In re Estate of Hodges, No. 2001-CA-00030-SCT.

• Decision Date: 14 February 2002
• Docket Number: No. 2001-CA-00030-SCT.
• Citation: 807 So.2d 438
• Parties: In the Matter of the ESTATE OF Jeff A. HODGES, M.D., Deceased. Mary Elizabeth Hodges, Administratrix v. Dr. Joan M. Hodges.
• Court: Mississippi Supreme Court

807 So.2d 438

In the Matter of the ESTATE OF Jeff A. HODGES, M.D., Deceased.

Mary Elizabeth Hodges, Administratrix v. Dr. Joan M. Hodges.

No. 2001-CA-00030-SCT.

Supreme Court of Mississippi.

February 14, 2002.

Raymond L. Brown, Pascagoula, Attorney for Appellant.

Joseph R. Meadows, Gulfport, Attorney for Appellee.

BEFORE McRAE, P.J., EASLEY and GRAVES, JJ.

EASLEY, J., for the Court.

¶ 1. On June 24, 1997, the Chancery Court of Harrison County, Mississippi, entered a judgment of divorce on the grounds of irreconcilable differences in the matter of Joan M. Hodges v. Jeff A. Hodges, Civil Action No. C2402 96-1205. The divorce decree incorporated, by reference, the parties' property settlement agreement ("agreement"). The agreement was executed by Dr. D. Jeff A. Hodges ("Jeff") and Dr. Joan M. Hodges ("Joan") on June 24, 1997, and sworn to before a notary public. The agreement provided for alimony and made a provision for the maintenance of a life insurance policy. A dispute arose after Jeff's death regarding the alimony and, primarily, the life insurance provision. Mary Elizabeth Hodges ("Mary"), Jeff's wife at the time of his death, served as administratrix of his estate and filed as petitioner, Cause No. 99-167-GB, In the Matter of Jeff A. Hodges, M.D., deceased, ("Estate"), in the Chancery Court of Jackson County, Mississippi.

¶ 2. On behalf of the Estate, Mary made claim to part of the life insurance proceeds. A complaint for a temporary restraining order, other injunctive relief, an attachment of property and a judgment was filed by the Estate against Joan, the ex-wife, on August 13, 1999, in the Chancery Court of Jackson County. The chancellor executed an order of attachment and a separate temporary restraining order on August 13, 1999, against Joan.

¶ 3. On October, 1, 1999, Joan filed a petition seeking to place the disputed life insurance proceeds into an interest-bearing account at Merchants and Marine Bank in Pascagoula, Mississippi, until further order of the court. In return for placing the life insurance proceeds in an account, Joan sought to release the lien on her Jackson County property. The chancellor on October 22, 1999, ordered that the life insurance proceeds be placed into an interest-bearing account at the Merchants and Marine Bank in Pascagoula under the name of "Joan Hodges and the Estate of Jeff A. Hodges", subject to the jurisdiction and future order of the court and released the lien against Joan's property located in Jackson County.

¶ 4. Mary was recognized as Jeff's sole heir at law by the Chancery Court of Jackson County on October 18, 1999.

¶ 5. On September 22, 2000, a hearing was conducted by the chancellor. The chancellor on October 5, 2000, entered the ruling of the court finding in favor of Joan. An order was prepared and entered on October 10, 2000, formalizing the court's ruling entitling Joan to the insurance proceeds being held in escrow. On December 20, 2000, the trial court denied the Estate's Motion to Reconsider.

¶ 6. Having timely filed its notice of appeal on December 22, 2000, the Estate now appeals the ruling of the Chancery Court of Jackson County to this Court.

FACTS

¶ 7. Joan and Jeff were divorced by the Chancery Court of Harrison County, Mississippi, on June 24, 1997, ending a long marriage, which began on June 30, 1973. Contemporaneous with entry of the Judgment of Divorce, Joan and Jeff entered into the agreement which was incorporated into the Judgment of Divorce. Among other things, the agreement addressed the issue of periodic alimony, which Jeff would pay Joan, and also made provision for the maintenance of life insurance policies by both parties.

¶ 8. The agreement provided that Jeff would pay Joan the sum of $4,000.00 per month in periodic alimony. Provision III provided as follows:

III.

The first payment shall be due on the first day of July, 1997, and a like amount on the first day of each month thereafter until such time as Wife shall die, remarry or further order of this Court.

¶ 9. The agreement also made provision for the maintenance of life insurance by both parties. With regard to the life insurance, the agreement provided the following:

Husband shall maintain his current policy of life insurance with Wife listed as a name beneficiary thereon for a sum not more than $164,000.00. Provided however, Wife's interest in the life insurance policy shall decrease at the rate of $4,000.00 per month beginning July 1, 1997, and a like amount each month thereafter so long as alimony is paid by Husband.

Wife shall maintain a policy of life insurance in the sum of $125,000.00 with Husband the name beneficiary. At such time as Wife's prorated interest in Husband's $200,000.00 life insurance policy is reduced to the sum of $125,000.00, then Wife's policy shall likewise be reduced at the rate of $4,000.00 per month with the payment of each alimony payment.

¶ 10. Jeff died intestate on May 18, 1999. At the time of his death, he was a resident of Jackson County, Mississippi. Joan had moved from Mississippi becoming a resident of New Jersey, but she still owned real property in Jackson County, Mississippi. Before his death, Jeff had timely made alimony payments to Joan, totaling $92,000.00. The $92,000.00 paid to Joan consisted of 23 alimony payments of $4,000.00 each.

¶ 11. Joan presented herself to AMA Provident Life Insurance Company as the beneficiary of all $200,000.00 of Jeff's life insurance proceeds, and she proceeded to retain the entire amount. Counsel for the Estate made several requests for the Estate's share of the life insurance proceeds under the terms of the agreement. Joan, however, refused to transmit the requested sum of $128,000.00 to the Estate.

¶ 12. Through attachment proceedings, these funds were subsequently paid into an interest-bearing escrow account waiting a ruling of the trial court. The trial court ruled that Joan was entitled to the entire $200,000.00.

¶ 13. On October 16, 2000, the Estate moved for rehearing, reconsideration and reversal of the trial court's order dated and filed in October, 2000. The trial court denied the Estate's motion for reconsideration on December 20, 2000. On December 22, 2000, the Estate timely filed its notice of appeal to this Court, and it raises the following issue:

I. Did the chancellor err in finding that Joan was entitled to the entire life insurance policy despite the parties' property settlement agreement?

A. Does the periodic alimony survive Jeff's death to bind his estate?

B. Does the parties' property settlement agreement serve to limit Joan's interest in the life insurance proceeds?

DISCUSSION

¶ 14. This Court has repeatedly stated that it will examine the record and accept the evidence reasonable tending to support the findings made below, along with all reasonable inferences which may be drawn therefrom which favor the trial court's finding of fact. In re Estate of Taylor, 609 So.2d 390, 393 (Miss.1992). The chancery court is the trier of fact. Bryan v. Holzer, 589 So.2d 648, 659 (Miss. 1991). In Hill v. Southeastern Floor Covering Co., 596 So.2d 874, 877 (Miss.1992), this Court stated that the chancellor's findings will be upheld unless those findings are clearly erroneous or an erroneous legal standard was applied. However, "the Court will not hesitate to reverse if it finds the chancellor's decision is `manifestly wrong, or that the court applied an erroneous legal standard ...'." In re McClerkin, 651 So.2d 1052, 1055 (Miss.1995) (quoting Armstrong v. Armstrong, 618 So.2d 1278, 1280 (Miss.1993)).

I.

¶ 15. In the case sub judice, the chancellor had the task of determining who should get the balance of Jeff's life insurance proceeds, the Estate or Joan, pursuant to the parties' agreement which was made part of their judgment for divorce. The parties were divorced on June 24, 1997, and the agreement was executed by the parties on the same day. The agreement addressed the matter of alimony, as well as, life insurance proceeds. The chancellor determined that Joan was entitled to receive the full life insurance proceeds, thereby determining that the balance of the life insurance proceeds held in escrow should be relinquished to Joan. In arriving at his decision, the chancellor relied on the In re Last Will and Testament of Sheppard, 757 So.2d 173 (Miss.2000) and the Matter of the Estate of Peacocke, 694 So.2d 1252 (Miss.1997) in interpreting the parties' agreement. The chancellor determined that the contract designating Joan as the beneficiary of the insurance proceeds was a separate contract with the insurance company; and therefore, she was entitled to the full amount of proceeds and was not bound by the terms of the agreement.

¶ 16. We find that the chancellor, while citing Sheppard and Peacocke, erred in applying the proper legal standard established by this Court in Sheppard and Peacocke.

A. Does the periodic alimony survive Jeff's death to bind his estate?

¶ 17. In Peacocke, this Court examined the general rule in this State that "a claim for future periodic alimony terminates upon the death of the payor or upon the death or remarriage of the payee" and "cannot be made an obligation of the decedent's estate." 694 So.2d at 1253-54. In prior cases, this Court made a distinction between periodic alimony and lump-sum alimony. McDonald v. McDonald, 683 So.2d 929 (Miss.1996); Hubbard v. Hubbard, 656 So.2d 124 (Miss.1995); see Bowe v. Bowe, 557 So.2d 793 (Miss.1990). This Court in Hubbard, stated that "unless it is clear from the record what sort of award (alimony) is given, we will construe any ambiguity as being periodic and not lump sum." 656 So.2d at 130; see Sharplin v. Sharplin, 465 So.2d 1072, 1073 (Miss.1985). "Periodic alimony becomes vested only on the date each periodic payment becomes due." Bowe, 557 So.2d at 795; see Rubisoff v. Rubisoff, 242 Miss. 225, 235, 133 So.2d 534, 537 (1961). By way of contrast, "lump-sum alimony is vested in the obligee...