Neil Price v. Toni Price ( 2000 )

NEIL PRICE, )
)
Plaintiff/Appellant, )
) Appeal No.
v. ) M1998-00840-COA-R3-CV
)
TONI PRICE, )
) Davidson Circuit
Defendant/Appellee. ) No. 94D-3333
COURT OF APPEALS OF TENNESSEE
APPEAL FROM THE CIRCUIT COURT FOR DAVIDSON COUNTY
AT NASHVILLE, TENNESSEE
THE HONORABLE MARIETTA SHIPLEY, JUDGE
JAMES G. MARTIN, III
GREGORY D. SMITH
Farris, Warfield & Kanaday
424 Church Street, Suite 1900
Nashville, Tennessee 37219
ATTORNEY FOR PLAINTIFF/APPELLANT
ROBERT L. JACKSON
STANLEY A. KWELLER
Jackson, Kweller, McKinney & Badger
One Washington Square, Suite 103
214 Second Avenue North
Nashville, Tennessee 37201
ATTORNEYS FOR DEFENDANT/APPELLEE
AFFIRMED IN PART
REVERSED IN PART
AND REMANDED
WILLIAM B. CAIN, JUDGE
OPINION
This case involves the dissolution of a seventeen-year long marriage.
The parties have raised on appeal issues involving spousal support, child support,
their partial marital dissolution agreement and attorney fees. Upon a review of
the record and the relevant law, we find that the decision of the trial court should
be reversed in part and affirmed in part.
I. Facts
Dr. Neil Price (“the Husband”) and Toni Naugle Price (“the Wife”)
were married in 1981 at which time the Wife had a college degree and the
Husband was within weeks of completing medical school. The parties made
several moves while the Husband completed his medical education as a specialist
in gastroenterology. In July 1987, the parties moved to Nashville where the
Husband accepted a job with the Frist-Scoville Medical Group earning $125,000
per year. In January of 1988, the Wife took a job in advertising at $40,000 per
year. Later in 1988, the parties purchased a home on Golf Club Lane for
$500,000. A few months after purchasing this house, the Wife quit her job. She
found another job at $60,000 per year in June of 1989 but left this job after about
three months.
In December of 1990, the parties' one child was born. Before the birth
of this child, a daughter named Noel, the Wife had decided to go to law school.
She began attending the University of Tennessee in Knoxville in the fall of 1992
when Noel was twenty months old. During her first year of law school, the
Husband was the primary care giver for Noel during the week and the Wife
returned to Nashville to spend the weekends with the Husband and Noel.
In the spring of 1993, while the Wife was in her second semester of law
school, the Husband engaged in a brief romantic relationship with a woman who
was a friend of the parties and whose mother babysat regularly for the child.
Though the Wife did not learn of the affair until 1995 through the Husband’s
answers to interrogatories, the parties experienced marital troubles much earlier.
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The Wife did not return to law school for the 1993-1994 academic year, but
instead remained in Nashville. During this time, the parties spent seven or eight
months in marital counseling. In August of 1994, the Wife, along with the
daughter, moved back to Knoxville to resume her law school education. The
Husband bought a condo in Knoxville for the Wife and child to live in while the
Wife attended law school. The parties have not lived together since the summer
of 1994.
The Husband testified that other than the purchase of their home for
$500,000, the evidence established that the parties lived moderately. They had
little furniture, they drove medium-priced vehicles, they took annual driving trips
to the beach and they did not belong to clubs. The Husband testified that the
Wife began to spend more money after he informed her that he was unhappy in
the marriage. He claims that in the fall of 1994, she spent $18,000 to furnish the
Knoxville condominium including an $11,000 bedroom suite for their young
daughter.
The Husband filed for divorce in September of 1994 at which time the
parties entered a pendente lite order which required the Husband to continue to
pay all of the Wife’s expenses including the monthly mortgage payment on the
Knoxville condo of $1,817, the costs of tuition, fees and books for the Wife's law
school, $5,700 per month for the child’s and the Wife’s support, $5,000 to be
applied to the Wife’s attorney fees. In addition, the Husband maintained the
monthly payments and utilities on the Golf Club Lane residence until it was sold.
At the 1998 trial, the Husband stated that he had been paying between $7,500
and $8,000 per month pursuant to the pendente lite order for more than three
years, even though his present take-home pay had declined to $11,000 per
month. Except for $5,000 that the Wife earned through temporary employment
in the fall of 1997, the Husband provided all of her support before the final
divorce. He completely financed the Wife’s living and school expenses while
she obtained her law degree.
The trial was heard in two segments: the first segment in 1996 and the
second in 1998. During the 1996 hearing, after a full day of trial was held but
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before the case was reconvened to conclude the trial, the parties entered into a
Reconciliation Agreement by Order entered September 16, 1996. However, by
order entered in June of 1997, the Reconciliation Agreement was set aside and
the case was reinstated on the docket for trial. This second and final segment of
the trial was heard in March of 1998.
Prior to the 1996 trial, the parties had entered into a Partial Marital
Dissolution Agreement (PMDA). This agreement purported to settle all issues
involving child custody, visitation, the division of marital property and the
responsibility for the payment of debts other than attorney fees. The PMDA
specifically included a provision that “each party shall be responsible for paying
debts incurred by that party except for attorneys fees and expenses that may be
awarded by the court.” Following the 1996 Order of Reconciliation, the parties
continued to recognize the PMDA as binding. For example, all of the marital
assets, including the proceeds from the sale of the Golf Club Lane residence,
were divided pursuant to the PMDA. The 1998 Final Decree held that the
PMDA was approved by the court and that each provision of it was made an
order of the court except as modified by the parenting plan.
At the time of the 1998 trial, the Husband was a partner in the Frist-
Scoville partnership and a shareholder of the Nashville Medical Group. His
gross salary was approximately $18,244.32 per month plus a $1,000 per month
stipend for serving on his company’s executive committee for a monthly total of
$19,244.32. The parties stipulated that during January and February of 1998, the
Husband had received a gross monthly salary of $19,234.46 and that 21% of the
net monthly income from that monthly salary was $2,748. The evidence was that
the Husband’s income from salary had been much higher in 1994 and 1995
during which he made $35,798 per month and in 1995 and 1996 during which
he made $27,376 per month. The proof showed that his salary had declined
based upon matters out of his control. For example, his firm had hired an
additional gastroenterologist, overhead had increased, production by his group
had decreased and he was working fewer hours so his schedule could
accommodate visitation with an out-of-town child. The president of the
Nashville Medical Group Corporation, Dr. Bolds, testified that the Husband’s
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salary was likely to continue to decrease. Dr. Bolds stated that the Husband had
no direct participation in setting his salary.
Dr. Bolds testified with regard to recruitment bonuses that were given
to doctors in the Nashville Medical Group when the group received new recruits.
He said that Dr. Price had received $14,261 in recruitment bonuses in 1996 and
$18,352 in 1997 but that he should not expect any such bonus in 1998. The
contract had been renegotiated such that the amount of recruitment bonus per
new physician had been decreased. The Husband could expect only $3,000 per
recruit in the future. In addition, the Husband had received $8,500 in 1996 and
$1,000 in 1997 as distributions from the Frist-Scoville partnership. At the time
of trial, the undisputed testimony was that the partnership had shown no profit
in 1998 and was currently losing money such that distributions in 1998 were
unlikely. The Husband testified that another potential source of income for him
was from the Independent Practice Association (I.P.A.) which had paid him
$1,800 in 1997 and nothing in 1998. Other than his salary, potential recruitment
bonuses, and distributions from Frist-Scoville and the I.P.A. should they be
profitable, the Husband testified that his only other possible source of income
was from speaking engagements which he had done only a couple of times.
According to Dr. Bolds, much of the Husband’s income in 1996 and
1997 had come from goodwill payments arising from the sale of the Frist-
Scoville Medical Group to Baptist Hospital. Dr. Bolds testified that the Husband
had received $32,000 in 1996 and $39,000 in 1997 due to these payments and
that he would receive no more payments from the goodwill sale. All of the
goodwill payments, including the 1997 payment, were taken into account when
the parties divided their assets prior to the 1996 trial pursuant to the PMDA. In
addition, the Husband had received $60,000 in 1995 after a reconciliation of the
Frist-Scoville capital accounts and this money was also taken into account in the
PMDA’s asset division.
At the March 1998 trial, the Wife submitted an Income and Expense
statement to the court showing regular monthly expenses of $7,575, which
included $2,623 in mortgage payments, $1,652 in hotel payments and $2,500 in
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legal expenses. The Wife acknowledged that she had spent more than $11,000
for cosmetic surgery in the fall of 1997. When the Wife moved with the daughter
to Texas in August of 1997, she moved into a Marriott Hotel where she
continued to reside as of the trial date at a cost of $1,652 per month. As of the
March 1998 trial date, the Wife had not taken the bar exam and was not yet
employed. She testified about a potential job with an insurance company which
had also been a potential job a year and a half earlier at the 1996 trial. Her
testimony revealed that she had made only minimal efforts to secure a job as well
to take the bar exam. In addition to the monthly support of between $7,500 and
$8,000 per month that the Wife had been receiving pursuant to the pendente lite
order, she had received $208,000 in marital assets by the time of trial.
II. Disposition by the Trial Court
Following the 1998 trial, the trial court entered a Memo Opinion and
a Final Order in which it granted the Wife a divorce on the ground of
inappropriate marital conduct. The court approved and adopted the PMDA in all
respects except as modified by the Parenting Plan and a provision regarding the
preparation and date of a Qualified Domestic Order.
Finding, that the Husband’s income at the time of trial was $18,234 per
month plus a $1,000 per month stipend for serving on the executive committee,
the court ordered the Husband to pay regular child support of $2,800. Of this
amount, $2,100 was to paid to the Wife directly and $700 was to be paid into an
educational trust. The court specifically ordered that any remainder of the
educational trust be paid over to the daughter when she turns twenty-four years
of age. Further, the court ordered that in the event that the Husband receives any
bonus, 21% of the net proceeds should be paid into the educational trust fund
until the fund has received $10,000 in 1998 and 1999 and $13,800 in subsequent
years. Any monies from bonuses left over after funding the educational trust will
be paid to the Wife for regular child support at 21% of the net rate. The court
stated that if the Husband’s income increases, the initial amounts over the $2,800
will first be paid into the educational trust until the trust receives the amounts
indicated above. Any monies over that amount shall be paid to the Wife directly
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as regular child support. Finally, the court held that if child support is to exceed
$3,000 per month, the Husband may request the court to again determine the
child support payable to the Wife and into the trust.
With regard to alimony, the court ordered that the Husband should pay
rehabilitative alimony until June 1, 2003 at the rate of $4,500 per month through
January 5, 1999 and at the rate of $3,500 per month from January 5, 1999 to June
5, 2003. The court also ordered the Husband to pay periodic alimony from June
5, 2003 until June 5, 2008 at the rate of $2,000 per month. Finally, the court
ordered the Husband to continue to maintain major medical hospitalization
insurance for the Wife. In setting alimony, the court decided that based on her
March 1998 Income and Expense Statement, the Wife's "rock bottom" expenses
were $6,633 per month.
Furthermore, the court ordered the Husband to pay $12,000 toward the
$23,000 in debts shown by the Wife and to pay Noel's tuition for the 1997-98
academic year. The court ordered the preparation and entry of a Qualified
Domestic Relations Order which would divide retirement benefits as of January
1, 1998. Lastly, the court ordered the parties to file a joint tax return for 1997
and to divide any refund.
III. Spousal Support Award
The Husband challenges the trial court’s award of alimony contending
that it is excessive and unnecessary. In its final order, the court ordered that the
Husband pay rehabilitative alimony at the rate of $4,500 per month from June 5,
1998 to January 5, 1999 and, at the rate of $3,500 per month from January 5,
1999 until June 5, 2003. In addition, the court ordered the Husband to pay
periodic alimony from June 5, 2003 until June 5, 2008 at the rate of $2,000 per
month. Thus, the court’s award amounts to ten years of support totaling
approximately $337,000. Specifically, the Husband claims that the court erred
by awarding “closing in” alimony in the absence of a finding that the Wife is not
able to be economically rehabilitated and by wrongly equating economic
rehabilitation with economic parity. Also, the Husband notes that the court
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awarded the Wife more than she needs even by her own assessment of her need.
Trial courts are given broad discretion in determining the nature,
amount and duration of a spousal support award. Wilson v. Moore, 929 S.W.2d
367, 375 (Tenn. Ct. App. 1996). These decisions are factually driven and are
guided by the statutory factors set out in Tenn. Code Ann. § 36-5-101(d)(1). See
Brown v. Brown, 913 S.W.2d 163, 169 (Tenn. Ct. App. 1994). Accordingly, the
appellate courts are disinclined to alter alimony awards unless they are not
supported by the evidence or are contrary to the public policies reflected in the
applicable statutes. Id.; see also Young v. Young, 971 S.W.2d 386, 390 (Tenn. Ct.
App. 1997); Gilliam v. Gilliam, 776 S.W.2d 81, 86 (Tenn. Ct. App.1988).
The legislative preference for temporary, rehabilitative support over
long term support is embodied in § 36-5-101(d)(1)of the Tennessee Code:
It is the intent of the general assembly that a spouse who is
economically disadvantaged, relative to the other spouse, be
rehabilitated whenever possible by the granting of an order
for payment of rehabilitative, temporary support and
maintenance. Where there is such relative economic
disadvantage and rehabilitation is not feasible in
consideration of all relevant factors, including those set out
in this subsection, then the court may grant an order for
payment of support and maintenance on a long-term basis or
until the death or remarriage of the recipient.
As this court has stated, “[t]he purpose of rehabilitative support is to enable the
disadvantaged spouse to acquire additional job skills, education, or training that
will enable him or her to be more self-sufficient. . . . [while t]he purpose of
long-term spousal support . . . is to provide support to a disadvantaged spouse
who is unable to achieve some degree of self-sufficiency.” Anderton v.
Anderton, 988 S.W.2d 675, 682 (Tenn. Ct. App. 1998); Kinard v. Kinard, 986
S.W.2d 220, 234 (Tenn. Ct. App. 1998).
The supreme court has articulated the policy that though “alimony is
not intended to provide a former spouse with relative financial ease, . . . alimony
should be awarded in such a way that the spouses approach equity.” Aaron v.
Aaron, 909 S.W.2d 408, 411 (Tenn. 1995). However, this court has noted that
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“[w]hile divorced couples often lack sufficient income or assets to enable both
of them to retain their pre-divorce standard of living, . . . the obligor spouse may
be able to provide some "closing in money" to enable the disadvantaged spouse
to approach his or her former financial condition.” Anderton, 988 S.W.2d at 682
(citing Aaron, 909 S.W.2d at 411); see also Kinard, 986 S.W.2d at 234-35.
When determining an appropriate amount of alimony to award a party,
the court shall consider all relevant factors including:
(A) 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;
(B) 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
earning capacity to a reasonable level;
(C) The duration of the marriage;
(D) The age and mental condition of each party;
(E) The physical condition of each party, including, but not
limited to, physical disability or incapacity due to a chronic
debilitating disease;
(F) 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;
(G) The separate assets of each party, both real and personal,
tangible and intangible;
(H) The provisions made with regard to the marital property
as defined in § 36-4-121;
(I) The standard of living of the parties established during the
marriage;
(J) 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;
(K) The relative fault of the parties in cases where the court,
in its discretion, deems it appropriate to do so; and
(L) Such other factors, including the tax consequences to
each party, as are necessary to consider the equities between
the parties.
Tenn. Code Ann. § 36-5-101(d) (1996).
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The courts have consistently held that the two most important
considerations are the need of one spouse and the ability of the other spouse to
meet that need. Wright v. Quillen, 909 S.W.2d 804, 812 (Tenn. Ct. App. 1995)
(citing Fisher v. Fisher, 648 S.W.2d 244 (Tenn.1983)). Despite the fact that
fault is a factor in the determination of an alimony award, see Tenn. Code Ann.
§ 36-5-101(d)(1)(K), alimony decisions are not intended to be punitive. Lindsey
v. Lindsey, 976 S.W.2d 175, 179 (Tenn. Ct. App. 1997). At the same time, the
court has articulated the policy that “[a] wife whose marriage has been shattered
by her husband's misconduct should not be left in a financial condition inferior
to her economic situation prior to the parties' divorce.” Young v. Young, 971
S.W.2d 386, 391 (Tenn. Ct. App. 1997) (citing Aaron, 909 S.W.2d at 410-11).
The trial court awarded spousal support for a ten-year period evincing
a determination that rehabilitation is feasible for the Wife. We agree that the
evidence supports a conclusion that the Wife is capable of self support and thus
find that an award of temporary, rehabilitative support is appropriate under the
circumstances of this case. The Wife is currently forty-five years old. She has
a law degree from the University of Tennessee and was planning to take the
Texas bar exam at the time of the appeal. She has some brief work experience
in the advertising field. Though the Wife had no job at the time of the 1998 trial,
her own testimony revealed that she had made very little effort to find
employment. With proper diligence, the Wife should be able to secure adequate
employment to support herself.
A review of the Husband’s ability to pay and the Wife’s need support
a conclusion that this is an appropriate case for an amount of alimony which
assists the Wife in closing in on her former lifestyle for a time. As will be
discussed later, the Husband’s gross income from salary at the time of trial was
$19,234 per month. The Husband has not disputed that he is currently able to
pay support as awarded. However, he specifically has taken issue with the
amount of alimony awarded claiming it exceeds the Wife’s calculated needs.
The Wife presented several statements of her expenses which, while
similar, were not identical. The trial court relied on her March 1998 Expense
10
Statement which showed that she has $7,853 in monthly expenses. In its
Memorandum Opinion, the court found that the Wife’s rock bottom expenses
were $6,633. The court arrived at this figure by calculating about $2,500 to
$3,000 per month for housing expenses, adding $100 for utilities and reducing
the Wife’s calculated expenses for insurance, clothing, laundry, cleaning
services, beauty shop services, maid service, newspapers and periodicals, pets
and miscellaneous. Though the trial court did not specify how much it subtracted
for each of these expenses, we agree with its conclusion that certain of the Wife’s
calculated expenses were excessive. For example, among the Wife’s projected
needs were $500 per month for her clothes, $200 per month for beauty shop
expenses and $280 per month for maid services. We therefore hold that the court
did not err in finding that $6,633 was the more appropriate sum of the Wife’s
expenses in order for her to maintain the standard of living established during the
marriage.
The court found that the Wife’s immediate earning potential was
$30,000 per year for 1998 and $55,000 per year for the following years. The
lower figure, $30,000 per year, equates to $2,500 per month and the higher,
$55,000, equates to $4,583 per month in income for the Wife. The Husband
argued that even the lowest salary, $2,500 per month, once added to the $2,550
per month that the Wife was receiving for child support, amounted to an income
of $5,050 which is only $1,583 per month less than her $6633 need. However,
the problem with the Husband’s argument is that he considers child support as
income when the $6,633 expense figure does not include the child’s expenses.
The child support is not at issue in this appeal and our review of alimony should
be based only upon the Wife’s expenses and the Wife’s income. Thus, the actual
shortfall here is either $4,133 ($2,500 in job income subtracted from $6,633 in
expenses) or $2,050 ($4,583 in job income subtracted from $6,633).
At present, the Wife received $4,500 per month for six months until
January of 1999 at which point she began receiving $3,500 per month, the
amount she currently receives under the trial court’s order. We uphold the
court’s award of $4,500 per month for six months and $3,500 per month up until
this point finding this an appropriate amount of alimony to meet the Wife’s needs
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and aid her “close-in” on her former lifestyle as she has entered the work force.
However, by now, the Wife has been out of law school for two and a half years
and should be able to receive an increased salary thus decreasing the amount of
alimony she will need. Therefore, at the time this opinion is filed, alimony
should be modified to $2,000 per month and shall be paid at that rate through
December of 2008.
As the trial court found, the Wife “will never approach [the Husband’s]
earning capacity, barring some entrepreneurial expertise.” An award of $2,000
per month in alimony for this duration will enable the Wife to approach financial
equity with the Husband during the time that she has a minor child at home. Our
conclusion that the Wife is entitled this duration of alimony is consistent with the
statutory factors including not only the parties’ differing earning capacities and
levels of work experience but also the seventeen-year duration of this marriage
and the fact that the Husband’s fault was grounds for the divorce.
IV. Child Support
Finding that the Husband’s income at the time of trial was $18,234 per
month plus a $1,000 per month stipend for serving on the executive committee,
the court ordered the Husband to pay regular child support of $2,800. Of this
amount, $2,100 was to be paid to the Wife directly and $700 was to be paid into
an educational trust. The court specifically ordered that any remainder of the
educational trust be paid over to the daughter when she turns twenty-four years
of age. Further, the court ordered that in the event that the Husband receives any
bonus, 21% of the net proceeds should be paid into the educational trust fund
until the fund has taken in $10,000 in 1998 and 1999 and $13,800 in subsequent
years. Any monies from bonuses left over after funding the educational trust will
be paid to the Wife for regular child support at 21% of the net rate. The court
stated that if the Husband’s income increases, the initial amounts over the $2,800
will first be paid into the educational trust until the trust receives the amounts
indicated above. The court directed that any fund over that amount shall be paid
to the Wife directly as regular child support. Finally, the court held that if child
support exceeds $3,000 per month, the Husband may request the court to again
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determine the child support payable to the Wife and into the trust.
A.
The Husband does not challenge the $2,800 amount of child support
awarded by the court. However, he insists that the court erred in ordering child
support to be paid based on a percentage of his future bonuses. The Wife
concedes and we agree that the law is clearly in the Husband’s favor on this
issue.
In Lovan v. Lovan, No. 01A01-9607-CV-00317, 1997 WL 15223(Tenn. Ct. App. 1997), this court first addressed the issue of whether a trial court
could base its child support award upon a percentage of the husband's future
income. In addition to setting child support at $1,783 per month, the trial court
had ordered the husband to pay a sum equal to 32% of any income received from
his business interests in excess of $96,000 per year. The court vacated the lower
court’s child support award holding:
We believe that the trial court exceeded its authority in
ordering an automatic adjustment in child support based
upon a percentage of the husband's future income as
determined by his income tax return. While the child support
guidelines create a rebuttable presumption as to the correct
amount of child support, based upon the obligor's income,
Tenn.Code Ann. § 36-5-101(a)(2)(A) only authorizes the
courts to provide for the future support of a spouse or of the
children "... by fixing some definite amount or amounts to be
paid in monthly, semimonthly or weekly installments, or
otherwise, as circumstances may warrant...." (emphasis
added).
Such a definite obligation provides the dependent
children with a predictable amount of support, and enables
the obligor to shoulder a known burden. If the obligor's
income should increase or decrease substantially, then either
party may apply to the court for a modification of the child
support obligation. In view of the existence of a
well-established mechanism for adjustment of child support,
the court's action, although well-intentioned, amounts to an
extension of its authority beyond the mandate of the
legislature.
Lovan, 1997 WL 15223 at *4-5; see also Robertson v. Robertson, No.
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03A01-9711-CV-00511, 1998 WL 783339 (Tenn. Ct. App. 1998).
In Smith v. Smith, No. 01A01-9705-CH00216, 1997 WL 672646 at *2
(Tenn. Ct. App. 1997), the court cited Lovan to overturn a lower court’s child
support award which was calculated, in part, based on "32% of any future bonus
or commission" of the obligor parent. This court held that the lower court should
have averaged the commission and bonus amounts in with the obligor parent’s
salary in order to establish a definite amount of child support. The Wife now
relies upon this holding from Smith in asserting that the Husband’s monthly
income for the years before trial should be averaged in order to determine the
appropriate amount of child support.
There is no doubt that an average of the Husband’s varying amounts of
monthly salary from the two years before trial would yield a higher number upon
which to base the award of child support. However, the evidence was not that
the Husband had fluctuating income levels. Rather, it was that he had
experienced a decrease in income due to several legitimate factors. He was
receiving a smaller salary because, among other reasons, his group had hired an
additional gastroenterologist, the overhead for his practice was higher and the
production by his group had decreased. The Frist-Scoville Partnership and the
Independent Practice Association were not making distributions as they were not
currently turning a profit. The Husband could expect at most $6,000 in
recruitment bonuses for the next year. The trial court based its award on the
Husband’s gross salary at the time of trial and we find that the evidence supports
a conclusion that the trial court’s $2,800 per month child support award was
based upon an accurate determination of the Husband’s income as of March
1998. We therefore affirm this child support award.
B.
The next issue involves the disposition of any trust assets which might
remain after the child receives an education. The court ordered that the child be
the recipient of any funds in the trust at the time she turns twenty four years of
age. The Husband argues that the court’s order violates the purpose of child
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support which is to provide for the support and maintenance during minority.
See Garey v. Garey, 482 S.W.2d 133 (Tenn.1972). We agree. Addressing this
same issue, this court in Lee v. Askew, No. 02A01-9805-JV-00133, 1999 WL
142389 (Tenn. Ct. App. 1999), held that the remainder of funds from an
educational trust belongs to the one who funded the trust. The court reasoned
that “the Court has no authority to advance a perceived inheritance to a child or
confiscate a parent's assets on behalf of a child.” Id. at *2.
We thus modify the court’s order such that any remainder of the trust
be turned over to the Husband who had funded the trust. Thus, in the event that
any funds remain in the trust upon the child’s twenty-fourth birthday, they shall
be paid to the Husband. In so holding, we note that in the PMDA which was
adopted in the final decree, the Husband has agreed to be responsible for the
costs of tuition , fees and books not covered by an educational fund for the
parties’ daughter to attend four years of college.
V. The Partial Marital Dissolution Agreement
The parties entered into the PMDA on July 2, 1996, immediately prior
to the 1996 trial which began on the same day. This agreement addressed issues
involving child custody, visitation, the division of marital property and the
responsibility for the payment of debts other than attorney fees. Among its other
provisions, the PMDA provided that “each party shall be responsible for paying
debts incurred by that party except for attorneys fees and expenses that may be
awarded by the court.” The 1996 trial was cut short due to the parties’
resolution to reconcile and an order of reconciliation was entered on September
of 1996. However, the parties were obviously unsuccessful and they returned to
trial in March of 1998 at the end of which the 1996 PMDA was approved by the
court in the final decree of divorce. On appeal, the Husband claims that certain
aspects of the trial court’s final ruling disregard the parties’ agreement in the
PMDA.
Specifically, the Husband challenges that part of the final order
requiring the Husband to pay $12,000 of the Wife’s $23,000 in debts incurred
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after the execution of the PMDA and that part requiring the Husband to pay
private school tuition for the parties’ daughter for the 1997-98 academic year.
The Husband also takes issue with the requirement that the parties file a joint
1997 federal income tax return. The Husband argues that all three of these
provisions in the final order contradict the agreement in the PMDA that each
party should be responsible for his or her own debts. In addition, the Husband
contends that the final order, by providing that the account be divided as of
January 1, 1998, ignores the PMDA’s provision that the Husband’s retirement
account be divided as of June of 1996. Finally, the Husband disagrees with the
final order’s provision that he maintain major medical insurance for the Wife
until she is offered equivalent insurance at her place of employment and that he
be responsible for the cost of the premiums in excess of $250 per month. He
claims that this conflicts with the PMDA under which he was required to
maintain insurance on the Wife no later than June 1, 1998.
The problem with the Husband’s position that the PMDA governs the
preceding matters is that the parties entered an unanticipated two-year period of
reconciliation following the execution of the PMDA. We find only one
Tennessee case addressing this issue of the effect of reconciliation upon a marital
dissolution agreement. See Martin v. Martin, 733 S.W.2d 883 (Tenn. Ct. App.
1987). In Martin, the parties had entered an oral MDA and fully executed the
terms of the MDA in contemplation of an imminent divorce. However, once the
division of the marital property had been made, the parties continued to live
together for another five years before obtaining a divorce. This court held that
“the evidence is that the agreement did not purport to conclude the marital rights
in the event there was a reconciliation. The agreement purported only to divide
the property if there was a divorce at that time.” Id. at 885. Therefore, the trial
court was correct in equitably dividing the marital property that had been
acquired by the parties subsequent to the MDA but before the divorce.
The rationale of Martin v. Martin is applicable to the issue in the case
at bar. At the time that the parties entered into the PMDA, they anticipated that
trial and divorce were impending. However, almost two years passed during
which the parties attempted to salvage their marriage but at the end of which the
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parties finally obtained a divorce. The parties intended that the PMDA resolve
their marital rights only under the circumstance of imminent divorce. We
therefore uphold the trial court’s award with regard to debt incurred and the
retirement benefits accrued after July 2, 1996. We also affirm the court’s order
relating to payment of the insurance premiums for the Wife and the 1997-98
school tuition for Noel. However with regard to the portions of the PMDA
already executed, we hold that the agreement stands. See e.g. Peterson v.
Peterson, 583 S.W.2d 707, 709-11 (Ky. Ct. App. 1979); Case v. Case, 325
S.E.2d 661, 663-64 (N.C. Ct. App. 1985); Kaminsky v. Kaminsky, 364 S.E.2d
799, 801-02 (W. Va. 1987) (holding the majority view that the reconciliation of
divorcing parties abrogates their settlement agreements as to executory
provisions of the agreement only). See also Crawford v. Crawford, 392 S.E.2d
675, 679 (S.C. Ct. App. 1990) (holding that the public policy of the state
recognizes that reconciliation of parties to a divorce nullifies the provisions of
a separation agreement in which they have agreed not to be liable for one
another).
Finally, we note that the trial court adopted the PMDA stating that
“every provision of said [PMDA] shall be, and is hereby, made an Order of the
Court except as modified by the Parenting Plan attached hereto which
incorporates subsequent Orders regarding visitation and the provision contained
in this Order regarding the preparation of a Qualified Domestic Relations Order.”
It is clear that certain provisions in the Final Decree are not in accord with the
PMDA. To the extent that this is true, we find that the PMDA is further
modified by the final judgment to rectify these inconsistencies. The judgment
of the trial court in this respect is affirmed.
VI. Attorney Fees
In the final order, the trial court awarded the Wife $5,000 in attorney
fees stating that this amount “would be approximately one-half of a high, but
reasonable attorney’s fee.” On appeal, the Wife requests that this court award
her $43,739 in attorney fees to keep her from dissipating her assets. Pursuant to
the authority of Tennessee Code Annotated § 36-5-103(c), courts have wide
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discretion in awarding attorney fees, and this court will not interfere in the
exercise of that discretion in the absence of a clear showing of abuse. See
Salisbury v. Salisbury, 657 S.W.2d 761, 770 (Tenn. Ct. App. 1983). The trial
court's award with regard to attorney fees need only be just and equitable under
the circumstances. Sherrod v. Wix, 849 S.W.2d 780, 785 (Tenn. Ct. App. 1992).
In its Memo Opinion, the trial court clearly communicated its
exasperation with what it considered to be excessive fees. After stating that it
had “thoroughly reviewed the attorney’s fees affidavits of” the Wife’s attorney,
the court pointed out certain “glaring excesses.” The court concluded that while
a party could choose to spend its own money in this way, the court would not
require the other party to pay for such excessive fees. Under the circumstances
of this case, we do not find that the trial court abused its discretion in awarding
the Wife only $5,000 toward her attorney fees.
In addition, we find that the Wife is not entitled to attorney fees
incurred in the appeal of this case. This court has the authority to award attorney
fees for legal services rendered on appeal. Seton v. Seton, 516 S.W.2d 91(Tenn.1974). This appeal has resulted in a reversal of the trial court’s holding
with regard to several issues. To this extent the Husband has prevailed.
Therefore, we find that each party shall be responsible for his or her own
attorney fees on appeal.
VII. Conclusion
The trial court’s decision is affirmed in part and reversed in part. With
regard to spousal support, the decision of the trial court is modified such that
from the time this opinion is filed through December of 2008, alimony shall be
paid to the Wife at the rate of $2,000 per month. With regard to child support,
we affirm the court’s order that the Husband pay $2,800 per month, $2,100 to the
Wife and $700 to an educational trust. However, we reverse the order that the
Husband pay a percentage of his future earnings finding this is contrary to
statutory law. We find that the final decree does not violate the PMDA but
rather supplements it as that agreement purported to divide the parties’ property
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and assign their financial responsibilities only in contemplation of imminent
divorce. Finally, we affirm the trial court’s award of only $5,000 to the Wife in
attorney fees and we deny the Wife her request for attorney fees on appeal. The
costs of this appeal shall be divided equally between the parties.
_______________________________
WILLIAM B. CAIN, JUDGE
CONCUR:
_______________________________________
WILLIAM C. KOCH, JR., JUDGE
_______________________________________
PATRICIA J. COTTRELL, JUDGE
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