Rust v. Rust ( 1997 )

JAMES DOYLE RUST, II, )
)
Plaintiff/Appellant, )
) Appeal No.
) 01-A-01-9608-CH-00361
VS. )
) Rutherford Chancery
) No. 90DR-360
KAREN RUTH WAX RUST )
GERBMAN,
Defendant/Appellee.
)
)
)
FILED
May 21, 1997
Cecil W. Crowson
COURT OF APPEALS OF TENNESSEE Appellate Court Clerk
MIDDLE SECTION AT NASHVILLE
APPEALED FROM THE CHANCERY COURT OF RUTHERFORD COUNTY
AT MURFREESBORO, TENNESSEE
THE HONORABLE ROBERT E. CORLEW, III, CHANCELLOR
RONALD L. STONE
6th Floor, 211 Printers Alley
Nashville, Tennessee 37201
Attorney for Plaintiff/Appellant
BRAD W. HORNSBY (At trial)
JAY B. JACKSON (On appeal)
BULLOCK, FLY & McFARLIN
301 N. Spring Street
P. O. Box 398
Murfreesboro, Tennessee 37133-0398
Attorney for Defendant/Appellee
AFFIRMED AND REMANDED
BEN H. CANTRELL, JUDGE
CONCUR:
LEWIS, J.
KOCH, J.
OPINION
Mr. Rust experienced a dramatic decline in income after his divorce, and
petitioned for a reduction in his child support obligation. Following a lengthy course
of litigation, the trial court reduced his obligation from $1,500 per month to $690 per
month, and made the reduction retroactive to the date he petitioned for the
modification.
Mr. Rust appealed, arguing that even this drastically reduced obligation
was in excess of the presumptively correct amount to be awarded under the child
support guidelines. His former wife’s position on appeal was that it was error to order
any reduction at all in child support, because the husband was willfully
underemployed. Other issues on appeal involved the modification of the alimony
award, the conduct of the wife’s attorney, and a finding of contempt against the
husband. We affirm the trial court in all respects.
I. The Proceedings
In October of 1989, James Doyle Rust left the marital home that he had
shared with Karen Rust. The couple had three young children, one of whom had
been born in March of that same year. Mrs. Rust filed a petition for child support, and
an agreed order was entered on July 10, 1990, which obligated Mr. Rust to pay $1500
per month in child support, to provide medical insurance for Mrs. Rust and the three
children, and to pay all their uninsured medical and dental expenses.
Mr. Rust quickly fell behind on his child support obligation, and Mrs. Rust
filed a petition for contempt and for judgment on the arrearages. The petition was still
pending when the wife filed for divorce on October 16, 1990.
The parties subsequently entered into a Marital Dissolution Agreement,
which was incorporated into the Final Decree of Divorce, filed March 19, 1991.
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Divorce was granted to the wife on the ground of irreconcilable differences, and child
support was set at $1,200 per month. The contempt case and divorce complaint were
consolidated for the purpose of resolving all the pending issues in a single proceeding.
A judgment against Mr. Rust for the child support arrearage in the amount of $7,192
was made a part of the decree, but execution on the judgment was stayed pending
continuing payment on the obligation of $100 per month.
Further litigation followed, largely involving visitation and schooling for
the children, the details of which it is unnecessary to recite here, except insofar as the
court’s order resolving those issues also modified Mr. Rust’s support obligations once
again.
The court ordered that child support again be increased to $1,500 per
month. Because of a physical condition that made it difficult for Mrs. Rust to obtain
medical insurance, Mr. Rust’s insurance obligation as to her was replaced with a
requirement that he pay her $150 per month for sixty months. The court later
characterized this obligation as alimony. Mr. Rust was ordered to continue to provide
medical insurance for his children.
Mrs. Rust subsequently remarried and took her new husband’s last
name. Henceforth in this opinion she will be referred to as Mrs. Gerbman. Mr. Rust
also remarried. On September 3, 1993, Mr. Rust filed a pro se Petition to Modify
Child Support. He claimed that his net income, which had been $4,100 per month at
the time the prior support order was issued, had been reduced to $1,300 per month.
Mrs. Gerbman answered, and filed a counter-petition for contempt, alleging Mr. Rust’s
failure to make monthly payments on the judgment, and on his child support. She
claimed that he was understating his income, and that he was voluntarily
underemployed.
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Both parties subsequently filed numerous motions which raised
additional issues and lengthened the course of the proceedings. After disposing of
those issues, the court issued its ruling from the bench, and ordered Mrs. Gerbman’s
attorney to draft the order. Mr. Rust’s attorney moved the court to amend the
judgment, and the court responded to his objections before the amended order, from
which this appeal was taken, was finally entered and approved by both counsel. The
date was April 30, 1995, more than twenty months after Mr. Rust filed his pro se
petition.
The court reduced Mr. Rust’s child support to $690 per month, and
made the reduction retroactive to September 3, 1993. The court also reduced the
alimony payment (the money previously ordered to be paid in lieu of medical
insurance) to $75 per month, retroactive to the same date, but extended the period
during which it had to be paid to 120 months, so that the total payout ($9,000)
remained unchanged.
Giving retroactive effect to these modifications reduced, but did not
eliminate the arrearages Mr. Rust had accumulated, and the court’s order included a
new schedule for paying off those arrearages. The court also found Mr. Rust to be
in contempt for having made only one child support payment during the first four
months of 1995, and for failing to comply with the court’s order to attend a seminar for
divorcing parents. The judge ordered Mr. Rust to serve four days in the Rutherford
County jail for his contempt.
II. Child Support
The Tennessee legislature has provided specific direction to the courts
charged with setting child support, by ordering that uniform child support guidelines
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be established. See Tenn. Code Ann. § 36-5-101(e). The guidelines are promulgated
by the Department of Human Services, and are based on a flat percentage of the
obligor’s net income. By law they create a rebuttable presumption that the amount of
child support determined by an application of the guidelines is the correct amount to
be awarded.
In applying the guidelines, the courts determine the income of the obligor
parent for the year or years immediately preceding the filing of the petition for support,
and find the corresponding amount of support in the guideline tables for that level of
income and the number of children for whom support is being sought. Since the
obligor is expected to pay future support out of future income, the rebuttable
presumption of correctness obviously indicates a corollary presumption that prior
earnings are a reliable predictor of future earnings.
It is not easy for the obligor to attack this corollary (nor should it be),
since past income is easier to verify than future income is to predict, and since the
order remains within the court’s control and subject to modification if future events
result in a significant change in the obligor’s income, or his earning capacity.
In the present case, the proof showed that although Mr. Rust had been
able to earn a very good living from the sale of automobiles, he frequently came into
serious conflict with his employers. He worked for several different dealerships, but
his income was highest when he was employed as finance manager at Superior
Motors in Nashville. He earned $83,362 during eleven months in 1992, and made
timely payments on his child support during that time. According to Mr. Rust, he had
to quit that job because of stress related to his employer’s order that he falsify certain
entries on the books of the company, and because of a worsening alcohol problem
related to that stress. Bill Proctor, comptroller of Superior Motors, denied any
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wrongdoing by the company, but confirmed that Mr. Rust had a drinking problem that
created concern and difficulties for the employer.
After leaving Superior Motors, Mr. Rust changed his line of work, and
began selling insurance. He earned no income during the period while he was being
trained. After he acquired his license, he managed to earn a net income of $13,986
in 1993. During that year, he fell behind on his child support payments again, but
managed to avoid a threatened contempt by making two payments that amounted to
$5,600, from the sale of the house that had belonged to his present wife.
Mr. Rust testified that when the books were closed on his 1994
transactions, he expected them to show that he had netted between $18,000 and
$20,000. He had acquired some large institutional clients, and hoped that
commissions from them would result in a 1995 net income between $40,000 and
$50,000. However problems with his new marriage plunged him back into alcohol
abuse, and he testified that he had been attending an outpatient alcohol rehabilitation
program for the five or six weeks preceeding the hearing of April 29, 1995. The
program involved at least three three-hour sessions each week. The effect of Mr.
Rust’s problems on his 1995 income was uncertain.
These facts were before the trial court when it ordered that child support
be set at $690 per month. Such an award for the support of three children
corresponds to an annual income of $25,200 for the obligor. Both parties disputed the
correctness of the trial court’s determination, but in light of the fluctuations and
uncertainty surrounding Mr. Rust’s income, we do not believe the trial court erred.
In his motion to alter or amend the court’s judgment, Mr. Rust argued
that the only correct way to calculate the retroactive portion of his obligation would
have been to base it directly on his income for those years. He contended that such
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a calculation would result in an obligation of only about $350 per month for 1993, and
$550 per month for 1994. The court’s response to the motion included a finding that
Mr. Rust was voluntarily underemployed during those years, and that “he had the
capability and capacity to earn more than he asserted.”
Mrs. Gerbman seized on this finding to argue that Mr. Rust was not
entitled to any reduction at all. She reasoned that the language of Rule 1240-2-4-
.03(d) of the Child Support Guidelines, precluded any downward modification under
the facts of this case:
If an obligor is willfully and voluntarily unemployed or
underemployed child support shall be calculated based on a
determination of potential income, as evidenced by
educational level and/or previous work experience.
Since the earlier order of child support was based on an income level
that Mr. Rust admittedly achieved (and in fact subsequently exceeded), Mrs. Gerbman
argued that as a matter of law, the trial court was not permitted to reduce his
obligation.
We believe that both parties have taken too restrictive a view of the
power of the trial court to fashion an equitable order within the constraints of the child
support guidelines. A finding that an obligor is voluntarily underemployed enables the
court to set a child support amount commensurate with his earning capacity rather
than his actual earnings. Such a finding obligates the court to ascertain that capacity;
it does not create an automatic determination that he remains capable of earning what
he has earned in the past.
In the present case, there is evidence that even aside from his difficulties
at Superior Motors, the automobile sales business has been a source of constant
stress for Mr. Rust, and has worsened his alcohol problem. Hopefully, the insurance
business will offer him a more stable working environment, and a reliable income that
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will be of benefit to himself and his three young children. In light of the facts in the
record, we cannot say that the trial court erred in finding that at this point in his new
career, Mr. Rust’s potential income could only sustain a child support obligation of
$690 per month.
III. Alimony
A second issue on appeal involves the alimony payments that Mr. Rust
was ordered to make in lieu of medical insurance. The trial court found that the
payments were in the nature of rehabilitative alimony, and that the court accordingly
retained jurisdiction to modify it. As we discussed above, the court chose only to
modify the payment schedule, and it left the size of the total obligation unchanged.
Once again, both parties objected to the trial court’s action on grounds that are
diametrically opposed to each other.
Mr. Rust argued that the payments should have been terminated
because of the rebuttable presumption stated in Tenn. Code Ann. § 36-5-101(a)(3),
which reads as follows:
(3) In all cases where a person is receiving alimony in futuro
and the alimony recipient lives with a third person, a
rebuttable presumption is thereby raised that:
(A) The third person is contributing to the support of
the alimony recipient and the alimony recipient therefore does
not need the amount of support previously awarded, and the
court therefore should suspend all or part of the alimony
obligation of the former spouse; or
(B) The third person is receiving support from the
alimony recipient and therefore does not need the amount of
alimony previously awarded and the court therefore should
suspend all or part of the alimony obligation of the former
spouse.
Mrs. Gerbman argues that when the trial court modified the insurance
obligation to make it a fixed number of payments of a fixed size, without stating any
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conditions or limitations on the award, the award was converted into alimony in solido,
which the court no longer had any power to modify. Thus, she impliedly argues, the
court was in error in reducing the monthly payments, and extending the length of the
payment obligation.
The advent of rehabilitative alimony as a distinct category of spousal
support has added complexity to the problem of correctly classifying an alimony
award. Whereas alimony in solido and alimony in futuro can usually be distinguished
without difficulty, rehabilitative alimony has some of the characteristics of both. It has
a calculable total value like alimony in solido, but it is modifiable like alimony in futuro.
In the present case, the trial court modified an insurance obligation of
indefinite duration (which, if it was alimony, was alimony in futuro) to an obligation of
limited duration and fixed total value (which could theoretically be considered either
rehabilitative alimony or alimony in solido). Responding to arguments from both sides,
the chancellor stressed the purpose of the original award and the circumstances that
made its initial modification necessary. Based on these considerations, he concluded
that the modification created the kind of temporary support that remained within the
jurisdiction of the courts to adjust as circumstances required.
We do not believe the chancellor erred in this determination, but we do
not adopt the appellant’s argument that the rebuttable presumption found in Tenn.
Code Ann. § 36-5-10(a)(3) thereby applies to this case. We note that the terms of the
statute refer specifically to alimony in futuro, not to rehabilitative alimony, and that the
two forms of modifiable alimony are based on opposite findings as to the possibility
of the obligee spouse becoming capable of providing his or her own support. Of
course even without the presumption, Mr. Rust was not prevented from asserting that
Mrs. Gerbman’s remarriage eliminated her need for further spousal support. But he
did not make that argument, nor is there any evidence in the record to support it.
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IV. Contempt
Mr. Rust argues that the trial court erred in finding him in willful contempt
and sentencing him to four days in jail, because inability to pay is a defense to
contempt. He claims that he was not capable of complying with the trial court’s order
during the four month period when he failed to pay his child support. He attributed
this alleged incapacity to two problems: lack of income during the relevant period, and
impairment of judgment due to a deteriorating domestic situation that plunged him into
alcohol abuse.
However by his own admission Mr. Rust had some income every month
during the relevant period, and we do not believe that his personal problems, grave
though they may have been, excused him from the duty to support his children by his
former marriage. As for the argument that his alcoholism somehow made his non-
compliance with the court’s orders involuntary, it does not appear to us to be based
on sound reasoning or to be supported by any precedent or other authority that we are
bound to respect.
V. Attorney Disqualification
In the course of the prolonged struggle between the parties, Brad
Hornsby, the wife’s attorney filed a motion to terminate Mr. Rust’s visitation privileges.
The ground was that “recently discovered evidence” of felony warrants against Mr.
Rust in Florida and South Carolina indicated that Mr. Rust “poses a risk of flight with
the parties’ children.”
In response, Mr. Rust’s attorney filed a motion to disqualify Mr. Hornsby,
arguing that he was guilty of blatant misrepresentation to the court. Mr. Rust claimed
that as a family friend and advisor on financial and legal matters, Mr. Hornsby had
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long been aware of the disputes Mr. Rust had with former employers in those states,
including their threats to swear out criminal warrants against him, and that he had
specific knowledge as to the Florida warrant at least thirty-one months before he
presented it to the court as “newly discovered evidence.”
Mr. Rust further claimed that Mr. Hornsby had threatened him with
criminal prosecution to get him to sign the marital dissolution agreement, and that Mr.
Hornsby’s prior relationship with the parties gave him knowledge of confidential
information about Mr. Rust that should have precluded his subsequent representation
of Mrs. Gerbman.
The trial court considered Mr. Rust’s allegations and dismissed the
motion to compel Mr. Hornsby to withdraw. The court found that Mr. Hornsby had not
established an attorney-client relationship with either of the parties prior to the
beginning of the divorce proceedings, and that he had therefore not violated DR 4-101
of the rules of the Code of Professional Responsibility in regard to preserving the
confidences and secrets of a client. The court also found that Mr. Hornsby had not
violated DR 7-105, which prohibits using the threat of criminal prosecution to gain
advantage in a civil matter. The court did not directly address the question of Mr.
Hornsby’s alleged misrepresentation, but presumably found that Mr. Rust did not meet
his burden of proof on that issue, or that the allegation, if proven, was not sufficiently
grave to warrant disqualification.
We believe that it rests within the sound discretion of the trial court to
determine whether an an attorney should be disqualified from appearing before it in
a particular case. That discretion is rooted in the court’s general powers, found in
Tenn. Code Ann. § 16-1-102(4), to “[c]ontrol, in furtherance of justice, the conduct of
its officers, and all other persons connected with a judicial proceeding before it, in
every matter pertaining to the proceeding”. The court’s decision should not be
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reversed except for abuse of that discretion. We do not find that the chancellor
abused his discretion, and we accordingly affirm his decision.
VI.
At the conclusion of the opinion which preceded his final order, the
chancellor wrote, “[i]t certainly is the hope of the Court that with the conclusion of
these proceedings, the bitter disputes and ill-feelings which the parties have
experienced toward each other will cease. Certainly the lives of the minor children will
be enriched by such cessation.” This court heartily concurs. The order of the trial
court is affirmed. Remand this cause to the Chancery Court of Rutherford County for
further proceedings consistent with this opinion. Tax the costs on appeal to the
appellant.
_____________________________
BEN H. CANTRELL, JUDGE
CONCUR:
_______________________________
SAMUEL L. LEWIS, JUDGE
_______________________________
WILLIAM C. KOCH, JR., JUDGE
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