Trim v. Trim

• Decision Date: 29 April 2010
• Docket Number: No. 2007-CT-01648-SCT.,2007-CT-01648-SCT.
• Parties: George E. TRIMv.Lisa Mosley TRIM.
• Court: Mississippi Supreme Court

33 So.3d 471

George E. TRIM
v.
Lisa Mosley TRIM.

No. 2007-CT-01648-SCT.

Supreme Court of Mississippi.

April 29, 2010.

33 So.3d 472

William Lee Colbert, Jr., Jackson, attorney for appellant.

Kimberly Pine Turner, Randall Harris, Canton, attorneys for appellee.

EN BANC. ON WRIT OF CERTIORARICHANDLER, Justice, for the Court:

¶ 1. George E. Trim and Lisa Mosley Trim obtained an irreconcilable-differences divorce by order of the Chancery Court for the First Judicial District of Hinds County on June 14, 2000. Lisa was not represented by counsel in the divorce proceeding, and neither party propounded discovery beyond the mandatory Uniform Chancery Court Rule 8.05 financial disclosure statements. On November 19, 2004, Lisa filed a “Petition to Set Aside the Final Judgment of Divorce and/or Property Settlement Agreement on the Allegation of Fraud.” In the petition, Lisa asserted that George fraudulently had misrepresented the value of his corporate stock, a marital asset, to be $100,000 in his Rule 8.05 financial disclosure statement. The chancellor granted the petition, finding that the elements of fraud were met by clear and convincing evidence and that the actual value of the corporate stock at the time of the divorce had been $694,000. Subtracting the $100,000 that had been equitably distributed in the divorce judgment, the chancellor awarded Lisa twenty-five percent of $594,000 under Ferguson v. Ferguson, 639 So.2d 921 (Miss.1994), plus attorneys' fees and costs. George appealed, arguing that Lisa's petition had been untimely filed under Mississippi Rule of Civil Procedure 60(b) and that the chancellor erroneously had found clear and convincing evidence of the elements of fraud. This Court assigned the case to the Court of Appeals.

¶ 2. A divided Court of Appeals reversed and rendered, finding that Lisa's petition had been untimely filed under Mississippi Rule of Civil Procedure 60(b). Trim v. Trim, 33 So.3d 480, 486-87 (Miss.Ct.App.2009). The Court of Appeals held that the chancellor erroneously had deemed the petition timely under the catch-all provision in Rule 60(b)(6), under which a motion for relief from a final judgment shall be made within a reasonable time. The Court of Appeals determined that because Lisa's petition alleged fraud, Rule 60(b)(1) applied and that the petition was untimely under that rule's six-month deadline. Having so found, the Court of Appeals declined to reach the merits of the fraud issue. After the Court of Appeals denied Lisa's motion for rehearing, Lisa filed a petition for writ of certiorari, which this Court granted. Lisa raises two issues for decision on certiorari: (1) whether the decision rendered by the Court of Appeals conflicts with prior Court of Appeals decisions and with decisions of this Court, and (2) whether this case involves fundamental issues of broad public importance requiring our review.

¶ 3. This Court is confronted with a finding by the chancery court that a party to

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divorce litigation intentionally submitted a substantially false Rule 8.05 financial disclosure statement. The chancellor determined that this misconduct constituted fraud on an adverse party. We take this opportunity to hold that a party's intentional filing of a substantially false Rule 8.05 financial disclosure statement constitutes a fraud on the court, for which there is no limitation of time restricting the court from affording a remedy. Miss. R. Civ. P. 60(b). Therefore, it was within the chancellor's authority to modify the final judgment of divorce. The judgment of the Court of Appeals is reversed, and the judgment of the Chancery Court of Hinds County is reinstated and affirmed. FACTS

¶ 4. The Court of Appeals provided a thorough recitation of the facts, which we restate:

On November 16, 1990, George and Lisa were married in Hinds County, Mississippi. No children were born to the marriage. Over the course of their marriage, Lisa worked as a sales representative for the Berry Company selling yellow page advertisements, and George was self-employed in a computer networking and cabling business, Business Communications, Inc., (BCI). In 1993, George and Tony Bailey (Bailey) partnered to form (BCI), which is a closely-held subchapter S for profit corporation. Bailey owned fifty-one percent of the stock, with George owning a minority share of forty-nine percent.

George and Lisa continued to live as husband and wife until their separation in September 1999. Around the time of their separation, George and Lisa discussed their financial status. George thought that the value of his stock in BCI was worth $100,000, and Lisa owned a retirement account valued at $120,000. The equity in George and Lisa's home was $30,000. George proposed that Lisa keep her retirement account; he keep his BCI stock and their home; and he pay Lisa $5,000 to make up the difference. In essence, the couple divided their marital assets equally. After this, on September 24, 1999, Lisa signed a property settlement agreement reflecting the couple's decision.

George and Lisa did not file for divorce until seven months later. On April 10, 2000, George and Lisa filed a Joint Complaint and Consent to Divorce based on irreconcilable differences. They also attached the above property settlement agreement to their complaint. Pursuant to Uniform Chancery Court Rule 8.05 (hereinafter 8.05), each party submitted a financial statement of their assets and liabilities to the court. In his 8.05 statement, George again listed the value of his BCI stock at $100,000. On June 14, 2000, the Hinds County Chancery Court entered a final judgment granting a divorce to George and Lisa and ratified the property settlement agreement attached in the divorce complaint.

Following the divorce, in 2001, the business relationship between George and Bailey began to deteriorate. In July 2001, at a board of directors' meeting, Bailey and a third director voted to fire George as president of the company and reduce his management responsibilities and salary. As a result of being “squeezed out” of the company, George filed suit against Bailey and BCI alleging breach of fiduciary duty and wrongful breach of minority rights. He sought to have the company dissolved. Pursuant to statutory requirements, the Madison County Chancery Court held a hearing to determine the value of George's BCI stock, and the court determined that the better result, rather than

33 So.3d 474

to dissolve the company, was to have BCI pay George for his stock and for George to relinquish any rights in BCI. The stock valuations presented in that hearing spurred the present litigation between Lisa and George.

During the litigation between George and Bailey, each party presented expert testimony to determine the value of George's stock, and the chancellor adopted George's expert's finding that the stock was worth $1,186,000 as of August 14, 2001. During the Trim v. Bailey litigation, the chancellor expressed dissatisfaction with the determined values because of the disparity of findings between the parties' experts. However, due to the parties' unwillingness to hire a third expert, he felt bound to choose one of the amounts, so he chose the higher value. It is clear that difficulty existed in placing a definitive monetary value on the stock. Rather, determinations were based on numerous factors that were not easily discernible and resulted in vastly different valuations.

Lisa waited until November 19, 2004, to file suit against George claiming that he had fraudulently misrepresented the value of his stock when they were discussing their property settlement agreement over five years earlier in September 1999.[¹] In the Trim v. Trim litigation, Lisa hired a third expert, which presented yet another opinion concerning the value of George's stock. Lisa's expert valued George's stock at $694,000 at the time of George and Lisa's divorce. The chancellor accepted this opinion and awarded Lisa 25% of this amount [less the $100,000 that had already been subjected to equitable distribution in the divorce judgment]. In other words, Lisa received an additional $148,000 plus attorneys' fees and costs. The judgment from that litigation is now the subject of this appeal.

Trim, 33 So.3d at 482-83 (footnotes omitted). STANDARD OF REVIEW

¶ 5. This Court reviews...