Sylvia Folger v. Robert Folger ( 2016 )

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
August 26, 2015 Session
SYLVIA FOLGER v. ROBERT FOLGER
Appeal from the Chancery Court for Cumberland County
No. 2012CH575 Ronald Thurman, Chancellor
No. E2014-02069-COA-R3-CV-FILED-JANUARY 28, 2016
This appeal arises from a divorce. Sylvia Folger (“Wife”) sued Robert Folger
(“Husband”) for divorce in the Chancery Court for Cumberland County (“the Trial
Court”). After a trial, the Trial Court, among other things, awarded Wife transitional
alimony. On appeal, Wife raises a number of issues. Because of Wife‟s pronounced
economic disadvantage relative to Husband, we modify the judgment of the Trial Court
to increase the amount of Wife‟s transitional alimony, and remand this case for the Trial
Court to award Wife attorney‟s fees as alimony in solido as well as her reasonable
attorney‟s fees incurred on appeal. Otherwise, we affirm the judgment of the Trial Court.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed
as Modified; Case Remanded
D. MICHAEL SWINEY, C.J., delivered the opinion of the court, in which JOHN W.
MCCLARTY and THOMAS R. FRIERSON, II, JJ., joined.
Daniel H. Rader, IV, Cookeville, Tennessee, for the appellant, Sylvia Folger.
Michael R. Giaimo, Cookeville, Tennessee, for the appellee, Robert Folger.
OPINION
Background
Husband and Wife married in 1993. No children were born of the
marriage. Wife filed suit for divorce in August 2012. Husband filed an answer and
counterclaim in response. The case went to trial in July and August 2014. We now
review the testimony from the witnesses relevant to the issues on appeal.
Wife, age 58 at trial, resided in Cookeville, Tennessee. Wife‟s marriage to
Husband was her second marriage. Wife lived in an apartment following the sale of the
marital residence, paying $1,400 per month in rent. Wife grew up in Ohio and attended
college in Kentucky. In 1978, Wife graduated from Eastern Kentucky University with a
degree in finance. Wife has worked in accounting jobs for many years. At the time of
trial, Wife worked at J & S Construction. Wife earned a wage of $23.85 per hour. In
2010, Wife earned $54,000. In 2011, Wife earned $41,941. Wife testified to neck
surgery she had undergone, but this medical condition did not prevent Wife from working
outright. Wife also had suffered from back problems.
Wife testified that the parties previously had resided in Kentucky, where
Husband was a bank executive. Due to loan losses, Husband lost his job. Wife stated
that her previous husband provided a contact name for Husband at State Farm. Husband
was given an agency in Crossville, Tennessee. During this period, Wife assisted
Husband with his work. Wife later moved on to her present employment at J & S
Construction. J & S provides a number of benefits to Wife, including health insurance, a
401k, and vacation time. Wife testified that during the marriage, Husband had given
Wife $6,000 per month with which to handle financial needs. Wife bases her request on
appeal for $6,000 in monthly alimony in part based on this record. Wife acknowledged
that Husband lives in a $500 per month apartment, but stated that her more expensive
apartment was due to different environments between Cookeville and Crossville.
Wife testified to the problems that developed in the marriage. Wife stated
that Husband sometimes called her various expletives. Moreover, Wife alleged that
Husband had an adulterous affair with Connie Fuell (“Fuell”), a teller at Cumberland
County Bank. Considerable testimony was devoted to Wife‟s allegations. Wife asserted
that she found a bra in her bedroom that did not belong to her. Wife even went to the
length of tracking Husband‟s movements on his vehicle. Nevertheless, Wife provided no
concrete evidence that Husband actually had an affair with Fuell.
Fuell, the alleged paramour, testified. Fuell, 53, was employed at
Cumberland County Bank. Fuell saw Husband almost every day as he banked at her
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place of employment. Fuell stated that she did speak to Husband on the phone after she
witnessed a man electrocuted in a work accident, and she needed someone to talk about
it. Fuell, however, strongly denied having an affair with Husband.
Husband, age 64 at trial, testified. Husband had been married once before.
Husband is from Kentucky, and he now lives in Crossville. Wife had exclusively
possessed the marital residence for two years until it was sold. Husband is an agent with
State Farm Insurance Company. Husband received his contract in 2005. Husband‟s
agency taxes are filed as a subchapter “S” corporation. Husband is paid a commission as
a sole proprietor. Husband stated that he does not actually own the insurance business,
and that he cannot transfer the agency. Husband‟s gross income had increased over the
past five years. Husband stated that he will continue to draw revenue from State Farm
for five years after he retires from life insurance premiums on policies he sold. Husband
agreed that the lifestyle he and Wife enjoyed was upper middle class. Husband‟s gross
revenue for 2013 was around $360,000.
Husband earned a communications degree from Western Kentucky
University in 1973. Husband did post-graduate work at the Graduate School of Banking
at Louisiana State University. Husband suffered a severe medical problem when he
contracted aplastic anemia in 2008. Husband spent two years receiving blood
transfusions. Regarding Wife‟s allegations that he had committed adultery, Husband was
adamant that he had not done so.
Ted Austin Burkhalter, Jr. (“Burkhalter”), an attorney and certified public
accountant, testified for Husband. Wife stipulated that Burkhalter was an expert in
accounting. Husband had been Burkhalter‟s client since 2007. Burkhalter had been
asked to prepare a cash flow analysis for Husband from the period of January 1, 2014
through June 30, 2014. Burkhalter used the Quicken check register to develop the cash
flow analysis. The cash flow analysis reflected Husband‟s income and expenses over the
six-month period. Burkhalter testified that Husband‟s expenditures were exceeding his
income on a monthly basis. Income tax liability was one culprit. Effectively confronting
and eliminating the income tax liability would leave Husband with little more than
$1,000 per month in positive cash flow, considering his alimony and living expenses.
Burkhalter testified that Husband‟s agency had held fairly stable in the range of $345,000
to $364,000 in revenue but that there had been a dip in new clients. Continuing his
testimony, Burkhalter stated that there could be growth in Husband‟s business given the
money Husband was spending on increased advertising. Burkhalter testified also that
Husband‟s tax bracket would change from 32% to 35% following the divorce.
Burkhalter stated that Husband‟s received personal income was in the range of $145,000
to $160,000 per year. Burkhalter testified that Husband had a greater probability of
increasing his assets than Wife. Burkhalter stated further that the reported gross revenue
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in the six month period was $181,176.41. According to Burkhalter, Husband‟s net
income for personal use during the six month cash flow analysis period was $43,000.
In September 2014, the Trial Court entered its final decree of divorce. The
Trial Court found that Wife was unable to carry her burden of proof as to the adultery
allegation. The Trial Court instead declared the parties divorced. The Trial Court
effectuated a division of the assets such that Wife received approximately 56% to
Husband‟s 44%, around $650,000 in total assets divided. The Trial Court also divided an
Edward Jones account and assigned Husband a life insurance policy that had been in
Wife‟s name, items Wife asserts are in fact her separate property. The Trial Court
awarded Wife transitional alimony for forty months in the amount of $2,200 per month.
The Trial Court declined to award Wife her attorney‟s fees as alimony in solido.
Husband timely appealed to this Court.1
Discussion
Although not stated exactly as such, Wife raises the following issues on
appeal: 1) whether the Trial Court erred in setting the amount of transitional alimony for
Wife; 2) whether the Trial Court erred in finding that Wife failed to prove that Husband
committed adultery; 3) whether the Trial Court erred in failing to award Wife attorney‟s
fees; 4) whether the Trial Court erred in classifying the Edward Jones account as marital
property; 5) whether the Trial Court erred in divesting Wife of a State Farm Life
Insurance Policy and awarding it to Husband; and, 6) whether Wife should be awarded
her reasonable attorney‟s fees incurred on appeal.
Our review is de novo upon the record, accompanied by a presumption of
correctness of the findings of fact of the trial court, unless the preponderance of the
evidence is otherwise. Tenn. R. App. P. 13(d); Bogan v. Bogan, 60 S.W.3d 721, 727
(Tenn. 2001). A trial court‟s conclusions of law are subject to a de novo review with no
presumption of correctness. S. Constructors, Inc. v. Loudon County Bd. of Educ., 58
S.W.3d 706, 710 (Tenn. 2001).
Our Supreme Court has discussed awards of spousal support as follows:
This Court has frequently recognized that trial courts in Tennessee have
broad discretion to determine whether spousal support is needed and, if so,
to determine the nature, amount, and duration of the award. See
Gonsewski, 350 S.W.3d at 105; Bratton v. Bratton, 136 S.W.3d 595, 605
1
Husband later asked for and received dismissal of his appeal from this Court, but Wife proceeds now in
the posture of appellant and continues to raise her own issues on appeal.
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(Tenn. 2004); Burlew v. Burlew, 40 S.W.3d 465, 470 (Tenn. 2001);
Crabtree v. Crabtree, 16 S.W.3d 356, 360 (Tenn. 2000). Because a trial
court‟s “decision regarding spousal support is factually driven and involves
the careful balancing of many factors,” Gonsewski, 350 S.W.3d at 105
(footnote omitted), the role of an appellate court is not to second guess the
trial court or to substitute its judgment for that of the trial court, but to
determine whether the trial court abused its discretion in awarding, or
refusing to award, spousal support. Id. “An abuse of discretion occurs
when the trial court causes an injustice by applying an incorrect legal
standard, reaches an illogical result, resolves the case on a clearly erroneous
assessment of the evidence, or relies on reasoning that causes an injustice.”
Id. (citing Wright ex rel. Wright v. Wright, 337 S.W.3d 166, 176 (Tenn.
2011); Henderson v. SAIA, Inc., 318 S.W.3d 328, 335 (Tenn. 2010)). In
determining whether the trial court abused its discretion, an appellate court
“should presume that the [trial court‟s] decision is correct and should
review the evidence in the light most favorable to the decision.”
Gonsewski, 350 S.W.3d at 105-06; see also Tenn. R. App. P. 13(d)
(“[R]eview of findings of fact by the trial court in civil actions shall be de
novo upon the record of the trial court, accompanied by a presumption of
the correctness of the finding [s], unless the preponderance of the evidence
is otherwise.”).
***
Tennessee recognizes four distinct types of spousal support: (1)
alimony in futuro, (2) alimony in solido, (3) rehabilitative alimony, and (4)
transitional alimony. Tenn. Code Ann. § 36-5-121(d)(1) (2010 & Supp.
2012). Alimony in futuro, a form of long-term support, is appropriate when
the economically disadvantaged spouse cannot achieve self-sufficiency and
economic rehabilitation is not feasible. Gonsewski, 350 S.W.3d at 107.
Alimony in solido, another form of long-term support, is typically awarded
to adjust the distribution of the marital estate and, as such, is generally not
modifiable and does not terminate upon death or remarriage. Id. at 108.
By contrast, rehabilitative alimony is short-term support that enables a
disadvantaged spouse to obtain education or training and become self-
reliant following a divorce. Id.
Where economic rehabilitation is unnecessary, transitional alimony
may be awarded. Transitional alimony assists the disadvantaged spouse
with the “transition to the status of a single person.” Id. at 109 (internal
quotation marks omitted). Rehabilitative alimony “is designed to increase
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an economically disadvantaged spouse‟s capacity for self-sufficiency,”
whereas “transitional alimony is designed to aid a spouse who already
possesses the capacity for self-sufficiency but needs financial assistance in
adjusting to the economic consequences of establishing and maintaining a
household without the benefit of the other spouse‟s income.” Id.
Consequently, transitional alimony has been described as a form of short-
term “bridge-the-gap” support designed to “smooth the transition of a
spouse from married to single life.” Engesser v. Engesser, 42 So. 3d 249,
251 (Fla. Dist. Ct. App. 2010).
***
Tennessee statutes concerning spousal support reflect a legislative
preference favoring rehabilitative or transitional alimony rather than
alimony in futuro or in solido. See Tenn. Code Ann. § 36-5-121(d)(2)-(3);
Gonsewski, 350 S.W.3d at 109. Not even long-term support is a guarantee
that the recipient spouse will be able to maintain the same standard of
living enjoyed before the divorce because “two persons living separately
incur more expenses than two persons living together.” Gonsewski, 350
S.W.3d at 108 (quoting Kinard v. Kinard, 986 S.W.2d 220, 234 (Tenn. Ct.
App. 1998)). Although the parties‟ standard of living is a factor courts
must consider when making alimony determinations, see Tenn. Code Ann.
§ 36-5-121(i)(9), the economic reality is that the parties‟ post-divorce assets
and incomes often will not permit each spouse to maintain the same
standard of living after the divorce that the couple enjoyed during the
marriage. Gonsewski, 350 S.W.3d at 113. Decisions regarding the type,
length, and amount of alimony turn upon the unique facts of each case and
careful consideration of many factors, with two of the most important
factors being the disadvantaged spouse‟s need and the obligor spouse‟s
ability to pay. Id. at 109-10.
Mayfield v. Mayfield, 395 S.W.3d 108, 114-16 (Tenn. 2012).
With respect to the award of attorney‟s fees in divorce cases, our Supreme
Court has stated:
It is well-settled that an award of attorney‟s fees in a divorce case
constitutes alimony in solido. The decision whether to award attorney‟s
fees is within the sound discretion of the trial court. As with any alimony
award, in deciding whether to award attorney‟s fees as alimony in solido,
the trial court should consider the factors enumerated in Tennessee Code
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Annotated section 36-5-121(i). A spouse with adequate property and
income is not entitled to an award of alimony to pay attorney‟s fees and
expenses. Such awards are appropriate only when the spouse seeking them
lacks sufficient funds to pay his or her own legal expenses or the spouse
would be required to deplete his or her resources in order to pay them.
Thus, where the spouse seeking such an award has demonstrated that he or
she is financially unable to procure counsel, and where the other spouse has
the ability to pay, the court may properly grant an award of attorney‟s fees
as alimony.
Gonsewski v. Gonsewski, 350 S.W.3d 99, 113 (Tenn. 2011) (citations omitted).
We refer to a number of statutory factors in determining the nature and
amount of alimony:
(1) The relative earning capacity, obligations, needs, and financial
resources of each party, including income from pension, profit sharing or
retirement plans and all other sources;
(2) The relative education and training of each party, the ability and
opportunity of each party to secure such education and training, and the
necessity of a party to secure further education and training to improve such
party‟s earnings capacity to a reasonable level;
(3) The duration of the marriage;
(4) The age and mental condition of each party;
(5) The physical condition of each party, including, but not limited to,
physical disability or incapacity due to a chronic debilitating disease;
(6) The extent to which it would be undesirable for a party to seek
employment outside the home, because such party will be custodian of a
minor child of the marriage;
(7) The separate assets of each party, both real and personal, tangible and
intangible;
(8) The provisions made with regard to the marital property, as defined in §
36-4-121;
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(9) The standard of living of the parties established during the marriage;
(10) The extent to which each party has made such tangible and intangible
contributions to the marriage as monetary and homemaker contributions,
and tangible and intangible contributions by a party to the education,
training or increased earning power of the other party;
(11) The relative fault of the parties, in cases where the court, in its
discretion, deems it appropriate to do so; and
(12) Such other factors, including the tax consequences to each party, as are
necessary to consider the equities between the parties.
Tenn. Code Ann. § 36-5-121(i) (2014).
We first address whether the Trial Court erred in setting the amount of
transitional alimony for Wife. The Trial Court awarded Wife $2,200 per month for forty
months in transitional alimony. Wife does not contest either the type or duration of
alimony awarded by the Trial Court, but rather only the amount. Wife argues that the
statutory factors and the facts of this case justify an award to her of $6,000 per month in
transitional alimony. Husband acknowledges that he has a significantly larger income
than Wife, but argues that the Trial Court did not abuse its discretion in setting the
amount of alimony at $2,200 per month.
Wife, 58 at trial, has suffered from health problems including a neck
condition. In terms of economic disparity, Wife earns in the range of $40,000 to $50,000
at J & S Construction. Husband‟s gross income is $360,000. Husband‟s net pay of, at a
low end, $120,000 to $160,000, still is materially higher than Wife‟s income. Husband
and Wife enjoyed an upper middle class lifestyle during the marriage. Moreover, Wife‟s
portion of the marital estate, while significant, included many illiquid retirement assets.
There is a justified need to transition Wife, 58, until a time when she may retire and draw
upon her retirement resources. Husband, 64, still works and the record reflects that his
business is, if anything, likely to increase, especially given his investment in advertising.
Wife listed her monthly shortfall as $4,995.95, a sum Husband criticized as inflated and
excessive. Nevertheless, we agree with Wife that the amount set by the Trial Court is too
low given the applicable law and facts of this case. This Court does not tweak or second-
guess trial courts on alimony determinations but, given the marked economic disparity
going forward and the relatively affluent lifestyle previously enjoyed by Wife during the
marriage, the amount of alimony set by the Trial Court is an illogical result as it falls far
short of the range of acceptable figures. We, however, decline to adopt Wife‟s proposed
figure of $6,000 as that figure also is not supported by the evidence. We instead increase
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the amount of transitional alimony awarded Wife from $2,200 to $4,000 per month, an
amount appropriate under the evidence including the parties‟ relative economic
circumstances. We disturb neither the type nor duration of Wife‟s alimony.
We next address whether the Trial Court erred in finding that Wife failed to
prove that Husband committed adultery. Much testimony and evidence in this case
centered on Wife‟s allegations that Husband had committed adultery. Wife points to the
following, among other things, as circumstantial evidence of Husband‟s adultery: a bra
found in the parties‟ bedroom; certain sexual performance medication that went missing;
Husband‟s alleged going places without legitimate explanation; and a phone call to the
alleged paramour. Both Husband and the alleged paramour flatly denied the allegations,
and no definitive evidence as to adultery can be found in the record. The Trial Court
found that Wife failed to carry her burden as to the allegation of adultery. We find that
the evidence presented by Wife purporting to prove that Husband committed adultery is
inconclusive at best, and the evidence does not preponderate against the Trial Court‟s
finding as to this issue. We affirm the Trial Court on this issue.
We next address whether the Trial Court erred in failing to award Wife her
attorney‟s fees. Our analysis on this issue is shaped by many of the same facts
considered in the transitional alimony discussion above. Wife‟s attorney placed an
attorney‟s lien to be paid from the proceeds from the sale of the marital home. While
Husband technically is correct that Wife had the funds to pay her attorney‟s fees, Wife
needed to draw significantly upon one of her few liquid assets to do so. Husband,
meanwhile, as has been noted, is in a significantly better economic position relative to
Wife. This being the case, we find that Wife has the need, and, Husband the ability to
pay attorney‟s fees to Wife. We remand for the Trial Court to determine an award of
reasonable attorney‟s fees to Wife as alimony in solido.
We next address whether the Trial Court erred in classifying the Edward
Jones account as marital property. The Edward Jones account held $78,818, and
Husband was awarded nearly two-thirds of the amount. Wife contends that the funds
were her separate property, accumulated from child support payments paid by her
previous husband. However, Husband testified that the account also contained funds
from Husband‟s income. According to Husband: “The monies, you couldn‟t distinguish
and say, „that was child support money.‟ . . . It was commingled money, and it went into
a joint investment account the same way.” We find that the evidence does not
preponderate against the Trial Court‟s findings relevant to and its characterization and
division of the Edward Jones account.
We next address whether the Trial Court erred in divesting Wife of a State
Farm Life Insurance Policy and awarding it to Husband. Husband had created a life
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insurance policy insuring his life and in Wife‟s name insuring him in the amount of
$1,000,000. At trial, Husband stated that he wanted this policy back. The evidence was
that the insurance policy had no cash surrender value. The Trial Court assigned the
insurance policy to Husband. Wife argues that the insurance policy was her separate
property and she should be allowed to keep it to insure her interest in Husband‟s ongoing
obligations to her. Wife‟s desire to retain this policy is understandable, but she has cited
no law providing that she is absolutely entitled to such insurance security. This
especially is the case when one considers that Wife is slated to receive alimony for a
period of forty months only, after which it will terminate. It appears to this Court that the
Trial Court was attempting to extricate these parties from one another‟s financial affairs
as best as possible in the course of granting their divorce. We find that the Trial Court
committed no reversible error in awarding the life insurance policy at issue to Husband.
The final issue we address is whether Wife should be awarded her
reasonable attorney‟s fees incurred on appeal. We already have discussed Wife‟s need
for attorney‟s fees above. Similarly, Wife should not be forced to further dissipate her
assets to pay her attorney‟s fees on appeal. In light of all relevant circumstances, and in
the exercise of our discretion, we hold that Wife should be awarded her reasonable
attorney‟s fees incurred on appeal. We remand for the Trial Court to determine an award
to Wife of reasonable attorney‟s fees incurred by her on appeal.
In summary, we increase Wife‟s transitional alimony from $2,200 to
$4,000 per month, while not disturbing either the type or the duration of the alimony. We
remand for the Trial Court to determine and award reasonable attorney‟s fees to Wife as
alimony in solido, as well as Wife‟s attorney‟s fees incurred on appeal. Otherwise, we
affirm the judgment of the Trial Court. The judgment of the Trial Court is affirmed as
modified.
Conclusion
The judgment of the Trial Court is affirmed as modified, and this cause is
remanded to the Trial Court for collection of the costs below, and for the Trial Court to
determine and award reasonable attorney‟s fees to Wife as alimony in solido, as well as
Wife‟s attorney‟s fees incurred on appeal. The costs on appeal are assessed against the
Appellee, Robert Folger.
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D. MICHAEL SWINEY, CHIEF JUDGE
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