Steven A. Holdsworth v. Wendy Alford Holdsworth ( 2015 )

IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
March 10, 2015 Session
STEVEN A. HOLDSWORTH v. WENDY ALFORD HOLDSWORTH
Direct Appeal from the Circuit Court for Shelby County
No. CT-000718-11 James F. Russell, Judge
No. W2013-01948-COA-R3-CV – Filed June 3, 2015
This is an appeal from an extremely contentious divorce. The parties married in
1994 and had one child together during the marriage. Husband filed for divorce in 2011.
In July 2013, the trial court entered a final decree of divorce. Among other things, the
trial court found that Husband dissipated marital assets by writing checks to his girlfriend
totaling $15,633 and ordered Husband to reimburse Wife that amount. The trial court
also entered a permanent parenting plan that designated Wife the primary residential
parent and provided a residential parenting schedule. As part of its permanent parenting
plan and based on its calculation of the parties‟ respective incomes, the trial court set
Husband‟s child support obligation and ordered Husband to pay Wife $34,109 in
retroactive child support. Finally, the trial court awarded Wife $4,000 per month as
alimony in futuro and $461,586 as alimony in solido to reimburse Wife for her attorney‟s
fees and expenses. Husband filed a notice of appeal challenging the trial court‟s rulings.
Prior to Husband‟s appeal of the July 2013 order being heard, however, Husband
and his girlfriend were arrested when a sheriff‟s deputy discovered a marijuana plant
growing in their garage. Shortly thereafter, Wife filed a petition seeking to modify the
permanent parenting plan to impose certain restrictions on Husband‟s parenting time.
Among other things, Wife sought to condition Husband‟s parenting time on his
girlfriend‟s submission to and passing of random drug tests. In March 2014, the trial
court ruled that a material change of circumstance occurred following the entry of the
July 2013 order and entered a modified permanent parenting plan that incorporated
Wife‟s proposed restrictions. Husband filed a separate appeal from that order, and the
two cases were consolidated for appeal to this Court.
Having thoroughly reviewed issues raised by the parties and the record on appeal,
we conclude that while the trial court did not err in finding that Husband dissipated
marital assets by writing checks to his girlfriend, Wife is not entitled an award equal to
the full amount of the dissipation. We modify the amount of the dissipation award to
$7,816.53 to reflect Husband‟s one-half interest in the dissipated amounts. We affirm the
trial court‟s allocation of parenting time. While we also affirm the trial court‟s decisions
to award Wife child support and retroactive child support, we conclude that the trial court
based the amount of those awards on a determination of the parties‟ respective incomes
that is not supported by a preponderance of the evidence. Accordingly, we vacate the
trial court‟s ruling as to the amount of those awards and remand this matter for further
proceedings consistent with this opinion. Next, we reverse the trial court‟s award of
alimony in futuro. Given the facts of this case, we conclude that Wife is a candidate for
transitional alimony and direct the trial court on remand to determine the appropriate
amount and duration of such an award. While we affirm the trial court‟s decision to
modify the permanent parenting plan, we conclude that because Husband‟s girlfriend was
not a party to the proceedings, the trial court erred in setting conditions on Husband‟s
parenting time based on her compliance with provisions of the permanent parenting plan.
Finally, we conclude that the trial court did not apply a proper legal standard in awarding
Wife her attorney‟s fees and expenses and reached an illogical result. We reverse the
trial court‟s award of attorney‟s fees. We decline to award attorney‟s fees associated
with this appeal to either party.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed in
part, Affirmed in part as Modified, Vacated in part, Reversed in part, and
Remanded
BRANDON O. GIBSON, J., delivered the opinion of the court, in which ARNOLD B.
GOLDIN, J., and KENNY ARMSTRONG, J., joined.
Amy J. Farrar, Murfreesboro, Tennessee, and Lanier Fogg, Memphis, Tennessee, for the
appellant, Steven A. Holdsworth.
George Lawrence Rice, III and Mary Louise Wagner, Memphis, Tennessee, for the
appellee, Wendy Alford Holdsworth.
OPINION
I. BACKGROUND AND PROCEDURAL HISTORY
Steven Holdsworth (“Husband”) and Wendy Alford Holdsworth (“Wife”) met
when they were both students at the University of Texas-Arlington. The parties married
in Texas in July 1994. After the marriage, they remained in Texas and continued to
pursue their education. In 1995, Wife earned a Master‟s Degree of Science in Social
Work from the University of Texas-Arlington. In 1999, Husband earned a Master of
Business Administration degree in Financial and Estate Planning from the University of
Dallas. Shortly thereafter, the parties moved to Memphis to be closer to Wife‟s parents.
2
After moving to Memphis, Wife got a job as a social worker with Shelby County
Schools, and Husband began working as a financial planner for Legacy Wealth
Management (“LWM”), where he remained employed through the time of trial.
In April 2005, Wife resigned from her position with Shelby County Schools to
stay home and provide care for her mother, who had been experiencing serious health
issues. In January 2007, Wife gave birth to the parties‟ only child. For the remainder of
the marriage, Wife stayed at home to care for the parties‟ daughter. In the meantime,
Husband was extremely successful in his career at LWM. By 2008, Husband rose to the
position of Managing Director and was receiving a yearly compensation that allowed the
family to live comfortably. They took several trips to Hawaii and, in 2009, purchased a
five-bedroom home in Cordova for $415,000.
In 2008, Husband met Elizabeth McFadden1 (“Ms. McFadden”) while both were
serving on the board of directors of a local trade association. Over time, the relationship
between the two transitioned from professional to personal, and in November 2009,
Husband began having an affair with Ms. McFadden. At the time, Ms. McFadden was
married and had two children of her own.
As Husband‟s relationship with Ms. McFadden became more serious, it had a
significant impact on both his personal and professional life. In January 2011, Husband
told Wife he wanted a divorce. On February 16, 2011, Husband filed a petition for
divorce on the ground of irreconcilable differences. Around the same time, Ms.
McFadden applied for a position at LWM and was hired by the company. Although
Husband served on the three-person committee that interviewed Ms. McFadden and
ultimately made the hiring decision, he opted not to disclose the extent of his personal
relationship with Ms. McFadden prior to her hire. Despite Husband‟s efforts to conceal
the romantic nature of the relationship, it did not take long for his coworkers at LWM to
learn that he was having an affair with Ms. McFadden. In March 2011, the company
forced Husband to resign from its board of directors and take a sixty-day leave of
absence. Additionally, according to the testimony of Husband and Wife at trial, the
company reduced Husband‟s annual base salary from $125,000 to $100,000.
Despite Husband‟s failure at concealing the affair from LWM, he still attempted to
conceal it from Wife by telling her that his leave of absence was voluntary and taken in
response to the recent death of his father. Not surprisingly, Wife found out about the
affair shortly thereafter and filed an answer and counter-complaint for divorce on May 6,
2011. As the divorce proceedings commenced, the parties attempted to move on with
their lives. In June 2011, Wife moved out of the parties‟ marital residence into a home
1
Husband‟s paramour is referred to throughout the record using several different names. We refer to her
throughout this opinion as Ms. McFadden, as that is the name the parties use in their briefs.
3
she rented from her parents. In October 2011, the parties sold the marital residence at a
significant loss, and Husband moved into an apartment. Husband was forced to draw
down a significant portion of his 401(k) to cover a $59,879 deficit on the sale of the
home. In an attempt to cut down on his living expenses, Husband moved in with Ms.
McFadden in a rented home in August 2012. In the meantime, the divorce proceedings
grew exceedingly contentious.
Divorce Proceedings
After the parties filed over 300 pleadings and made more than thirty court
appearances for hearings on various petitions and motions, the case was finally set for
trial beginning April 29, 2013. Prior to trial, each party submitted proposed permanent
parenting plans (“PPP”) and sworn affidavits of their respective incomes and expenses
pursuant to Local Rule 14(C).2
Wife‟s proposed PPP set forth a parenting schedule, providing that the child would
spend 288 days with Wife and 77 days with Husband. The plan also provided that until
such time as Husband and Ms. McFadden were lawfully married, Husband would not be
allowed to introduce the child to Ms. McFadden or exercise overnight visitation with the
child. Wife listed Husband‟s monthly imputed income as $15,0503 and sought $1,421
2
In pertinent part, Rule Fourteen of the Circuit Court for the Thirtieth Judicial District (Shelby County)
states:
(C) Sworn Statement Pertaining to Child Custody, Child Support or Alimony.
(1) In all contested divorces, suits for separate maintenance, or for legal separation, each
party must file with the clerk, no later than ninety (90) days before trial, a sworn
statement setting forth the party‟s income, a list of expenses, and a description and
valuation (or estimate) of real and/or personal property possessed in any form, the state of
its title, and the party‟s claimed interest in such property. The sworn statement must also
include, if known, or if the information is reasonably procurable, the income and property
interest of the opposing party, both real and personal, and the valuation thereof. Any
changes in the statement while the case is pending must be disclosed as soon as possible,
and not later than ten (10) days before the trial.
(2) The sworn statement must also set forth separately the amount deducted from salary
for social security and income tax. Self-employed persons must estimate these sums,
using governmental guidelines or other reliable sources that are available.
(3) In all custody proceedings, the sworn statements required by T.C.A. § 36-4-106(b)(1)
must also be contained within the pleadings or in an affidavit attached to the pleading.
3
Wife added Husband‟s $125,000 base salary prior to his demotion in March 2011 to the average of his
annual bonuses from 2010 to 2012: ($125,000 + $55,609.03 = $180,609.03 annually or $15,050.75 per
month).
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from him in monthly child support. Using similar estimations of Husband‟s monthly
income, Wife sought $34,109.25 in retroactive child support that accrued during the
pendency of the divorce proceedings. In her Rule 14 affidavit, Wife listed her monthly
income from her private practice as a licensed clinical social worker as $437. Wife listed
$8,631 in monthly expenses, which she claimed resulted in a $6,773 monthly shortfall.
The expenses included rent, utilities and home maintenance expenses, food and clothing,
and child-care expenses. Some of the expenses listed related to her business, such as
$1,500 in office rent and staffing. Wife also listed $1,788 in monthly payments on
promissory notes executed in favor of her parents for attorney‟s fees and living expenses.
To offset the deficit in her monthly budget, Wife sought an award of alimony in futuro
from Husband payable as $4,000 per month for sixty months, then $7,000 per month for
sixty months, then $8,000 per month for 300 months. Wife also submitted that she
should receive alimony in solido for her share of the parties‟ primary marital asset:
Husband‟s LWM stock, which she valued at $839,261. Wife specified that the award of
alimony in solido should be payable over approximately twenty-four years, with three
percent interest, beginning at $15,000 per year and increasing by $2,000 each year until
fully paid. Finally, Wife sought an award of alimony in solido to repay her attorney‟s
fees and living expenses incurred in connection with the divorce. Wife attached the
affidavit of her attorney listing her attorney‟s fees and expenses in the amount of
$346,683.96.
Perhaps not surprisingly, Husband‟s filings presented a drastically different picture
of the parties‟ respective incomes and expenses. Husband‟s proposed PPP also
designated Wife the primary residential parent, but set forth a parenting schedule that
provided that the child would spend 255 days with Wife and 140 days with Husband.4
Husband‟s proposed PPP did not contain any restrictions on his parenting time related to
Ms. McFadden. Husband‟s plan sought to impute monthly income of $3,500 to Wife and
provided that he would pay her $973 in monthly child support. In his Rule 14 affidavit,
Husband listed his gross monthly income from LWM as $8,343.5 Husband stated that his
net monthly pay, after tax and benefit deductions, was $5,733. Husband listed $7,823 in
monthly expenses, which he claimed resulted in a $2,090 monthly shortfall. Like Wife,
Husband listed expenses for rent, utilities, home maintenance, etc. Husband also listed
$1,438 in expenses related to the parties‟ child, including child support and $3,008 in
monthly payments for litigation expenses, credit card debt, and personal loans. Husband
agreed that the LWM stock should be classified as marital property and divided equally
4
As noted by the trial court, the parenting schedule in Husband‟s proposed PPP provides for 395 days of
total parenting time per year.
5
Husband calculated his monthly income using a $100,000 base salary without adding any amount for
bonuses.
5
but stated that the value of the stock was $468,599. Husband‟s filings did not propose
any specific method of splitting the remainder of the parties‟ marital property.
A bench trial was conducted over the course of eleven days, beginning on April
29, 2013 and concluding with closing arguments on May 15, 2013. The parties stipulated
the existence of grounds for divorce, and evidence was presented on other issues, such as
spousal support, child support, the PPP, distribution of marital assets and debt, and
attorney‟s fees. The trial court also heard a great deal of testimony regarding the
appropriate valuation of the parties‟ primary marital asset: the 5,030 shares of LWM
stock. In addition to hearing testimony from Husband and Wife, the court heard the
testimony of Robert Vance, an expert in forensic accounting, and Jim Isaacs, the
President and CEO of LWM. The court also reviewed the deposition testimony of the
child‟s psychologist, Dr. Elizabeth Harris. On May 15, 2013, Wife‟s attorney submitted
an affidavit of attorney‟s fees stating that through that date, Wife had been charged
$384,652.50 in attorney‟s fees and $36,420.82 in expenses. Wife argued that based on
her limited income, she did not have the ability to pay her own attorney‟s fees and
expenses and requested that the trial court order Husband to pay the full $421,073.32
amount as alimony in solido.
July 25, 2013 Order
After reviewing the testimony and exhibits presented at trial, the trial court
announced its findings and conclusions orally on May 29, 2013. On July 25, 2013, the
trial court entered its Final Decree of Divorce along with a separate written memorandum
of Findings of Fact and Conclusions of Law. Pursuant to the parties‟ stipulation that
Husband‟s inappropriate marital conduct constituted grounds for divorce, the trial court
declared the parties divorced. With respect to the division of property, the trial court
found that the parties‟ compliance with Local Rule 14 was “marginal at best” and made
its task of dividing the marital assets nearly impossible. Nevertheless, the court
attempted to make such an equitable distribution. The court awarded each party the cars,
furniture, and other personal property currently in their possession. The trial court found
that the parties possessed “modest sums” of money held in various checking and savings
accounts and ordered that each party retain the funds of separate bank accounts and split
funds in any joint accounts. The trial court found that the parties‟ other marital assets
included approximately $57,735 in Husband‟s LWM 401(k) account and $43,319 held in
a joint escrow account by the parties‟ attorneys. The court awarded Husband the $43,319
held in escrow but ordered that it be used to satisfy the parties‟ two substantial marital
debts: $29,584 in credit card debt and $24,597 owed to the IRS for taxes due but not paid
in 2011. The court also awarded Husband the full amount of his 401(k) but ordered that
it also be used to satisfy the marital debts if they were not paid off within a year. Because
the parties sold the marital home during the course of the litigation, the parties did not
6
have mortgage debt at the time of the hearing.
The parties‟ primary marital asset at the time of the hearing was Husband‟s
5,030.03 shares of LWM stock. Notably, the stock was issued by LWM subject to tight
restrictions on its transfer and liquidation. At the time of the trial, the stock could not be
liquidated without penalty of a substantial discount. Throughout the proceedings, each
party vigorously disputed the other‟s valuation of the stock. Wife argued that the stock
should be valued at $839,261, an amount based on its 2012 year-end book value as set
forth in an independent audit. Conversely, Husband argued that the stock should be
valued at $468,599, an amount the trial court determined to be based on its value after the
penalty and after taxes. The trial court accepted Wife‟s valuation of the stock and
concluded that she should be awarded fifty percent of that amount, or $419,631. Due to
the restrictions on the transfer of the stock, the trial court ordered that Husband pay that
amount, with three percent interest annually, as alimony in solido over a period of years
with payments beginning at $15,000 per year and increasing by $2,000 per year until
fully paid. Finally, the court found that Husband dissipated marital assets by writing
checks to Ms. McFadden for $15,633.06 and ordered that Husband reimburse Wife that
amount.
Next, the court turned its attention to parenting issues. After reviewing the
proposed PPPs submitted by each party, the court noted the parties agreed that Wife
should be named the child‟s primary residential parent. The parties‟ primary dispute with
regard to parenting was whether the court should impose restrictions on the presence of
Ms. McFadden around the child. Husband‟s proposed PPP did not impose any
restrictions or limitations with regard to Ms. McFadden. Wife‟s proposed PPP provided
that until Father lawfully married Ms. McFadden, Father would not be permitted to
exercise any overnight parenting time with the child and would not be permitted to leave
the child in Ms. McFadden‟s care for any length of time. The trial court adopted Wife‟s
proposed PPP. In doing so, it expressed concern regarding Ms. McFadden‟s behavior
and her parenting of her own children. Additionally, the court found that Husband
prioritized his relationship with Ms. McFadden over his relationship with the child.
Citing those concerns, the court found that Wife‟s proposed PPP would serve the child‟s
best interests and adopted her plan without any modification. As such, the court also
adopted Wife‟s calculations of the parties‟ respective monthly incomes for purposes of
computing Husband‟s child support obligation and ordered Husband to make child
support payments to Wife of $1,421 per month. Additionally, the trial court ordered
Husband to pay retroactive child support of $34,109.25 for arrearages from the date of
the parties‟ separation through the date of the trial.
Next, the trial court addressed the issue of spousal support. Given the large
income disparity of the parties, the trial court determined that Wife was the
7
“disadvantaged spouse” as that term is used in the relevant statutes. To determine
whether spousal support was warranted and, if so, the nature, amount, and duration of the
support, the trial court considered Wife‟s need and Husband‟s ability to pay. Based on
Wife‟s pre-trial filings, the court found that Wife demonstrated a need for long-term
support of $4,000 per month. In considering Husband‟s ability to pay that support, the
trial court examined Husband‟s pre-trial filings and rejected several of the litigation-
related expenses and loans he had listed as expenses. After doing so, the court calculated
Father‟s “real” expenses to be $4,179 per month. The trial court found that even if it
accepted Husband‟s calculation of his net monthly income and subtracted Husband‟s
“real” expenses, Husband would be able to meet his child support obligations, make his
monthly support payments, and still have money left over each month. Consequently, the
court ordered Husband to pay Wife $4,000 per month as alimony in futuro until her death
or remarriage. To secure that obligation, the trial court also ordered Husband to secure
and maintain a life insurance policy in the sum of $1,500,000 with Wife designated as the
primary beneficiary until her death or remarriage.
Finally, the court addressed Wife‟s contention that Husband should be responsible
for her attorney‟s fees and other litigation expenses. In doing so, the trial court stated that
the litigation was “entirely of the Husband‟s making.” The trial court found that
Husband filed the original complaint for divorce, leaving Wife with no choice but to
defend herself. Moreover, the trial court found that many of the expenses incurred by
Wife in the lawsuit were the result of Husband‟s attempts to throw up “smoke screen
after smoke screen” and “roadblock after roadblock” in the discovery process. The trial
court ordered that Husband pay $421,073.32 to Wife as alimony in solido for her
attorney‟s fees and expenses incurred through May 14, 2013. Additionally, the trial court
ordered that Wife‟s attorney file an additional supplemental affidavit to include
additional attorney‟s fees and expenses incurred after that date through the entry of the
final decree of divorce. Wife‟s attorney subsequently filed an affidavit reflecting
additional attorney‟s fees and expenses in the amount of $40,513.50, and the court
ordered Husband to also pay that amount as alimony in solido.6
In sum, as set forth in its July 25, 2013 Final Decree of Divorce, the trial court
awarded Wife the following judgments against Husband: (1) $419,631, reflecting the
value of Wife‟s interest in LWM stock; (2) $15,633.06, reflecting the amount of
Husband‟s dissipation of marital assets; (3) $34,109.25, reflecting the amount of
retroactive child support Husband owed; (4) $421,073.32 for attorney‟s fees and
6
The trial court requested evidence of fees and expenses incurred by Wife after May 14, 2013 during its
oral ruling on May 29, 2013. On July 19, 2013, Wife‟s attorney submitted a supplemental affidavit of
attorney‟s fees reflecting fees and expenses incurred by Wife from May 15 through July 18, 2013 of
$40,513.50. Accordingly, both totals were included in the trial court‟s Final Decree of Divorce entered
on July 25, 2013.
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expenses incurred through May 14, 2013; and (5) 40,513.50 for attorney‟s fees and
expenses incurred from May 15 through July 18, 2013. The listed amounts reflected a
total judgment against Husband in the amount of $930,960.13. The trial court also
ordered Husband to make payments to Wife of $1,421 per month in child support and
$4,000 per month in alimony in futuro. To secure satisfaction of the judgments, the trial
court imposed a lien on all LWM stock and all real and personal property owned or
thereafter acquired by Husband. Father timely filed a Notice of Appeal from the trial
court‟s July 25, 2013 ruling. Prior to Husband‟s appeal being heard by this Court,
however, events transpired that necessitated further proceedings in the trial court.
Modification Proceedings and March 13, 2014 Order
On November 14, 2013, a Sheriff‟s deputy went to the residence shared by
Husband and Ms. McFadden to execute on a levy filed by Wife. While searching the
premises for property to levy, the deputy discovered drug paraphernalia and a marijuana
plant in the parties‟ detached garage. Husband and Ms. McFadden were both arrested
and charged with unlawful possession of a controlled substance with intent to sell.
On December 19, 2013, Wife filed a petition to modify the PPP order in light of
the criminal charges pending against Husband and Ms. McFadden. In her petition, Wife
sought to temporarily modify the PPP to suspend Husband‟s parenting time or,
alternatively, to limit Husband‟s parenting time to two hours per day on days he is
scheduled to have parenting time and require that his parenting time be supervised by
Wife, Wife‟s mother, or another person charged with such supervision. Additionally,
Wife sought to add provisions prohibiting the child from being taken to the home
Husband shared with Ms. McFadden, prohibiting the child from being in Ms.
McFadden‟s presence, prohibiting Husband from taking the child out of school, and
requiring Husband, at his expense, to submit to random urine and hair follicle drug
screens.
Prior to the trial court‟s hearing on the petition, the charges against Husband were
dismissed, and Ms. McFadden entered a plea that placed her in a Diversion Program until
January 2015. The trial court held a hearing on Wife‟s petition over the course of two
days on January 31 and February 14, 2014. The trial court heard testimony from each
party as well as from a Shelby County Sheriff‟s Deputy called to investigate the
marijuana plant found in Husband‟s garage. At the outset of the proceedings, Wife‟s
attorney submitted a proposed ruling that provided for modification of the PPP to add the
following residential schedule and restrictions:
1. For the period of January 31, 2014 through January 20, 2015, the
following conditions shall apply:
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a. Father shall exercise unsupervised parenting time on the following
dates and times: 5:00 p.m. to 8:00 p.m. on Fridays, 9:00 a.m. to 7:00
p.m. on Saturdays, and 9:00 a.m. to 5:00 p.m. on Sundays, every
other weekend, beginning January 31, 2014.
b. Father may exercise additional, unsupervised parenting time from
5:30 p.m. to 7:00 p.m. on Tuesdays.
c. For those holidays that Father was permitted to exercise parenting
time pursuant to the parties‟ Permanent Parenting Plan, entered July
25, 2013, Father may exercise unsupervised parenting time from
9:00 a.m. to 5:00 p.m.
d. Father shall continue to pick the child up from and return the child to
Mother‟s residence.
e. Father shall not exercise any parenting time at the residence he
shares with Ms. Elizabeth McFadden.
f. Father shall not permit Ms. McFadden to have any contact with
[child] and shall not exercise any parenting time in the presence of
or near Ms. McFadden.
g. This residential schedule shall be conditioned upon Father and Ms.
McFadden agreeing to submit to three (3) urine and hair follicle drug
screenings at Mid-South Drug Testing, to be randomly requested by
Mother, at any time in Mother‟s discretion, and to be completed
within five (5) hours of such request. Father shall pay for the
screenings. If Father or Ms. McFadden either refuse to submit to a
drug screening pursuant to the terms described in this paragraph or
fail a screening, Father shall be limited to only supervised parenting
time as described in Section B, including subsections one (1)
through three (3), of the Fiat of Mother‟s Petition to Modify
Permanent Parenting Plan Order, filed December 19, 2014.
2. If Ms. McFadden fulfills the requirements of her diversion program,
which is scheduled to be completed on January 20, 2015, Father shall
resume exercising parenting time consistent with the parties‟ Permanent
Parenting Plan, entered July 25, 2013, with the following conditions:
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a. Father must supervise [child] for the entire duration of his parenting
time and shall not permit [child] to be in the care of Ms. McFadden
unsupervised for any length of time.
b. This residential schedule shall be conditioned upon Father and Ms.
McFadden agreeing to three (3) drug screenings per year, as set out
in paragraph (1)(g) until January 20, 2017.
Wife testified that she was worried for her child‟s safety and viewed the
restrictions in her proposed modified PPP as necessary to ensure that Ms. McFadden
could demonstrate responsibility and appropriate behavior before being allowed around
the child. During his testimony, Husband stated that the marijuana plant belonged to Ms.
McFadden. Husband testified that Ms. McFadden obtained the plant to limit the severity
of migraines she experienced over the course of the summer in 2013. Husband insisted
he had not helped Ms. McFadden in growing or nurturing the plant and denied that he
smoked marijuana. Husband testified that Ms. McFadden had never smoked marijuana
around the child and insisted that the presence of the marijuana plant did not pose any
threat to the safety of the child. Nevertheless, at the close of the hearing on February 14,
2014, the trial court announced its finding that a material change of circumstance had
occurred and that the child‟s best interests would be served by modifying the PPP to
include the residential plan and restrictions set forth in Wife‟s proposed ruling. On
March 13, 2014, the trial court entered a written order memorializing its ruling and
incorporating a transcript of its prior oral ruling. In a separate order, the trial court also
awarded Wife $9,528 for attorney‟s fees and expenses incurred in connection with her
petition to modify. Husband timely filed a second Notice of Appeal from the trial court‟s
March 13, 2014 ruling. This Court subsequently ordered that the two appeals be
consolidated.
II. ANALYSIS
Husband presents a number of issues for our review on appeal. We will address
each of Husband‟s arguments in turn. Though Husband does not challenge the trial
court‟s distribution of the parties‟ marital assets and debts, he contends that the trial court
erred in concluding that he dissipated marital assets. Husband argues that the trial court
erred in adopting Wife‟s proposed PPP, in modifying the PPP, in calculating Husband‟s
child support obligation, and in awarding retroactive child support. Husband contends
that the trial court erred in awarding alimony in futuro to Wife and in setting an amount
of alimony in futuro that exceeds Wife‟s need and his ability to pay. Finally, Husband
asserts that the trial court should not have ordered him to pay Wife‟s attorney‟s fees and
litigation expenses.
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Wife argues that the trial court‟s ruling should be affirmed. Though Wife does not
seek any additional award of alimony in futuro, as further support for the trial court‟s
decision she asserts that the trial court erred in excluding certain expenses in its
calculation of her monthly need and in miscalculating the amount of Husband‟s net
monthly income. Wife also seeks attorney‟s fees and expenses for this appeal.
On appeal, we review the trial court‟s findings of fact de novo on the record with
the presumption that those findings are correct, “unless the preponderance of the
evidence is otherwise.” Tenn. R. App. P. 13(d). Additionally, because the trial court has
the opportunity to observe the witnesses‟ demeanor and hear the in-court testimony, we
afford considerable deference to the trial court‟s credibility determinations and the weight
given to oral testimony. Andrews v. Andrews, 344 S.W.3d 321, 339 (Tenn. Ct. App.
2010). We review the trial court‟s conclusions of law de novo with no presumption of
correctness. Hyneman v. Hyneman, 152 S.W.3d 549, 553 (Tenn. Ct. App. 2003).
A. Dissipation
We begin by addressing Husband‟s argument that the trial court erred in
concluding that he dissipated marital assets by writing checks totaling $15,633.06 to Ms.
McFadden. In its Findings of Fact and Conclusions of Law, the trial court stated:
90. There has been an issue raised in this case regarding dissipation by Mr.
Holdsworth of marital assets or portions of the marital estate in terms of his
relationship with Elizabeth McFadden. Found among the exhibits in the
cause is Trial Exhibit No. 32 which is a Rule 1006 summary reflecting the
sum of fifteen thousand six hundred thirty-three dollars and six cents
($15,633.06) in checks actually written by Mr. Holdsworth to Elizabeth
McFadden.
91. Again, considering the entire body of proof as a whole, the Court finds
a dissipation of marital assets in that amount and will award judgment in
favor of the Wife against the Husband. The record is not clear, but there
appears to be other dissipation -- for example, money spent for gifts of
jewelry and the like to Ms. McFadden -- but there is no empirical evidence
in this record of a specific amount for which the Court may enter judgment
without speculation.
Husband acknowledges that he wrote the checks to Ms. McFadden but contends that the
trial court erred in failing to consider the purpose of the checks. Husband contends that
the majority of the checks are for living expenses he and Ms. McFadden shared after
12
moving in together in August 2012.
A party‟s dissipation of marital or separate property is one of many factors a trial
court may take into consideration in making an equitable division of a marital estate.
Tenn. Code Ann. § 36-4-121(c)(5). While there is no statutory definition of dissipation,
the term typically refers to the use of marital property for a purpose unrelated to the
marriage, often to “hide, deplete, or divert” marital property after a marriage is
irretrievably broken. Larsen-Ball v. Ball, 301 S.W.3d 228, 235 (Tenn. Ct. App. 2010).
The concept of dissipation is based on waste. Altman v. Altman, 181 S.W.3d 676, 681
(Tenn. Ct. App. 2005). In determining whether dissipation has occurred, the court must
distinguish between dissipation and discretionary spending. Larsen-Ball, 301 S.W.3d at
235. While discretionary spending may be ill-advised, it is typical of the parties‟
expenditures throughout the course of the marriage. Id. Expenditures that constitute
dissipation, on the other hand, are so far removed from normal expenditures that they can
be characterized as wasteful or self-serving. See Watson v. Watson, 309 S.W.3d 483, 490
(Tenn. Ct. App. 2009). In Watson, this Court discussed the appropriate analysis for
allegations of dissipation:
In determining whether dissipation occurred, we find trial courts should
consider the following: (1) whether the evidence presented at trial supports
the alleged purpose of the various expenditures, and if so, (2) whether the
alleged purpose equates to dissipation under the circumstances. The first
prong is an objective test. To satisfy this test, the dissipating spouse can
bring forward evidence, such as receipts, vouchers, claims, or other similar
evidence that independently support the purpose as alleged. The second
prong requires the court to make an equitable determination based upon a
number of factors. Those factors include: (1) the typicality of the
expenditure to this marriage; (2) the benefactor of the expenditure, namely,
whether it primarily benefitted the marriage or primarily benefitted the sole
dissipating spouse; (3) the proximity of the expenditure to the breakdown
of the marital relationship; (4) the amount of the expenditure.
Id. at 490-91 (quoting Ward v. Ward, No. W2001-01078-COA-R3-CV, 2002 WL
31845229, at *3 (Tenn. Ct. App. Dec. 19, 2012)). The party alleging dissipation has the
initial burden of production and the burden of persuasion at trial. Larsen-Ball, 301
S.W.3d at 235. Once the party alleging dissipation establishes that the money has been
dissipated, the burden shifts to the party who spent the money to produce evidence to
show that the expenditures were appropriate. Watson, 309 S.W.3d at 491.
During the hearing, Wife introduced evidence in the form of a Rule 1006
13
summary7 that between September 1, 2011 and March 14, 2013, Husband wrote forty-
one checks to Ms. McFadden totaling $15,633.06. Husband did not object to the
evidence. By introducing evidence of the checks, several of which are for amounts
exceeding one thousand dollars, written by Husband to his paramour, Wife satisfied her
initial burden of production and shifted the burden to Husband to produce evidence that
the expenditures were appropriate. See Larsen-Ball, 301 S.W.3d at 236 (stating that the
money husband spent on his paramours “clearly constitutes dissipation”). Husband
contends that he met that burden, but relies on little more than his own testimony in doing
so. Specifically, Husband asserts that his undisputed testimony demonstrates that the
checks to Ms. McFadden were for living expenses. Given the trial court‟s findings on
Husband‟s credibility, this argument carries little weight. Moreover, we note that of the
ten checks for which Husband gave an explanation on direct examination, four were
intended to reimburse Ms. McFadden for rental of a condo for their July 2012 South
Carolina vacation. In his brief, Husband also states that the memo line of each check
contains a notation of its purpose. There are 156 checks attached to the Rule 1006
summary submitted at trial. We decline to sift through each check in an effort to discern
which notations appear to indicate an expenditure for living expenses when Husband has
apparently declined to do so himself. Moreover, we note that while Husband states that
each check contains a notation of its purpose, he does not argue that the stated purposes
are not indicative of dissipation. In light of the foregoing, we are not able to conclude
that the evidence preponderates against the trial court‟s finding that Husband‟s
expenditures constituted dissipation.
Notwithstanding our conclusion that the evidence supports the trial court‟s finding
that the checks Husband wrote to Ms. McFadden constituted dissipation, we note that the
trial court ordered Husband to reimburse Wife for the full amount of the checks. The
trial court‟s award ignores the fact that Husband also had an interest in the money. See
Odom v. Odom, No. E2007-02250-COA-R3-CV, 2008 WL 4415429, at *8, (Tenn. Ct.
App. Sept. 30, 2008) (noting that each of the divorcing parties was entitled to one-half of
the dissipated assets). Here, because the trial court divided the parties‟ marital assets
equally, we conclude that Husband is entitled to one-half of the assets he dissipated.
Therefore, we modify the amount of the trial court‟s dissipation award to $7,816.53 to
reflect Husband‟s one-half interest in the dissipated assets.
B. Permanent Parenting Plan
This case presents an unusual mix of issues related to the PPP. The trial court
7
“The contents of voluminous writings, recordings, or photographs which cannot conveniently be
examined in court may be presented in the form of a chart, summary or calculation. The originals or
duplicates shall be made available for examination or copying, or both, by other parties at reasonable
times and places. The court may order that they be produced in court.” Tenn. R. Evid. 1006.
14
adopted Wife‟s proposed PPP on July 25, 2013 as part of its Final Decree of Divorce.
Later, however, Husband and Ms. McFadden were discovered to have a marijuana plant
growing in their garage and were both arrested and charged with unlawful possession of a
controlled substance with intent to sell. Wife filed a petition to modify the PPP to impose
certain restrictions on Husband‟s parenting time. After a hearing, the trial court modified
the PPP to incorporate the restrictions. Husband challenges both the original PPP and the
modified PPP. Because the modified PPP is essentially the same as the original PPP with
additional limitations on Husband‟s parenting time, it is necessary for us to address
Husband‟s challenges with regard to both. To begin, we address the arguments Husband
raises related to the trial court‟s entry of the original PPP.
Original Permanent Parenting Plan
Prior to trial, each party submitted a proposed PPP. In its Final Decree of Divorce,
the trial court adopted Wife‟s proposed PPP without modification. Though the plans
submitted by each party provide for Wife to be designated as child‟s primary residential
parent, Husband takes issue with the trial court‟s allocation of residential parenting time.
The residential parenting schedule in Wife‟s proposed PPP provided for Wife to
have 288 days of parenting time with the child per year and for Husband to have 77 days.
The parenting schedule in Husband‟s proposed PPP provided for Wife to have 255 days
of residential parenting time with the child per year and for Husband to have 140 days.
As the trial court noted, Husband‟s proposed allocation of residential parenting time calls
for a 395-day calendar year. Though Husband‟s proposed PPP sets forth day-to-day and
holiday/school vacation schedules, given the many variables it contemplates, it is
impossible to determine exactly where the extra thirty days of parenting time should be
subtracted. In any event, the trial court found that after considering the testimony and
evidence presented by the parties, “the plan proposed by Mother is in the manifest best
interest of the child under all of the facts and circumstances in this case.” Husband
argues that the evidence presented “strongly preponderates” against the trial court‟s
parenting time determination.
Creating a workable parenting plan is one of the most important responsibilities
courts have. Armbrister v. Armbrister, 414 S.W.3d 685, 696 (Tenn. 2013). The
Tennessee Supreme Court recently explained the standard applicable to this Court‟s
review of a residential parenting schedule in Armbrister:
Because decisions regarding parenting arrangements are factually driven
and require careful consideration of numerous factors, Holloway v. Bradley,
190 Tenn. 565, 230 S.W.2d 1003, 1006 (1950); Brumit v. Brumit, 948
S.W.2d 739, 740 (Tenn.Ct.App.1997), trial judges, who have the
15
opportunity to observe the witnesses and make credibility determinations,
are better positioned to evaluate the facts than appellate judges. Massey–
Holt v. Holt, 255 S.W.3d 603, 607 (Tenn.Ct.App.2007). Thus, determining
the details of parenting plans is “peculiarly within the broad discretion of
the trial judge.” Suttles v. Suttles, 748 S.W.2d 427, 429 (Tenn.1988)
(quoting Edwards v. Edwards, 501 S.W.2d 283, 291 (Tenn.Ct.App.1973)).
“It is not the function of appellate courts to tweak a [residential parenting
schedule] in the hopes of achieving a more reasonable result than the trial
court.” Eldridge v. Eldridge, 42 S.W.3d 82, 88 (Tenn.2001). A trial court‟s
decision regarding the details of a residential parenting schedule should not
be reversed absent an abuse of discretion. Id. “An abuse of discretion
occurs when the trial court . . . appl[ies] 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.” Gonsewski v.
Gonsewski, 350 S.W.3d 99, 105 (Tenn.2011). A trial court abuses its
discretion in establishing a residential parenting schedule “only when the
trial court‟s ruling falls outside the spectrum of rulings that might
reasonably result from an application of the correct legal standards to the
evidence found in the record.” Eldridge, 42 S.W.3d at 88.
Armbrister, 414 S.W.3d at 693.
Husband contends that the trial court adopted Wife‟s proposed PPP based on its
moral disapproval of his actions and its desire to punish him for his affair with Ms.
McFadden. Husband argues that the trial court‟s underlying motivation for adopting
Wife‟s plan is evidenced by its failure to conduct a comparative fitness analysis or
consider the statutory factors enumerated in Tennessee Code Annotated section 36-6-
404(b).8 Husband further contends that an examination of the trial court‟s written
statement of findings and conclusions demonstrates that the court failed to consider many
important facts before adopting Wife‟s proposed PPP. Husband insists that after proper
reexamination of the facts, this Court should articulate a modified PPP that provides
Husband with more participation in the child‟s life.
In crafting a residential schedule, section 36-6-404(b) of the Tennessee Code
8
In his brief, Husband cites the fifteen factors set forth in Section 36-6-106(a) applicable to trial courts in
designating the primary residential parent. At the time of the hearing in this case, trial courts setting
residential schedules were guided by a different, albeit similar set of sixteen factors listed in Section 36-6-
404(b)(1)-(16). Tenn. Code Ann. § 36-6-404(b) (2010). By Ch. 617 Pub. Acts of 2014, Section 36-6-
404(b) was amended by replacing the list of sixteen factors with language directing the court to consider
the fifteen factors at Section 36-6-106(a) when determining the residential schedule. Because there is
little substantive difference between the factors in the two statutes, we proceed with our analysis as
though Husband had cited the factors in Section 36-6-404(b).
16
directs the trial judge to consider fifteen enumerated factors, as well as any other factors
it deems relevant, to determine how much time the child should spend with each parent.
Although the statute does not require the trial court to list each applicable factor along
with its conclusion as to how that particular factor impacted the court‟s overall
determination, the statute clearly requires the court to at least consider all applicable
factors. In re Connor S.L., No. W2012-00587-COA-R3-JV, 2012 WL 5462839, at *7
(Tenn. Ct. App. Nov. 8, 2012) (internal citations omitted).
Here, the trial court did not reference each of the section 36-6-404(b) factors
specifically. With regard to the fifteen enumerated factors, the trial court stated in its
Findings of Fact and Conclusions of Law:
The Court has carefully studied points one (1) through fifteen (15) in that
code section, and they need not be repeated and articulated here.
Considering each one of those points, the Court has articulated previously
facts which address virtually all of them, and as to all of those points the
Mother comes out ahead in virtually each and every point.
In considering other relevant factors, the court was particularly bothered by Husband‟s
decision to vacation with Ms. McFadden rather than his daughter in July 2012. Husband
and Ms. McFadden had planned and funded the trip in advance in anticipation that it
would be their honeymoon. Though Husband and Ms. McFadden were not married when
the time for the trip arrived, as the trial court had not yet entered a final decree of divorce
in this case, they took the trip as planned. In its findings, the trial court criticized
Husband‟s decision to take the trip with Ms. McFadden rather than use it as an
opportunity to bond with his daughter. In part, the trial court stated that, “[Husband]
chose to follow his own selfish desires by doing the „honeymoon‟ with Elizabeth
McFadden. That speaks volumes to this Court with regard to where Father‟s priorities
rest when it comes to his daughter.” Husband contends that the trial court‟s statements in
reference to his trip with Ms. McFadden reveal that it failed to consider important facts
with regard to the statutory factors.
After reviewing the evidence, we are unconvinced by Husband‟s argument. From
the time the child was born in 2007 until her return to the workforce in April 2012, Wife
stayed at home to care for the child. Even since her return to the workforce, Wife has
continued to be heavily involved in the child‟s life on a daily basis. Wife testified that
the flexibility in her work schedule allows her to have a great deal of participation in the
child‟s life. Wife testified that she is able to take days off to go on all of the child‟s
school field trips. Conversely, Husband testified that at the time of the hearing he had
been forced to ask Wife to deviate from the parties‟ temporary parenting plan on multiple
occasions due to work-related conflicts.
17
Moreover, we note that Husband does not specify any particular modifications to
the trial court‟s allocation of parenting time that he would like this Court to make. In the
absence of such a specification, it is reasonable to assume that Husband seeks the entry of
a PPP that more closely resembles the one he submitted prior to trial. We note, however,
that a comparison of the proposed residential schedules submitted to the trial court by
each party reveals that their specific allocations of parenting time are very much alike.
Both schedules provide that Husband will exercise parenting time every other weekend.
The schedules divide holidays and other school-free days similarly. Both plans provide
for Husband to exercise two full weeks of parenting time in the summer (though Wife‟s
plan sets specific dates for summer visitation and Husband‟s plan does not). The two
schedules also provide essentially the same allocation of parenting time during the child‟s
winter vacation. Wife‟s schedule actually provides more parenting time for Husband
during the child‟s fall and spring vacations than Husband‟s schedule. There are only two
differences in Husband‟s proposed plan that result in him having more parenting time
than Husband receives under Wife‟s schedule: (1) Husband‟s schedule provides that his
parenting time every other weekend will begin on Friday at 5:30 p.m. and end when he
drops the child off at school on the following school day, while Wife‟s schedule provides
that Husband‟s parenting time every other weekend will begin on Friday at 5:00 p.m. and
end on Sunday at 5:00 p.m.; and (2) Husband‟s schedule provides that he will have
overnight parenting time every other Thursday night, while Wife‟s schedule provides that
Husband may have additional parenting time each Tuesday from 5:30pm to 7:00pm. At
the hearing, Wife expressed concern with the Thursday night visitation in Husband‟s
proposed schedule because the child often has tests on Friday, and she was not sure
Husband would consistently get her to school on time. Having considered the evidence
presented, we are unable to conclude that the trial court abused its discretion in adopting
the proposed PPP submitted by Wife rather than the one submitted by Husband.
Therefore, we affirm the trial court‟s allocation of parenting time between the parties.
Modification of the Permanent Parenting Plan
On December 19, 2013, Wife filed a petition to modify the PPP to add certain
restrictions on Husband‟s parenting time after Husband and Ms. McFadden were both
arrested and charged with unlawful possession of a controlled substance with intent to
sell. Prior to the trial court‟s hearing on the petition, the charges against Husband were
dismissed, and Ms. McFadden entered a plea that placed her in a Diversion Program until
January 2015. The trial court conducted a hearing on the petition over the course of two
days on January 31 and February 14, 2014. On March 13, 2014, the trial court entered an
order granting Wife‟s petition to modify the PPP. The court attached a copy of the
modified PPP, which included the following provisions:
18
The following special provisions apply:
1. For the period of January 31, 2014 through January 20, 2015, the
following conditions shall apply:
a. Father shall exercise unsupervised parenting time on the following
dates and times: 5:00 p.m. to 8:00 pm. on Fridays, 9:00 a.m. to 7:00
p.m. on Saturdays, and 9:00 a.m. to 5:00 p.m. on Sundays, every
other weekend, beginning January 31, 2014.
b. Father may exercise additional, unsupervised parenting time from
5:30 p.m. to 7:00 p.m. on Tuesdays.
c. For those holidays that Father was permitted to exercise parenting
time pursuant to the parties‟ Permanent Parenting Plan, entered July
25, 2013, Father may exercise unsupervised parenting time from
9:00 a.m. to 5:00 p.m.
d. Father shall continue to pick the child up from and return the child to
Mother‟s residence.
e. Father shall not exercise any parenting time at the residence he
shares with Ms. Elizabeth McFadden.
f. Father shall not permit Ms. McFadden to have any contact with
[child] and shall not exercise any parenting time in the presence of
or near Ms. McFadden.
g. This residential schedule shall be conditioned upon Father and Ms.
McFadden agreeing to submit to three (3) urine and hair follicle drug
screenings at Mid-South Drug Testing, to be randomly requested by
Mother, at any time in Mother‟s discretion, and to be completed
within five (5) hours of such request. Father shall pay for the
screenings. If Father or Ms. McFadden either refuse to submit to a
drug screening pursuant to the terms described in this paragraph or
fail a screening, Father shall be limited to only supervised parenting
time as described in Section B, including subsections one (1)
through three (3), of the Fiat of Mother‟s Petition to Modify
Permanent Parenting Plan Order, filed December 19, 2014.
2. If Ms. McFadden fulfills the requirements of her diversion program,
19
which is scheduled to be completed on January 20, 2015, Father
shall resume exercising parenting time consistent with the parties‟
Permanent Parenting Plan, entered July 25, 2013, with the following
conditions:
a. Father must supervise [child] for the entire duration of his parenting
time and shall not permit [child] to be in the care of Ms. McFadden
unsupervised for any length of time.
b. This residential schedule shall be conditioned upon Father and Ms.
McFadden agreeing to three (3) drug screenings per year, as set out
in paragraph (1)(g) until January 20, 2017.
Husband raises two issues with regard to the trial court‟s modification of the PPP.
First, Husband contends that the trial court erred in modifying the PPP to add the
additional restrictions because there was no material change in circumstances following
the entry of the original PPP. Second, Husband contends that even if Wife did establish a
material change in circumstances, the trial court erred in conditioning his parenting time
on Ms. McFadden‟s compliance with the court‟s order because she is a non-party.
Once a PPP has been incorporated into a final decree of divorce, the parties are
required to comply with it unless and until it is modified by the court. Armbrister, 414
S.W.3d at 697. In deciding whether to modify a PPP, the court must first determine
whether a material change in circumstances has occurred and then determine whether the
modification would be in the child‟s best interest. Tenn. Code Ann. § 36-6-101(a)(2)(B)-
(C). If no material change of circumstances has been proven, the trial court is not
required to make a best interests determination and must deny the petition to modify. Cf.
Pippin v. Pippin, 277 S.W.3d 398, 405 (Tenn. Ct. App. 2008) (dealing with a petition for
modification of custody).
Tennessee Code Annotated section 36-6-101(a)(2)(C) addresses the material
change in circumstances standard applicable to this case. That section provides:
If the issue before the court is a modification of the court‟s prior decree
pertaining to a residential parenting schedule, then the petitioner must
prove by a preponderance of the evidence a material change of
circumstance affecting the child‟s best interest. A material change of
circumstance does not require a showing of a substantial risk of harm to the
child. A material change of circumstance for purposes of modification of a
residential parenting schedule may include, but is not limited to, significant
changes in the needs of the child over time, which may include changes
20
relating to age; significant changes in the parent‟s living or working
condition that significantly affect parenting; failure to adhere to the
parenting plan; or other circumstances making a change in the residential
parenting time in the best interest of the child.
As this Court has recognized, the statute sets “a very low threshold for establishing a
material change of circumstances” when a party is seeking to modify a residential
parenting schedule (as opposed to modifying custody). Boyer v. Heimermann, 238
S.W.3d 249, 257 (Tenn. Ct. App. 2007). Even if the changed conditions reasonably
could have been anticipated when the initial residential parenting schedule was adopted,
the court may find a material change of circumstances so long as the party seeking
modification has demonstrated a material change in circumstances affecting the child‟s
best interest. Armbrister, 414 S.W.3d at 705.
Husband contends that, despite the very low threshold applicable to modification
of a residential parenting schedule, the trial court erred in finding a material change of
circumstances took place after the entry of the original PPP. In support of his argument,
Husband relies on statements in the trial court‟s oral ruling, which were later incorporated
by reference into its final order related to its knowledge of Ms. McFadden‟s marijuana
use at the time it entered the original PPP. In pertinent part, the trial court stated:
The reality is that at the time this case was tried back in the spring, resulting
in the Final Decree and existing Permanent Parenting Plan, an abundance of
evidence was presented to the Court centered around, generally, the
immoral behavior of the paramour, Ms. Elizabeth McFadden, that to
include, among other things, her marijuana use.
....
One might say that while discovery of a growing marijuana plant by
deputies of the Shelby County Sheriff‟s Department is shocking to the
conscience of some, quite frankly, in light of the proof presented during the
trial of this case, it comes as no surprise to this Court.
There was no evidence presented during this hearing that there was
any real intent to sell and distribute this in support of the charges that were
initially lodged, but absent that, in reality nothing has changed.
The real change is that now Ms. McFadden has taken to growing her
own marijuana in a container that apparently she has harvested for her
personal use, and that is perhaps even more egregious than what we
21
encountered during the trial of the case.
The quote, circumstances, end quote, which formed the basis upon
which the existing Permanent Parenting Plan was predicated, in essence,
remained the same. The restriction that was put in place at the time of the
Final Decree and the entry of the existing Permanent Parenting Plan were
deemed to be sufficient and, at the time, anticipated that they would abide
future use.
The real change of circumstances, if you will, after listening to the
testimony presented, is that not only has that use not discontinued, it has
grown, and I use that word somewhat loosely, realizing that we‟re dealing
with a growing marijuana plant, rather than marijuana purchased from
dealers.
More compelling is listening to this father now testify, and the most
compelling change of circumstance is that this parent has completely lost
touch with reality. To now assert, and attempt to convince this Court, that
this father had no knowledge of the ongoing use of marijuana by his house
partner is, frankly, an insult to the conscience of this Court.
Husband emphasizes the trial court‟s statement that it had knowledge of Ms.
McFadden‟s marijuana use when it entered the original PPP. Husband argues that the
discovery that Ms. McFadden grew her own marijuana rather than purchased it is not a
material change of circumstance. Perhaps more boldly, Husband contends that even if
discovery of the marijuana plant is evidence of a material change in circumstance, it is
evidence of a positive change because Ms. McFadden is no longer buying drugs from
drug dealers.
We reject Husband‟s arguments. Given the “very low threshold” required to
establish material change in circumstances in this case, we conclude that evidence does
not preponderate against the trial court‟s finding that the discovery of the marijuana plant
constitutes a material change of circumstances. Additionally, while Husband insisted in
his testimony that the marijuana plant was solely Ms. McFadden‟s doing, his cavalier
attitude towards her decision to engage in clearly illegal behavior is disconcerting. See
Armbrister, 414 S.W.3d at 705 (“The character, attitude and general personality of other
persons who would be in a position to influence the children are important considerations
for the court.”). Our review of Husband‟s testimony supports the trial court‟s finding that
Husband “has completely lost touch with reality.” Husband admitted that he knew Ms.
McFadden was growing marijuana on the parties‟ property and that he never attempted to
prevent or discourage her from doing so. Moreover, Husband admitted that the child, or
22
one of Ms. McFadden‟s children, could have accessed a box of “drug paraphernalia”
discovered by the Sherriff‟s deputy in the parties‟ carport. Given the lower threshold
applicable in modification proceedings, the proof in the record simply does not
preponderate against the trial court‟s finding that Wife established a material change of
circumstances.
Next, Husband contends that even if Wife did establish a material change in
circumstances, the trial court erred in conditioning his parenting time on Ms. McFadden‟s
compliance with the modified PPP. Specifically, Husband challenges the provision of the
modified PPP that prohibits Husband from allowing Ms. McFadden to contact the child,
and the provision that restricts his parenting time if Ms. McFadden does not agree to
submit to three random drug tests per year until January 20, 2017. Husband argues that
because Ms. McFadden is not a party to the proceedings, and the trial court had no
jurisdiction to enjoin her from contacting the child or order her to submit to the drug
tests, it erred in requiring her compliance as a condition of his parenting time. Wife, on
the other hand, contends that the restrictions of the modified PPP are reasonable and cites
cases in which this Court has held that it is proper to prohibit contact between a child and
a third party.9
In our view, there is a clear distinction between prohibiting contact with a non-
party and restricting a parent‟s contact based on a non-party‟s compliance with the PPP.
The latter is not within the court‟s power. Though the case is not directly analogous, we
find guidance from this Court‟s opinion in Marlow v. Parkinson, 236 S.W.3d 744 (Tenn.
Ct. App. 2007). In Marlow, the trial court enjoined the father from allowing the
stepmother to interfere with the mother‟s parenting obligations. Id. at 751. On appeal,
this Court reversed, concluding that the terms of the injunction were overly broad. Id. at
752. The court stated that a better practice would have been to join the stepmother as a
party and issue an injunction against her. Id. at 752 n.8. The Marlow Court noted that
while many cases impose an obligation on a parent to police the activities of others while
in the home where the child resides or in other locations when the parent is present with
the children, the injunctions in those cases are tempered by the fact that the parent must
have the ability to prevent the act that the trial court has prohibited. Id. at 752–53. The
court stated that the injunction went well beyond the concept of controlling the
environment to which the child was exposed. Id. at 753. Moreover, the court noted that
there was no evidence in the record to indicate that the father had the authority or the
ability to restrict the activities of his wife that occurred outside of his home or outside his
or the child‟s presence. Id. Similarly, in the case before us, the trial court has essentially
ordered Husband to police Ms. McFadden‟s activities and require her compliance with
the PPP. There is no evidence in the record that Husband has the authority or the ability
9
Wife cites Mobley v. Mobley, No. E2012-00390-COA-R3-CV, 2013 WL 1804189, at *14 (Tenn. Ct.
App. Apr. 30, 2013), and Stogner v. Stogner, No. M2011-00503-COA-R3-CV, 2012 WL 1965598, at *3
(Tenn. Ct. App. May 31, 2012).
23
to prevent Ms. McFadden from contacting the child. Likewise, there is no evidence that
Husband has the authority or ability to require Ms. McFadden to submit to the drug tests
or to prevent her from engaging in activities outside of his presence that would cause her
to fail the drug tests. The better practice would have been to join Ms. McFadden as a
party and issue an injunction against her. See id. at 752 n.8. Thus, we conclude that the
trial court erred in imposing restrictions on Husband that conditioned his parenting time
on Ms. McFadden‟s actions. On remand, the trial court is instructed to modify the PPP
so that Husband‟s parenting time is not conditioned on the actions of a non-party.
C. Child Support
As part of its adoption of Wife‟s PPP, the trial court ordered Husband to pay child
support in the amount of $1,421 per month. The trial court‟s calculation was based on a
monthly gross income of $15,050.75 for Husband and $437 for Wife. Husband contends
that the trial court erred in determining the amount of his child support obligation because
the evidence preponderates against the trial court‟s findings as to each party‟s monthly
income.
In setting the proper amount of child support, trial courts are guided by the
Tennessee Child Support Guidelines (“Guidelines”) promulgated by the Tennessee
Department of Human Services. Tenn. Code Ann. § 36-5-101(e)(2); Tenn. Comp. R. &
Regs. Ch. 1240-2-4-.01(1)(a). The Guidelines set forth the appropriate method for
determining a parent‟s gross income. Tenn. Comp. R. & Regs. Ch. 1240-2-4-.04(3).
“Gross income” is defined as “all income from any source” including salaries, bonuses,
dividends, interest, annuities, and income from self-employment. Id. at 1240-2-4-
.03(3)(a)(1). Variable income, such as a bonus, is to “be averaged over a reasonable
period of time consistent with the circumstances of the case and added to a parent‟s fixed
salary or wages to determine gross income.” Id. at 1240-2-4-.04(3)(b). Imputing
additional gross income to a parent is appropriate if the court finds that the parent is
willfully and/or voluntarily underemployed. Tenn. Comp. R. & Regs. Ch. 1240-2-4-
.04(3)(a)(2)(i)(I). A determination of willful and/or voluntary underemployment is not
limited to choices motivated by an intent to avoid or reduce the parent‟s child support
obligation. Id. at 1240-2-4-.04(3)(a)(2)(ii)(I). If the court makes such a determination,
“additional income can be allocated to that parent to increase the parent‟s gross income to
an amount which reflects the parent‟s income potential or earning capacity.” Id. at 1240-
2-4-.04(3)(a)(2)(ii)(II). Once the court has determined the appropriate income of the
parties and the Guidelines have been applied, the calculation of child support is made
with certainty, predictability, and precision. Taylor v. Fezell, 158 S.W.3d 352, 357
(Tenn. 2005).
In its Findings of Fact and Conclusions of Law, the trial court noted that the
24
determination of each party‟s income was a threshold issue affecting its resolution of
subsequent issues and expressed frustration with the evidence presented by each of the
parties regarding income. The court noted that neither party presented a single pay stub
or tax return and complained that “this record is simply devoid of any empirical evidence
of the actual income of either one of these parties.” Nevertheless, after reviewing the
submissions and testimony of each party, the trial court adopted the figures in Wife‟s
proposed PPP of monthly gross income of $15,050.75 for Husband and $437 for Wife.
We are sympathetic to the trial court‟s task of sorting through the parties‟ various
submissions on income. In one part of Husband‟s Rule 14(C) affidavit, he listed his
projected gross annual income for 2013 as $157,736 ($13,144.67 per month). Yet, in an
estimated 2013 monthly budget included in the very same filing, Husband reported a
gross income of only $8,343 per month.10 Husband‟s 14(C) affidavit did not provide any
income information for Wife. In his proposed PPP, Husband listed his gross income as
$12,470 per month and imputed $3,500 of income per month to Wife. The income
amounts listed in Wife‟s filings, while consistent with each other, were vastly different
from those listed in Husband‟s filings. In both her 14(C) affidavit and proposed PPP,
Wife listed Husband‟s gross income as $15,050 per month and listed her own income as
$437 per month. Because the trial court adopted the income figures for each party
submitted by Wife, we examine the method in which she calculated those figures.
Husband’s Income
For purposes of calculating Husband‟s monthly gross income, Wife imputed a
base salary of $125,000 per year to Husband. She then calculated the average amount of
Husband‟s annual bonuses from 2010-2012, which she determined to be $55,609.03.
Wife added the two numbers together to arrive at her calculation of Husband‟s annual
gross income of $180,609.03 or $15,050.75 per month. The trial court found Wife‟s
determination of Husband‟s income to be accurate and adopted it in calculating
Husband‟s child support obligation. Husband contends that the evidence preponderates
against the trial court‟s finding.
We begin our analysis of Husband‟s income, perhaps inversely, by addressing the
trial court‟s calculation and inclusion of Husband‟s annual bonuses. Husband contends
that the trial court erred in including his bonuses in its calculation of his gross income
because it had already allocated the use of Husband‟s annual bonus income to pay off his
debt to Wife in the division of the marital estate. As stated above, the trial court ordered
that Husband pay Wife the value of her interest in shares of LWM stock, with three
percent interest annually, as alimony in solido over a period of years with payments
10
This amount was apparently calculated based on a $100,000 base salary and did not account for income
from Husband‟s annual bonus.
25
beginning at $15,000 per year and increasing by $2,000 per year until fully paid. In
making its award, the trial court ordered that Husband‟s payments be made by January 31
of each year, which would coincide with Husband‟s receipt of his annual bonus.
Therefore, Husband contends that the trial court‟s inclusion of his bonus income in
calculating his gross income for child support means that the same income is allocated
twice. We reject this argument for several reasons. First, the trial court‟s order does not
specify that Husband must make his annual alimony in solido payments using income
from his annual bonus; it merely points out that Husband will receive his bonus around
the same time that the payments come due each year. Second, the average amount of
Husband‟s annual bonuses ($55,609.03) is much larger than the amount of the alimony in
solido payments due each January. Moreover, the Guidelines expressly state that bonus
income is to be included in determining a parent‟s gross income. Tenn. Comp. R. &
Regs. Ch. 1240-2-4-.04(3)(b). To determine Husband‟s annual bonus income, Wife
averaged the bonus amounts listed in Husband‟s Personal Benefit Statements for 2010,
2011, and 2012. The statements reflect that Husband‟s bonus was $60,693.09 in 2010,
$52,577 in 2011, and $53,557 in 2012. Using the three most recent years for which the
amount Husband‟s bonus is available to calculate his average bonus income satisfies the
Guidelines‟ direction to average variable income over a reasonable period. See Stacey v.
Stacey, No. 02A01-9802-CV-00050, 1999 WL 1097975, at *4 (Tenn. Ct. App. Oct. 6,
1999) (“Since the amount of the option income varies from year to year, it would be fair
to average the option income in 1996 and 1997 and add this figure to Husband‟s base
salary.”). Thus, we discern no error in the trial court‟s calculation and inclusion of
Husband‟s bonus income in determining the amount of his gross income.
Husband also takes issue with the trial court‟s determination that his base salary is
$125,000 per year. The amount of Husband‟s base salary was a point of discussion
throughout the hearing and one that the court addressed specifically in its findings. On
direct examination, Husband testified as follows regarding his salary in 2010 and 2011:
Q. Do you know what that is approximately in 2010?
A. In 2010, my gross salary would have been approximately a hundred or
110,000. And so my net pay would have been between six or $7,000.
Q. What, a month?
A. Yes, sir. And again, that‟s after payroll deductions and withholding.
Q. What about 2011?
A. 2011, my salary coming into that year was 110,000, from January
26
through March; it was approximately -- my annual income was 125,000.
And then effectively, post-leave-of-absence, my salary was 100,000
on an annual basis. And so our net income effectively for that period of
time was, on an annual basis, again, between six and, you know, and about
-- between six and $6500 a month.
Husband testified that the reduction in salary occurred as a result of his colleagues‟
discovery of his affair with Ms. McFadden:
Q. As a result of that, was any punitive action taken against you by
Legacy?
A. Yes.
Q. What action was that?
A. It was a reduction in salary, which had just began in January 2011, from
$125,000.00 to $100,000, and I was removed from the management
committee. And I resigned as a voting member of the board of directors.
Citing its concerns with Husband‟s credibility, the trial court found that Husband‟s salary
was never reduced and used his $125,000 base salary in its calculation of his gross
income. The court stated:
The proof in this case is not even clear if [Husband‟s leave of absence] was
to be with or without pay. Neither is the proof clear as to what period the
sixty (60) day leave of absence covered. In that regard, the Court finds that
there are many questions that surround the so-called “twenty-five thousand-
dollar ($25,000) reduction” in base salary. For example, we do not know
from this record when the reduction began. We do not know from this
record if it was permanent or intended to be some temporary period. We do
not know from this record that if it was intended to be a temporary period,
from when to when, for example, that should cover. Moreover, indeed,
from this record, the Court is not satisfied that this so-called “twenty-five
thousand dollar ($25,000) reduction” even really occurred.
This Court must afford considerable deference to the trial court‟s factual findings
where issues of witness credibility are concerned; however, we will re-evaluate the trial
court‟s findings based on credibility if there is clear and convincing evidence to the
contrary. Kelly v. Kelly, 445 S.W.3d 685, 692 (Tenn. 2014). For evidence to be clear
and convincing, it must eliminate any and all “serious or substantial doubt about the
27
correctness of the conclusions drawn from the evidence.” Id. at 692-93 (citations
omitted). While that standard of review presents a high bar, our review of the record
reveals that this case presents such a rare instance where the evidence is clearly and
convincingly contrary to the trial court‟s findings.
To begin, we note that Wife‟s testimony corroborates Husband‟s claim that his
salary was reduced. During questioning about Husband‟s affair with Ms. McFadden,
Wife gave the following testimony:
Q. How did this impact Mr. Holdsworth‟s career?
A. It was pretty significant. When Legacy found out about the affair, they
reduced his salary.
....
Q. Now, as to your family, what happened to Mr. Holdsworth‟s -- Mr.
Holdsworth was making how much per year as base salary at that point?
A. We were really excited. He had gotten a raise to a hundred and twenty-
five thousand dollars a year.
Q. With that raise, when the affair was discovered, what happened to that?
A. They took twenty-five thousand dollars from that base salary. He was
given a sixty-day leave of absence or suspension. He had to resign from
the voting three board members at the company.
Additionally, the parties‟ testimony appears to be corroborated by the amount of
Husband‟s base salary as it is listed in his Personal Benefit Statements from 2010, 2011,
and 2012. The Personal Benefit Statements, which were offered as evidence of
Husband‟s income by Wife’s attorney on the first day of trial, list Husband‟s base salary
as $110,000.43 in 2010, $110,416.65 in 2011, and $95,961.59 in 2012. While the trial
court did not reference the Personal Benefit Statements in its Findings of Fact and
Conclusions of Law, neither party has indicated that the income amounts listed in the
statements are not accurate. In fact, we note that Wife calculated Husband‟s average
annual bonus income using the bonus amounts listed in the very same statements.
Adding Husband‟s base salary for each year to his annual bonus for that year, the
Personal Benefit Statements reflect Husband‟s total pay as $170,693.52 in 2010,
$162,993.65 in 2011, and $149,518.59 in 2012.11 These amounts translate to gross
11
These amounts do not include employer contributions to Husband‟s 401(k) account of $1,099.90 in
28
monthly incomes of $14,224.46, $13,582.80, and $12,459.88 in each year respectively.
These figures also align much more closely with the amount Husband listed in his
proposed PPP as his 2012 gross income ($12,470 per month) than they do with the
amount Wife listed in her filings and the trial court adopted ($15,050 per month).
Moreover, Wife never actually represented to the trial court that Husband‟s base
salary was $125,000; rather, she argued that that Husband‟s imputed base salary was
$125,000. A review of Wife‟s filings and arguments before the trial court reveals that
she clearly sought to impute additional gross income to Husband under the theory that his
reduction in salary, which resulted from his decision to conceal his relationship with Ms.
McFadden, constitutes willful and voluntary underemployment. A footnote
accompanying the $125,000 base salary amount, which Wife labeled “IMPUTED Base
Salary,” states:
Father‟s base annual salary at Legacy Wealth Management was $125,000
prior to his resignation from his position as the third-highest-ranking
employee, due to the willful and voluntary act of concealing his ongoing
affair with [Ms. McFadden] during her hiring process at Legacy Wealth
Management.
Additionally, in both his opening and closing statements to the trial court, Wife‟s attorney
explicitly argued that Husband‟s reduction in salary was a result of willful and voluntary
acts such that additional income should be imputed to him. Thus, Wife clearly
acknowledged that Husband‟s actual base salary was less than $125,000 but urged the
court to find that Husband was willfully and voluntarily underemployed and to impute
additional income to him.
The Guidelines identify three situations in which imputing additional income to a
parent is appropriate “[i]f a parent has been determined by a tribunal to be willfully
and/or voluntarily underemployed or unemployed.” Tenn. Comp. R. & Regs. Ch. 1240-
2-4-.04(3)(a)(2)(i)(I). While trial courts have considerable discretion to determine
whether to impute income to a parent for purposes of calculating child support, Miller v.
Welch, 340 S.W.3d 708, 712 (Tenn. Ct. App. 2010), the Guidelines explicitly state that
the court must make a determination that the parent is “willfully and/or voluntarily
underemployed or unemployed” before it can impute income to the parent. Tenn. Comp.
R. & Regs. Ch. 1240-2-4-.04(3)(a)(2)(i)(I). The trial court made no such finding in this
case. The trial court simply refused to believe that any reduction in Husband‟s salary
2010 and $651 in 2011. The Guidelines specify that employee benefits that are typically added to the
salary that a parent may receive as a standard added benefit, such as employer contributions to a
retirement or pension plan, are not counted as income for purposes of calculating child support. Tenn.
Comp. R. & Regs. Ch. 1240-2-4-.04(3)(a)(4)(iv).
29
ever occurred.
After reviewing the record, we conclude that the evidence preponderates against
the trial court‟s finding that Husband earns a base salary of $125,000 per year. Because
the trial court used that base salary in its calculation of Husband‟s annual gross income
and child support obligation, the evidence also preponderates against the trial court‟s
findings on those matters. Therefore, we vacate the trial court‟s determination of
Husband‟s child support obligation and remand for a redetermination of his income and
child support obligation.
Wife’s Income
The trial court also adopted Wife‟s calculation of her own monthly gross income.
Wife set her own monthly income of $437 using her average monthly salary for the
months she worked in 2012. After resigning from her position with Shelby County
Schools in 2005, Wife did not return to the workforce until she began her private practice
as a licensed clinical social worker in April 2012. In her proposed PPP, Wife reported
that from April 2012 through December 2012 she earned $3,931. She calculated her
monthly income as $437 by dividing that number by the number of months she worked
that year (nine). The trial court found that Husband did not seriously challenge this
amount and adopted it in calculating Husband‟s child support obligation. Husband
contends that the evidence preponderates against the trial court‟s finding.
First, Husband argues that the trial court should have imputed gross income of
$42,000 to $50,000 per year to Wife. Husband‟s argument is based in part on the fact
that Wife‟s salary prior to resigning from Shelby County Schools in 2005 was
approximately $42,000. Husband also relies on Wife‟s testimony that ideally, she would
like to make between $40,000 and $50,000 in her private practice. The trial court
rejected each of these arguments and stated that “Mr. Holdsworth offers no basis for such
an imputation and the Court finds that such an imputation would be nothing more than
mere speculation.” We agree with the trial court‟s assessment. There is simply no
evidence in the record to support such a finding.
Alternatively, Husband contends that because Wife failed to produce reliable
evidence of her income, the trial court should have imputed annual gross income of
$29,300 to Wife. The Guidelines provide that imputing income to a parent may be
appropriate if the trial court has “no reliable evidence of the parent‟s income or income
potential.” Tenn. Comp. R. & Regs. Ch. 1240-2-4-.04(3)(a)(2)(iv)(I)II. The Guidelines
state:
I. If a parent fails to produce reliable evidence of income (such as tax
returns for prior years, check stubs, or other information for determining
30
current ability to support or ability to support in prior years for calculating
retroactive support); and
II. The tribunal has no reliable evidence of the parent's income or income
potential;
III. Then, in such cases, gross income for the current and prior years shall
be determined by imputing annual gross income . . . twenty-nine thousand
three hundred dollars ($29,300) for female parents. These figures represent
the full time, year round workers‟ median gross income, for the Tennessee
population only, from the American Community Survey of 2006 from the
U.S. Census Bureau.
Tenn. Comp. R. & Regs. Ch. 1240-2-4-.04(3)(a)(2)(iv)(I).
Here, there is no reliable evidence of Wife‟s income or income potential. The
only specific evidence of the Wife‟s income before the trial court was Wife‟s own
statements in her filings and testimony that she made $437 per month from April 2012
through December 2012. The trial in this case took place in April and May 2013. In its
Findings of Fact and Conclusions of Law, the trial court implicitly found Wife‟s
statement of her 2012 income to be credible. We have no reason to doubt its accuracy
either. However, Wife is not an employee earning consistent pay. Wife is a licensed
clinical social worker with a solo practice; she is a self-employed small business owner.
As such, her income is bound to grow along with the growth and success of her business.
Here, Wife provided only a snapshot of her income from the very earliest stages of her
private practice. Given the unique circumstances of this case, we conclude that Wife‟s
statement that she made $437 per month in 2012 is not reliable evidence of her income or
income potential for purposes of calculating child support.
To begin, we note that the $437 per month figure is itself misleading. Wife started
her own solo private practice from scratch in April 2012. While Wife undoubtedly had
some contacts from her previous career in social work prior to 2005, such an endeavor
will inevitably involve a period of client acquisition and added expenses as she
establishes her practice. The only income information provided is from the very early
stages of what Wife indicated that she planned to do “for the remainder of my life.”
Wife‟s statement that she made, on average, $437 per month during the first nine months
of her private practice provides little, if any, insight into the amount of income she can be
expected to make once her practice is more established. Moreover, Wife‟s own
testimony indicates that she made more than $437 per month in 2012 once she actually
started seeing clients. Wife testified that after she received a letter reinstating her license
on April 2, 2012, she had to wait “about a month” for her license to be approved and
31
mailed to her before she could begin to solicit clients. Wife did not meet with any clients
in April 2012. Nevertheless, Wife included April in calculating her $437 as her average
monthly income for 2012. Thus, it is clear that Wife actually made more than $437 per
month in 2012 once she actually started soliciting and meeting with clients.
Additionally, the evidence indicates that the size of Wife‟s practice was growing
each month. Wife testified that her practice was getting “steadily better” in 2013. She
also testified that the months immediately preceding the trial were her busiest to date.
Wife stated that in February 2013 she had eighty-two sessions with patients; in March
2013 she had sixty-five sessions despite taking two weeks off for spring break and for the
initially scheduled trial dates; in April 2013 she had eighty-six sessions. Wife testified
that May 2013, though the total number of sessions would likely be lower than April
because of the time she took off for trial, was her busiest month to date. Wife indicated
that she expected the trend to continue. When asked about her anticipated future
earnings, Wife stated that she hoped to make $40,000 to $50,000 per year in her private
practice, if not more.
In light of the foregoing, we conclude that the record does not include reliable
evidence of Wife‟s income or income potential. We do not doubt the veracity of Wife‟s
statement that she earned $437 per month from April 2012 through December 2012.
However, given the circumstances, that statement does not accurately reflect Wife‟s
income or her income potential. We conclude that the evidence preponderates against the
trial court‟s use of $437 per month as Wife‟s income and remand this case for a
determination of Wife‟s income potential in light of all relevant factors. If the parties are
unable to provide reliable evidence of Wife‟s income on remand, the trial court should
impute annual income of $29,300 according to the child support guidelines.
Retroactive Child Support Award
During the pendency of the divorce proceedings, the trial court did not enter a
temporary parenting plan setting child support.12 Subsequently, as part of its adoption of
Wife‟s PPP, the trial court ordered Husband to pay Wife $34,109.25 in retroactive child
support that accrued since the parties‟ separation.13
12
Wife submitted a Proposed Amended Temporary Parenting Plan on December 19, 2011 requesting that
Husband make temporary child support payments of $1,602 per month. After a hearing, the trial court
adopted Wife‟s plan on August 7, 2012. However, the plan adopted by the trial court did not include
Wife‟s child support determination. Instead, the plan stated that “issues of current and retroactive child
support are reserved for resolution by the Court at trial.”
13
The Guidelines provide that in divorce cases in which an initial child support award is being set, a
judgment must generally be entered to include an amount of monthly support due from the date of the
separation of the parties up to the date that an order for current support is entered. Tenn. Comp. R. &
Regs. Ch. 1240-2-4-.06(1)(b)(1).
32
Husband argues that the trial court erred in failing to consider voluntary monthly
payments of $1,000 he made to Wife during the pendency of the parties‟ divorce. During
cross-examination, Husband stated that he paid Wife $1,000 per month beginning in
October 2011:
Q. Let me ask this: You only gave Ms. Holdsworth, your wife and the
mother of your child, a thousand dollars a month, correct, since the
separation?
A. Correct, for 19 months, $19,000. And in addition to that over the period
of time since I‟ve filed, I have paid $47,000, approximately, in either
marital expenses or direct reimbursements or expenditures on her behalf.
Q. We‟ll look into some of those later on.
But let me ask you this: You‟re saying that all of that‟s child support, yes?
A. The $19,000, a thousand per month since October of ‟11 is child
support, correct.
Though Wife acknowledged receiving those monthly payments during her own cross-
examination, she did not necessarily agree that they were child support payments:
Q. I believe Mr. Holdsworth started paying you with child support in the
amount of $500 twice a month in October 2011; is that correct?
A. He provided me -- yes, $500 twice a month. I‟m not sure how it was
deemed, but yes.
The trial court did not address its award of retroactive child support at all in its findings.
The trial court‟s only statement in reference to the payments in its Findings of Fact and
Conclusions of Law was made in the context of determining the appropriateness of
Wife‟s alimony in futuro award:
The Court further finds that since selling the parties‟ marital residence at a
significant loss and moving out, the only pendente lite support given to the
Wife by the Husband has been in an amount that is not even equal to the
amount of child support that would be due based upon the child support
guidelines.
Based on our review of the record, it is clear that the trial court did not consider
33
the payments at all in setting the amount of Husband‟s retroactive child support
obligation. In his brief, Husband cited a similar case, Gilland v. Gilland, Nos. M2002-
02276-COA-R3-CV, M2002-02770-COA-R3-JV, 2004 WL 2583885 (Tenn. Ct. App.
Nov. 9, 2004). In Gilland, the lower court awarded the mother $23,273.50 in retroactive
child support. Id. at *7. The father asserted that he voluntarily paid $27,270 in support
of the parties‟ child prior to entry of the court‟s order. Id. The mother admitted she
received $25,000 from the husband prior to entry of the order but argued that the funds
were for payment of another debt and were not child support. Id. The lower court ruled
in the mother‟s favor. Id. In reversing the lower court‟s ruling, this Court stated:
Based on our de novo review of the evidence, we find that the evidence
preponderates against the court‟s ruling. Father testified that he paid
Mother specific amounts of money for a period of time following the
child‟s birth. Mother did not deny receiving the money; to the contrary, she
essentially admitted receiving the money. Mother‟s challenge to the
payments by Father arises from and pertains to their dispute regarding the
$25,000 she deposited into his account following the sale of her house. She
claims Father has not repaid the $25,000 he allegedly owes her. She may be
right; however, we are not ruling on whether Father owes her $25,000 from
the sale of her house. He testified that he paid her amounts in excess of the
arrearage judgment following the child‟s birth as support for the child. She
does not deny receiving the funds, she only challenges the reason for its
payment. Considering all of the evidence before us we find that the
evidence preponderates in favor of the finding that Father remitted funds as
support in excess of the arrearage judgment and therefore is entitled to
credit for the payments.
Id. This Court ruled that the father was entitled to a credit in an amount not to exceed the
amount of the retroactive child support award set by the lower court.14 Id. at *8.
Wife contends that Gilland is distinguishable because the parties in that case were
never married and there were no temporary alimony issues to consider in that case.
Based on our review of the record, however, there are no temporary alimony issues to
consider in this case either. The trial court never entered an order requiring Husband to
make regular payments of pendente lite support or temporary spousal support to Wife.
Wife does not dispute she received the monthly payments, nor does she dispute that
Husband made the payments voluntarily. Wife received the payments; Wife was the
child‟s primary residential parent; we fail to see any distinction between Husband‟s
voluntary monthly payments and monthly payments Wife would have received had a
14
The Court stated that any amounts the father paid in excess of the amount of the retroactive support
award should be viewed as gratuity or voluntary contributions. Gilland, 2004 WL 2583885, at *8.
34
temporary child support order been in place.
Having considered all of the evidence, we conclude that Husband is entitled to
credit for the monthly payments to the extent that the total amount of the credit does not
exceed the amount of the retroactive child support obligation. Additionally, we note that
the calculation of Husband‟s retroactive child support obligation was based on the same
inaccurate income figures discussed in further detail in the previous sections. Thus, we
vacate the trial court‟s award of $34,109.25 in retroactive child support and direct the
trial court on remand to recalculate the amount of the award in light of its findings as to
the parties‟ incomes and consistent with this opinion.
D. Alimony
Husband contends that the trial court erred in making its awards of alimony in
futuro and in solido. As previously noted, the trial court awarded Wife $4,000 per month
in alimony in futuro and $461,586.82 in attorney‟s fees and expenses as alimony in
solido.
The Tennessee Supreme Court recently discussed the standard of review
applicable to a trial court‟s decision on matters of alimony in detail in Gonsewski v.
Gonsewski:
For well over a century, Tennessee law has recognized that trial courts
should be accorded wide discretion in determining matters of spousal
support. See Robinson v. Robinson, 26 Tenn. (7 Hum.) 440, 443 (1846)
(“Upon a divorce . . . the wife is entitled to a fair portion of her husband‟s
estate for her support, and the amount thus to be appropriated is a matter
within the legal discretion of the chancellor. . . .”). This well-established
principle still holds true today, with this Court repeatedly and recently
observing that trial courts have broad discretion to determine whether
spousal support is needed and, if so, the nature, amount, and duration of the
award. See, e.g., Bratton v. Bratton, 136 S.W.3d 595, 605 (Tenn. 2004);
Burlew v. Burlew, 40 S.W.3d 465, 470 (Tenn. 2001); Crabtree v. Crabtree,
16 S.W.3d 356, 360 (Tenn. 2000).
Equally well-established is the proposition that a trial court's
decision regarding spousal support is factually driven and involves the
careful balancing of many factors. Kinard v. Kinard, 986 S.W.2d 220, 235
(Tenn. Ct. App. 1998); see also Burlew, 40 S.W.3d at 470; Robertson v.
Robertson, 76 S.W.3d 337, 340-41 (Tenn. 2002). As a result, “[a]ppellate
courts are generally disinclined to second-guess a trial judge‟s spousal
35
support decision.” Kinard, 986 S.W.2d at 234. Rather, “[t]he role of an
appellate court in reviewing an award of spousal support is to determine
whether the trial court applied the correct legal standard and reached a
decision that is not clearly unreasonable.” Broadbent v. Broadbent, 211
S.W.3d 216, 220 (Tenn. 2006). Appellate courts decline to second-guess a
trial court‟s decision absent an abuse of discretion. Robertson, 76 S.W.3d
at 343. 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. 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). This standard does not permit an appellate
court to substitute its judgment for that of the trial court, but “„reflects an
awareness that the decision being reviewed involved a choice among
several acceptable alternatives,‟ and thus „envisions a less rigorous review
of the lower court's decision and a decreased likelihood that the decision
will be reversed on appeal.‟” Henderson, 318 S.W.3d at 335 (quoting Lee
Medical, Inc. v. Beecher, 312 S.W.3d 515, 524 (Tenn. 2010)).
Consequently, when reviewing a discretionary decision by the trial court,
such as an alimony determination, the appellate court should presume that
the decision is correct and should review the evidence in the light most
favorable to the decision. Wright, 337 S.W.3d at 176; Henderson, 318
S.W.3d at 335.
Gonsewski v. Gonsewski, 350 S.W.3d 99, 105-06 (Tenn. 2011)(footnote omitted).
Tennessee law 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). In Mayfield v. Mayfield, the supreme court offered a
description of each form of spousal support:
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. 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. 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.
Where economic rehabilitation is unnecessary, transitional alimony
36
may be awarded. Transitional alimony assists the disadvantaged spouse
with the “transition to the status of a single person.”
Mayfield, 395 S.W.3d 108, 115 (Tenn. 2012) (internal citations omitted).
While courts are afforded considerable discretion in matters of spousal support,
they must make their determination within the statutory framework. The Tennessee
statutes concerning spousal support reflect a legislative preference favoring short-term
spousal support over long-term spousal support, with the aim being rehabilitation of the
economically disadvantaged spouse relative to the other spouse and to achieve self-
sufficiency where possible. See Tenn. Code Ann. § 36-5-121(d)(2)-(3); Gonsewski, 350
S.W.3d at 109. “While this statutory preference does not entirely displace long-term
spousal support, alimony in futuro should be awarded only when the court finds that
economic rehabilitation is not feasible and long-term support is necessary.” Gonsewski,
350 S.W.3d at 109 (citing Bratton v. Bratton, 136 S.W.3d 595, 605 (Tenn. 2004);
Robertson v. Robertson, 76 S.W.3d 337, 341-42 (Tenn. 2002)). Thus, trial courts should
not refrain from awarding long-term support when such support is appropriate under the
statutory factors. Robertson, 76 S.W.3d at 341-42.
In determining whether to award spousal support and, if so, the nature, amount,
length, and manner of payment, courts must consider all relevant factors, including, to the
extent that they are relevant, the statutory factors listed in Tennessee Code Annotated
section 36-5-121(i).15 Although the court must consider each of the relevant statutory
15
The statutory factors include:
(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;
(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
37
factors relevant to the parties‟ circumstances, “the two that are considered the most
important are the disadvantaged spouse‟s need and the obligor spouse‟s ability to pay.”
Gonsewski, 350 S.W.3d at 110 (citations omitted). Guided by these principles, we
consider the trial court‟s awards of spousal support and the specific circumstances of this
case.
Alimony in Futuro
The trial court awarded Wife alimony in futuro of $4.000 per month until her
death or remarriage. Husband contends that the trial court‟s award is excessive and
unwarranted in this case. In arguing that the trial court erred in granting Wife alimony in
futuro, Husband relies heavily on the supreme court‟s opinion in Gonsewski for support.
The parties in Gonsewski were married for twenty-one years and had two adult
children. Gonsewski, 350 S.W.3d at 103. In the year preceding their divorce, the wife
earned $73,000, and the husband earned approximately $170,000. Id. The trial court
determined that the wife was not entitled to alimony of any kind given her stable job,
good income, and share of the marital estate. Id. at 104. The court of appeals reversed
the trial court‟s decision and ordered the husband to pay alimony in futuro of $1,250 per
month. Id. The supreme court reversed the court of appeals and explained that alimony
in futuro should not have been awarded because it is intended to apply when the recipient
party could not be fully rehabilitated. Id. at 111. The supreme court also emphasized
that an appellate court is not permitted to substitute its judgment for that of the trial court
and should not reverse a trial court‟s alimony decision unless it has abused its discretion.
Id. at 112.
We disagree with Husband‟s contention that Gonsewski is analogous to the present
case. In Gonsewski, the appellate court was charged with considering whether the trial
court abused its discretion in declining to award alimony; in this case, we review the trial
court‟s decision to grant Wife alimony in futuro. Because we are reviewing a trial
court‟s decision to award alimony rather than deny it, Gonsewski is only marginally
useful on this issue.
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).
38
As we stated above, alimony in futuro is appropriate when the economically
disadvantaged spouse cannot achieve self-sufficiency and economic rehabilitation is not
feasible. Tenn. Code Ann. § 36-5-121(f)(1). Though the general assembly has expressed
a preference for awards of short-term alimony, it has not entirely displaced awards of
long-term spousal support like alimony in futuro. Before a trial court can make an award
of alimony in futuro, however, it must make a finding that “economic rehabilitation is not
feasible and long-term support is necessary.” Gonsewski, 350 S.W.3d at 109 (citing
Bratton v. Bratton, 136 S.W.3d 595, 605 (Tenn. 2004); Robertson v. Robertson, 76
S.W.3d 337, 341-42 (Tenn. 2002)).
In this case, the trial court stated that, “the Wife is not a candidate for either
transitional alimony or rehabilitative alimony as those forms are described and defined in
the Tennessee Code.” However the trial court did not make any specific factual findings
to support its conclusion that Wife was not capable of rehabilitation. When the trial court
has not made a specific finding on a particular issue, this Court reviews the record to
determine where the preponderance of the evidence lies. Lee v. Lee, 66 S.W.3d 837, 843
(Tenn. Ct. App. 2001).
For purposes of determining whether an award of alimony in futuro is appropriate,
rehabilitation means that:
the disadvantaged spouse is unable to achieve, with reasonable effort, an
earning capacity that will permit the spouse‟s standard of living after the
divorce to be reasonably comparable to the standard of living enjoyed
during the marriage, or to the post-divorce standard of living expected to be
available to the other spouse.
Tenn. Code Ann. § 36-5-121(f)(1); Gonsewski, 350 S.W.3d at 111. Alimony in futuro “is
not, however, a guarantee that the recipient spouse will forever be able to enjoy a lifestyle
equal to that of the obligor spouse.” Gonsewski, 350 S.W.3d at 108 (quoting Riggs v.
Riggs, 250 S.W.3d 453, 456 n. 2 (Tenn.Ct.App.2007)). In many instances, the economic
realities of divorce are such that “in most divorce cases it is unlikely that both parties will
be able to maintain their pre-divorce lifestyle.” Id. (quoting Kinard v. Kinard, 986
S.W.2d 220, 235 (Tenn.Ct.App.1998)). Thus, the prior concept of alimony as lifelong
support to enable the disadvantaged spouse to maintain the marital standard of living has
been superseded by the statutory preference for short-term support. See id. (quoting
Robertson v. Robertson, 76 S.W.3d 337, 340–41 (Tenn.2002)).
This Court recently addressed a similar situation in Willenberg v. Willenberg. No.
M2013-02627-COA-R3-CV, 2014 WL 4725252 (Tenn. Ct. App. Sept. 23, 2014), which
we find to be instructive in our disposition of the present case. In Willenberg, the parties
39
were married for twenty-three years. Id. at *2. The husband earned between $100,000
and $120,000 per year, with the ability to increase his earning capacity. Id. The wife had
a degree in public management, had experience as a probation officer, and had no
physical limitations. Id. at *4. She earned $39,000 per year but could increase her salary
to about $50,000 per year with her completion of a two-year accounting program. Id.
The trial court awarded wife alimony in futuro of $2,000. Id. at *3. On appeal, this
Court determined that the trial court did not make specific findings relative to its
conclusion that the wife was not capable of rehabilitation and conducted its own review
of the record to determine whether the preponderance of the evidence supported the trial
court‟s award. Id. This Court ruled that the evidence supported a determination that the
wife was capable of rehabilitation and reversed the trial court‟s award of alimony in
futuro and awarded the wife rehabilitative alimony. Id.
Turning our attention back to the case at bar, we conclude that the preponderance
of the evidence supports a determination that Wife is capable of rehabilitation. Wife‟s
earning capacity and financial situation is remarkably similar to the wife in Willenberg.
Wife is relatively young; at the time of trial, she was forty-three years old. She testified
that she did not have any medical conditions that impaired her ability to work. Wife also
has a Master‟s Degree in Science and Social Work. As the trial court noted, she is
“exceedingly well educated.” Though she had been out of the workforce for
approximately seven years prior to starting her private practice as a licensed clinical
social worker, she has experience in the field. While Wife is still in the process of
establishing her private practice, the evidence indicates that she will be able to utilize her
education and experience to earn a good income. Wife testified that “[s]tarting out, I
think I‟m doing pretty well,” and that business was “steadily getting better.” She stated
that she expected to eventually make $40,000 to $50,000 per year in private practice if
not more. Indeed, Wife testified that she chose to enter private practice because she
wanted to find “a position I could do for the remainder of my life that would eventually
provide the most income.” This testimony supports a determination that Wife can be
rehabilitated to achieve a high income in the future and that long-term support as ordered
by the trial court is not necessary. We reverse the trial court‟s award of alimony in
futuro.
Notwithstanding our determination that long-term support is not necessary in this
case, we are mindful of Wife‟s need for support during this period of transition from
married life to single life as she establishes her private practice. “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.” Gonsewski,
350 S.W.3d at 109. The trial court found that Wife demonstrated a monthly need for
40
$4,000 per month in support.16 Wife stated that she anticipated making $40,000 to
$50,000 per year in her private practice but estimated that it would take about five years
of gradually growing her clientele to reach that goal. Thus, while it is clear that Wife is
not currently capable of self-sufficiency, the evidence indicates that she has the capacity
to become self-sufficient over time as her income from private practice increases.
Therefore, we conclude that Wife is a candidate for transitional alimony. Accordingly,
we direct the trial court on remand to determine the appropriate duration and amount of
Wife‟s transitional alimony award, bearing in mind that Wife testified that it would take
about five years to grow her clientele.
Attorney’s Fees
Finally, we consider the trial court‟s awards of attorney‟s fees. In its Final Decree
of Divorce, the trial court awarded Wife $461,586.82 in attorney‟s fees and expenses as
alimony in solido. Later, the trial court awarded Wife an additional $9,528 in attorney‟s
fees and expenses associated with litigation of her petition to modify the PPP. Husband
challenges the award of fees and expenses, arguing that it is extreme and unnecessary.
Wife responds that Husband has the ability to pay for the fees and that if she is forced to
pay them she will be forced to deplete her share of the marital estate.
The trial court‟s Findings of Fact and Conclusions of Law, in which it awarded the
initial $461,586.82 in attorney‟s fees, provide:
130. It is, of course, the Wife‟s theory and contention that the
Husband should be responsible for all of her litigation expenses, including
attorney‟s fees, court reporters, and so on. In that regard, the Court makes
the following findings:
131. From the outset, this litigation has been entirely of the
Husband‟s making. From the time the dark side of his life with Elizabeth
McFadden came to light, he has been dead set on abandoning what, by all
accounts, was a good and solid marriage with his present wife and the
mother of his child.
16
The trial court‟s finding was based on the figures submitted in Wife‟s Rule 14(C) affidavit. In the
affidavit, Wife claimed she had a monthly shortfall of $6,773; however, the trial court found that this
amount erroneously included certain expenses. Therefore, the trial court excluded $3,365 of Wife‟s
claimed expenses from its calculation. We note that reducing the amount of Wife‟s claimed monthly
shortfall ($6,773) by the amount of the expenses the trial court excluded in its calculation ($3,365) results
in a shortfall of $3,408. However, as Husband has not raised this issue in his brief, we decline to address
it.
41
132. In spite of it all, it is clear to the Court from the proof and
from the pleadings that the Wife did not necessarily want to even be
divorced. Indeed, given her professional background, training, experience,
and her practice, the Court is of the distinct impression that she has much
preferred to attempt to seek a reconciliation and make this marriage work.
133. According to the Wife‟s testimony, the Husband informed
her that he wanted a divorce. The record is not completely clear about how
much time passed from the point of his telling his wife that he wanted a
divorce. It appears to be about a month. Mr. Holdsworth grew impatient.
When Mrs. Holdsworth did not file, he filed the original complaint in this
cause. Mrs. Holdsworth was left with no choice but to defend herself and
take all reasonable steps necessary to protect her own rights and those of
the parties‟ daughter [].
134. At the outset, the Court articulated certain facts that could be
gleaned from the docket entries in this case. A printout of the docket
entries in this case consists of some nineteen (19) pages of entries.… A
careful review of the docket in this case reveals how Steven Holdsworth
has thrown up smoke screen after smoke screen after smoke screen and
roadblock after roadblock after roadblock, and that‟s especially so in the
discovery process alone.
135. Among the exhibits in the case is Trial Exhibit No. 613 which
contains a somewhat detailed summary of the litigation history more than I
have just articulated. As a result, the Wife in this case has been forced to
incur attorney‟s fees and other litigation expenses in the hundreds of
thousands of dollars. Fortunately for her, she has been able to turn to her
parents for help, and they have been able to respond. Our law clearly
allows for reimbursement of such litigation expenses from one spouse to
the other in appropriate and proper cases. This is one such case.…
136. The Court is compelled to a conclusion here that the Wife is
entitled to recover all of such expenses from the Husband. In the case of
Aaron v. Aaron, 909 S.W.2d 408 (Tenn. 1995) we are taught by our
appellate courts that the analysis must follow the same analysis as for
alimony.
137. Found among the exhibits in this case are Exhibit No. 61,
which is a collection of promissory notes numbered one (1) through twelve
(12); also, Exhibit No. 152, which is an affidavit of attorney‟s fees and
42
expenses; and Exhibit No. 613, which is an amended affidavit of attorney‟s
fees and expenses.…
138. The Court has reviewed the itemization of fees and expenses
and finds all to be necessarily incurred and reasonable and in line with
charges made by other attorneys practicing in the field of domestic relations
law in this community. Moreover, the Court has considered the factors
again set forth in T.C.A. § 36-5-121(i). The Court will order and direct that
the Wife be awarded her attorney‟s fees and other suit expenses as alimony
in solido, necessary for her support. . . .
In a divorce proceeding, an award of attorney‟s fees may constitute alimony in
solido. See Tenn. Code Ann. § 36-5-121(h)(1) (“alimony in solido may include attorney
fees, where appropriate”); Gonsewski v. Gonsewski, 350 S.W.3d 99, 113 (Tenn.2011).
The decision whether to award attorney‟s fees as alimony in solido is within the sound
discretion of the trial court, and that decision will only be overturned if the trial court
abuses that discretion. Gonsewski, 350 S.W.3d at 113 (citations omitted). “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.” Gonsewski, 350 S.W.3d
at 105. As with any alimony award, the trial court making an award of attorney‟s fees as
alimony in solido should consider the factors enumerated in Tennessee Code Annotated
section 36-5-121(i). Id. Generally, an award of attorney‟s fees is appropriate if the
spouse receiving the award demonstrates that he or she “is financially unable to procure
counsel, and where the other spouse has the ability to pay.” Id. at 113. We address each
of these factors separately.
First, Wife did not demonstrate that she was financially unable to procure counsel,
and the trial court did not make a factual finding that she was unable to do so. Thus, she
fails to meet the first prong of the analysis. The trial court did note the existence of
several promissory notes indicating that Wife borrowed funds from her parents between
February 23, 2011 and April 25, 2013. Attachments to the promissory notes indicate that
Wife‟s parents funded everything associated with Wife‟s life during this particular
period, including payment for Wife‟s attorney‟s fees, Wife‟s purchase of professional
clothing, and even the euthanasia of a pet. Further, it appears that Wife‟s mother
provided a listing of expenses to Wife‟s counsel, who appears to have then drafted the
promissory notes ultimately signed by Wife. The promissory notes bear interest at the
rate of one percent (1%) per year, contain no payment schedule, and indicate only that
they are demand notes.
The trial court noted that Wife was able to turn to her parents for help, and the
43
existence of the promissory notes discussed above certainly supports that conclusion.
While the Tennessee Supreme Court‟s choice of wording in Gonsewski is our most recent
guide on this issue, the court‟s choice of wording in a prior decision is also worthy of
note. In Fox v. Fox, 657 S.W.2d 747 (Tenn. 1983), the Tennessee Supreme Court, in
discussing a wife‟s right to an allowance of legal expenses, noted:
[i]t is conditioned upon a lack of resources to prosecute or defend a suit in
good faith. This rule is to enable the wife, when destitute of means of her
own, to obtain justice and to prevent its denial. Thompson v. Thompson, 40
Tenn. 527, 529 (1859). If a spouse does not have separate property of her
own which is adequate to defray the expenses of suit, certainly she should
not be denied access to the courts because she is unable to procure counsel.
Id. at 749. Clearly, Wife had resources upon which to draw to participate in this
litigation, and she was not destitute. Not only did her parents aid her, but she was also
awarded over $400,000 in marital assets and had returned to the workforce. However, in
finding that Wife was entitled to recover attorney‟s fees from Husband, the trial court did
not analyze Wife‟s share of the marital estate or her income.
Moreover, the test articulated by the Gonsewski court does not require a party to
prove that he or she is financially unable to procure the most experienced or most
expensive attorney in the region. Wife had the freedom to choose which counsel she
would hire, and she must bear some responsibility for her choice. Wife must also bear
some responsibility for her choice of litigation strategy. Litigants are not flies on the wall
observing the litigation in which they are embroiled; they maintain some measure of
control over the lengths to which their attorneys reach, and they must bear some
responsibility for it as well. While Wife‟s counsel has clearly used “every litigation
arrow in his quiver in pursuit of [Wife‟s] goals,” and while she can “certainly engage in
such a strategy[,] she must recognize that she cannot expect the other side to pay for it.”
Coleman v. Coleman, No. W2011-00585-COA-R3-0CV, 2015 WL 479830 (Tenn. Ct.
App. 2015) (no perm. app. filed) (quoting the trial judge‟s concerns with attorney‟s fees).
On appeal, Wife argues that she will be required to deplete her share of the marital
estate if she is required to pay her own fees. The primary asset of this marriage was the
LWM stock, which was valued by Husband at $468,599 and valued by Wife at $839,261.
The trial court accepted Wife‟s valuation and split it, awarding each party $419,631.
Wife‟s attorney‟s fees exceed her share of the marital estate by more than $50,000.
Wife‟s argument regarding depletion of her share of the marital estate fails to
acknowledge that requiring Husband to pay her attorney‟s fees would have the effect of
requiring Husband to deplete his share of the marital estate. This scenario seems to be a
textbook case of “having your cake and eating it too.” Wife wants to preserve her share
44
of the marital estate yet ensure that Husband is depleted of his share of the marital estate,
based on her choice of attorneys and litigation strategy. Such a result is illogical, given
that the trial court conducted no analysis on Husband‟s ability to pay.
With regard to the second consideration, the trial court did not make an express
finding that Husband had the ability to pay the attorney‟s fees in light of the other
financial obligations he must bear. The trial court did not analyze the financial impact of
the division of the marital estate, child support, and alimony on Husband before also
requiring him to pay nearly half of a million dollars in Wife‟s attorney‟s fees.
In Anderton v. Anderton, 988 S.W.2d 675, 679-80 (Tenn. Ct. App. 1998), this
court stated:
The dissolution of a marriage requires the courts to engage in the orderly
disentanglement of the parties‟ personal and financial affairs. Many of the
issues that must be addressed during this process are interrelated, and the
disposition of earlier issues directly influence the decision on later issues.
Accordingly, the parties and the courts should pay careful attention to the
order in which the various issues in a divorce case are addressed and
decided.
....
The trial court‟s first task . . . is to identify and distribute the parties‟
separate property and then divide their marital property in an equitable
manner. . . . Sorting out the parties‟ property interests must precede
support decisions because the manner in which the separate and marital
property is divided can affect later support decisions.
After the parties‟ property interests have been addressed, trial courts
should then turn their attention to child support. . . . Child support
decisions should precede decisions about spousal support because a
spouse‟s ability to pay spousal support may be directly and significantly
influenced by the amount of child support he or she has been ordered to
pay.
Consideration of spousal support questions should follow the
disposition of all the preceding questions.
Anderton, 988 S.W.2d at 679 (citations and footnotes omitted). With respect to both
child support and alimony, the trial court must determine whether the obligor spouse has
an ability to pay. In making an alimony award, the trial court must analyze ability to pay
45
by including the obligor spouse‟s child support payment. In the category of alimony, the
trial court should first make a determination regarding alimony that is intended to help
support or rehabilitate the disadvantaged spouse, regardless of type, before making a
determination regarding attorney‟s fees as alimony in solido. Thus, “ability to pay”
must be analyzed three separate times: when determining the amount of child support;
when determining the amount of supportive alimony; and when determining the amount
of attorney‟s fees as alimony in solido. This three-step analysis is necessary because
each additional obligation imposed impacts the obligor‟s ability to pay the next award.
See, e.g., Douglas v. Douglas, No. M2008-00219-COA-R3-CV, 2009 WL 21036, at *6
(Tenn. Ct. App. Jan. 2, 2009) (reducing an award of attorney‟s fees as alimony in solido,
even where the wife was significantly disadvantaged economically, because Husband
had “numerous obligations to pay,” including child support and transitional alimony,
which impaired “his ability to pay additional alimony in the form of Wife‟s attorney‟s
fees”). Thus, in this case, the trial court erred by not expressly considering Husband‟s
income and share of the marital estate, his living expenses, his own attorney‟s fees, his
child support obligation, and his spousal support payment before determining whether
he had an ability to pay Wife‟s attorney‟s fees as alimony in solido. Considering all
these factors, Husband simply does not have the ability to pay Wife‟s exorbitant
attorney‟s fees. Thus, we reverse the trial court‟s award of Wife‟s attorney‟s fees and
expenses.
We would be remiss if we did not convey our displeasure with the extraordinary
amount of attorney‟s fees incurred in this case. Though Husband initially tried to conceal
the extent of his relationship with Ms. McFadden, he admitted fairly early on in this
litigation that he had engaged in an extra-marital affair constituting inappropriate marital
conduct. The parties agreed that Wife should be designated primary residential parent of
their child and submitted substantially similar proposed PPPs to the trial court.
Additionally, despite Husband‟s professional success and high income, the parties‟ only
substantial asset at the time of the divorce was the LWM stock, which they agreed should
be divided equally between them. Nevertheless, the parties somehow incurred more than
half of a million dollars in attorneys‟ fees and expenses. The trial judge stated that this
case “could arguably be the most „litigated‟ case” he had been involved in during the
course of his more than forty years in the legal profession, and we are perplexed by the
fact that Wife‟s attorney‟s fees well exceed her share of the marital estate. We note that
our disposition of issues on appeal may necessitate further proceedings in the trial court
for which each party may incur additional attorneys‟ fees and expenses. Given the
extraordinary amount of attorneys‟ fees and expenses already incurred by the parties in
what should have been a relatively straightforward case, we strongly encourage the
parties and their attorneys to dispose of the remaining issues as efficiently as possible on
remand.
46
Both parties contend that they should be entitled to an award of attorney‟s fees and
expenses associated with this appeal. Considering the result reached in this appeal, we
decline to make such an award.
IV. CONCLUSION
Based on the foregoing, the judgment of the trial court is affirmed in part, affirmed
in part as modified, vacated in part, reversed in part, and remanded for further
proceedings consistent with this opinion. Costs of this appeal taxed one-half to the
appellee, Wendy Alford Holdsworth and one-half to the appellant, Steven A. Holdsworth,
and his surety, for which execution may issue, if necessary.
_________________________________
BRANDON O. GIBSON, JUDGE
47