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Gutierrez v. Gutierrez

Supreme Court of Mississippi, En Banc

June 15, 2017


          DATE OF JUDGMENT: 12/28/2015

          DATE OF JUDGMENT: 02/25/2016





          BEAM, JUSTICE.

         ¶1. On December 4, 2014, this Court issued its opinion in Gutierrez v. Gutierrez, 153 So.3d 703 (2014), in which it affirmed the chancellor's judgment in part and reversed it in part, remanding the case for the resolution of three overarching issues. Clayton Gutierrez now appeals the chancellor's decisions concerning the issues on remand, as outlined in the chancery court's September 22, 2015, December 29, 2015, and February 26, 2016, orders. In all, Clayton alleges five errors. Finding that the court neither abused its discretion nor erred in its decision, this Court affirms the chancellor's judgments on the matter.


         ¶2. After twenty-two years of marriage, Trisha Gutierrez filed for divorce from her husband in March 2010. Shortly thereafter, Clayton Gutierrez (Clay) responded with a counterclaim for divorce. Initially, both parties asserted various fault grounds for their petitions, though the couple eventually settled on an irreconcilable-differences divorce. The parties quickly agreed to custody and visitation arrangements for their three children, leaving the division of marital assets and liabilities and spousal support as the only matters to be resolved. To date, the primary source of disagreement in this cause surrounds the division of the parties' second mortgage, [1] the award of alimony, and a judgment for contempt.

         Procedural History

         ¶3. Since 2010, this matter has proceeded through two trials, review by the Supreme Court, and multiple chancery court hearings, judgments, orders, and revised orders. This represents the third appeal to this Court on the matter, all of which have been presented by Clay.[2]

         ¶4. Clay's first appeal was decided by this Court on December 4, 2014. Gutierrez v. Gutierrez, 153 So.3d 703 (Miss. 2014). There, Clay presented four issues, each addressing the chancellor's evaluation of the marital property and debt. Gutierrez, 153 So.3d at 707. To address those issues, this Court reviewed the chancellor's April 23, 2013, Corrected Final Judgment on Divorce, which granted the parties' petition, adopted their child-custody and visitation agreements, and detailed the chancellor's division of marital assets and liabilities. Finding the chancellor made no error in his valuation, this Court affirmed the chancery court's assessment of Clay's interests in three individual companies; though the Court remanded on issues concerning the calculation and distribution of assets and liabilities, as well as the chancellor's findings on alimony, contempt, and attorney's fees. Gutierrez, 153 So.3d at 714. On remand, the chancery court addressed these concerns in the following three judgments.

         September 22, 2015, Judgment: Second Mortgage Distribution

         ¶5. Through its 2014 decision, this Court requested that the chancery court provide a more definite explanation and finding regarding the second-mortgage debt. Gutierrez, 153 So.3d at 709. In doing so, the Court recognized (1) that Clay, individually, maintains the legal and financial obligation under the note; (2) Trisha was not a maker of the note and did not sign it;[3] (3) and at that point in the litigation, the holder of the note had yet to make a demand for the deficiency. The Court then asked two questions of the chancellor: first, if the holder obtains a deficiency judgment, what are the respective obligations of the parties regarding repayment? Next, as a party not obligated under the note, can Trisha be held legally responsible for the deficiency if Clay cannot pay?

         ¶6. In its September 22, 2015, M.R.C.P. 54(b) Certified Judgment, [4] the chancery court sought to clarify its original ruling and refine its determination regarding the second mortgage and the subsequent assessment of alimony. First, the court determined that including the liability for the second-mortgage debt in the distribution of the assets would be inequitable because the bank had yet to collect actively on the note.[5] Because the court could not speculate that the bank eventually would initiate collection efforts, or predict if the debt would be settled in the future for less than the amount owed, the chancellor decided to refrain from charging the amount to either party. Rather, he amended his original decision and removed the debt allocated to both Trisha's and Clay's respective columns. The court then provided for joint responsibility between the two parties, making each accountable for one-half of any payment made toward the debt. The court recognized that, while Clay retains the sole legal liability to Wells Fargo, his obligation is contingent and unliquidated. The court held that making both parties equally responsible for any payment amount negotiated, settled, or other wise agreed to provides for joint responsibility without charging the amount to either party. The court then readopted and reincorporated its previous distribution of the remaining assets and liabilities from its April 23, 2013, Judgment, taking all other issues under advisement.

         December 29, 2015, Judgment: Contempt and Attorney's Fees

         ¶7. Following the September 2015 Judgment, each party filed a motion questioning or disputing the chancellor's findings. The December 29, 2015, Judgment addressed both motions in turn, along with questions regarding claims of contempt in 2012 and 2015.

         ¶8. The chancellor first addressed Clay's post-trial motion, which argued that the court had failed to address all issues on remand together. Clay claimed that this Court requires matters of equitable distribution and alimony to be considered together, rather than in the isolation of an Rule 54(b) certified judgment. He argued that, as a result, the chancellor's ruling directly conflicted with the Court's requests on remand. Next, Clay claimed that the chancellor's removal of the second mortgage from the marital estate and the allocation of joint payment responsibility to the parties ignored the requests of this Court by assessing the debt as a liability to both parties. Clay requested the chancery court set aside the Rule 54(b) Certified Judgment and leave him solely responsible for the debt and diminishing assets. He contends that this decision would conform with this Court's mandate while significantly decreasing the lump-sum alimony award to Trisha from $215, 138.50 to $33, 136.[6]

         ¶9. The court quickly dismissed Clay's motion, maintaining the position that "the contingent nature of the loan, while a marital debt, would make it inequitable to include the liability in the equitable distribution of the assets." The court then readopted its original Armstrong[7] analysis, removing the contingent Wells Fargo debt and reincorporating its previous equitable distribution of the remaining marital assets and liabilities.

         ¶10. Next, the chancellor reviewed Trisha's Rule 59 Motion, which asserted that the Court's September 2015 Judgment failed to set forth a starting point for lump-sum alimony payments. While the previous judgment reincorporated the analysis in the April 23, 2013, Corrected Final Judgment, including the amount of payments to be made and the duration of payment activity, the information therein did not identify when those payments were to begin. The chancellor recognized this oversight and determined that payments would begin February 1, 2016, continuing each year thereafter, until the amount was paid in full.

         ¶11. Last, the chancellor addressed claims of contempt from 2012 and 2015. The first of the contempt issues-Contempt 2012-was addressed by this Court in 2014 and primarily concerned Clay's failure to pay debts and expenses as ordered by the court on May 4, 2010, and July 8, 2011. In Gutierrez, this Court held that the chancellor's March 23, 2012, Contempt Judgment focusing on the court's May 2010 and July 2011 temporary orders was "manifestly in error." Gutierrez, 153 So.3d at 713. The Court found that the July 2011 "temporary order created several obvious ambiguities regarding Clayton's continuing support obligations." Gutierrez, 153 So.3d at 715. Those ambiguities created confusion which "arguably excused Clayton from continuing to pay Trisha's monthly expenses, or, at the very least, make the $750 monthly 'other support' payments." Gutierrez, 153 So.3d at 713. Although Clay admitted his failure to pay for some of Trisha's valid monthly expenses, this Court reversed the chancery court's contempt judgment and award of attorney's fees and remanded the issue for the chancery court to resolve the ambiguity in its previous orders and determine Clay's actual deficiency. Gutierrez, 153 So.3d at 714. In a succinct, two-paragraph response, the chancery court merely acknowledged the issue in this order and reassessed Trisha's award, amending it to reflect the additional amount owed from March 2012, along with attorney's fees.

         ¶12. The final issue-Contempt 2015-addressed both parties' claims for reimbursement for expenses incurred on behalf of the minor children. Having found no contempt in the issue, the court dismissed it without merit.

         February 25, 2016, Judgment: Alimony and Contempt

         ¶13. Following the entry of the court's December 2015 Judgment, Trisha filed her second Rule 59 Motion requesting the court to amend the judgment to set forth that Clay is ordered to pay her $3, 000 per month in periodic alimony, and to define the expenses to be divided by the parties which are to be considered "college expenses." Shortly thereafter, Clay filed his Post-Trial Motion requesting the court to revisit its decision on the second mortgage, resolve the ambiguity in the court's prior orders regarding responsibility for expenses, and make findings on the issues of periodic alimony and expenses specific to the children.

         ¶14. Addressing the matter of periodic alimony first, the court performed a new Armstrong analysis in light of its September 22, 2015, Judgment, its reconsideration of the equitable distribution and the subsequent removal of the second-mortgage debt. In examining the test's twelve factors, the 2016 analysis produced nearly identical results to the 2013 review. However, the court acknowledged that, within the three years that had passed, Trisha had significantly reduced her standard of living in response to a request by the court, though she continued to struggle to meet her monthly obligations. Conversely, while Clay did not yet own a home, he continued to maintain a high standard of living with no evidence that he could not meet his basic needs. Further, the court noted that, while the Wells Fargo debt was removed from the obligations and assets summary, the discrepancy-and Tricia's deficit-remained the same. Finally, the court provided a thorough explanation of its first lump-sum-alimony determination, readopting its initial award to counter the shortfall created by Clay's receipt of many of the unliquidated marital assets. Through this second Armstrong analysis, the court found that Trisha should receive periodic alimony in the amount of $3, 000 per month in addition to the previously awarded lump-sum payments.

         ¶15. After settling the matter surrounding alimony, the court turned to the issue of college expenses for the two minor children. In its 2013 judgment, the court mandated that expenses outside the previously established, prepaid college fund are to be paid sixty percent by Clay and forty percent by Trisha. Here, the court clarified that college expenses consist of "an amount equal to those charged by the University of Southern Mississippi for tuition, fees, books, room and board, the cost of school supplies, and a laptop computer."

         ¶16. The final issue addressed by the court in this judgment concerned the Contempt 2012 matter discussed in the December 2015 Judgment. Because this Court found the language of the May 2010 and July 2011 temporary orders created "several obvious ambiguities regarding Clayton's continuing support obligations, " the chancery court offered a comprehensive clarification on the matter. Gutierrez, 153 So.3d at 715. The court explained that the language of the July 2011 temporary order, which removed Clay's obligation to pay "other marital necessities of the wife, " was intended to impose a new and separate obligation upon the parties. As a result, Clay no longer was responsible for paying the "necessities of the marriage" mandated under the May 2010 temporary order; rather, he was to maintain responsibility for all the debts of the marriage, with the exception of five specific bills which Trisha would pay through the court registry.

         ¶17. Having simplified the requirements of the parties, the court then recognized that: (1) Trisha's evidence and testimony of the financial obligations she had incurred since May 2010 were both credible and unchallenged, (2) Clay's statements conveyed a higher earning capacity than Trisha's without providing evidence to the contrary, and (3) unprovoked, Clay admitted to contemptuous behavior. As a result, the court found Clay to be in contempt of the previous temporary orders for his repeated failure to pay the required family expenses and entered a judgment against him in the amount for $17, 588.50, in addition to attorney's fees of $5, 000.

         ¶18. On appeal, Clay alleges that the chancery court erred as a matter of law, abused its discretion, was manifestly wrong, or committed plain error in its findings in each of the three judgments. Clay alleges these errors through five individual issues, though, because issues II and III focus on the chancellor's decision on periodic and lump-sum alimony, we address them together.


         ¶19. "In matters of equitable distribution and alimony, the Court enjoys only limited powers of review. 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, 289-90 (Miss. 2000) (citing Hammett v. Woods, 602 So.2d 825, 827 (Miss. 1992)). Likewise, a "chancellor has substantial discretion in deciding whether a party is in contempt." R.K. v. J.K., 946 So.2d 764, 777 (Miss. 2007), disapproved of on other grounds in later appeal, 30 So.3d 290 (Miss. 2009). Because this Court employs a limited standard of review when evaluating the decisions of a chancellor (Reddell v. Reddell, 696 So.2d 287, 288 (Miss. 1997)), his findings will be disturbed only when they are manifestly wrong, clearly erroneous, or if the chancellor applied an erroneous legal standard. McEwen v. McEwen, 631 So.2d 821, 823 (Miss. 1994).


         I. Whether the chancellor erred in his calculation of the marital assets and liabilities on remand and improperly decided the issue separately from the context of alimony.

         ¶20. As detailed above, the chancery court addressed this issue on remand in its September 2015 Rule 54(b) Certified Judgment. There, the chancellor sought to clarify his rationale with respect to the removal of the second-mortgage debt from the allocation of assets and liabilities. The chancellor maintained that, because the debt was incurred during the marriage, it represents a marital liability for the purpose of equitable distribution, but because it is unliquidated and may never be collected, dividing the debt or attributing it to one party alone would be inequitable. Instead, the chancellor created a joint obligation between the parties, holding Trisha and Clay equally responsible for any future payments made on the note.

         A. The chancellor properly issued the Rule 54(b) Certified Judgment, dispensing of the second-mortgage debt prior to his reconsideration of alimony.

         ¶21. Under this issue, Clay first argues that the chancellor erred in considering the second mortgage in isolation, rather than ruling on its equitable distribution and alimony together. Quoting the conclusion of this Court's December 2014 decision, [8] Clay claims that the Court's plain language required that the chancellor consider all issues on remand together. In his argument, however, Clay failed to acknowledge the Court's analysis and the caselaw upon which it stood, in earlier paragraphs of the same decision. In discussing the issue of lump-sum and periodic alimony, the Court explained that

[t]his case is being remanded for the chancery court to determine whether Trisha or Clayton has any legal responsibility to repay the second mortgage and to reallocate the mortgage liability accordingly. Where it is necessary to reverse the chancery court's division of the marital estate, an accompanying award of alimony should also be ...

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