Tammy Milam v. James Milam

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
August 21, 2013 Session
TAMMY MILAM v. JAMES MILAM
Appeal from the Chancery Court for Montgomery County
No. MCCHCVDI06323 Michael R. Jones, Judge.
No. M2012-01659-COA-R3-CV - Filed September 19, 2013
Mother appeals from the trial court’s post-divorce modification decreasing Father’s child
support obligation. Finding no error, we affirm. We have also determined that Father is
entitled to recover the reasonable and necessary attorney’s fees he incurred in this appeal
pursuant to Tennessee Code Annotated § 36-5-103(c).
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed
F RANK G. C LEMENT, J R., J., delivered the opinion of the Court, in which P ATRICIA J.
C OTTRELL, P.J., M.S., and R ICHARD H. D INKINS, J., joined.
Mark R. Olson, Clarksville, Tennessee, for the appellant, Tammy L. Milam.
Mark A. Rassas and Julia P. North, Clarksville, Tennessee, for the appellee, James P. Milam.
OPINION
This action involves the post-divorce reduction of Father’s child support obligation.
The parties were divorced in 2007 and have three minor children from the marriage. Mother
was designated the primary residential parent in the permanent parenting plan, which was
entered on November 13, 2008. Mother was given 247 days of parenting time and Father
received 118 days.
Father is a builder and contractor by trade and at the time of divorce, his income was
designated as $4,333.33 per month or $52,000 per year. Mother works for a medical supply
and intravenous drug company, and at the time of divorce her income was designated as
$6,856.13 per month or $82,273.56 per year. By agreement of the parties, Father’s child
support obligation was set at $1,200 per month, which included a substantial upward
deviation.
On January 20, 2011, Father filed a Petition for Modification of the child support
obligation seeking to reduce his child support obligation. A trial on his petition was held on
November 9, 2011, and December 14, 2011. Father and his employer, James Shelpman,
testified regarding Father’s employment and financial difficulties. Mr. Shelpman testified
that he and another man purchased Farther’s construction business when it was in financial
difficulty and the two men formed Milam Builders, LLC. He also testified that Father is an
employee of the company and the company uses Father’s contractor’s license to conduct its
business. Father and Mr. Shelpman both testified that Father’s salary was $1,000 per week,
being $52,000 per year, if he were paid regularly, however, both Father and Mr. Shelpman
testified that during the months the company was not profitable, Father did not receive his
salary. Father also testified that he performed odd jobs outside of his employment with
Milam Builders to supplement his income.
Father testified that he was experiencing significant financial problems and his income
was insufficient to meet his obligations. He stated he had liquidated personal assets,
including real property he received in the divorce, and borrowed money from his mother to
pay his bills. Father’s mother, Patricia Milam, testified that she had made several loans and
provided financial gifts to her son to aid him financially.
At the conclusion of the trial, the court took the matter under advisement. In a
Memorandum Opinion entered on June 19, 2012, the trial court found that Father’s income
for 2011 was $64,000, this sum included his $52,000 annual salary from Milam Builders and
imputed income of an additional $12,000. As for Mother, the trial court found that her
income for 2011 was $129,636.00, which represented a substantial increase over her 2007
income, which was $82,273.56. The court also found Father was no longer able to pay the
$1,200 per month in child support, which was based upon a substantial agreed upon upward
deviation. The court also noted there was no evidence to justify such an upward deviation.
After calculating Father’s monthly income, which was $5,333.33, and Mother’s
monthly income, which was $10,803, the trial court calculated the presumptive support
obligation on the Child Support Worksheet using the income shares guidelines and found that
the presumptive child support obligation of Father was $358 per month. Additionally,
because Father testified he was willing to pay $600 per month for child support and an
additional $210 per month for the children’s health insurance, the trial court awarded an
upward deviation to modify and set Father’s child support obligation at $600 per month.
Realizing the petition to modify support was filed on January 20, 2011, the court instructed
the parties to determine if there was an overpayment; the court also reserved all other issues
pending a determination of the child support overpayment.
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By orders entered on July 16, 2012, and September 7, 2012, the latter of which was
to make a correction, the trial court set Father’s child support at $600 per month retroactive
to the filing of the Petition to modify child support and ordered Father to continue paying the
expense for the children’s health insurance, which was an additional $210 per month.1 The
trial court also found that Father was entitled to a credit of $15,074.29 for excess support
payments remitted during the pendency of the petition to modify. To satisfy this obligation,
Father was given a credit of $100 per month; thus reducing his future child support
obligation to $500 per month until the overpayment was satisfied. Mother filed a timely
appeal.
A NALYSIS
Mother identified three issues on appeal. First, she contends the trial court erred by
failing to apply the proper standard to a voluntary upward deviation; stated another way,
Mother argues that the court erred by not enforcing Father’s contractual agreement to pay
support of $1,200 per month. Second, Mother argues the trial court erred in failing to impute
greater income to Father. Last, Mother argues the court erred in not properly calculating
support so as to establish a significant variance.
A. The Standard of Review of Child Support Orders
Prior to the adoption of the Child Support Guidelines in 1984, the trial court had wide
discretion in matters relating to child custody and support, which was guided only by broad
equitable principles. Richardson v. Spanos, 189 S.W.3d 720, 725 (Tenn. Ct. App. 2005).
With the adoption of the Child Support Guidelines, the trial court’s discretion was limited
and decisions regarding child support must now be made within the strictures of the Child
Support Guidelines. Id. The amount of support derived from a proper application of the
guidelines is the presumptive amount of child support owed, however, the presumptive
amount of support is rebuttable. Id. Accordingly, the trial court may deviate from the amount
of support required by the guidelines, but when it does, the court must make specific written
findings regarding how the application of the guidelines would be unjust or inappropriate.
Id.
Although setting child support is still a discretionary matter, see State ex rel. Vaughn
v. Kaatrude, 21 S.W.3d 244, 248 (Tenn. Ct. App. 2000), that discretion is bounded on all
1
In the first order, Father’s wage assignment was set at $810 per month, which included a child
support obligation of $600 plus an additional $210 per month for the children’s health insurance. The
September 7, 2012 order was entered to modify the assignment to $600 because Father was paying the
premiums for the children’s health insurance.
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sides by the child support guidelines. Smith v. Darmohray, No. M2003-00236-COA- R3-JV,
2004 WL 904095, at *4 (Tenn. Ct. App. Apr. 27, 2004) (citing Butler v. Butler, 680 S.W.2d
467 (Tenn. Ct. App. 1984)). We review the record de novo with a presumption that the
court’s factual findings are correct, absent a showing that the evidence preponderates to the
contrary. Tenn. R. App. P. 13(d); see Berryhill v. Rhodes, 21 S.W.3d 188, 190 (Tenn. 2000).
To the extent the trial court exercises its discretion to set child support, we review such
decisions pursuant to the deferential “abuse of discretion” standard. Spanos, 189 S.W.3d at
725. “A trial court will be found to have ‘abused its discretion’ when it applies an incorrect
legal standard, reaches a decision that is illogical, bases its decision on a clearly erroneous
assessment of the evidence, or employs reasoning that causes an injustice to the complaining
party.” Id.
B. Mother’s Contractual Agreement Contention
In the 2008 Permanent Parenting Plan that was incorporated into the parties’ Final
Decree of Divorce, Father agreed to pay $1,200 a month in child support, which included an
upward deviation of $733, more than double the presumptive obligation. Had Father not
agreed to the upward deviation in 2008, Father’s presumptive child support obligation would
have been $467 per month, which included an additional expense under Section IV of the
worksheet of $210 for health insurance for the children.
As our courts have recognized, “parties are free to agree ‘to a child support obligation
that exceeds the amount payable directly to an obligee parent under the Guidelines and to a
method of calculating child support that differs from the mechanism contemplated by the
Guidelines as long as the resulting child support meets or exceeds the amount mandated
under the Guidelines.”’ Jones v. Jones, No. M2009-01512-COA-R3-CV, 2010 WL 2025403,
at *4 (Tenn. Ct. App. May 20, 2010) (quoting Kesser v. Kesser, 201 S.W.3d 636, 642 (Tenn.
2006)). Agreements memorialized in an MDA or a settlement agreement are generally
enforceable as contracts;2 however, “an agreement between parties ‘with respect to,’ ‘dealing
with,’ or within ‘the scope of’ the legal duty to support their children during minority ‘loses
its contractual nature’ when merged into a divorce decree.” Kesser, 201 S.W.3d at 642 (citing
Penland v. Penland, 521 S.W.2d 222, 224-25 (Tenn. 1975); Blackburn v. Blackburn, 526
S.W.2d 463, 465 (Tenn. 1975)). As such, the child support obligation is subject to
modification by the trial court. Id. (citing Penland, 521 S.W.2d at 224; Tenn. Code Ann. §
36-5-101(a) (Supp. 2003)). Accordingly, Mother’s contention that the trial court applied an
2
In Kesser v. Kesser, the Tennessee Supreme Court acknowledged that an MDA is a contract “that
generally is subject to the rules governing construction of contracts.” Kesser, 201 S.W.3d at 642. In Jones
v. Jones, the parties’ agreement regarding child support was entered into in an agreed Permanent Parenting
Plan Order. Jones, 2010 WL 2025403, at *3.
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erroneous legal standard in relieving Father of his voluntary agreement in 2008 to pay an
upward deviation of $1,200 is without merit.
C. Modification Based Upon A Significant Variance
Modification of child support is governed by Tennessee Code Annotated § 36-5-
101(g)(1). Modification of an existing child support order must be based on a “significant
variance, as defined in the child support guidelines . . . between the guidelines and the
amount of support currently ordered.” Id. A “significant variance” is defined as “at least a
fifteen percent (15%) change between the amount of the current support order (not including
any deviation amount) and the amount of the proposed presumptive support order.” Tenn.
Comp. R. & Regs. 1240–02–04–.05(2)(c). The procedure for determining whether a
significant variance, which is set forth in Tenn. Comp. R. & Regs. 1240–02–04–.05(3), reads
as follows:
To determine if a modification is possible, a child support order shall first be
calculated on the Child Support Worksheet using current evidence of the
parties’ circumstances. . . . If the current child support order was calculated
using the income shares guidelines, compare the presumptive child support
order amounts in the current and proposed orders. . . . If a significant variance
exists between the two amounts, such a variance would justify the
modification of a child support order unless, in situations where a downward
modification is sought, the obligor is willfully and voluntarily unemployed or
underemployed, or except as otherwise restricted by paragraph (5) below or
1240-2-4-.04(10) above.
If a significant variance has been established, Tenn. Comp. R. & Regs. 1240-02-04-
.05(5) states:
[T]he tribunal shall increase or decrease the support order as appropriate in
accordance with these Guidelines unless the significant variance only exists
due to a previous decision of the tribunal to deviate from the Guidelines and
the circumstances that caused the deviation have not changed. If the
circumstances that resulted in the deviation have not changed, but there exist
other circumstances, such as an increase or decrease in income, that would
lead to a significant variance between the amount of the current order,
excluding the deviation, and the amount of the proposed order, then the order
may be modified.
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D. Evidence of the Parties’ Current Circumstances
The trial court found Father’s imputed income for 2011 was $64,000, which was
based upon a salary of $52,000 and imputed income of $12,000. Mother contends that Father
had additional income he did not disclose; however, she presented no persuasive proof of any
additional income. The so-called evidence cited in Mother’s brief is little more than
conclusory allegations, which do not constitute evidence. Moreover, both Father and Mr.
Shelpman testified that Father’s listed salary was $52,000 a year, but he did not receive all
of his salary due to Milam Builders not having sufficient income to pay his full salary.
Further, Father testified that he sold his real estate he received in the divorce and borrowed
money to pay his bills. Father’s mother testified that she had to provide him with financial
assistance through loans and gifts. Based upon the foregoing, we have determined that the
evidence in the record does not preponderate against the trial court’s finding of fact that
Father’s income for 2011 was $64,000. We have also determined that the evidence in the
record does not preponderate against the trial court’s finding of fact that Mother’s income
for 2011 was $129,636.
E. Child Support Calculations
The trial court used the Child Support Worksheet and the income shares model to
determine that Father’s current presumptive child support obligation, as set in 2008, was
$467 per month, including health insurance as an additional expense under Section IV of the
worksheet.3 After finding Father’s imputed monthly income for 2011 was $5,333.33 and
Mother’s income was $10,803, the trial court used the Child Support Worksheet and the
income shares guidelines to determine that Father’s proposed presumptive child support
obligation would be $358 per month, including health insurance as an additional expense
under Section IV of the worksheet.4 The court also found there was more than a fifteen
percent variance in the current and proposed presumptive child support obligation, in fact it
was a variance of twenty-three percent. Therefore, the trial court correctly determined that
Father was entitled to a modification of his child support.
The trial court then correctly found there was no evidence that the children needed
additional support, thus there was no evidence to support an upward deviation unless it was
3
The current presumptive child support order (“PCSO”) amount of $467 per month, which was set
in 2008, was based upon an adjusted basic child support order (“BCSO”) amount of $385 per month plus an
additional expense of $82 for Father’s share of the children’s portion of the health insurance premium.
4
The proposed PCSO amount of $358 per month was based upon an adjusted BCSO amount of $289
per month plus an additional expense of $69.30 for Father’s share of the children’s portion of the health
insurance premium.
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agreed upon. As he had done in 2008, Father agreed to pay child support of up to $600 per
month. Therefore, based upon Father’s voluntary agreement to an upward deviation, the trial
court granted an upward deviation from the presumptive child support obligation of $358,
which included the additional expense for health insurance premiums, setting support at $600
per month.
For the foregoing reasons, we find no error with the trial court’s decision to modify
and set Father’s child support obligation at $600 per month, which includes Father’s
voluntary agreement for an upward deviation. Therefore, we affirm the trial court’s order
decreasing Father’s child support obligation to $600 per month and affording Father a credit
of $100 per month until the overpayment is satisfied.
F. Attorney’s Fees on Appeal
Father seeks to recover the attorney’s fees he incurred on appeal. Tennessee Code
Annotated § 36-5-103(c) provides that a party may recover their reasonable and necessary
attorney’s fees in cases involving the custody and support of children, including fees incurred
on appeal. Pippin v. Pippin, 277 S.W.3d 398, 407 (Tenn. Ct. App. 2008). The decision on
whether to award attorney’s fees remains within the discretion of this court. Id.
In 2008, at the time of the parties’ divorce, Father agreed to pay child support in an
amount substantially greater than his legal obligation. In 2011, Father filed a petition to
reduce his support obligation as he was unable to maintain the agreed upon child support.
Despite overwhelming evidence that Father was struggling financially, Father once again
agreed to pay child support in an amount substantially greater than his legal obligation.
Nevertheless, Mother vigorously opposed his petition for modification in the trial court. At
trial, Mother presented no persuasive proof of Father having additional income and she
presented no proof of a need for maintaining a substantial upward deviation of child support.
Thereafter, even when Father agreed to pay substantially more than the presumptive child
support obligation again, Mother appealed the trial court’s decision to modify his child
support obligation. Father prevailed on every issue on appeal.
Based upon the foregoing and the merits, we find that Father is entitled to recover the
reasonable and necessary attorney’s fees he incurred in this appeal. On remand, the trial court
shall determine the amount of Father’s reasonable and necessary attorney’s fees incurred on
appeal and award a judgment against Mother in that amount.
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I N C ONCLUSION
The judgment of the trial court is affirmed, and this matter is remanded for further
proceedings consistent with this opinion. Costs of appeal are assessed against the appellant,
Tammy L. Milam.
______________________________
FRANK G. CLEMENT, JR., JUDGE
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