Gutierrez v. Gutierrez

• Decision Date: 04 December 2014
• Docket Number: No. 2013–CA–00779–SCT.,2013–CA–00779–SCT.
• Court: Mississippi Supreme Court
• Parties: Clayton Frank GUTIERREZ v. Trisha GUTIERREZ.

153 So.3d 703

Clayton Frank GUTIERREZ

v.Trisha GUTIERREZ.

No. 2013–CA–00779–SCT.

Supreme Court of Mississippi.

Dec. 4, 2014.

David A. Pumford, Hattiesburg, attorney for appellant.

Dean Holleman, attorney for appellee.

Before WALLER, C.J., CHANDLER and KING, JJ.

Opinion

WALLER, Chief Justice, for the Court:

¶ 1. Clayton Gutierrez appeals from the divorce judgment of the Chancery Court of Harrison County, Second District, in which the chancellor granted Clayton's wife Trisha lump-sum and periodic alimony incident to the divorce and found Clayton in contempt for failing to make court-ordered support payments to Trisha. Finding a lack of record support in the allocation of marital liabilities, we reverse the chancery court's judgment and remand for further proceedings.

FACTS & PROCEDURAL HISTORY

¶ 2. Clayton and Trisha married on December 12, 1987. At the time, Clayton worked for his family's seafood business, and Trisha was a student teacher. They had three children during their marriage. The parties separated in December 2009 but remained living together in the marital home. At the time of the separation, Trisha did not have a job outside the home. Clayton was still working for his family's business, but he also worked in real estate and construction. Following the separation, Trisha enrolled at William Carey College and became recertified to teach, eventually obtaining a job as a first-grade teacher at D'Iberville Elementary School.

¶ 3. Trisha filed for divorce in March of 2010, and Clayton filed a counterclaim for divorce in response. Although the parties initially asserted various fault grounds for divorce, eventually they agreed to proceed on the ground of irreconcilable differences. In their Voluntary Consent to Divorce, the parties reached an agreement for the custody and visitation of the children. The parties' remaining contested issues dealt primarily with the equitable distribution of marital assets and liabilities.

¶ 4. Several temporary hearings were held prior to the final trial on the merits. In a May 4, 2010, temporary order, the chancery court ordered Clayton to “continue to pay the necessities of the marriage, including but not limited to utilities, mortgages, cellular telephones, automobile notes, automobile insurance, health insurance, gas and groceries of the wife.” Subsequent to the entry of this order, Trisha filed several motions for citation of contempt against Clayton, claiming that he had failed to pay for necessary family expenses. The chancery court ruled on Trisha's first motion, finding Clayton in contempt for failing to pay $7,656.27 in necessary expenses. However, the chancellor reserved ruling on all other subsequent contempt issues until the trial on the merits.

¶ 5. A trial on the contested issues was held in April 2012. The majority of the evidence presented at trial focused on the value of Clayton's interests in various business ventures, including his family's seafood business, Global Seafood Technologies, Inc. Evidence regarding the parties' net worth was highly conflicting. The chancellor noted that Clayton had represented his family's net worth to be as high as $13,000,000 in financial statements given to banks two years prior to the filing of the divorce, but that this figure had shrunk to $1,400,000 a few weeks after Trisha filed her divorce complaint. By the time of trial, Clayton represented his net worth to be zero. Annette Herrin, a court-appointed business valuation expert, and James C. Stokes, Clayton's accountant, each offered their respective opinions regarding the value of Clayton's various business interests. Herrin placed a value on Clayton's equity interests in his various business ventures at $618,500. Stokes claimed that Clayton's net worth was approximately -$70,000, but could drop as low as -$800,000 due to other potential liabilities.

¶ 6. In its divorce judgment, the chancery court granted the parties a divorce on the grounds of irreconcilable differences and adopted the parties' child-custody and visitation agreements.¹ Then, the chancellor reviewed the Ferguson² factors for the equitable distribution of marital property and divided the parties' marital estate into four categories: (1) assets available to be distributed, (2) assets already distributed or sold, (3) assets foreclosed on and sold, and (4) Clayton's business interests. The chancellor determined that the net marital estate, which consisted primarily of Clayton's business interests, was valued at $501,647, allocating $35,685 to Trisha and $465,962 to Clayton. Trisha's share of the net marital estate consisted of her vehicle, her checking and retirement account, the couple's interest in several parcels of real estate, and proceeds from other marital assets that had been sold during the divorce. The chancellor balanced the apportionment of assets by granting Trisha lump-sum alimony of $215,139.50, to be paid in five annual installments. In addition, after considering the Armstrong³ factors, the chancellor awarded Trisha $2,000 per month in permanent alimony.

¶ 7. With respect to Trisha's previous contempt motions, the chancellor found Clayton in contempt for failing to pay $16,019 in family expenses as required by previous temporary orders, entered judgment in that amount in Trisha's favor, and awarded Trisha $2,500 in attorney's fees.

¶ 8. Clayton now appeals from the chancery court's judgment, raising the following issues:

I. Whether the chancery court erred in its calculation of marital assets and liabilities.

II. Whether the chancery court erred in its valuation of Clayton's interest in Global Seafood Technologies, Inc.

III. Whether the chancery court erred in awarding Trisha lump-sum and periodic alimony.

IV. Whether the chancery court erred in finding Clayton in contempt of court and awarding Trisha a judgment and attorney's fees for the same.

STANDARD OF REVIEW

¶ 9. A chancellor's findings will not be disturbed upon review unless the chancellor was manifestly wrong, clearly erroneous, or applied an incorrect legal standard. A.B. v. Y.Z., 60 So.3d 737, 739 (Miss.2011). Where there is a question of law, the appellate court applies a de novo standard of review. Estate of Davis v. O'Neill, 42 So.3d 520, 524 (Miss.2010). “Chancellors are afforded wide latitude in fashioning equitable remedies in domestic relations matters, and their decisions will not be reversed if the findings of fact are supported by substantial credible evidence in the record.” Henderson v. Henderson, 757 So.2d 285, 289 (Miss.2000) (citing Hammett v. Woods, 602 So.2d 825, 827 (Miss.1992) ).

DISCUSSION

I. Whether the chancery court erred in its calculation of marital assets and liabilities.

¶ 10. Clayton claims that the chancery court made several serious errors in its calculation of marital assets and liabilities which, taken together or individually, skewed the court's equitable distribution and require reversal. Specifically, Clayton attacks the chancery court's division of the second mortgage on the marital home and valuation of his interest in his family's seafood business and other business ventures. Clayton's argument regarding the valuation of his family's seafood business will be discussed later in Section II of this opinion. We discuss each of Clayton's other assignments of error separately.

A. Whether the chancellor incorrectly divided the second mortgage on the marital home as a liability to both parties.

¶ 11. The parties' marital home was subject to two mortgages at the time of the separation. Prior to trial, the bank holding the first mortgage foreclosed on the house, and it was sold for $328,000. This amount covered all of the first mortgage and left a balance of $341,636 on the second mortgage. In determining how the marital estate should be distributed, the chancellor assessed the balance of the second mortgage equally as a $170,818 liability to both Clayton and Trisha. Clayton argues that the chancery court should have assigned the entire second mortgage as a liability to him. Increasing the allocation of debt Clayton is required to pay on the second mortgage would decrease the assets to be awarded to Trisha. Clayton claims that the trial court's error in allocating the second mortgage calls into question its large award of lump-sum alimony to Trisha.

¶ 12. During trial and at other hearings before the chancery court, Clayton testified that, although both he and Trisha had signed the deed of trust on the second mortgage, Trisha had not signed the promissory note. Therefore, according to Clayton, Trisha would not be responsible for repaying any of the outstanding balance on the second mortgage. The chancellor recognized this fact in the judgment of divorce, noting that responsibility for the second mortgage was Clayton's alone. The chancellor also listed the second mortgage as one of Clayton's debts during his discussion of the Armstrong factors for awarding alimony.

¶ 13. The record does not contain evidence that demand has ever been made for the deficiency on the second mortgage, which is required under Mississippi law before a mortgagee can collect a post-foreclosure deficiency. See Lake Hillsdale Estates, Inc. v. Galloway, 473 So.2d 461, 466 (Miss.1985) (“[A] mortgagee's right to a deficiency decree is not absolute.”); Miss. Valley Title Ins. Co. v. Horne Constr. Co., Inc., 372 So.2d 1270, 1272 (Miss.1979) (“[S]ince the mortgaged premises constitute the primary fund for the payment of the mortgage debt, it is only where the mortgagee has endeavored to collect it out of the land that a just judgment for deficiency can be entered.”). Assuming that the holder of the second mortgage intends to collect on the remaining balance, neither party has cited any authority addressing whether Trisha can be held legally responsible for paying the deficiency if Clayton cannot pay. Also, while the chancellor noted that Clayton might not have to pay back the deficiency, he never expressly addressed the parties' respective obligations in...