Deborah Coates v. Thomas Coates ( 2002 )

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
Assigned on Briefs May 31, 2002
DEBORAH A. COATES v. THOMAS A. COATES
Appeal from the Chancery Court for Maury County
No. 99-258 Stella A. Hargrove, Chancellor
No. M2001-01928-COA-R3-CV - Filed November 15, 2002
This appeal arose after the trial court rejected the father’s petition to reduce child support. Because
the father showed a substantial variance between the amount of child support he was ordered to pay
and the amount of child support called for under the guidelines, we reverse the trial court’s order
denying modification prospectively. Because the court originally awarded support from the father’s
property, we affirm the denial of modification of that portion of the child support award.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed in Part, Reversed in Part and Remanded
PATRICIA J. COTTRELL, J., delivered the opinion of the court, in which BEN H. CANTRELL , P.J., M.S.,
and WILLIAM C. KOCH , JR., J., joined.
Thomas A. Coates, Lexington, Kentucky, Pro Se.
Delilah Ann Speed, Columbia, Tennessee, for the appellee, Deborah A. Coates.
OPINION
The parties were divorced by order entered June 26, 2000, and custody of their two children,
who were 13 and 7 at that time, was awarded to Deborah Coates (“Mother”). At the time of the
divorce, Thomas Coates (“Father”) was incarcerated in federal prison in Kentucky for drug
trafficking. The court later distributed the parties’ assets and set child support. In that order, the
court found Mother earned $24,000 per year as a cosmetologist and that she was also a substitute
teacher. The court also found that prior to Father’s incarceration he was a professional gambler, that
he had 182 months remaining on his 200 month sentence, and his monthly wages in prison were
$5.00. Father had reported earnings of $51,000 to $80,000 during a three-year period prior to his
incarceration. The court found it was equitable to calculate child support based upon a determination
of Father’s potential income “as evidenced by previous work experience, i.e., gambling, and finds
that annual gross receipt of $80,000 is the proper calculation.” Using the child support guidelines,
the court set Father’s child support obligation at $1,497 per month based on an income of $80,000.
The award was to be reviewed when the older child reached majority.
The court awarded virtually all personal property owned by the parties to Mother. The court
ordered that the marital residence be sold and that one-half of the net proceeds be awarded to
Mother. The remaining one-half was to be placed in an account for the purpose of paying Father’s
child support at the rate of $1,497 per month. The court also ordered that if the account was
insufficient to pay support throughout the minority of the younger child “the monthly child support
will continue to accrue and collection of same will be enforceable against [Father].” Any balance
remaining after the children reached majority was awarded to Mother as alimony in solido.
Father later filed a pro se motion seeking modification of the final judgment, which the court
treated as a motion to alter or amend pursuant to Tenn. R. Civ. P. 59 and dismissed as untimely.
Father did not appeal either the final judgment or the dismissal of his motion. Instead, approximately
a month after the court’s dismissal, he filed a petition for reduction of child support.
The trial court found there was no change of circumstances to warrant a reduction in child
support and dismissed the petition. In addition the court ordered that costs and Mother’s attorney
fees be paid out of the fund deposited for child support. It is from this judgment that Father appeals.
The applicable standard for determining whether an existing child support order should be
modified, as requested by Father in this case, is the “significant variance test” adopted by the General
Assembly in 1994. Turner v. Turner, 919 S.W.2d 340, 342-43 (Tenn. Ct. App. 1995). This
legislation provides that:
In cases involving child support, upon application of either party, the court shall decree an
increase or decrease of such allowance when there is found to be a significant variance, as
defined in the child support guidelines established by subsection (e), between the guidelines
and the amount of support currently ordered unless the variance has resulted from a
previously court-ordered deviation from the guidelines and the circumstances which caused
the deviation have not changed.
Tenn. Code Ann. § 36-5-101(a)(1).
Thus, the substantial and material change of circumstances test, applicable to modifications
of spousal support, Tenn. Code Ann. § 36-5-101(a)(1), is not the appropriate test, although a request
for modification of child support is generally triggered by a change of circumstances.
A significant variance between the guideline amount and the current support order is defined
as “at least 15% if the current support is one hundred dollars ($100.00) or greater per month,” and
“such variance would justify the modification of a child support order unless, in situations where a
downward modification is sought, the obligor is willfully and voluntarily unemployed or
underemployed.” Tenn. Comp. R. & Regs., ch. 1240-2-4-.02(3). The party seeking the modification
bears the burden of showing the necessary significant variance. Turner, 919 S.W.2d at 345; Seal v.
Seal, 802 S.W.2d 617, 620 (Tenn. Ct. App. 1990).
-2-
The appropriate amount of support is determined by applying a flat percentage, based on the
number of children to be supported, to the obligor parent’s net income. Tenn. Comp. R. & Reg., ch.
1240-2-4-.03(5). It is clear that difference between the amount which would be due under the
guidelines based on Father’s current monthly income of $5.00 and the amount of current support
under the court’s original order is more than 15%.
Thus, Father has established he is entitled to a reduction of his monthly obligation unless:
(1) under the statute, the current amount was the result of a court-ordered deviation from the
guidelines amount; or (2) under the guidelines, Father is voluntarily and willfully unemployed or
underemployed. When determining the amount of support, the court is required to apply the
guidelines as a rebuttable presumption. Tenn. Code Ann. § 36-5-101(c)(1)(A). A deviation from
the guidelines must be supported by written findings that application of the guidelines would be
unjust or inappropriate and such findings must include the amount of support that would have been
ordered under the guidelines and a justification for the variance. Id.
The trial court’s original order did not make the specific findings set out in the statute.
Instead, the court found that it was equitable to calculate support based upon Father’s potential
income as evidenced by prior work experience. The court’s language mirrors that of the guidelines
provision which allows the setting of support based upon potential income where an obligor is
willfully and voluntarily unemployed or underemployed. Tenn. Comp. R. & Regs., ch. 1240-2-4-
.03(3)(d).
However, willful and voluntary unemployment or underemployment must result from an
intent to reduce or terminate income. Wilson v. Wilson, 43 S.W.3d 495, 497 (Tenn. Ct. App. 2000).
This court has rejected the proposition that a parent’s dishonest acts which lead to unemployment
constitute willful and voluntary unemployment. Id. As a logical extension of that principle, we have
also held that unemployment or underemployment resulting from incarceration is not willful and
voluntary. Pennington v. Pennington, No. W2000-00568-COA-R3-CV, 2001 Tenn. App. LEXIS
193, at *13 (Tenn. Ct. App. Mar. 14, 2001) (no Tenn. R. App. P. 11 application filed).
Consequently, we conclude that Father has demonstrated a significant variance under Tenn.
Code Ann. § 36-5-101(a)(1) and was entitled to a reduction in his child support obligation.
The reduction of Father’s future child support obligation means that he will not accrue
arrearages for his inability to pay the support originally ordered. It does not, however, mean that the
trial court’s order that half of the net proceeds of the parties’ residence be used to support the
children must be set aside.
Whether the marriage is dissolved absolutely, or a perpetual or temporary separation
is decreed, the court may make an order and decree for the suitable support and
maintenance. . . of the children, or any of them, by either spouse or out of such
spouse’s property, according to the nature of the case and the circumstances of the
parties . . . .
-3-
Tenn. Code Ann. § 36-5-101(a)(1) (2001) (emphasis added).
We interpret the trial court’s order as awarding Father’s interest in half the proceeds from the
sale of the marital residence as child support. Knowing Father was not available for gainful
employment and would remain incapable of earning more than a nominal salary for the duration of
his sentence, the trial court awarded child support out of Father’s property, in accordance with Tenn.
Code Ann. § 36-5-101(a)(1). The fact that the court ordered regular payments from the fund
established with the proceeds does not alter the fundamental nature of the order.
Based upon the foregoing analysis, we affirm the trial court’s denial of a reduction in support
with regard to that portion of the trial court’s order awarding Father’s half of the proceeds from the
sale of the house as child support. We reverse the trial court’s order denying a prospective reduction
based upon Father’s actual income and remand for a determination of his obligation, if any, based
upon that current income.
Costs are taxed equally to Appellant, Thomas A. Coates, and Appellee, Deborah A. Coates.
____________________________________
PATRICIA J. COTTRELL, JUDGE
-4-