Blanchard v. Blanchard

368 So.3d 374

Christopher Joseph BLANCHARD, Appellant v. Tammie Lynn BLANCHARD, Appellee

NO. 2022-CA-00356-COA

Court of Appeals of Mississippi.

July 25, 2023

ATTORNEY FOR APPELLANT: STEPHEN J. MAGGIO, Gulfport

ATTORNEY FOR APPELLEE: KIMBERLY-JOY LOCKLEY MIRI, Hattiesburg

BEFORE WILSON, P.J., GREENLEE AND SMITH, JJ.

WILSON, P.J., FOR THE COURT:

¶1. When Christopher (Chris) Blanchard and Tammie Blanchard divorced, they entered into a Child Custody, Support, Visitation and Property Settlement Agreement (PSA) drafted by Tammie's attorney. The PSA granted Tammie the exclusive use and possession of the former marital home but also granted Chris a right to half the "net proceeds" from a future sale of the home. Under the PSA, Tammie must put the house on the market when the parties’ youngest child turns eighteen, though she may sell the home at any time prior to that point. The present proceedings arise from Tammie's attempt to sell the house and her contention that by refinancing the home she effectively severed Chris's right to receive any of the proceeds from its sale. The chancery court ruled that the PSA was ambiguous on this point, and, based on parol evidence, the court found that Tammie's refinancing of the home "severs [Chris's] interest in the equity in the home." Chris appealed.

¶2. Reviewing this issue of law de novo, we hold that the relevant provision of the PSA is not ambiguous and that Tammie's refinancing of the home did not sever Chris's interest in the net proceeds from a sale of the home. Therefore, we reverse and render the judgment of the chancery court.

FACTS AND PROCEDURAL HISTORY

¶3. Chris and Tammie were married in 2006 and had two children during their marriage. In 2018, they filed a joint complaint for an irreconcilable-differences divorce based on a PSA that they had signed on February 12, 2018. Tammie's lawyer drafted the PSA, while Chris was unrepresented. The chancery court approved the PSA and incorporated it as part of the final judgment of divorce entered on May 14, 2018. Section 14 of the PSA addressed the marital home:

The Parties agree that [Tammie] shall be awarded the exclusive and sole use possession and title to the [marital home] and that [Tammie] shall continue to pay the monthly note, taxes and insurance on said home .... The Parties agree that [Tammie] shall have exclusive and sole possession and title to the [home] until the Parties’ youngest minor child ... turns eighteen (18) years of age, ^{[1 ]} at which time [Tammie] shall place the [home] on the market and sold for fair market value to be determined by a licensed appraiser. Upon the sale of such property, the current mortgage is to be paid in full and the net proceeds will be divided equally between the Parties.

[Tammie] will attempt to refinance at terms equal to or better than terms on present loan to remove [Chris's] name from the loan. If [Tammie] cannot refinance, then she will attempt to secure such financial loan within two (2) years from the date of this Agreement at terms equal to or better than terms of present loan. If [Tammie] is still unable to refinance, then [Tammie] will be solely responsible for payment of the loan. [Tammie] shall hold [Chris] harmless in the repayment of this loan.

There is no evidence of the value of the home or its mortgage balance at the time of the divorce because the parties signed and filed a joint waiver of the requirements of Uniform Chancery Court Rule 8.05. Elsewhere in the PSA, the parties agreed that each would keep the automobile and other personal property then in his or her possession and be responsible for any debt in his or her name. There was no marital debt to address other than the mortgage on the marital home. Finally, Chris disclaimed any interest in Tammie's pension through the Teachers’ Retirement System of Louisiana. ²

¶4. Tammie did not refinance the home or remove Chris's name from the loan within two years. But on or about September 14, 2020—two years and seven months from the date of the PSA and two years and four months after the final judgment of divorce—Tammie refinanced the home under a new thirty-year fixed-rate mortgage. ³ Tammie's loan application listed the value of the home as $200,000, and an August 19, 2020 appraisal estimated that the house had a market value of $185,000. Tammie's loan application showed that the home's existing mortgage balance was approximately $139,000.

¶5. Almost immediately after she refinanced the home, Tammie listed it for sale and then entered into a contract to sell the home. Tammie took the position that she was entitled to receive all proceeds from the sale of the home and owed Chris nothing.

¶6. On November 6, 2020, Chris filed a complaint for injunctive relief in the Pearl River County Chancery Court. Chris alleged that he was entitled to half the proceeds from any sale of the home and requested that the court enjoin Tammie from expending the same. Tammie filed an answer and counterclaim for declaratory relief, alleging that she was entitled to all proceeds from the sale because she had refinanced the home.

¶7. The contract to sell the home later "fell through," but both parties requested that the court resolve their dispute regarding the interpretation of the PSA because the issue would arise again in the future. ⁴ In April 2021, the chancellor entered an interlocutory order concluding that the PSA was ambiguous and that the case would proceed to trial to allow the parties to offer parol evidence regarding the PSA's meaning. The case then proceeded to trial in October 2021. Tammie, Chris, and Tammie's former attorney testified at trial.

¶8. At trial, a prior draft of the PSA was admitted into evidence that showed that some of the language in section 14 was added at Chris's insistence. Specifically, the underlined language below was not in the original draft but was added before the PSA was signed:

The Parties agree that [Tammie] shall be awarded the exclusive and sole use possession and title to the [marital home] and that [Tammie] shall continue to pay the monthly note, taxes and insurance on said home .... The Parties agree that [Tammie] shall have exclusive and sole possession and title to the [home] until the Parties’ youngest minor child ... turns eighteen (18) years of age, at which time [Tammie] shall place the [home] on the market and sold for fair market value to be determined by a licensed appraiser. Upon the sale of such property, the current mortgage is to be paid in full and the net proceeds will be divided equally between the Parties.

[Tammie] will attempt to refinance at terms equal to or better than terms on present loan to remove [Chris's] name from the loan. If [Tammie] cannot refinance, then she will attempt to secure such financial loan within two (2) years from the date of this Agreement at terms equal to or better than terms of present loan. If [Tammie] is still unable to refinance, then [Tammie] will be solely responsible for payment of the loan. [Tammie] shall hold [Chris] harmless in the repayment of this loan.

The remainder of section 14 regarding the marital home remained unchanged. Thus, the original draft of the PSA granted Tammie the marital home outright and granted Chris no right to any equity in the home. In contrast, the final PSA granted Chris a right to equity in the home upon the sale of the home.

¶9. Tammie testified it was her understanding that "the current mortgage" mentioned in this provision referred only to the mortgage on the home at the time of the parties’ divorce. Tammie testified that she believed that if she refinanced the home as provided in the second paragraph quoted above, Chris would no longer have a right to any equity in the home under the first paragraph.

¶10. Chris testified that he wanted Tammie and their children to be able to remain in the marital home after the divorce, but he wanted to preserve his right to the equity in the home. Chris testified that he insisted on a right to equity in the marital home in part because he agreed to disclaim any right to Tammie's pension. Chris testified that he understood and believed that the PSA granted him a right to half the proceeds from the sale of the marital home even if Tammie refinanced the home to remove him from the mortgage. Chris also testified that he had been receiving Social Security Disability Insurance payments for eight-plus years based on a diagnosis of Guillain-Barre syndrome, paralysis, and other ailments.

¶11. Tammie's former attorney, Nathan Farmer, ⁵ testified that he drafted the PSA based on his discussions with Tammie and that he did not advise Chris regarding the meaning of any of its provisions. Farmer stated he believed that the PSA granted Chris a right to receive proceeds from the sale of the marital home only if Tammie did not refinance the home at any point—i.e., either before or after the two-year period set out in the PSA— and if Tammie waited until the parties’ youngest child turned eighteen to sell the home. Farmer believed that if Tammie refinanced the home or sold it before the child turned eighteen, she would owe Chris nothing. Farmer acknowledged that he never advised Chris regarding the meaning of the PSA.

¶12. After trial, the chancery court entered an opinion and final judgment. The court found that section 14 of the PSA was "ambiguous"; that "the intent of the parties remains unascertainable" even after applying the traditional canons on contract construction; and that based on the testimony and other parol evidence, "the intent of the parties in [section] 14 of the [PSA] was that Tammie's refinanc[ing] of the property in September 2020 sever[ed] [Chris's] interest in the equity in the home." Therefore, the court held that Chris had no right to any proceeds from a sale of the home. Chris filed a motion to alter or amend the judgment, which the chancery court denied, and then appealed.

ANALYSIS

¶13. Generally, when we "review[ ] a chancellor's decision...