Morgan v. Morgan, 98-CA-00558-COA.

• Decision Date: 04 May 1999
• Docket Number: No. 98-CA-00558-COA.,98-CA-00558-COA.
• Citation: 744 So.2d 321
• Parties: Christy Ann MORGAN, Appellant, v. John Michael MORGAN, Appellee.
• Court: Mississippi Court of Appeals

744 So.2d 321

Christy Ann MORGAN, Appellant, v. John Michael MORGAN, Appellee.

No. 98-CA-00558-COA.

Court of Appeals of Mississippi.

May 4, 1999.

Ray T. Price, Hattiesburg, Attorney for Appellant.

William Lawrence Peebles, Eugene Love Fair, Jr., Hattiesburg, Attorneys for Appellee.

BEFORE McMILLIN, C.J., IRVING, AND PAYNE, JJ.

McMILLIN, C.J., for the Court:

¶ 1. This appeal arises from a judgment in a post-divorce contempt proceeding brought by Christy Morgan against her former husband, John Morgan. Mrs. Morgan brought this action to compel Mr. Morgan to honor the terms of their property settlement agreement regarding a 1994 Honda Civic awarded to Mrs. Morgan in the agreement. Under the terms of the 1996 agreement, Mr. Morgan committed to make all remaining car payments and to pay for insurance and the cost of a tag for the vehicle. Once the loan was paid off, Mr. Morgan agreed that he would convey title to the vehicle to Mrs. Morgan. According to Mrs. Morgan's petition, the note payments on the car were scheduled to run through March 1999.

¶ 2. In mid-December 1996, the vehicle was totally destroyed in an accident. The insurance company settlement on the vehicle was enough to pay off the bank loan and produce a surplus of $1,650.43. The surplus money over the loan payoff is all Mrs. Morgan received from the loss of her car. After the vehicle was destroyed, Mr. Morgan ceased to make any further payments relating to his former wife's transportation needs. Mrs. Morgan brought a contempt proceeding claiming that Mr. Morgan's obligation, after the loss of this vehicle, was to continue to pay directly to her a similar amount on a monthly basis in order to permit her to obtain, insure, and license a replacement vehicle. Evidence indicated that, at the time of the casualty loss, there were twenty-seven payments of $318 outstanding on the car loan. There was no evidence presented as to the cost of licensing and insuring the vehicle for that same term.

¶ 3. Mr. Morgan defended on two grounds. First, he urged that a literal reading of the agreement obligated him to make periodic payments until the balance on this particular loan was paid off, after which his only obligation was to convey to Mrs. Morgan the title to a specific vehicle, namely the 1994 Honda Civic. He claims that his duty to pay under this provision of the settlement agreement ceased once the loan was paid off, no matter how it was paid. He was apparently of the opinion that his secondary obligation to convey title to the vehicle to her at a future time was extinguished by her receipt of all the insurance proceeds arising from the vehicle's total destruction.

¶ 4. In his second defense to Mrs. Morgan's claim, Mr. Morgan presented a previously-undisclosed side agreement between Mr. and Mrs. Morgan dated the same date as the property settlement agreement filed with the court. The agreement filed with the court indicated that Mrs. Morgan was to receive a distribution of one-half of Mr. Morgan's thrift savings plan at his place of employment. Apparently, the parties understood that the balance in the account was about $18,000 so that Mrs. Morgan would be receiving $9,000 under that provision of the agreement. By the unfiled side agreement, however, Mr. and Mrs. Morgan covenanted that she would retain only $2,000 of the distribution and would pay the remainder over to Mr. Morgan. Mr. Morgan explained that the side agreement was necessary because the terms of the thrift plan did not permit him to make a withdrawal except for purposes of distribution to a spouse in connection with a divorce proceeding.

¶ 5. In actuality, Mrs. Morgan only received $7,222.75 in the distribution because of withdrawal penalties and other charges. She refused to honor the side agreement, choosing instead to retain all of the money. She claimed that she had to use a substantial part of the money to discharge an income tax liability created by the distribution and excused her failure to give her former husband any part of the money by saying she subsequently learned that to do so would be a violation of the terms of the thrift plan. Mr. Morgan argued in the contempt proceeding that he was entitled to some credit for Mrs. Morgan's failure to honor the side agreement against anything he might otherwise owe Mrs. Morgan in regard to the car. He urged that the credit should be an amount equal to what he should have gotten under the side agreement. He claimed that he would not have committed to pay for Mrs. Morgan's car had he not anticipated receiving approximately $7,000 in cash near the time of the divorce.

¶ 6. The chancellor, clearly disturbed (and appropriately so) by the actions of both parties relating to the undisclosed side agreement, stated in his order the following:

This Court will not now entertain any representation of the fiscal arrangements of the parties now shown to have been different than that presented in the Court ordered Divorce Judgment and will leave the parties as they have previously agreed as to the withdrawal of the funds in the thrift savings plan by Plaintiff and her entitlement to the 1994 Honda Civic....

¶ 7. The chancellor, in resolving other matters tried at the same time, adjusted child support upward from $300 to $330 per month and clarified the visitation schedule, but the judgment was silent as to any further resolution of Mrs. Morgan's claim regarding Mr. Morgan's obligations to provide her a vehicle at his expense.

¶ 8. Mrs. Morgan claims that the chancellor's failure to grant her any relief was an abuse of discretion since the clear purpose of the agreement with her former husband was that she would be furnished a vehicle for which she would owe no payments and for which insurance and a tag would be provided at no expense to her. She claims that she has been deprived of the benefit of her bargain because, rather than having a vehicle of approximately $10,000 in value with insurance and tag furnished, she has only the surplus insurance funds remaining after the bank loan was paid off—an insignificant amount when compared to what she had contracted to receive. She points out that Mr. Morgan has, by virtue of the destruction of the vehicle in an accident, been relieved of responsibility for making the monthly loan payments and paying for insurance and car tag fees through the end of the loan term—a rather substantial sum just based on the 27 loan payments of $318 each, without taking into consideration the added costs of licensing and insuring the vehicle. Under those circumstances, she claims that she has been unfairly deprived of the benefits of the bargain she struck and that her former husband has enjoyed an unanticipated and inequitable windfall if he is not required to honor the terms of the agreement, or at least some equitable modification of the original agreement which has been rendered impossible due to unanticipated events beyond the parties' control.

¶ 9. We conclude that there is enough ambiguity in the holding of the chancellor this Court must reverse and remand for further proceedings.

¶ 10. In our review of the record, it appears that the chancellor at one point considered dismissing Mrs. Morgan's contempt petition on the ground that she (and her former husband) had come into court with unclean hands. The chancellor was properly concerned about the effect of Mrs. Morgan's participation in the undisclosed side agreement on the propriety of granting her any relief in a court of equity. Under the circumstances, we cannot say with certainty that, had the chancellor elected to decline relief on that ground, it would have been an abuse of discretion. It is within the chancellor's discretion to decline to entertain even a meritorious claim for relief if the petitioning party comes to the court with unclean hands. Brennan v. Brennan, 605 So.2d 749, 752 (Miss.1992); Simmons v. Simmons, 724 So.2d 1054 (¶ 22)(Miss.Ct.App.1998); V.A. GRIFFITH, MISSISSIPPI CHANCERY PRACTICE §§ 32, 42 (2d ed.1950).

¶ 11. However, in our review of the chancellor's ruling, we are unable to...