Poole v. Poole

• Decision Date: 13 November 1997
• Docket Number: No. 96-CA-01124-SCT,96-CA-01124-SCT
• Citation: 701 So.2d 813
• Parties: Calvin Philip POOLE, Jr. v. Penny Woods POOLE.
• Court: Mississippi Supreme Court

Page 813

701 So.2d 813

Calvin Philip POOLE, Jr. v. Penny Woods POOLE.

No. 96-CA-01124-SCT.

Supreme Court of Mississippi.

Nov. 13, 1997.

Vaughn Davis, Davis & Rogers, Jackson, for Appellant.

Samuel D. Habeeb, J. Mack Varner, Varner Parker Sessums & Underwood, Vicksburg, for Appellee.

En Banc.

MILLS, Justice, for the Court:

STATEMENT OF THE CASE

¶1 On March 26, 1996, the Chancery Court of Warren County heard Calvin Poole's Motion for Modification of child support payable to his ex-wife, Penny Poole. On May 15, 1996, the court denied the motion. Calvin Poole filed a Motion for Reconsideration which, was denied on August 2. Aggrieved, Calvin Poole appeals to this Court, assigning as error the following issues.

ISSUES

I. Whether the chancery court erred in taking judicial notice "that in the financial statement filed by Dr. Poole on June 25, 1992 ... he swore under oath that his gross monthly income was $9,573.19 and his adjusted gross income was $4,718.97."

II. Whether the chancery court erred in finding that no material change in circumstances had occurred warranting a modification of the prior judgment of divorce or, in the alternative, that any change which had occurred could have been reasonably anticipated or, in the alternative, that Calvin Poole should be denied relief based on a lack of good faith.

III. Whether the chancery court erred in awarding attorney fees to Penny Poole.

FACTS

¶2 Calvin Philip Poole, Jr. ("Calvin") and Penny Woods Poole ("Penny") were married on January 6, 1985. Calvin was a medical doctor having received his degree in 1980. He had specialized in obstetrics and gynecology and, since July of 1984, had practiced at The Street Clinic in Vicksburg, Mississippi. Two children were born of the marriage, Hunter David Poole, born in 1987, and Joseph Hillary Poole, born in 1990.

¶3 On September 24, 1992, the Chancery Court of Warren County granted Calvin and Penny a divorce on the ground of irreconcilable differences. The divorce decree, incorporating the Joint Settlement Agreement reached by the parties, provided that Penny would have physical custody of the two children, that Calvin would pay to Penny child support in the amount of $2,000 per month, and that Calvin would pay to Penny lump sum alimony in the amount of $120,000 payable at the rate of $1,000 per month for a period of ten years.

¶4 On November 27, 1995, Calvin filed a Motion for Modification of child support alleging that due to a material change in circumstances, he could no longer afford to pay the child support required by the divorce decree and joint settlement agreement. The motion was heard in the Chancery Court of Warren County on March 26, 1996.

¶5 Calvin testified that at the time of the divorce, he was practicing as an obstetrician/gynecologist ("OB/GYN") at The Street Clinic in Vicksburg, Mississippi, where he had worked since 1984. He testified that while working as a partner at the clinic, he ¶6 Calvin testified that after the divorce, he began drinking heavily, began having problems with depression and even became suicidal. Calvin went to the Hazelton Foundation in Minnesota for treatment, and when he returned, he attempted to return to his practice at the clinic on a part-time basis. After four months, the clinic placed him on disability, after which he began receiving checks from his disability insurance carrier in the amount of $15,000 per month.

regularly generated an annual income in the $300,000 range. His tax return for 1992 showed a total income of $367,504.

¶7 Calvin testified that he attempted to continue his medical career by undertaking a residency in psychiatry in August of 1994 at the University Medical Center in Jackson, Mississippi. However, he did not complete the residency. Calvin testified that he was contractually bound by his medical malpractice insurance policy to attend weekly meetings of the Caduceus Club, a group of impaired doctors in Mississippi. He testified that he was also required to attend three to four Alcoholics Anonymous meetings per week, and that he had to take monthly drug tests. According to Calvin, if he did not meet his obligations to the Caduceus Club, he would lose his medical malpractice insurance and possibly his medical license. He testified that his obligations to the Caduceus Club hindered his ability to perform as a resident, so he terminated his residency in May of 1995.

¶8 In September of 1995, Calvin secured employment as a physician at the Mississippi State Hospital at Whitfield, where he was still employed at the time of the hearing. He testified that his gross annual salary at the hospital was $93,065.76, or $7,755.48 per month, with a net take home pay of $4,344.27. He testified that this was his only source of income. Calvin testified that no medical licensure board or other authority was preventing him from practicing his specialty as an OB/GYN, but that he had chosen not to because his psychiatrist had recommended against it. He testified that he did not think that he could handle the pressures and lack of sleep caused by such a practice.

¶9 Calvin testified that in 1994, he sold his interest in a limited partnership for which he received $300,000, $200,000 of which he used to purchase the house in which he was residing at the time of the hearing. In January of 1995, The Street Clinic purchased Calvin's stock in the clinic for $120,000. Of this money, Calvin used $50,000 to start an annuity fund with New York Life, and he used $50,000 to make "a loan slash investment to a friend." The "loan slash investment" was made to Misty Meadows Mastiffs, a dog kennel in Maryland owned by Marla Blethern. Calvin was unable to say whether this payment was a loan or an investment, but he testified that he received no promissory note or stock in the kennel, and that he no longer expected the money to be repaid. At the time of the hearing, Calvin's annuity fund at New York Life was worth $59,000, and he had an $11,867 municipal bond, a life insurance policy with a net cash value of $6,000, a paid-for $19,000 automobile, and $155,000 in retirement funds.

¶10 Calvin's income tax return for 1994 showed a total income of $258,809. This tax return, however, did not reflect the $300,000 Calvin received that year for his interest in the limited partnership. Calvin's Certified Public Accountant, Steve Sessums, testified that Calvin's total income for 1994 was $516,772. Mr. Sessums also testified that while Calvin was employed at The Street Clinic, his tax returns reflected more income than he actually received. According to Mr. Sessums, the clinic was structured so that its partners would report the clinic's earnings as taxable income, but would receive only enough money from the partnership to pay taxes on the income. Thus, much of the income reported on Calvin's tax returns was "phantom" income which he did not actually receive.

¶11 On May 15, 1996, the chancery court entered its Memorandum Opinion and Order on Calvin's Motion for Modification. The chancellor found that at the time of the divorce, Calvin had an adjusted gross income of $4,718.97 per month. The chancellor found that Calvin's current adjusted gross income, as Calvin testified, was $4,344.27. The chancellor found that Calvin offered no positive proof of the reason for his decrease in income, and that he failed to show that he lacked the ability to earn more. The chancellor noted that Calvin offered no evidence ¶12 On May 30, 1996, Calvin filed a Motion for New Trial or, in the Alternative, to Open the Prior Judgment and Take Additional Testimony, Amend Findings of Fact and Enter New Judgment. Calvin argued that the chancery court erred in finding that at the time of the divorce, Calvin's adjusted gross income was $4,718.97. He asserted that because nothing establishing this figure was introduced into evidence, "the Court must have relied upon information or documentation which was not made a part of the record at this hearing," and that "the Court has undertaken to conduct an independent investigation and to rely upon information which is apparently known only to the Court thereby denying the parties the opportunity to respond to the authenticity or reliability of the information relied on by the court." The chancery court granted the motion to take additional testimony, and a hearing was held on June 24, 1996.

                other than his own testimony, that he was unable to effectively handle the stress of his OB/GYN practice.  Also, noting Calvin's various expenditures, the chancellor stated that "Dr. Poole asks this court to reduce the support to his children, yet he continues to enjoy the same lifestyle he enjoyed prior to the divorce."   The chancellor denied Calvin's motion to modify and ordered Calvin to pay to Penny $1,800 in attorney fees
                

¶13 Calvin testified that while employed at The Street Clinic, where he worked throughout 1992, he was paid $4,000 every two weeks and received bonus distributions, depending on the profitability of the clinic, twice a year--one in July and one in December. He again introduced his 1992 tax return which showed a total income of $367,504. He testified that the joint settlement agreement, in which he agreed to pay $2,000 per month in child support, was based on his total income.

¶14 On cross-examination, Calvin testified that when he was divorced on September 24, 1992 and agreed to the terms of the joint settlement agreement, he did not know what his total income would be for 1992, as he had not yet received his December bonus. He testified that his July 1992 distribution was approximately $70,000 to $80,000. Then, reading from his sworn interrogatory responses signed on September 10, 1992 and filed with the court before his divorce, Calvin stated that his July 1992 distribution was approximately $35,000. Calvin also read his response stating that because a new partner was joining the clinic, he expected that "my income will drop drastically for a period...