Melissa Ann Henderson v. Richard Barry Henderson

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
August 20, 2014 Session
MELISSA ANN HENDERSON v. RICHARD BARRY HENDERSON
Appeal from the Circuit Court for Marion County
No. 19251 J. Curtis Smith, Judge
No. M2013-01879-COA-R3-CV - Filed September 23, 2014
Husband and Wife were divorced after being married for over twenty years. The trial court
awarded Wife alimony in futuro and divided the marital assets and debts. Husband appealed,
contending the trial court erred in the amount and type of alimony it awarded Wife. Husband
also asserted the trial court erred in its classification, valuation, and allocation of several
items of marital property. We find the trial court erred only in its allocation of $3,900 worth
of assets to Husband that the record reveals he does not own. Other than that slight
modification to the trial court’s allocation of assets, we affirm the trial court’s judgment in
all other respects. Wife is awarded one-half of the attorney fees she incurred on appeal.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed except
as Modified in Part
A NDY D. B ENNETT, J., delivered the opinion of the court, in which F RANK G. C LEMENT, J R.,
P.J., M.S., and R ICHARD H. D INKINS, J., joined.
John P. Konvalinka and Jillyn M. O’Shaughnessy, Chattanooga, Tennessee, for the appellant,
Richard Barry Henderson.
Kathryn R. Leiderman, Jasper, Tennessee, for the appellee, Melissa Ann Henderson.
OPINION
Melissa Ann Henderson (“Wife”) and Richard Barry Henderson (“Husband”) were
married for over twenty-one years when they separated in early 2011. They have two
children who are currently seventeen and nineteen years old. Wife filed a complaint for
divorce in January 2011, alleging inappropriate marital conduct or, in the alternative,
irreconcilable differences. Husband filed an answer and counter-complaint seeking a divorce
on the same grounds.
The case was tried over a period of four days in the summer and fall of 2012. The
trial court filed a memorandum opinion and order on March 22, 2013, and then entered an
amended memorandum opinion and order on July 18, 2013. In the amended opinion, the
court awarded the parties a divorce based on irreconcilable differences. The court then
classified, valued, and divided the parties’ marital property, awarded Wife alimony in futuro,
and designated Husband as the primary residential parent. Husband appeals, raising two
issues. First, Husband contends the trial court erred in the type and amount of alimony it
awarded Wife. Second, Husband contends the trial court erred in the designation, valuation,
and allocation of certain items of the parties’ property. Wife appeals no part of the amended
order, but she seeks an award of the attorney fees she incurred as a result of Husband’s
appeal.
I. A LIMONY
The evidence introduced at trial established that Wife graduated from high school in
1980 and took just a few college level courses. She attended hairdressing school and earned
her cosmetology license in 1983. Wife has worked in her mother’s beauty salon since 1983.
She worked part-time at the children’s school from approximately 2006 through 2010 and
also worked part-time at a women’s clothing store from 2009-2011, until her position was
eliminated.
Husband obtained a Bachelor of Science degree in Agriculture from Middle
Tennessee State University in 1978. He has been able to continue his education through
courses provided by the Tennessee Valley Authority (“TVA”) and the United States
Department of Agriculture-Natural Resources Conservation Services. Husband is a certified
professional soil scientist and a registered professional environmental specialist with the
National Environmental Health Association. He is licensed as a soil consultant in Tennessee,
Georgia, and Alabama.
During the parties’ marriage, Husband initially worked as an environmentalist for the
Hamilton County Health Department, where he was employed until May 2003. Husband was
hired by the TVA to work as an Assistant Unit Operator in November 2004, and he was still
employed in that capacity at the time of trial. In addition to his job with the TVA, Husband
started his own soil consulting business in 1990.
Wife’s income has always been much lower than Husband’s income, and Wife has
been dependent on Husband for financial support throughout the parties’ marriage. Husband
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provided the majority of the financial support for the family throughout the marriage, even
when his earnings were lower in earlier years. Wife testified at trial that she earns an average
of $650 per month working at her mother’s salon. She has looked for jobs at other salons in
the area where she lives, but she has not been able to find a position elsewhere.
Husband earned over $109,000 from his job at TVA in 2011. At the time of trial,
Husband was on track to earn at least $99,000 for the 2012 year, which does not include the
annual bonus he normally receives in December of each year. In addition to his income from
TVA, Husband has earned varying amounts from his soil consulting business. The trial court
found that Husband’s “income potential” as a soil consultant was $25,000 per year. Husband
does not contest this finding.
Wife testified and produced documentary evidence showing her monthly expenses
approximate $3,100. Based on her average monthly income of $650, Wife’s expenses exceed
her income by about $2,450. Husband, on the other hand, had a gross monthly income of
$9,216 at the time of trial. His income and expense statement shows his expenses exceed his
income by $109. Father included the children’s expenses in his overall expenses. Husband’s
testimony revealed, however, that he accounted for some expenses more than once. In
addition, the parties’ children have attended private school since kindergarten, and the elder
child was expected to graduate in the spring of 2013. Husband included a monthly expense
of $1,500 for the children’s tuition. The evidence showed Husband’s expenses will be
reduced by $750 per month going forward with only one child still attending private school.
In addition to evidence of the parties’ incomes and expenses, Wife testified that she
has some health issues that affect her ability to work. As the result of a fall at McDonald’s
in 2010, Wife suffered a compression fracture and had to undergo lumbar surgery. Her
mobility has been compromised as a result of the fall. Wife testified that she has had
physical therapy, but she still suffers pain and has to lie down when the pain becomes too
severe. In addition, Wife testified that she has arthritis in her hands and feet.
Husband contends the court should have awarded Wife rehabilitative or transitional
alimony and that the award should be reduced to $750 per month. Husband asserts Wife has
the capacity to earn more than she currently earns and that her expenses are minimal.
Husband also contends he does not have the ability to pay Wife more than $750 per month.
The Court of Appeals reviews the trial court’s findings of fact de novo, according the
trial court a presumption of correctness, unless the preponderance of the evidence convinces
the Court otherwise. Tenn. R. App. P. 13(d); Allstate Ins. Co. v. Tarrant, 363 S.W.3d 508,
515 (Tenn. 2012). The trial court has wide discretion in determining the type, amount, and
duration of alimony to award. Gonsewski v. Gonsewski, 350 S.W.3d 99, 105 (Tenn. 2011).
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This determination is “factually driven and involves the careful balancing of many factors.”
Id. (footnote omitted). Appellate courts will not interfere with or alter the trial court’s
exercise of that discretion absent an abuse of discretion. Crabtree v. Crabtree, 16 S.W.3d
356, 360 (Tenn. 2000); Riggs v. Riggs, 250 S.W.3d 453, 456-57 (Tenn. Ct. App. 2007);
Sullivan v. Sullivan, 107 S.W.3d 507, 511 (Tenn. Ct. App. 2002).
“‘The 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.’” Gonsewski, 350 S.W.3d at 105 (quoting Broadbent v.
Broadbent, 211 S.W.3d 216, 220 (Tenn. 2006)). To show the trial court abused its
discretion, Husband is required to show the court applied the wrong legal standard, arrived
at a decision that is not logical, resolved the case on a clearly erroneous assessment of the
evidence, or used reasoning that caused Husband to suffer an injustice. Gonsewski, 350
S.W.3d at 105; Eldridge v. Eldridge, 42 S.W.3d 82, 85 (Tenn. 2001). The appellate court
is not permitted to substitute its judgment for that of the trial court when reviewing the trial
court’s judgment for an abuse of discretion. Gonsewski, 350 S.W.3d at 105; Eldridge, 42
S.W.3d at 85.
Tennessee recognizes four different types of alimony, or spousal support:
rehabilitative alimony, alimony in futuro, alimony in solido, and transitional alimony. Tenn.
Code Ann. § 36-5-121 (Supp. 2013). There is a statutory preference for rehabilitative or
transitional alimony, Tenn. Code Ann. § 36-5-121(d)(2), but “[t]his statutory preference does
not entirely displace the other forms of spousal support when the facts of the case warrant
long-term or more open-ended support.” Gillespie v. Gillespie, No. E2006-00734-R3-CV,
2006 WL 3732195, at *3 (Tenn. Ct. App. Dec. 19, 2006) (citing Aaron v. Aaron, 909 S.W.2d
408, 410 (Tenn. 1995)).
Tennessee Code Annotated section 36-5-121(i) sets forth factors the trial court is to
consider when determining whether to award spousal support, and if so, the type and amount
to award. These factors include the following:
(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;
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(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.
The trial court considered each of these factors in determining whether to award Wife
spousal support, and if so, which type. The court correctly noted that the two most important
factors are the disadvantaged spouse’s need for the support and the obligor spouse’s ability
to pay. See Riggs, 250 S.W.3d at 457; Robertson v. Robertson, 76 S.W.3d 337, 342 (Tenn.
2002). The factor that weighed most heavily in Wife’s favor was number one, the relative
earning capacity, needs, and financial resources of each party. The court wrote, “Husband’s
earning capacity and financial resources substantially exceed those of Wife. Wife’s financial
needs are great as a result of her very limited earning capacity.”
After discussing the different types of alimony, the court awarded Wife alimony in
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futuro in the amount of $2,100 per month. The court explained:
Wife’s financial needs are great; and Husband has the ability to pay a
sufficient amount of support to Wife. The Court further finds Wife cannot be
rehabilitated, or able to achieve an earning capacity that will permit her [to
attain the] standard of living enjoyed during the marriage, or to the Husband’s
expected post-divorce standard of living.
Alimony in futuro is appropriate when the disadvantaged spouse cannot feasibly be
economically rehabilitated and long-term support is necessary. Sullivan, 107 S.W.3d at 511.
The trial court noted that Wife contributed as a homemaker and care-taker of the parties’
children, and this enabled Husband to work longer hours and continue his education and
training throughout the marriage. Wife was fifty years old at the time of trial. Although
Wife has worked throughout the parties’ marriage, she has earned just a fraction of the
amount Husband earned. Through no fault of her own, Wife has health issues that affect her
mobility and require her to lie down for periods of time. Husband acknowledges that Wife’s
expenses are modest and does not contest any of her itemized expenses.
Husband’s assertion that he cannot afford the amount of alimony the trial court
awarded is belied by the evidence. Husband testified that his income was sufficient to
support the family throughout the parties’ marriage, and his salary has increased as he has
gained seniority in his job. Husband’s expense of paying private school tuition should be
only half what it was when both children were in school, and the younger child should
graduate in the next year or so. At that time, Husband’s expenses will decrease even further.
Our review of the record convinces us that the evidence does not preponderate against
the trial court’s findings. Husband has failed to establish that the trial court abused its
discretion in awarding Wife alimony in futuro in the amount of $2,100 per month.
Accordingly, we affirm the trial court’s award of this support.
II. M ARITAL P ROPERTY
In all actions for divorce, upon the parties’ request, the trial court equitably divides,
distributes, or assigns the marital property between the parties. Tenn. Code Ann. § 36-4-
121(a)(1) (Supp. 2014). “Marital property” is defined as:
all real and personal property, both tangible and intangible, acquired by either
or both spouses during the course of the marriage up to the date of the final
divorce hearing and owned by either or both spouses as of the date of filing of
a complaint for divorce . . . .
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Tenn. Code Ann. § 36-4-121(b)(1)(A).
The trial court divided over $600,000 in marital assets between the parties. Wife was
awarded assets valued at $331,238.15, and Husband was awarded assets valued at
$294,132.09. Husband contends the court erred in the classification, valuation, and division
of particular assets. We will address each of Husband’s claims, seriatim.
A. Husband’s Pension Plan
The first error Husband contends the trial court made was in assigning a value to his
Tennessee Consolidated Retirement System Pension Plan (“TCRSPP”). The court valued
this asset at $112,524 based on expert testimony offered by a certified public accountant
(“CPA”). Husband’s defined monthly benefit was fixed at $501 as of the trial date, which
value neither party disputes. Wife retained the CPA to calculate the present value of the
TCRSPP. The CPA testified that he used a 2.3 percent interest rate to calculate the present
value because 2.3 percent is an annual interest rate that is considered conservative, or risk-
free. The CPA explained that 2.3 percent was the current market yield of United States
Treasury securities at a twenty-year constant maturity. The CPA explained further:
When I perform a present value calculation, I try to equate the lump
sum at a certain date, this being August 3, 2012, that would equate to a future
stream of cash flows, in this case $501 per month. Well, the only way to
equate those is to use a certain interest rate that you are going to be able to get.
The only way you would take a lump sum now as opposed to in future
payments in general would be if you can invest that money now to equate to
the same future payments or better.
Using a conservative . . . treasury rate of 2.3 percent is -- you know, that
is a guaranteed rate. That is something that’s published by the U.S.
Government on a 20-year constant maturity treasury bond. And anything other
than that would have a risk factor, such as a bond, a corporate bond that has
a risk of default in there and that sort of thing. So there was not -- from my
professional judgment, the 2.3 percent for the current market yield on the
United States Treasury was the most accurate.
Husband asserts the TCRSPP should not have been valued at more than $84,000.
According to Husband, this lower value would be attained if a higher interest rate were used
to calculate the present value of the TCRSPP. Husband sought to introduce into evidence
a document he identified as the Tennessee Consolidated Retirement System Comprehensive
Annual Financial Report for the fiscal year ending June 30, 2011 (the “financial report”), for
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the purpose of impugning the interest rate the CPA selected. According to Husband, the
financial report showed the historical rate of return of the portfolio of funds in which the
TCRSPP was invested, which was higher than the 2.3 percent interest rate the CPA used to
calculate the present value. However, as the CPA explained during cross-examination,
Husband was entitled to receive $501 per month regardless of the portfolio’s overall
performance. Because Husband’s monthly TCRSPP payments would not fluctuate based on
the portfolio’s rate of return, the CPA did not deem the portfolio’s internal rate of return to
be relevant to the present value calculation of Husband’s TCRSPP.
We understand Husband to be making two arguments with respect to his TCRSPP.
First, Husband contends the court erred in refusing to admit the financial report into
evidence. Second, Husband contends the court assigned an improper value to his TCRSPP.
We turn first to Husband’s argument about the admissibility of the financial report. Trial
courts have wide discretion to admit or exclude evidence during a trial, and we review a trial
court’s evidentiary rulings under an abuse of discretion standard of review. Otis v.
Cambridge Mut. Fire Ins. Co., 850 S.W.2d 439, 442 (Tenn. 1992); GSB Contractors, Inc.
v. Hess, 179 S.W.3d 535, 544 (Tenn. Ct. App. 2005).
During the trial, Husband argued that the financial report was admissible as a self-
authenticating document under Rule 902 of the Tennessee Rules of Evidence. That rule
states that “[e]xtrinsic evidence of authenticity as a condition precedent to admissibility is
not required” for particular types of documents. T ENN. R. E VID. 902. Without determining
whether the financial report qualified as one of the described documents, however, the court
noted that the rule requires “[a] party intending to offer a record into evidence under this
paragraph [to] provide written notice of that intention to all adverse parties” before offering
the document into evidence. Id. Husband acknowledged that he did not provide such notice
to Wife.
Husband then argued the financial report was admissible as a public record under Rule
1005 of the Tennessee Rules of Evidence. Rule 1005 provides:
The contents of an official record, or of a document authorized to be recorded
or filed and actually recorded or filed, including data compilations in any form,
if otherwise admissible may be proved by copy certified as correct in
accordance with Rule 902 or testified to be correct by a witness who has
compared it with the original. If a copy which complies with the foregoing
cannot be obtained by the exercise of reasonable diligence, then other evidence
of the contents may be given.
The court noted that Rule 1005 refers back to Rule 902 and rejected Husband’s attempt to
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introduce the financial report under Rule 1005 for the same reason it rejected Husband’s
attempt to introduce the report under Rule 902.1
On appeal, Husband argues that the trial court erred by failing to admit the financial
report into evidence as a public records exception to the hearsay rule pursuant to Rule 803
of the Tennessee Rules of Evidence. Husband did not attempt to introduce the financial
report as an exception to the hearsay rule under Rule 803 at trial, however, and he is
precluded from making this argument for the first time on appeal. See Coleman Mgmt., Inc.
v. Meyer, 304 S.W.3d 340, 355 (Tenn. Ct. App. 2009) (holding that issue not raised at trial
cannot be raised for the first time on appeal). We conclude the trial court did not abuse its
discretion in refusing to admit the financial report into evidence.
We turn now to the value the trial court assigned to Husband’s TCRSPP. A trial
court’s valuations of divorcing parties’ assets constitute decisions of fact. Woodward v.
Woodward, 240 S.W.3d 825, 828 (Tenn. Ct. App. 2007); Kinard v. Kinard, 986 S.W.2d 220,
231 (Tenn. Ct. App. 1998). These decisions “are entitled to great weight on appeal, and will
not be second-guessed unless they are not supported by a preponderance of the evidence.”
Woodward, 240 S.W.3d at 828; see Ray v. Ray, 916 S.W.2d 469, 470 (Tenn. Ct. App. 1995)
(stating that trial court’s valuation of marital property entitled to presumption of correctness).
When the parties present conflicting evidence of an asset’s value, “the court may place a
value on the property that is within the range of the values represented by all the relevant
valuation evidence.” Woodward, 240 S.W.3d at 828; see Watters v. Watters, 959 S.W.2d
585, 589 (Tenn. Ct. App. 1997) (indicating that trial court may value marital property within
range of evidence parties submit at trial).
The trial court adopted the CPA’s valuation of Husband’s TCRSPP. Husband cross-
examined the CPA in an effort to discredit the 2.3 percent interest rate the CPA used to arrive
at his present value of the TCRSPP, but Husband did not offer a competing expert or other
witness suggesting an alternative value for this asset. The method used to determine an
asset’s value “remains within the sound discretion of the trial court to determine after
consideration of all relevant factors and circumstances.” Cohen v. Cohen, 937 S.W.2d 823,
831 (Tenn. 1996). We are convinced, upon our review of the record, that the evidence does
not preponderate against the trial court’s finding that, as of the time of trial, the present value
1
Husband also contends that after the day on which he attempted to introduce the financial report,
but before a subsequent hearing date, he provided Wife notice that he intended to use the financial report,
as required by Rule 902. He claims the trial court erred by failing to rule on the document’s admissibility
after he provided this notice to Wife. Husband cannot satisfy the requirements of Rule 902 after the fact,
however. Rule 902 requires a party to make the document available for inspection before it is offered into
evidence, which Husband did not do.
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of Husband’s TCRSPP was $112,524.2
B. Wife’s Personal Injury Settlement
Wife testified that in 2010 she suffered a fall at McDonald’s and filed a lawsuit to
recover her damages. Wife settled her claims for $66,000. After paying attorney fees and
medical expenses, Wife’s net proceeds from the settlement were $27,635.84. The trial court
classified the settlement proceeds as Wife’s separate property. The court explained:
Marital property includes “recovery in personal . . . actions for the following:
wages lost during the marriage, reimbursement for medical bills incurred and
paid with marital property, and property damages to marital property.” Wife
testified as to her pain and suffering as a result of the back injury and how it
now affects her ability to work. There was no proof of any amount of lost
wages during the marriage as a result of the back injury or reimbursement for
medical bills incurred and paid with marital property or property damage to
marital property. . . . Some of the medical bills were paid by BlueCross
BlueShield and some were paid from the settlement proceeds.
Wife testified that she used a portion of the settlement proceeds for necessary
household and living expenses after the 2011 income tax was depleted.
Although Wife did not re-take the stand to testify as to the exact amount of
those funds that she was required to use for her support the Court finds based
on all the proof that Wife used the funds at the approximate rate of $2,500.00
per month. The balance of those settlement funds are now approximately
$19,000.00 and constitutes Wife’s separate property.
As the trial court noted, “marital property” is defined to include recoveries in personal
injury actions for “wages lost during the marriage, reimbursement for medical bills incurred
and paid with marital property, and property damage to marital property.” Tenn. Code Ann.
§ 36-4-121(b)(1)(C) (Supp. 2014). “Separate property,” in contrast, is defined to include
pain and suffering awards. Tenn. Code Ann. § 36-4-121(b)(2)(E). The record supports the
trial court’s statement that Wife testified she continues to suffer back pain as a result of her
2
Husband also asserts that as of the time of trial, he had worked for the State of Tennessee for fifteen
years, but that he did not get married until one year after he began working for the State. Husband contends
the court should have deducted 1/15th from its valuation of his TCRSPP to determine the value of the marital
property portion of this asset because this fraction was earned when he was not yet married. The record
shows, however, that the monthly benefit the CPA relied on to determine the present value of Husband’s
TCRSPP took this into consideration and assumed a service credit beginning on the date of the parties’
marriage, rather than the date Husband began working for the State.
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fall at McDonald’s. The record further supports the trial court’s finding that no evidence was
presented that Wife lost any wages as a result of her back injury. Further, no evidence was
presented that marital funds were used to pay any medical bills Wife incurred as a result of
her fall at McDonald’s or that there was any damage to any marital property as a result of her
injury.
Husband relies on the case Lane v. Lane, E2011-02293-COA-R3-CV, 2012 WL
3030579 (Tenn. Ct. App. July 26, 2012), to argue the proceeds from the McDonald’s
settlement should be classified as marital property. The husband in Lane suffered a
workplace injury and received worker’s compensation benefits for five months. Id. at *1.
The husband and wife then filed a products liability claim, based on the injury the husband
suffered, and received a lump sum settlement. Id. The settlement check was made payable
to both individuals without specifying the portion allotted to each party. Id. at *5. The trial
court classified the settlement as marital property, and the husband challenged this
classification, arguing it should have been classified as his separate property. Id. at *4.
The Court of Appeals affirmed the trial court’s classification, stating:
We hold that the settlement check represented the amount sought by both
parties and ultimately awarded to both parties in fulfillment of each of their
products liability claims. Accordingly, we conclude that the products liability
settlement was properly classified as marital property and reject Husband’s
contention that the settlement check was not marital property because it did not
specifically include recovery for lost wages pursuant to Tennessee Code
Annotated section 36-4-121(b)(1)(C).
Id. at *5.
Husband incorrectly suggests that the Lane case stands for the proposition that tort
action settlements should generally be classified as marital property if the settlement is
reached during the parties’ marriage. Husband glosses over the fact that both the husband
and wife in Lane were plaintiffs in the products liability lawsuit and that the settlement check
was made payable to both parties. In this case, by contrast, Wife was the sole plaintiff in the
lawsuit filed against McDonald’s, and no evidence was presented that Husband was entitled
to any of the settlement proceeds.
In the absence of evidence suggesting the settlement proceeds compensated Wife for
lost wages during the parties’ marriage, and in light of Wife’s testimony about the pain and
suffering she has experienced and continues to experience as a result of her fall, we conclude
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the evidence does not preponderate against the trial court’s classification of the McDonald’s
settlement as Wife’s separate property.
C. Husband’s Debt to his Parents
The evidence at trial showed that Husband’s parents loaned him money on several
occasions in 2011 and 2012, after the parties had separated, but before they were divorced.
The total amount Husband borrowed was $29,441. Husband testified that he used the money
to help pay for the children’s private school tuition, a family evaluation, and additional
expenses incurred as a result of having two separate homes. Husband took the position at
trial that these loans from his parents should be classified as marital debt because the loans
were incurred during the parties’ marriage for the benefit of the entire family.
The trial court denied Husband’s request, stating:
Both Husband and Wife testified Husband’s income was always sufficient to
support the family throughout the marriage. When the parties separated in
January 2011, Husband moved into his parents’ home and had no additional
living expenses until he moved into a rental house in March and began paying
$700.00 per month rent. He had stopped paying Wife’s household expenses
by March of 2012. In light of Husband’s substantial income and generous
spending habits the Court does not find credible Husband’s explanation of
financial difficulties necessitating loans from his parents. Husband did not list
attorney’s fees as an expense and which also lessens his credibility on the issue
of his expenses. The Court does not make any allowance for these alleged
debts in the division of the parties’ property and debt.
The classification of property as a marital asset or debt constitutes a question of fact,
and the trial court has broad discretion in classifying an asset or debt as marital or separate
property. Bilyeu v. Bilyeu, 196 S.W.3d 131, 135-36 (Tenn. Ct. App. 2005); Dunlap v.
Dunlap, 996 S.W.2d 803, 814 (Tenn. Ct. App. 1998); see Alford v. Alford, 120 S.W.3d 810,
813 (Tenn. 2003) (explaining that marital debts are subject to equitable division in the same
way as marital assets); Owens v. Owens, 241 S.W.3d 479, 490 (Tenn. Ct. App. 2007) (stating
that division of marital estate includes division of marital property and allocation of marital
debt). “On appeal, the trial court’s decision on such matters is entitled to great weight, and
absent an error of law, the trial court’s classification of property will be reversed or modified
only if the evidence preponderates against the court’s decision.” Bilyeu, 196 S.W.3d at 136.
The trial court is in the best position to determine a witness’s credibility. Wells v. Tenn. Bd.
of Regents, 9 S.W.3d 779, 783 (Tenn. 1999). Thus, we will not reevaluate a trial court’s
assessment of a witness’s credibility in the absence of clear and convincing contrary
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evidence. Id.
Husband contends that because the loans benefited the family and were incurred
during the parties’ marriage, the trial court should have classified them as marital debts. As
the trial court noted, however, Husband did not explain at trial why his expenses increased
after he moved out of the marital home to justify the loans from his parents. Evidence was
presented that Husband’s income had always been sufficient in the past to cover the family’s
expenses and that Husband’s salary increased steadily year after year. This evidence, taken
together with the court’s finding that Husband was not credible on this issue, leads us to
conclude that the evidence does not preponderate against the trial court’s determination that
Husband’s debt to his parents should not be classified as marital debt.
D. Assorted Other Assets
Husband contends the trial court erred in its division of two investment accounts, one
with Managers Investment Group and the other with Harbor Funds. At the time of trial, the
Managers Investment account was valued at $5,972 and the Harbors Fund was valued at
$7,422. The trial court assigned the Harbors Fund account to Husband and the Managers
Investment account to Wife. Husband asserts these funds were established by his parents for
the benefit of the parties’ children and that Husband should have been named the custodian
of both accounts.
The trial court is directed to divide the parties’ marital property equitably. Tenn. Code
Ann. § 36-4-121(a)(1). This does not mean, however, that the division must be equal as
between Husband and Wife. “A division of marital property is not rendered inequitable
simply because it is not precisely equal, or because each party did not receive a share of every
piece of marital property.” Owens, 241 S.W.3d at 490 (internal citations omitted); see Tenn.
Code Ann. § 36-4-121(c)(1)-(11) (list of factors court is to consider in making equitable
division of marital property). Trial courts have wide discretion in equitably dividing the
marital property, and appellate courts “‘are disinclined to disturb the trial court’s decision
unless the distribution lacks proper evidentiary support or results in some error of law or
misapplication of statutory requirements and procedures.’” Larsen-Ball v. Ball, 301 S.W.3d
228, 234 (Tenn. 2010) (quoting Keyt v. Keyt, 244 S.W.3d 321, 327 (Tenn. 2007)); see
Owens, 241 S.W.3d at 490 (“[I]t is not our role to tweak the manner in which a trial court has
divided the marital property.”).
Statements from each account were marked as exhibits at trial, and the statements do
not indicate that either account is a custodial account. Both accounts are in the names of
Husband and Wife as joint tenants with rights of survivorship. The account records do not
indicate the source or purpose of the funds. Husband has failed to establish that the trial
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court abused its discretion in awarding one account to Husband and the other account to
Wife. We affirm the trial court’s division of these two assets.
Husband next takes issue with the trial court’s decision assigning particular items of
personal property to Husband that Husband asserts do not belong to him. The items about
which Husband complains include an iPad as well as a stove, refrigerator, and washer and
dryer that are located in Husband’s rental home. Husband testified that the appliances belong
to his landlord rather than to Husband, and Wife did not present any evidence to contradict
this testimony. With regard to the iPad, Husband testified that he purchased an iPad for his
nephew at a price of $600 on behalf of his sister and that she paid him back for this purchase.
The total value of these items of personal property is $3,900.
After reviewing the transcript, we conclude Husband is correct with respect to these
items of personal property and that the evidence preponderates against the trial court’s
decision to assign these items to Husband. Accordingly, we modify the trial court’s
judgment to delete these items from the list of marital assets assigned to Husband. Contrary
to Husband’s argument, however, this adjustment does not necessitate a new overall
distribution of marital assets because it does not render the division of marital assets
inequitable.
Our adjustment of the assets assigned to each party reduces the total assets awarded
to Husband from $296,583.88 down to $292,683.88. The sum of marital assets awarded to
Wife totaled $335,238.15. The court awarded Wife more debt than it awarded Husband,
however, with the result that the net amount of marital assets awarded to Wife was
$331,238.15. Taking today’s adjustment to Husband’s assets into account, the net amount
of marital assets awarded to Husband totaled $290,232.09.
Husband complains that Wife was awarded six percent more of the marital assets than
Husband received and that, therefore, the trial court’s division of marital assets was not
equitable. We disagree. Included among the factors the courts are to consider in making an
equitable division of marital property are the parties’ physical health, employability, and
earning capacity; the relative ability of each party for future acquisitions of capital assets and
income; and the economic circumstances of each party when the division of property is to
become effective. Tenn. Code Ann. § 36-4-121(c)(2), (4), (8). The trial court thoroughly
considered each of the factors set out in Tenn. Code Ann. § 36-4-121(c) in an effort to reach
a fair and equitable distribution of the parties’ marital assets. The trial court’s distribution,
as modified herein, neither lacks proper evidentiary support nor results in an error of law or
misapplication of statutory requirements and procedures.
We affirm the trial court’s distribution of marital assets and debts, except that
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Husband’s assets will be reduced by $3,900 to account for the iPad and rental home
appliances that were improperly assigned to him.
III. W IFE’S A TTORNEY F EES
Wife relies on Tenn. Code Ann. § 36-5-103(c) in seeking an award of her attorney
fees incurred on appeal. Section 36-5-103(c) provides:
The plaintiff spouse may recover from the defendant spouse, and the spouse
or other person to whom the custody of the child, or children, is awarded may
recover from the other spouse reasonable attorney fees incurred in enforcing
any decree for alimony and/or child support, or in regard to any suit or action
concerning the adjudication of the custody or the change of custody of any
child, or children, of the parties, both upon the original divorce hearing and at
any subsequent hearing, which fees may be fixed and allowed by the court,
before whom such action or proceeding is pending, in the discretion of such
court.
This statute authorizes the award of attorney fees incurred at trial as well as on appeal,
and courts have discretion to award these fees. Huntley v. Huntley, 61 S.W.3d 329, 341
(Tenn. Ct. App. 2001); Deas v. Deas, 774 S.W.2d 167, 170 (Tenn. 1989). The Court of
Appeals has explored the application of this statute to cases where one former spouse is
required to defend the other former spouse’s attempt to reduce or eliminate the amount of
alimony awarded by the trial court. Evans v. Evans, M2002-02947-COA-R3-CV, 2004 WL
1882586, at *13-14 (Tenn. Ct. App. Aug. 23, 2004). Concluding that the statute authorized
the award of attorney fees in this situation, the Evans court wrote:
There is no justification in the language of the statute itself for treating
enforcement of alimony orders differently from enforcement of child support
orders. . . . Alimony is only awarded in the first instance to an economically
disadvantaged spouse who has a demonstrated need for the support. Absent a
showing in a modification proceeding that the need no longer exists, requiring
the recipient to expend that support for legal fees incurred in defending it
would defeat the purpose and public policy underlying the statute on spousal
support. Additionally, the possibility of being burdened with a former
spouse’s attorney’s fees helps deter unwarranted or unjustified attempts by an
obligor to evade or reduce an existing support obligation.
Id. at *13 (footnote omitted). Thus, the Evans court concluded, “Tenn. Code Ann. § 36-5-
103(c) authorizes a court to award attorney’s fees to an alimony recipient who is forced to
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defend an action to reduce or terminate that alimony.” Id.
If alimony were the only issue Husband raised on appeal, we would award Wife all
of the reasonable attorney fees she incurred on appeal. However, Husband also raised issues
regarding the valuation, classification, and allocation of the parties’ property. Wife is not
entitled to an award of the fees she incurred in defending these other issues. Husband
devoted one-half of his opening brief and all of his reply brief to his argument that the trial
court erred in awarding Wife alimony in futuro in the amount of $2,100 per month.
Accordingly, we award Wife one-half of the reasonable attorney fees she incurred on appeal.
We remand the case to the trial court to determine the amount of reasonable attorney fees
Wife incurred in this appeal.
IV. C ONCLUSION
We modify the trial court’s judgment by reducing Husband’s marital assets by $3,900
to account for the appliances and iPad erroneously assigned to him. The trial court’s
judgment is affirmed in all other respects. Wife is awarded one-half of the reasonable
attorney fees she incurred on appeal. The case is remanded for such further proceedings as
may be required, consistent with this Opinion. Costs of this appeal shall be assessed against
the appellant, Richard Barry Henderson, for which execution shall issue, if necessary.
_________________________
ANDY D. BENNETT, JUDGE
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