Dinah Bostic Norman v. John Arthur Norman, IV ( 2017 )

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
August 18, 2016 Session
DINAH BOSTIC NORMAN v. JOHN ARTHUR NORMAN IV
Appeal from the Chancery Court for Williamson County
No. 43349 James G. Martin III, Chancellor
___________________________________
No. M2015-02364-COA-R3-CV – Filed August 28, 2017
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This case arises out of the demise of a long-term marriage. The trial court declared the
parties divorced, equitably divided the marital estate, and awarded the wife alimony in
solido, rehabilitative alimony, and alimony in futuro. On appeal, the husband raises
many issues, including whether the doctrine of unclean hands should bar wife from
receiving an award of alimony in solido, whether the court’s division of the marital estate
was inequitable, and whether the court’s alimony awards were based on a clearly
erroneous assessment of the evidence. Finding no abuse of discretion, we affirm the trial
court’s decision in all respects.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed
W. NEAL MCBRAYER, J., delivered the opinion of the court, in which ANDY J. BENNETT
and RICHARD H. DINKINS, JJ., joined.
Robert E. Lee Davies, Franklin, Tennessee, (on appeal only) for the appellant, John
Arthur Norman IV.
Lorraine Wade, Nashville, Tennessee, (on appeal only) for the appellee, Dinah Bostic
Norman.
OPINION
I.
A. PRETRIAL PROCEEDINGS
On July 15, 2014, Dinah Bostic Norman (“Wife”) filed a complaint for absolute
divorce from John Arthur Norman IV (“Husband”) in the Chancery Court for Williamson
County, Tennessee. The parties had been married for twenty-two years, and since 2006
had jointly owned and operated A-Z DME, LLC (“A-Z”), a durable medical equipment
company.
In addition to her request for an absolute divorce, Wife sought an ex parte
restraining order. She alleged that Husband had verbally abused and threatened her
during the marriage, acted inappropriately at A-Z’s business offices, and misappropriated
company funds. Wife asked the court to prohibit Husband from having any contact with
her pending a final hearing and from “coming about” A-Z, contacting any employees,
accessing any business records or accounts, or otherwise interfering with Wife’s
operation of A-Z.
Based on Wife’s sworn allegations, on July 16, 2014, the court issued the
requested temporary restraining order. After an August 12, 2014 hearing, the court
modified the restraining order to allow Husband to return to the marital residence and
granted Husband limited access to A-Z.1
A-Z was the couple’s most valuable marital asset and their sole source of income.
After hearing testimony from both parties, the court imposed strict requirements on the
use of funds generated by the business pending a final hearing. The court ordered Wife
to transfer sufficient funds from the business to the parties’ joint checking account to pay
their respective household bills and prohibited any other withdrawals from the account.
Each party was also directed to maintain separate checking accounts for personal
expenses, and Wife was ordered to transfer $5,000 per month from the business to those
accounts.
After a second hearing, the court dissolved the restraining order. Beginning
September 29, 2014, the court ordered a return to the parties’ traditional roles in the
company but required them to alternate the days that they were physically present in the
local office. The court left in place the previously ordered restrictions on the use of
1
The court allowed Husband remote access to the financial books and records of the business and
ordered Wife to share all business emails and text messages.
2
marital funds.
But the parties were unable or unwilling to work together. In December, each
spouse asked the court to exclude the other from the business based on allegations of
misconduct. After a hearing, on December 19, 2014, the court issued an order excluding
Wife from A-Z and placing Husband solely in charge of business operations. The court
ordered Husband to be transparent in operating the business operation and to share copies
of all business information with Wife. The court ordered Wife to provide an accounting
of all funds removed from the business and prohibited her from receiving any additional
funds until the accounting was provided. Husband was allowed to withdraw $5,000 per
month from the business for personal expenses. The court also ordered the parties to sell
the marital residence.2
B. EVIDENCE PRODUCED AT TRIAL
The court held a four-day trial, beginning on July 13, 2015. At the outset, the
parties stipulated to the value of their marital assets and the total amount of funds A-Z
had distributed to each party in 2014.
1. History of A-Z
At the time of the hearing, Wife was 44 and Husband was 49. Both parties were
in good physical and mental health. They had two adult sons. Originally from Texas, the
family moved to Tennessee in 2006. Shortly thereafter, they formed A-Z, with each
spouse having a 50% ownership interest.
Initially, A-Z sold durable medical supplies from a small office space in Nashville.
In 2008, Wife became interested in soliciting contracts from the Veterans Administration.
She discovered that the federal government, through the Small Business Administration,
operates a business development program to assist eligible small disadvantaged
businesses in competing for federal government contracts. See 13 C.F.R. § 124.1 (2017).
Wife decided to apply for 8(a) certification,3 which would enable A-Z to participate in
the business development program and compete for federal contracts that are set aside for
2
Before trial, the marital residence was sold, and the sales proceeds were deposited with the
Clerk and Master.
3
Participation in the 8(a) business development program is limited to “small business[es] which
[are] unconditionally owned and controlled by one or more socially and economically disadvantaged
individuals who are of good character and citizens of and residing in the United States, and which
demonstrate[] potential for success.” 13 C.F.R. § 124.101. Once certified, a participant may only remain
in the 8(a) program for nine years. Id. § 124.2. At the end of the nine year period, the business is
presumed to have the “ability to compete in the marketplace without assistance.” Id. § 124.302(a)(1).
3
small businesses.4 To qualify for the program, the parties modified their respective
ownership percentages in A-Z, after which Wife owned a 51% controlling interest.
On July 28, 2009, Wife and, by extension, A-Z were awarded 8(a) certification.
A-Z also qualified to compete for federal contracts set aside for small businesses in
general, 13 C.F.R. § 121.101 (2017), for qualified HUBZone5 small businesses, 13 C.F.R.
§ 126.100 (2017), and for woman-owned small businesses, 13 C.F.R. § 127.100 (2017).
A-Z obtained its first government contract in April 2010, and a second followed shortly
thereafter. At the time of the hearing, A-Z had four government contracts, and its
business had expanded to include eleven offices in six states.
Both parties contributed to A-Z’s success. While Husband was responsible for the
financial aspects of the business, Wife was the “face” of the company. She pursued the
contracts, secured warehouse space, and hired employees. Her focus was marketing and
networking. She also set up the initial quality control systems for A-Z.
At the time of trial, contracts with the Veterans Administration comprised 90% of
A-Z’s business. Since obtaining 8(a) certification, the company had been highly
profitable. A-Z’s ordinary business income since 2010 had been well over $200,000 a
year. The couple paid many expenses, including their mortgage, car payments, life and
health insurance premiums, and the children’s student loans, through A-Z. Husband and
Wife distributed all company profits to themselves. Customarily, they received monthly
distributions of $20,000.
2. Changes in A-Z’s Financial Condition
During the pendency of the divorce, A-Z’s financial situation deteriorated
markedly. Husband testified that, when the restraining order was dissolved, he
discovered a company in disarray. The Veterans Administration placed the company on
month-to-month probation for October through December 2014 based on quality issues
that arose during his absence. The business checking account had a negative balance, and
Wife had withdrawn all available funds from the line of credit. He also discovered that
Wife had used company funds to pay over $20,000 to a personal friend, Latda Vaughn,
4
Federal government agencies set aside 23% of the available procurement contracts for small
businesses. 15 U.S.C.A. § 644(g)(1)(A)(i) (Supp. 2017). Within the overall percentage set aside for
small businesses generally, a specific percentage of contracts are earmarked for small businesses with
8(a) certification, for qualified HUBZone small businesses, and for woman-owned and veteran-owned
small businesses. Id. § 644(g)(1)(A).
5
HUBZone is an acronym for Historically Underutilized Business Zone. 13 C.F.R. § 126.103.
Through the HUBZone program, the Small Business Administration provides federal contracting
assistance for qualified small businesses located in historically underutilized business zones in an effort to
increase employment opportunities, investment, and economic development in such areas. Id. § 126.100.
4
and $14,000 to family members. Because of the company’s poor financial condition,
Husband did not withdraw his allotted $5,000 for personal expenses during the last three
months of 2014 or in January 2015.
Husband took immediate steps to implement more oversight of the company’s
quality control system and increased communication with federal procurement officials.
In December, based on the company’s good performance, the Veterans Administration
renewed the expiring contract. According to Husband, at the time of trial, all contracts
were renewed, and none were in danger of termination for noncompliance. The cash
balance in the business checking account also grew steadily during his tenure.
Wife testified that the company’s cash flow issues were Husband’s fault. She
claimed that Husband remotely deleted A-Z’s bookkeeping records for 2014, preventing
her from making payroll or paying company bills and forcing her to hire two accountants,
Erica Hayes and Latda Vaughn, to recreate the missing data.
In reality, Husband had not deleted the files, but had transferred them to an outside
accountant for necessary upgrades. The “missing” files were returned in less than a
week. Wife maintained that, even then, crucial data was missing, which necessitated
additional work by Ms. Vaughn. But two accountants who regularly performed work for
A-Z testified that Wife had a backup copy of the allegedly missing data on her computer.
Ms. Vaughn admitted at trial that the work she performed did not benefit A-Z.
The court called Paul Demonbreun, a certified public accountant who had
provided services to A-Z since its formation, to testify on two separate occasions about
the company’s financial health. Initially, he opined that the company’s future was “much
more cloudy” than in previous years. The company’s debt load had increased and its
cash flow had greatly diminished. In December 2014, the bank refused to renew the line
of credit and notified the company to repay the loan immediately. Between February and
July of 2015, the company only distributed a total of $20,000 to the parties, in addition to
paying the couple’s household bills.
When asked his opinion as to when the company would be able to return to its
previous level of financial success, Mr. Demonbreun responded: “[I]t may take a year. It
may take four years. It may not happen. It’s going to be difficult.” He was doubtful that
either spouse would be able to enjoy the same standard of living post-divorce as during
the marriage. But he conceded that, since Husband had returned to the company, the
company’s financial situation had improved.
Later, Mr. Demonbreun revised his opinion, explaining that even “[c]loudy skies
do sometimes turn to blue.” After reviewing the company finances for 2014, he
determined that, even during the tumultuous divorce proceedings, the company’s net
5
income was approximately $231,000. In the last few months, the company profits and
the bank account balance had also increased.
Both Husband and Wife were optimistic about the future of the company. Each
testified that, if they were awarded the business, they could pay $3,000 to $5,000 per
month to the departing spouse. Mr. Demonbreun agreed that their estimate was realistic.
C. FINAL ORDER
On October 15, 2015, the court issued its final order. The court found that
numerous allegations in Wife’s complaint for divorce were completely false or
unsupported by evidence presented at trial. As a consequence of Wife’s conduct, the
Court awarded A-Z to Husband:
Because of her misconduct in making gross misrepresentations to the Court
when she filed her Complaint for divorce, because of her mismanagement
of the business during the time Mr. Norman was locked out of the company
prior to October 2, 2014, and because of Ms. Norman’s failure to account
for funds that she withdrew from the business in compliance with the orders
of the Court and other conduct that resulted in the Court’s barring her from
the business in December 2014, the Court finds that the best prospect for
successful operation of A-Z DME, LLC lies in the hands of Mr. Norman.
For all of these reasons, the Court awards the business to him.
After considering the relevant statutory factors, the court divided the remaining
marital assets. See Tenn. Code Ann. § 36-4-121(c) (Supp. 2016). The court also
attributed to each spouse the amount of marital funds used for their respective attorney’s
fees and the marital funds each spouse had withdrawn from the estate without court
authorization before the final hearing. Finally, the court added the total amount of
marital funds Wife had dissipated to her portion of the marital estate.6
The court’s division of marital assets resulted in Wife receiving $414,542.25 in
marital assets while Husband received assets worth $610,042.12. “To equalize the
division of marital property,” the court granted Wife alimony in solido in a lump sum of
$115,120.38. But the court provided that Husband could choose to pay the award in 48
monthly installments with interest. Next, the court allocated $61,128 of the marital debt
to Wife and $106,439.63 to Husband. After accounting for the division of marital assets
and the allocation of marital debt, Husband received 51.8% of the marital estate and Wife
received 48.2%.
6
The court found that Wife had dissipated marital assets through her payments to Ms. Vaughn,
Ms. Hayes, and her family members. See Tenn. Code Ann. § 36-4-121(c)(5)(B).
6
To determine whether to award spousal support, the court reviewed the evidence
in light of the appropriate factors. See Tenn. Code Ann. § 36-5-121(i) (2014). The court
found that, during the marriage, the couple enjoyed a high standard of living. After the
divorce, “both parties will have substantial and similar financial obligations and needs.”
Although the parties might not enjoy that same high standard of living after the divorce,
Husband, as the recipient of the only income-producing marital asset, had a higher
earning capacity than Wife. While A-Z was having financial difficulties at the time of
trial, both parties were confident that they “could return it to its pre-divorce success.”
The court concluded that Husband had an earning capacity of $240,000 per year.
Based on Wife’s testimony that she would need additional education to obtain the
appropriate licenses to return to her former career as an elementary school teacher or a
guidance counselor, the court ordered Husband to pay $2,000 per month for 48 months in
rehabilitative alimony.
Even after Wife obtained the appropriate Tennessee license to pursue her former
career, her potential income would not approach Husband’s potential earnings from A-Z.
The court determined that Wife “cannot be completely rehabilitated to the point where
she will be able to enjoy a standard of living after the divorce comparable to the standard
of living expected to be available” to Husband. The court awarded Wife alimony in
futuro of $3,000 per month.
II.
Husband appeals both the division of the marital estate and the award of alimony
in futuro and rehabilitative alimony. Wife asks this Court to award her attorney’s fees in
defending this appeal.
A. EQUITABLE DIVISION OF THE MARITAL ESTATE
1. Doctrine of Unclean Hands
As an initial matter, Husband contends that the court’s division of the marital
estate was inequitable because Wife was not held accountable for her false allegations in
court pleadings and her mismanagement of A-Z. According to Husband, Wife is not
entitled to “recover her share of the business” because she has unclean hands.
The doctrine of unclean hands is an equitable doctrine based on the principle that
“he who seeks equity must do equity.” In re Estate of Boote, 265 S.W.3d 402, 417
(Tenn. Ct. App. 2007). “When the doctrine applies, it provides the court with a basis to
decline to grant relief to parties who have willfully engaged in unconscionable,
inequitable, immoral, or illegal acts with regard to the subject matter of their claims.” Id.
(footnote omitted). But in divorce litigation, the doctrine only applies when the
7
inequitable conduct constitutes “fraud and deceit upon the court.” Chastain v. Chastain,
559 S.W.2d 933, 935 (Tenn. 1977).
Wife obtained the ex parte restraining order through sworn allegations about
Husband that were proven false. Our courts should never condone perjury because it
“offends the basic principles underlying our judicial system.” Cummings v. Cummings,
No. M2003-00086-COA-R3-CV, 2004 WL 2346000, at *20 (Tenn. Ct. App. Oct. 15,
2004) (quoting Wilder v. Wilder, 863 S.W.2d 707, 713 (Tenn. Ct. App. 1992)). While
perjury may justify the application of the unclean hands doctrine in a divorce case, it is
not mandatory. Id. The decision as to whether to apply the doctrine is left to the
discretion of the trial court after consideration of the unique facts and circumstance of
each case. Jolley v. Jolley, No. M2011-02550-COA-R3-CV, 2013 WL 411454, at *3
(Tenn. Ct. App. Jan. 31, 2013) (citing In re Estate of Boote, 265 S.W.3d at 418); Wilder,
863 S.W.2d at 713-14.
Based on this record, we conclude that the trial court did not abuse its discretion in
failing to apply the doctrine of unclean hands in the manner Husband requests. Much of
the harm caused by Wife’s conduct was alleviated by the time of trial,7 and Husband was
free to use her conduct against her. Instead of gaining an unfair advantage, Wife’s
conduct had the “effect of destroying [her] credibility with the [c]ourt.” Courts have
authority to punish or sanction perjury though a variety of means, including an adverse
credibility finding. Cummings, 2004 WL 2346000, at *20 n.14. Contrary to Husband’s
claims, this is not a case in which a party with unclean hands went unpunished. The
court awarded the couple’s most valuable asset to Husband based on Wife’s inequitable
conduct and specifically held her accountable for wasting business assets and
withdrawing marital funds without court authorization.
2. Equitable Distribution
Next, Husband argues that the court’s division of the marital estate was
inequitable because he was not awarded an additional $20,000, the court improperly
allocated the student loan debt, and the division was not mathematically equal. To reach
an equitable division, the trial court must weigh the relevant statutory factors. Tenn.
Code Ann. § 36-4-121(c);8 Larsen-Ball v. Ball, 301 S.W.3d 228, 234 (Tenn. 2010). The
7
We are cognizant that Husband was forced to incur additional attorney’s fees in responding to
Wife’s false allegations. But Husband has never requested that Wife be responsible for any portion of his
attorney’s fees in the court below or on appeal.
8
The court must consider all relevant factors:
(1) The duration of the marriage;
(2) The age, physical and mental health, vocational skills, employability, earning
capacity, estate, financial liabilities and financial needs of each of the parties;
8
trial court’s division is entitled to great weight on appeal and should not be overturned
unless it “lacks proper evidentiary support or results in some error of law or
misapplication of statutory requirements and procedures.” Keyt v. Keyt, 244 S.W.3d 321,
327 (Tenn. 2007) (quoting Herrera v. Herrera, 944 S.W.2d 379, 389 (Tenn. Ct. App.
1996)). “We review the trial court’s findings of fact de novo with a presumption of
correctness and honor those findings unless the evidence preponderates to the contrary.”
Larsen-Ball, 301 S.W.3d at 234-35; Tenn. R. App. P. 13(d).
Husband maintains that he was entitled to an additional $20,000 in the equitable
division to account for the marital funds he was allowed to use during the pendency of
the divorce for personal expenses but chose not to accept. The mere fact that the trial
court allowed the parties to use a portion of the marital assets while the divorce was
pending does not create a right to those particular assets. The trial court retains the
discretion to equitably divide the marital property “in proportions as the court deems
just.” Tenn. Code Ann. § 36-4-121(a)(1). Based on the record as a whole, we find no
abuse of discretion in the court’s refusal to award Husband an additional $20,000 in the
division of the marital estate.
We also find no abuse of discretion in the court’s allocation of the student loan
debt. The court considered the appropriate factors, and the evidence does not
preponderate against the court’s findings. See Alford v. Alford, 120 S.W.3d 810, 814
(3) The tangible or intangible contribution by one (1) party to the education,
training or increased earning power of the other party;
(4) The relative ability of each party for future acquisitions of capital assets and
income;
(5)(A) The contribution of each party to the acquisition, preservation,
appreciation, depreciation or dissipation of the marital or separate property, including the
contribution of a party to the marriage as homemaker, wage earner or parent, with the
contribution of a party as homemaker or wage earner to be given the same weight if each
party has fulfilled its role;
(B) For purposes of this subdivision (c)(5), dissipation of assets means wasteful
expenditures which reduce the marital property available for equitable distributions and
which are made for a purpose contrary to the marriage either before or after a complaint
for divorce or legal separation has been filed.
(6) The value of the separate property of each party;
(7) The estate of each party at the time of the marriage;
(8) The economic circumstances of each party at the time the division of property
is to become effective;
(9) The tax consequences to each party, costs associated with the reasonably
foreseeable sale of the asset, and other reasonably foreseeable expenses associated with
the asset;
(10) The amount of social security benefits available to each spouse; and
(11) Such other factors as are necessary to consider the equities between the
parties.
Tenn. Code Ann. § 36-4-121(c).
9
(Tenn. 2003) (holding that courts are to apply four factors in allocating marital debt).
Wife personally guaranteed the student loans and during the marriage both parties agreed
that the business would pay the debt. The purpose of the debt was the children’s higher
education, which benefitted both parties equally. At trial, Husband agreed that, if he
were awarded the business, he would continue to pay the student loans, and after the
division of the estate, Husband was in the best position to repay the debt.
Finally, Husband contends that “to equalize the division of marital property” the
court should have awarded $97,750 in alimony in solido instead of $115,120.38. We will
not reverse a court’s division of marital property because “it is not precisely equal.”
Owens v. Owens, 241 S.W.3d 478, 490 (Tenn. Ct. App. 2007). The division of marital
property “is not a mechanical process.” Flannary v. Flannary, 121 S.W.3d 647, 650
(Tenn. 2003). In light of the particular facts of the case, some statutory factors may be
more relevant than others. See Tate v. Tate, 138 S.W.3d 872, 875 (Tenn. Ct. App. 2003).
In the end, the court’s division of the marital estate is judged by its results. Altman
v. Altman, 181 S.W.3d 676, 683 (Tenn. Ct. App. 2005). After accounting for the division
of marital assets and the allocation of marital debt, the court awarded 51.8% of the
marital estate to Husband and 48.2% to Wife. An essentially equal division in a long-
term marriage such as this one is appropriate. See Phelps v. Phelps, No. M2010-00856-
COA-R3-CV, 2011 WL 2535026, at *6 (Tenn. Ct. App. June 24, 2011) (noting the
general presumption that a long-term marriage supports an essentially equal division of
the marital estate).
B. SPOUSAL SUPPORT
Husband also takes issue with the trial court’s award of spousal support.9 “[T]rial
courts have broad discretion to determine whether spousal support is needed and, if so,
the nature, amount, and duration of the award.” Gonsewski v. Gonsewski, 350 S.W.3d
99, 105 (Tenn. 2011). In reviewing the trial court’s award of alimony, we apply an abuse
of discretion standard. Id. “An abuse of discretion occurs when the trial court causes an
injustice by applying an incorrect legal standard, reaches an illogical result, resolves the
case on a clearly erroneous assessment of the evidence, or relies on reasoning that causes
an injustice.” Id. But we “are generally disinclined to second-guess a trial judge’s
spousal support decision.” Kinard v. Kinard, 986 S.W.2d 220, 234 (Tenn. Ct. App.
1998).
Tennessee law recognizes four types of alimony: (1) rehabilitative alimony; (2)
transitional alimony; (3) alimony in future; and (4) alimony in solido. Tenn. Code Ann.
9
Contrary to Husband’s assertion, Wife’s complaint for divorce included a request for all
available types of alimony.
10
§ 36-5-121(d)(1). While the Legislature has expressed a preference for rehabilitative or
transitional alimony awards rather than long-term support, “courts should not refrain . . .
from awarding long-term support when appropriate.” Robertson v. Robertson, 76 S.W.3d
337, 341-42 (Tenn. 2002). Alimony decisions are factually driven and “involve[] the
careful balancing of many factors.” Gonsewski, 350 S.W.3d at 105. In determining
whether to award alimony, courts must carefully weigh the factors in Tennessee Code
Annotated § 36-5-121(i).10 The two most important factors are “the disadvantaged
spouse’s need and the obligor spouse’s ability to pay.” Id. at 110 (citation omitted).
1. Interest on Alimony in Solido
We first address Husband’s claim that the trial court erred in requiring him to pay
interest on the award of alimony in solido, relying on Price v. Price, 472 S.W.2d 732,
734 (Tenn. 1971). Alimony in solido can be payable either in a lump sum or in
installments. Tenn. Code Ann. § 36-5-121(h)(1). In Price, our supreme court held that
the recipient of an award of alimony in solido payable in installments is not entitled to
10
The 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
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).
11
interest on the judgment from the date of entry. 472 S.W.2d at 734. Instead, interest is
only payable after an installment is past due. Id. Here, the court clearly designated the
award as payable immediately. Because Wife was entitled to the use of the money from
the date of the judgment, the court did not err in its award of interest.
2. Rehabilitative Alimony and Alimony in Futuro
Husband also argues that the awards of alimony in futuro and rehabilitative
alimony were based on a clearly erroneous assessment of the evidence. He maintains that
Wife is not economically disadvantaged or in need of rehabilitation.
We conclude that the evidence does not preponderate against the court’s finding
that Husband has an earning capacity of $240,000. Before the divorce filing, the parties
received $20,000 in monthly distributions from A-Z even after the company paid many of
their household expenses. After the divorce, Husband will be the sole beneficiary of that
income. While at trial Husband was optimistic about the company’s future, on appeal, he
argues that A-Z’s financial health is in doubt, relying on Mr. Demonbreun’s initial
testimony. But Mr. Demonbreun revised his opinion after reviewing the company’s 2014
financial records. Although the turmoil of the divorce proceedings drastically reduced
the available distributions for a period of time, under Husband’s direction, the company’s
cash balance was steadily increasing. Mr. Demonbreun agreed that “when there’s no
turmoil in this company, it makes money.”
We also conclude that the evidence does not preponderate against the trial court’s
finding that Wife’s earning capacity was limited to the income she would receive as an
elementary school teacher or a guidance counselor. Wife has a bachelor’s degree in
interdisciplinary studies and master’s degrees in guidance and psychotherapy. Before the
parties started their business, her only work experience was as an elementary school
teacher and a guidance counselor. Although Husband claims that Wife could start her
own business using the skills she acquired at A-Z, there is no evidence in this record that
Wife had such plans. When faced with the prospect of losing A-Z, she contacted the
appropriate Tennessee licensure boards to ascertain the requirements for returning to her
former career. After obtaining a Tennessee license, Wife’s starting salary as a teacher is
anticipated to be $43,000.
On this record, we find no error in the court’s determination that Wife was
relatively economically disadvantaged. This is a long-term marriage of 22 years. Neither
party has any separate property. Since 2009, Husband and Wife devoted all their time
and energy to A-Z. Both parties contributed to A-Z’s financial success, which allowed
them to enjoy a high standard of living. The court divided the marital estate essentially
equally but awarded A-Z, the only income-producing asset, to Husband. Without the
business she helped to build, Wife will be forced to start anew while Husband enjoys
greater economic potential. Husband’s higher earning capacity post-divorce can be
12
directly linked to Wife’s efforts to establish and grow the business. After Wife pays the
debt allocated to her, she will be left with a small retirement fund and a limited amount of
cash from the sale of the marital residence. See Stratienko v. Stratienko, No. E2016-
00542-COA-R3-CV, 2017 WL 1205935, at *11 (Tenn. Ct. App. Mar. 31, 2017) (finding
Wife relatively economically disadvantaged despite Wife’s education and work
experience in the parties’ businesses).
Husband also claims that Wife’s education and business skills preponderate
against a finding that she needs rehabilitation. We disagree. This record includes no
evidence that Wife could support herself with her newly acquired business skills. See
Lubell v. Lubell, No. E2014-01269-COA-R3-CV, 2015 WL 7068559, at *18 (Tenn. Ct.
App. Nov. 12, 2015) (noting that Wife’s work experience at business operated with
Husband may not easily transfer to post-divorce employment). What the evidence does
establish is that Wife needs an additional twelve hours of graduate education to obtain a
license to teach in Tennessee. Rehabilitative alimony is appropriate when an
economically disadvantaged spouse needs additional education or training to become
self-sufficient after the divorce. Gonsewski, 350 S.W.3d at 108.
Because Wife is relatively economically disadvantaged and can only be partially
rehabilitated, an award of alimony in futuro in addition to rehabilitative alimony is
appropriate. Tenn. Code Ann. § 36-5-121(d)(4); see, e.g., Lunn v. Lunn, No. E2014-
00865-COA-R3-CV, 2015 WL 4187344, at *11 (Tenn. Ct. App. June 29, 2015); Andrews
v. Andrews, 344 S.W.3d 321, 344 (Tenn. Ct. App. 2010). In addition to the types of
alimony awarded, however, we must also consider Husband’s challenge to the amount of
the award.
3. Amount of Alimony
Husband contends that the total amount of alimony awarded exceeds his ability to
pay. Husband is obligated to pay $5,000 a month in spousal support for four years, and
then $3,000 a month thereafter. Husband testified that he could pay $3,000 to $5,000 a
month, and Mr. Demonbreun agreed that this was a realistic number. But if Husband
chooses to pay the alimony in solido award in 48 monthly installments, his alimony
obligation will increase to $7,664.19 a month, plus interest, for the first four years. While
this amount exceeds what Husband testified he could pay, we cannot say the evidence
preponderates against the alimony amount awarded. Mr. Demonbreun testified that the
company’s 2014 taxable income was $231,000. This annual figure approaches the
company’s previous taxable income which allowed the couple to receive $20,000 in
distributions each month. We conclude the court did not abuse its discretion in
determining that Husband had the ability to pay $7,664.19 per month in spousal support.
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C. ATTORNEY’S FEES ON APPEAL
Wife requests that we award her attorney’s fees incurred in defending this appeal.
An award of attorney’s fees on appeal is a matter within this Court’s sound discretion.
Archer v. Archer, 907 S.W.2d 412, 419 (Tenn. Ct. App. 1995). When this Court
considers a request for attorney’s fees on appeal, we consider the requesting party’s
ability to pay such fees, the requesting party’s success on appeal, whether the appeal was
taken in good faith, and any other equitable factors relevant in a given case.
Darvarmanesh v. Gharacholou, No. M2004-00262-COA-R3-CV, 2005 WL 1684050, at
*16 (Tenn. Ct. App. July 19, 2005). When we consider all of the relevant factors in this
case, we respectfully decline to exercise our discretion to award Wife her attorney’s fees.
III.
For the foregoing reasons, we affirm the court’s decision.
_________________________________
W. NEAL MCBRAYER, JUDGE
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