT-00063-SCT
IN THE MATTER OF THE DISSOLUTION OF
THE MARRIAGE OF JAMES ALBERT HANLIN
AND MELANIE D. HANLIN: JAMES ALBERT
HANLIN
v.
MELANIE D. HANLIN
ON WRIT OF CERTIORARI
DATE OF JUDGMENT: 09/27/2012
TRIAL JUDGE: HON. J. DEWAYNE THOMAS
TRIAL COURT ATTORNEYS: SAMUEL M. BRAND, JR.
BRADLEY M. GLAZE
COURT FROM WHICH APPEALED: CHANCERY COURT OF THE FIRST
JUDICIAL DISTRICT OF HINDS COUNTY
ATTORNEYS FOR APPELLANT: SAGE EGGER HARLESS
DAVID NEIL MCCARTY
SAMUEL M. BRAND, JR.
ATTORNEY FOR APPELLEE: BRADLEY MICHAEL GLAZE
NATURE OF THE CASE: CIVIL - DOMESTIC RELATIONS
DISPOSITION: REVERSED AND RENDERED - 05/21/2015
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
EN BANC.
KITCHENS, JUSTICE, FOR THE COURT:
¶1. James and Melanie Hanlin obtained a divorce on the basis of irreconcilable
differences in 2007 and entered into a property settlement agreement, a term of which
required that James maintain military healthcare coverage “allowable by statute” for Melanie.
After the divorce, Melanie incurred significant medical expenses, which James’s insurer
initially paid. In 2009, however, Melanie learned that she had not been covered. She was
sued for her unpaid medical bills. In response to a contempt petition filed by James in 2012,
which later was withdrawn, Melanie filed a counter petition against James, arguing that he
had failed to maintain coverage in accordance with the terms of the property settlement
agreement. The chancellor found that each party was obligated to pay half of Melanie’s
medical expenses. The Court of Appeals affirmed. Having granted James’s petition for writ
of certiorari, we now reverse and render.
FACTS AND PROCEDURAL HISTORY
¶2. James and Melanie Hanlin married on October 15, 1988. On November 14, 2007, the
Chancery Court of the First Judicial District of Hinds County granted the couple an
irreconcilable differences divorce. The next day, November 15, 2007, James and Melanie
executed a property settlement agreement (PSA),1 which required, in pertinent part, that
James “maintain in full force and effect the insurance benefits that are allowable by statute
to the divorced spouse of a retired military person.” (Emphasis added.) Melanie testified that
1
It is anomalous that the judgment of divorce was signed November 14, 2007, though
the PSA was not signed until November 15, 2007. At the time the judgment of divorce was
signed on November 14, 2007, the division of property “remained unresolved.” Sanford v.
Sanford, 124 So. 3d 647, 654 (Miss. 2013). In Sanford, this Court held, “Section 93-5-2(2)
[(Rev. 2013)] is designed to allow divorcing parties to completely agree and settle all issues
touching the marriage. The parties must fully agree on all issues.” Id. Here, the judgment
stated that the “Property Settlement Agreement entered into by and between the parties is
approved, and . . . is made a part of this Judgment of Divorce, as if copied in full words and
figures herein, and both parties . . . are hereby ordered and directed to abide and perform all
of the terms and provisions thereof.” But the PSA to which the judgment referred was not
signed until the next day, November 15, 2007. This seems to have been cured, however, by
the fact that both documents were entered in the Office of the Chancery Clerk of the First
Judicial District of Hinds County on the same day, November 15, 2007.
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she believed, on the basis of the divorce negotiations, that she was covered for an additional
year after the divorce under James’s military heath insurance plan, known as Tricare. For that
reason and because Tricare provided “much better coverage,” she waived the coverage at her
place of employment.
¶3. In 2008, Melanie had a “frozen shoulder,” which had to be repaired by means of a
surgical procedure and followed by “several, several weeks of therapy.” Additionally, she
“had a disc that had to be . . . fused” and completed therapy associated with that procedure.
While Tricare preapproved the procedures and paid initial medical bills, Melanie learned in
2009 from the Department of Defense that the Tricare coverage she thought she had was not
in effect, and in fact had ended on the date of her divorce from James, November 14, 2007.
Because Melanie did not pay the medical bills which Tricare had declined to pay, Healthcare
Financial Services, an affiliate of Baptist Hospital, sued Melanie to collect the outstanding
balance, totaling $27,305.50.
¶4. In April 2012, James filed a motion to enforce the terms of the PSA. Specifically, he
claimed that Melanie had not complied with the PSA’s requirement that the marital domicile
be refinanced or sold upon emancipation of their minor child. Melanie filed a counter petition
seeking, inter alia, to hold James in contempt for failure to “maintain health insurance
coverage as required by the Court’s judgment.” While James voluntarily withdrew his motion
to enforce the PSA, Melanie’s petition to hold James in contempt was set for a hearing on
September 27, 2012.
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¶5. The chancellor found that Melanie was not covered under 10 U.S.C. § 1072 (2012),
but that “it was the intent at least on the parties’ part when they signed the contract that
[Melanie] would be covered and neither lawyer checked this out, which they probably should
have done, to determine if this was true or not.” The chancellor found that both James and
Melanie “are equally and totally responsible for any payment” of Melanie’s outstanding
medical bills. It was not until December 12, 2012, that the chancellor memorialized his ore
tenus ruling in a written judgment, entered nunc pro tunc to the date of the hearing,
September 27, 2012. James timely filed a notice of appeal in this Court, and the case was
assigned to the Mississippi Court of Appeals.
¶6. The Court of Appeals unanimously affirmed the chancellor’s judgment, reasoning that
under 10 U.S.C. “section 1078a(a), Melanie was entitled to health-care coverage for at least
one year.” Hanlin v. Hanlin, 2014 WL 2723884, *2 (Miss. Ct. App. 2014), cert. granted,
2013-CT-00063-SCT (Miss. Feb. 12, 2015). We granted James’s petition for writ of
certiorari to consider whether Melanie’s claims were procedurally barred under the doctrines
of estoppel and res judicata and to revisit whether the plain terms of the PSA were
disregarded by the chancery court.
STANDARD OF REVIEW
¶7. “We employ a limited standard of review in domestic relations cases.” In re
Dissolution of Marriage of Wood, 35 So. 3d 507, 512 (Miss. 2010). Generally, “[t]his Court
will not disturb the findings of a chancellor when supported by substantial evidence unless
the chancellor abused his discretion, was manifestly wrong, clearly erroneous or an erroneous
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legal standard was applied.” Id. (quoting Duncan v. Duncan, 774 So. 2d 418, 419 (Miss.
2000) (citing Kilpatrick v. Kilpatrick, 732 So. 2d 876, 880 (Miss. 1999))). However, “[w]hile
a chancellor’s decisions in a divorce action are reviewed for manifest error, a property
settlement agreement is a contract, and contract interpretation is a question of law, which is
reviewed de novo.” McFarland v. McFarland, 105 So. 3d 1111, 1118 (Miss. 2013) (citing
Harris v. Harris, 988 So. 2d 376, 378 (Miss. 2008)).
ANALYSIS
I. Estoppel and Res Judicata
¶8. James contends in his petition for writ of certiorari that “Melanie was fully aware that
Tricare had denied her coverage when she filed her earlier contempt petition in 2010” and
that “she waited until she was sued for unpaid bills to seek redress.” The Court of Appeals
addressed only James’s argument that Melanie’s claims were barred by the statute of
limitations, finding that James had failed properly to preserve the issue for appeal in the
chancery court. But it is clear from the record that the question of whether estoppel and res
judicata operated to bar Melanie’s claims, in fact, had been raised in the chancery court and
was raised on appeal.
¶9. Counsel for James stated, in an ore tenus motion for directed verdict, which the
chancery court denied, that “[Melanie] is estopped from bringing this action. One, it is res
judicata, because she knew in 2009 that it [her medical bill] wasn’t paid and she didn’t bring
it until 2010.” Further, James’s counsel stated “also estoppel applies here. [Melanie] has
known since—actually, since 2008 that the bills weren’t being paid. My client gets hit with
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it in this contempt [action].” It is abundantly clear that James properly preserved the defenses
of estoppel and res judicata for appeal.
¶10. In Clements v. Young, this Court considered whether a former spouse could be
obligated to pay medical expenses incurred prior to the entry of a contempt/modification
decree on September 12, 1978. Clements v. Young, 481 So. 2d 263, 270 (Miss. 1985).
Pursuant to that decree, the chancery court had “reduced Clements’ monthly child support
obligations from $465.00 to $350.00,” but was not presented with “the matter of medical or
dental bills.” Id. Therefore, this Court held that “[i]f there was a problem about medical or
dental bills prior to September, 1978, the matter could and should have been litigated then.
The decree of September 12, 1978, is res judicata with respect to all claims that were
presented or may reasonabl[y] have been presented at that time.” Id. (citing Dunaway v.
W.H. Hopper & Assocs., Inc., 422 So. 2d 749, 751 (Miss. 1982); Golden v. Golden, 246
Miss. 562, 568, 151 So. 2d 598, 600 (1963) (“[A] prior suit is conclusive in a subsequent suit
not only of matters actually determined but also matters which could and should have been
determined in the prior suit.”)).
¶11. The Court of Appeals likewise addressed a case in which one “Ms. Russell failed to
produce . . . medical bills in a timely fashion” and instead waited “four years to seek
payment.” Russell v. Russell, 724 So. 2d 1061, 1065 (Miss. Ct. App. 1998). Though she had
failed to do so in earlier proceedings, Ms. Russell later requested $575 in medical expenses
which had been incurred prior to and after her divorce from Mr. Russell. Id. Citing “two
earlier judgments and one order which was entered, at least one of which resulted from a
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contempt proceeding concerning dental expenses,” Mr. Russell claimed that those previous
judgments operated to bar Ms. Russell’s claim for $575, because she could have requested
that money at an earlier proceeding. Id. The Court of Appeals, applying Clements, reversed
and rendered the chancellor’s award of $575 to Ms. Russell. Id.
¶12. In the present case, Melanie had filed in the chancery court a petition for modification
and contempt against James in September 2010 in which she obtained a judgment against
him. The argument presented on appeal and in James’s petition for writ of certiorari is that
because Melanie was aware that Tricare was denying coverage at that time, on the basis of
Clements, any claims regarding payments she could have raised at that time and failed to
assert were barred under the doctrine of res judicata. Melanie testified that she knew in 2009
that, while Tricare initially paid a bill, that it was retracting what it had paid. But, instead of
communicating with Tricare or James about this problem, Melanie contacted only her
medical providers regarding why the bills were not being paid. She testified that “[w]e still
did not know what the problem was” at the time she brought the 2010 contempt action.
However, it is clear that Melanie did not bring her contempt action until May 2012, less than
one month after having been sued in April 2012 by Healthcare Financial on the outstanding
medical bills.
¶13. Because those “could and should have been litigated” during the prior proceedings,
at which time Melanie was aware that her health insurance provider was not paying her
medical bills, Melanie’s contempt claims are res judicata with respect to the claims for
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medical expenses which could have been sought in the 2010 proceeding. Clements, 481 So.
2d at 270.
II. Plain Language of the Property Settlement Agreement (PSA)
¶14. James argues in his petition for writ of certiorari that the chancery court ignored the
plain language of the PSA, which provided that: “The Husband agrees to maintain in full
force and effect the insurance benefits that are allowable by statute to the divorced spouse
of a retired military person.”
¶15. In his ore tenus bench ruling, the chancellor found, under Title 10, Section 1072, that
Melanie was not eligible for coverage. The chancellor ultimately adjudicated that, because
both parties believed that Melanie was covered, each of them would bear half the cost of her
medical expenses. Section 1072(2)(F) defines a “dependent” in the following manner:
[T]he unremarried former spouse of a member or former member who (i) on
the date of the final decree of divorce, dissolution, or annulment, had been
married to the member or former member for a period of at least 20 years
during which period the member or former member performed at least 20 years
of service which is creditable in determining that member’s or former
member’s eligibility for retired or retainer pay, or equivalent pay, and (ii) does
not have medical coverage under an employer-sponsored health plan . . . .
10 U.S.C. § 1072(2)(F) (2012). Likewise, Section 1072(2)(G) defines “dependent” as
follows:
[A] person who (i) is the unremarried former spouse of a member or former
member who performed at least 20 years of service which is creditable in
determining the member or former member’s eligibility for retired or retainer
pay, or equivalent pay, and on the date of the final decree of divorce,
dissolution, or annulment before April 1, 1985, had been married to the
member or former member for a period of at least 20 years, at least 15 of
which, but less than 20 of which, were during the period the member or former
member performed service creditable in determining the member or former
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member’s eligibility for retired or retainer pay, and (ii) does not have medical
coverage under an employer-sponsored health plan . . . .
10 U.S.C. § 1072(2)(G) (2012).
¶16. Section 1072(2)(H) limits the preceding section in the following manner:
[A] person who would qualify as a dependent under clause (G) but for the fact
that the date of the final decree of divorce, dissolution, or annulment of the
person is on or after April 1, 1985, except that the term does not include the
person after the end of the one-year period beginning on the date of that final
decree . . . .
10 U.S.C. § 1072(2)(H) (2012).
¶17. Here, the final judgment of divorce was signed on November 14, 2007, and entered
in the Office of the Chancery Clerk of the First Judicial District of Hinds County on
November 15, 2007. Melanie testified unequivocally that she and James had been married
for nineteen years and one month. The chancellor and the Court of Appeals, therefore, were
correct in determining that Section 1072(2)(H) was inapplicable, since the Hanlins had not
met the requirements of the federal statute. But that finding does not end the analysis of what
constitutes “insurance benefits that are allowable by statute to the divorced spouse of a
retired military person” according to the language of the PSA.
¶18. Section 1078a(b)(3) provides temporary continued health benefits coverage2 for “[a]
person who . . . (C) is not a dependent of the member or former member under subparagraph
(F) or (G) of section 1072(2) of this title or ends a one-year period of dependency under
2
See 10 U.S.C. § 1078a(a) (2012) (“The Secretary of Defense shall implement and
carry out a program of continued health benefits coverage in accordance with this section
to provide persons described in subsection (b) with temporary health benefits comparable
to the health benefits provided for former civilian employees of the Federal Government .
. . .”).
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subparagraph (H) of such section.” 10 U.S.C. § 1078a(b)(2)(C) (2012). The Court of Appeals
unanimously affirmed the chancellor’s judgment, reasoning that, under 10 U.S.C. “section
1078a(a), Melanie was entitled to health-care coverage for at least one year.” Hanlin, 2014
WL 2723884, at *2. We agree with the Court of Appeals to the limited extent that Melanie
may have had the ability under Section 1078a to seek and to obtain continuing coverage,
even if she did not qualify as a dependent under Sections 1072(2)(F), (G), or (H).
¶19. But we find nothing in the record to suggest that James breached the PSA in any
manner. Continued coverage was fully available to Melanie pursuant to the applicable federal
statutes, but she did not take any affirmative steps to obtain the coverage which was available
to her. Title 10, Section 1078a(c)(4), provides the following: "[i]n the case of a former
spouse of a member or former member who becomes eligible for continued coverage under
subsection (b)(3), the regulations shall provide appropriate notification provisions and a
60-day election period under subsection (d)(3).” 10 U.S.C. § 1078a(c)(4) (2012). Section
1078a(d)(3) provides:
In the case of a former spouse of a member or a former member who becomes
eligible for continued coverage under subsection (b)(3), the written election
shall be submitted to the Secretary concerned before the end of the 60-day
period beginning on the later of—
(A) the date as of which the former spouse first ceases to meet the
requirements for being considered a dependent under section
1072(2); or
(B) such other date as the Secretary of Defense may prescribe.
10 U.S.C. § 1078a(d)(3) (2012). According to the applicable federal statutes, it is clear that
the “insurance benefits that are allowable by statute to the divorced spouse of a retired
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military person” required the divorced spouse to take affirmative steps in order to secure the
benefits of coverage.
¶20. In interpreting property settlement agreements, this Court has held that “[a]n
agreement made between the parties should ordinarily be enforced, and the court should take
a dim view of efforts to modify or reform the parties’ settlement agreement.” McFarland v.
McFarland, 105 So. 3d 1111, 1119 (Miss. 2013) (citing Williams v. Williams, 37 So. 3d
1171, 1174 (Miss. 2010)). Where the court finds that the settlement agreement was a valid
contract, “it should not modify anything decided by that agreement.” McFarland, 105 So.
3d at 1119. The Court must first “determine whether the contract is ambiguous, and if it is
not, then it must be enforced as written.” Id. (quoting Epperson v. SOUTHBank, 93 So. 3d
10, 16 (Miss. 2012)).
¶21. We do not find the term at issue in the Hanlins’ property settlement agreement to have
been ambiguous, which requires it to have been “susceptib[le] to two reasonable
interpretations.” Epperson, 93 So. 3d 10, 19 (Miss. 2012) (citing Dalton v. Cellular South,
Inc., 20 So. 3d 1227, 1232 (Miss. 2009)). The agreement unambiguously stated that “[t]he
Husband agrees to maintain in full force and effect the insurance benefits that are allowable
by statute to the divorced spouse of a retired military person.” The meaning of the
contractual term was readily ascertainable—through due diligence on Melanie’s part—at the
time she signed the property settlement agreement. Thus, as Melanie agreed, if James had
given her “whatever the statute allowed and the statute didn’t allow [her] any coverage, then
[she] would not have been covered.” Melanie was eligible for continuing coverage, but the
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record reflects that she took no affirmative steps to obtain it. James should not be penalized
where the coverage was fully available to Melanie, and she and her attorney merely failed
to ascertain and take advantage of the insurance benefits “allowable by statute to the divorced
spouse of a retired military person.” In fact, Melanie testified that, “I was told by my
attorney—by Jeff Rimes to have an insurance opinion to see what the deal really was.” But
there was no evidence presented that this, or any other action on Melanie’s part, ever was
taken to ensure continuing coverage.
¶22. We cannot, therefore, agree with the chancellor’s determination to modify the
agreement to require James to contribute to Melanie’s post-divorce medical bills, nor can we
agree with the affirmance of that judgment by the Court of Appeals. James was not in breach
of the plain provisions of the property settlement agreement.
CONCLUSION
¶23. In light of our holding that Melanie’s contempt claims are barred by res judicata, we
reverse and render the respective judgments of the Court of Appeals and of the Chancery
Court of the First Judicial District of Hinds County.
¶24. REVERSED AND RENDERED.
WALLER, C.J., DICKINSON, P.J., CHANDLER, KING AND COLEMAN, JJ.,
CONCUR. RANDOLPH, P.J., AND LAMAR, J., CONCUR IN PART AND IN
RESULT WITHOUT SEPARATE WRITTEN OPINION. PIERCE, J., NOT
PARTICIPATING.
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