Voting 7-2, the Mississippi Supreme Court refused to relieve a closeted gay doctor, who is also HIV-positive, from the terms of a very one-sided divorce settlement agreement which he had signed with his ex-wife more than two years prior to filing an actionto set the agreement aside or modify it as unconscionable and formed under duress. Under the agreement, which was approved by the Hinds County Chancery Court, all but $5,000 a month of his income goes towards support of their one child and alimony for his wife, and obligates him to assume all the expenses of raising the child through college and potential marriage, among other things. Smith v. Doe, 2018 Miss. LEXIS 39, 2018 WL 549404 (Jan. 25, 2018). For confidentiality purposes, the court used pseudonyms to refer to the parties, using the names Carl Smith and Lisa Doe. Both of them are doctors. Justice James D. Maxwell, II, wrote for the court. Justices Leslie D. King and James W. Kitchens each wrote dissenting opinions, and Justice Kitchens also joined Justice King’s opinion.
The divorce occurred because Lisa found out that Carl had been engaging in extramarital affairs with known and anonymous same-sex partners. He had lied to her about how he contracted HIV, and about allegations concerning his alleged pedophilic activities (trading nude pictures of underage boys on-line). Lisa, represented by two lawyers, proposed an extremely one-sided settlement agreement, which included a provision in which Carl, who was not represented by counsel at Lisa’s insistence, acknowledged that the agreement was one that a court would not normally impose in a contested case. The provision stated: “Nevertheless, Husband is both willing to limit and restrict his rights and expand his obligations regarding child support, alimony, and division of marital property and debt as contained in this agreement. These limitations and restrictions of rights and expansion of obligations are based, in part, by both Husband and Wife’s mutual understanding of the unique difficulties in which Husband’s behavior has placed the family unit.” The agreement obligated Carl to pay over about 75% of his income to Lisa on a monthly basis, and although it stated that Carl had been encouraged and free to seek legal advice concerning the agreement, he testified that in fact Lisa threatened to go public with all the detrimental information he uncovered if he hired a lawyer. Carl testified that he had not seen the agreement until it was presented to him for signature, with no opportunity to review it or seek advice about it.
Carl made all payments for more than two and a half years, but then filed a complaint to set aside, or alternatively to modify, the agreement. He argued coercion, duress, and unconscionability. Wrote Justice Maxwell, “He suggested his wife had strong-armed him, threatening to disclose his affairs, disease, and alleged malfeasance if he did not sign the agreement. And he signed the agreement under duress, facing ‘financial ruin, humiliation, loss of his medical license, criminal prosecution, and loss of contact’ with his daughter. Carl also claims Lisa would not permit him to have an attorney review the agreement’s terms.”
Lisa, while “admitting that she was angry and behaved harshly toward Carl after she had unearthed much of his hidden second life and illicit activities,” argued that “his coercion and duress allegations are not only false but are undermined by his express acknowledgements in the property-settlement agreement.”
The chancellor granted Carl a hearing, but concluded after five days of testimony that a statutory limitation period for contesting a divorce settlement agreement approved by the chancellor barred Carl’s complaint. Rule 60(b)(1) of the state’s Rules of Civil Procedure requires an action to set aside an agreement on grounds of the other party’s misconduct be filed within six months, but he waited more than two years. Although there are equitable grounds to grant relief from that time limit, the chancellor found that they do not apply in this case, and the Supreme Court backed up the chancellor in the finding that there was “no evidence of good cause in Carl’s delay” and that granting relief “at this late date would cause actual prejudice to Lisa.” The chancellor had also, alternatively, rejected Carl’s contention that the agreement was unconscionable, noting that both of the parties are educated, licensed professionals and that “Carl was not overly browbeaten or otherwise coerced into signing a procedurally or substantively unconscionable agreement.” Carl’s complaint that after meeting all monthly financial requirements under the agreement he was left to live on only $5,000.00 a month, was not calculated to carry much weight in Mississippi. (An on-line check shows that based on 2016 data, an annual income of $60,000 both exceeds the national median family income and far, far, far exceeds the annual median family income in Mississippi, which is one of the poorest states with one of the lowest costs of living. No crocodile tears from the majority of the court for the philandering Carl on this account.
Wrote Justice Maxwell, “The chancellor essentially found Carl knew exactly what he was doing and exactly what he was obligating himself to do when he signed the settlement agreement. Indeed, according to the agreement, Carl accepted its strict terms based on ‘the unique difficulties in which his behavior has placed the family unit.’ The chancellor recognized this and noted that ‘Carl was in a place of self-loathing and felt extreme guilt for his choices that had caused the destruction of his marriage and family.’ That his extramarital activities and devious behavior gave Lisa the upper hand in negotiating a favorable settlement did not negate that Carl ‘freely and willingly’ agreed to the settlement’s terms. Nor did Carl’s ‘self-imposed guilt’ and Lisa’s ‘obvious hostility,’ in the chancellor’s view, amount to an unconscionable disparity of bargaining power. Based on his advanced education, Carl was certainly aware of the finality of signed legal contracts and judgments. And the chancellor’s finding and the agreements express acknowledgements undermine Carl’s newly minted procedural unconscionability claim.”
As to the claim of substantive unconscionability, the court noted, as mentioned above, that Carl testified that he is “very stable” financially and can afford to make the payments. The chancellor did not find that any changed circumstances of the parties would themselves justify modifying the terms. “Here,” wrote Maxwell, “the chancellor ‘expressly determined that no fraud or overreaching existed in this matter.’ Thus, he deemed ‘all provisions of the agreements regarding fixed alimony or a division of property’ unmodifiable. We there find,” continued Maxwell, “even if Carl’s motion was not snagged on the chancellor’s Rule 60(b)(1) and Rule 60(b)(6) timeliness findings, the chancellor did not abuse his discretion in alternatively rejecting the merits of the unconscionability claims.”
Concluding, Maxwell noted that in light of the evidence presented, “this Court has significant public health and safety concerns. We therefore remand the chancellor’s order sealing the court file for the trial court to conduct the balancing test set out in Estate of Cole v. Ferrell, 163 So. 3d 921 (Miss. 2012), and determine whether the court file should remain under seal.” In Estate of Cole, the count observed that confidentiality of settlement agreements by consent of the parties should generally be respected as it effectuates settlement of disputes, but that if there is an overriding public interest, a court can unseal previously sealed court records.
Justice King’s dissent is long, detailed, and vociferous, criticizing the majority opinion on just about every point, and sets out in detail the terms of the agreement and the enormous financial obligations it imposes on Carl, some of which are indeterminate and likely to expand substantially in the future. For example, Carl agrees that when the child is old enough to drive, he will buy her a car with no cap on the price or input on his part to its selection. He is also obligated for all of the child’s college expenses, including any post-graduate or professional degrees, “to be selected by Carl, Lisa, and the child, by majority rule.” He was required to make monthly deposits into a designated college fund for the child, provide all insurance and cover all deductibles, maintain a life insurance policy on the child with Lisa as trustee until the child completes her education, making Lisa the primary beneficiary of all his pension plans and retirement savings with the child as secondary beneficiary, bear full liability for all his own debts and for all Lisa’s medical school debts. . . It goes on and on, including that, contrary to usual custom, his alimony obligation would continue even if Lisa remarried and would be an asset of her estate if she died before he did. She got the marital house and almost everything in it, and sole custody of the child; if Lisa died before the child’s majority, custody would go to Lisa’s parents. “The contract provisions wholly deprive Carl of seeing his daughter but require him to almost completely financially support his daughter,” wrote King. In other words, Lisa really took Carl to the cleaners, getting him to agree to things that went far beyond what a court was likely to order in a litigated divorce case.
Justice King commented, “The circumstances of this case by definition are extraordinary and compelling. Carl clearly has demonstrated good cause for not filing his motion sooner. At the time of his divorce, Carl had HIV, was homosexual without the knowledge of his family, had not disclosed his HIV-positive status to the state [medical] licensing board, had engaged in homosexual extramarital affairs, and was in a precarious situation of possibly losing his means to support himself and also losing complete contact with his child. Given the totality of the circumstances in this case, Carl’s hesitation to contest the property-settlement agreement was reasonable and was for good cause. Thus, I cannot agree with the majority’s conclusion that the chancellor had not erred in finding that Carl’s filing was untimely. I also cannot agree that Carl’s motion lacked merit.”
Justice King noted facts conveniently left out of Justice Maxwell’s opinion for the court, bearing on the unconscionability issue beyond just the content of the agreement. “Even though Carl admitted feeling guilty for his actions,” wrote King, “I cannot find that mere guilt coerced Carl into signing an agreement that gave complete custody and decision-making authority over Carl’s minor child to Lisa, along with extraordinary and oppressive financial obligations. Lisa had access to Carl’s email accounts and forwarded Carl emails that were private as well as potentially detrimental to his future medical career. Carl alleged that Lisa had threatened to reveal his homosexuality and had threatened not only criminal prosecution, but medical licensure revocation or suspension, disclosure of his HIV diagnosis, embarrassment, and humiliation. Carl testified that Lisa had threatened exposure if he hired an attorney to represent him in the divorce or told any family members or friends about what was occurring. Yet Lisa had two attorneys and drafted the agreement to provide Carl only with the minimal amount he would need to live on per month. He had not been able to see or read the contract until minutes immediately before he signed it. In addition, Carl stated that Lisa had threatened exposure if he rented an apartment or hotel room before the divorce was finalized. Consequently, Carl had lived in his car for several months. Carl had no bargaining power, had a lack of opportunity to study the contract, and had no input in drafting the agreement. Accordingly, I would find that the contract, too, was procedurally unconscionable.”
Chiding his colleagues in the majority, King wrote: “The majority makes much of the clearness of the agreement’s terms. With respect, I believe that the majority downplays the totality of Carl’s position. Lisa did not have the upper hand; she had the only hand.” He also objected to the court’s decision to remand to the chancellor on the issue of sealing the record. “If this Court has public health and safety concerns,” he wrote, “I believe the appropriate method to allay those concerns would be to report to the relevant governmental authority. Those relevant authorities must pursue the matter as they see fit. The trial court in this case agreed with the parties that the record should be sealed. Because unsealing the record would do little to remedy any public health and safety concerns, I fail to see the public benefit gained by unsealing the record.”
In a separate brief dissent, Justice Kitchens quotes from some of the incriminating emails, and implies that the majority is biased against Carl because he is gay. Or at least, that seems to be the import of his closing remarks: “Carl’s position is further supported by the majority’s use of the word ‘salacious’ to describe his extramarital affairs. The word salacious connotes indecency, obscenity, or lewdness. I dare say that the majority would not have chosen that particular term had Carl chosen to engage in heterosexual affairs. A search of the term ‘salacious’ in opinions reveals the term’s use in criminal cases involving pedophilia,” citing Shaffer v. State, 72 So. 3d 1090, 1098 (Miss. Ct. App. 2010); Wade v. State, 583 So. 2d 965, 968 (Miss. 1991). Notably, there are no allegations that Carl actually engaged in sexual conduct with minors, just that some of the emails he exchanged with other men referred to the subject
“Carl” is represented on appeal by William Abram Orlansky and Susan Latham Steffey.