May 2012 Archives

Proving Property is Separate and Not Marital in a Tennessee Divorce Can Have Major Consequences

The case of Bowers v. Bowers, No. E2011-00978-COA-R3-CV (Tenn. Ct. App. May 17, 2012) shows Tennessee divorce lawyers that proving whether property is marital or separate at trial can have far-reaching consequences for property division.

Wife entered the marriage with assets including real property on Loma Drive, which the Husband subsequently moved into. The parties kept their finances separate during the marriage, with Wife continuing to pay the Loma Drive mortgage. Husband paid for a renovation of the basement of Loma Drive. Then in 2002, the property was refinanced, but remained in Wife's name only. Wife then reimbursed Husband for all expenditures incurred as a result of the renovation. In 2005, Wife purchased another property on Navigator Pointe solely in her name. Wife then sold Loma Drive and received approximately $172,000, which was deposited into Husband's private bank account. Because the Husband's name was on the title to this property, a rebuttable presumption was created that Loma Drive was martial property. However, the trial court held this presumption was overcome by Wife's payment history and the repayment of Husband's investment in the renovation. The trial court also found that the $172,000 in proceeds from the sale of the home was Wife's separate property and Husband had dissipated it. The Navigator Pointe property was deemed marital and the equity was divided 2/3 to Wife and 1/3 to Husband.

The issues upon appeal included whether the properties were properly classified, whether Husband should have to pay back Wife the sale proceeds of Loma Drive and whether Wife should receive her attorneys fees upon appeal.

The Appeals Court must first classify all property as separate or marital pursuant to T.C.A. §36-4-121(a)(1). Separate property includes that owned prior to the marriage, income and appreciation from the same, pain and suffering awards (including future lost wages and medical expenses), gifts or inheritances. Marital property includes all that is acquired after the date of marriage. Separate property can be transmuted in marital property in the following situations: taking title in joint tenancy or treating the property in such a way as to give rise to evidence of the intent for it to become marital. These actions raise a rebuttable presumption of marital property.

Regarding Loma Drive, the Wife owned the property prior to the marriage and was her separate property. Although the joint deed created a presumption of marital property, that was rebutted by the care and maintenance and treatment of the obligations on the property and was properly classified as separate property by the trial court. With the Navigator Pointe property, Wife argues that she used separate funds to acquire it via her down payment and it is therefore not marital property. However, Husband signed the sales contract and was added as a purchaser. Husband also proved that he had paid for some expenses toward the home after the purchase. The testimony also showed an intent by the parties for the home to be owned jointly. Therefore, this was properly classified as marital property.

Finally, because Husband was reimbursed for the Loma renovation, because Wife asked for the proceeds to be returned to her and because she bore all the expenses, the trial court properly concluded that Husband should pay the Wife back the proceeds from the sale. Further, the Appellate Court found that Husband unlawfully dissipated these funds due to Wife's continued request for that the funds be returned to her. The trial court found these funds had been spent by the Husband in a way that did not contribute to the marriage and did not belong to him in the first place.
The decision of the trial court was affirmed, but Wife was not entitled to her attorneys fees as Husband's appeal was not totally lacking in merit.

Tennessee Custody Cases May Be Transfered to Other States If Forum Inconvenient

Lee v. Lee, No. M2011-01893-COA-R3-CV (Tenn. Ct. App. May 17, 2012), shows Tennessee Divorce attorneys that the Uniform Child Custody Jurisdiction and Enforcement Act ("UCCJEA") allows for TN courts to decline to exercise jurisdiction and will transfer petitions to other state courts.

In November 2008, Father and Mother divorced and the Court allowed Mother to relocate to the State of Florida. Starting in 2009, Mother allegedly engaged in an "ever-expanding pattern of vexatious litigation against the Father in Florida." In 2010, Father filed a petition to modify the parenting plan, for criminal contempt, and application of an ex parte restraining order. Father alleged that litigation against him by Mother in Florida represented a material change in circumstances. The trial court granted the restraining order against Mother which prevented her from litigating the case outside the jurisdiction of the Chancery Court for Williamson County, TN. In June 2010, Mother filed a petition to dismiss because of lack of jurisdiction and for summary judgment. Mother argued the Tennessee court was an inconvenient forum and Florida was more convenient forum. The court dismissed Mother's petition and summary judgment requests. In March 2011, the parties attempted mediation which resulted in no resolution. In June 2011, Mother filed a motion to transfer jurisdiction or to set for trial. Mother filed an affidavit outlining her and the daughter's connections to Florida. The court granted Mother's request to transfer and Father filed a motion to alter or amend judgment. The court denied the motion and Father appealed.

Father's appeal raised two questions: (1) whether the Tennessee trial court had exclusive, continuing jurisdiction over the case; and (2) whether the trial court erred in declining to exercise jurisdiction.

In their analysis, the Court of Appeals had to determine whether the state that made the initial custody determination (Tennessee) retained exclusive continuing jurisdiction. The court making the initial custody determination (here, Tennessee) retains exclusive jurisdiction unless and until one of two statutory triggers occur under T.C.A. §36-6-217(a): (1) a Tennessee court determines that neither the child nor the child and one parent nor the child and one person acting as the parent have a significant connection with the state and substantial evidence does not exist in this state concerning the child's care, protection, training and personal relationships; 2) both parents live outside the state of original jurisdiction.

Under the UCCJEA and T.C.A. §36-6-205(5), jurisdiction attaches at the commencement of proceeding which is defined as the date of the filing of the first pleading. Here, Father filed a petition in May 2010 and Mother had lived in Florida since 2008. At issue is whether one of the statutory triggers had occurred prior to Father's filing in May 2010.
Here, the Appellate Court did not rule on whether Tennessee had continuing, exclusive jurisdiction. However, the Court did determine under T.C.A. §36-6-222, sufficient evidence existed to support the trial court's decision that Tennessee was an inconvenient forum and it would be appropriate to transfer jurisdiction to Florida.

This determination is separate and apart from the original and continuing jurisdiction question, and relies upon several factors, including: the length of time the child has lived outside this state, the distance between Tennessee court and the other state's court, the parties' financial circumstances, any agreement between the parties as to the appropriate state, the nature and location of the evidence needed to resolve the pending litigation, each court's ability to decide the case quickly, whether domestic violence has occurred and which state may best protect the child and parties, and each court's familiarity with the relevant facts and issues.

Reasonable Notice Required for Tennessee Divorce Hearings

The case of Burnett v. Burnett, No. E2011-02297-COA-R3-CV (Tenn. Ct. App. May 22, 2012), shows Tennessee divorce lawyers that they must be very specific when notifying other parties of court settings and hearings if they want to be afforded the relief they request.

The parties had a child in 1994 and married in 2000. In June 2011, the Wife filed for divorce. At that time, the Husband was incarcerated at Northeast Correctional Complex. Wife simultaneously with the Complaint filed a Notice stating a hearing would be held in August 2011 on the Wife's proposed parenting plan. In July, the Husband filed a pro se response to the Complaint and objected to Wife's parenting plan. The August hearing was held without Husband's presence. Although the Notice only indicated that the parenting issues would be heard, the trial court allowed the entire divorce to be heard, and entered a Final Decree of Divorce (holding Husband liable for certain debts) in addition to approving Wife's Parenting Plan. The Husband appealed.

Husband's only issue raised upon appeal was whether the trial court committed error in entering the Final Divorce Decree when the notice to Husband only indicated a hearing on the parenting plan would be occurring.

Tennessee Rules of Civil Procedure 5.01 reads: .... "every written notice...shall be served upon each of the parties..." This means that the Wife was required to notify Husband that the August hearing would include parenting and the divorce itself. This notice requirement is intended to allow the other party be apprised of the pending matters and afford them an opportunity to object. Here, the notice of a hearing on the parenting plan is not reasonable in light of the fact that the entire divorce case was heard. Even though the Husband here was incarcerated, he is entitled to "reasonable access" to the court system. This means he must be given the opportunity to present his side of the issues. Because he did not receive proper notice that all issues pertaining to the divorce would be tried that day, he was not given this opportunity and was therefore denied reasonable access to the court system. Accordingly, the Judgment is vacated and remanded so that proper notice may be sent out. Court costs on appeal were taxed to the Wife.

Upon remand, the Husband's level of participation is up to the trial court, which may consider the following: the cost and inconvenience of transporting the prisoner, any danger or security risk, the gravity of the matter being heard, the possibility of delay until the prisoner is released, probability of success on the merits, and the interests of the inmate testifying in person. Knight v. Knight, 11 S.W. 3d 898 (Tenn. Ct. App. 1999).

Wife Allowed to Clarify Final Decree 12 Years After Divorce

Richmond v. Richmond, No E2011-01687-COA-R3-CV (Tenn. Ct. App. May 7, 2012), shows Tennessee Divorce Attorneys that although a Wife waited 12 years after her divorce to clarify her final decree, the elapsed time did not serve as a bar to her claim nor waive her right to her Husband's retirement.

In 1999, Husband and Wife divorced and Wife was awarded 50 percent of Husband's retirement from U.S. AIR Force through the date of divorce. In 2010, Husband retired from military with 28 years of service. In 2011, Wife filed motion to clarify the Final Decree which did not include sufficient language to allow direct payment of Husband's retirement to the Wife. Wife also sought award of any lapsed payments she would be entitled to while not receiving direct pay. In 2011, the trial court entered a Military Retired Pay Division Order ("MRPDO") which awarded Wife 42.5% of Husband disposable military pay. The trial court also determined that Husband owed Wife her share of his Federal military retirement which accrued between August 2010 and June 2011 and ordered Husband to pay $200.00 a month until the total due was paid, an amount of approximately $3,000.00. Husband appealed.

Husband raised two issues on appeal: (1) whether Wife's failure to file the necessary paperwork until 12 years later after the final divorce entitles Husband to the protection of the unclean hands doctrine; and (2) whether Wife waived her right to receive the past payments of her share of Husband's retirement by waiting 12 years to complete the necessary paperwork to secure such payments.

The doctrine of unclean hands, provides the court a reason to refuse to grant relief to parties who have willfully engaged in unconscionable, inequitable, immoral, or illegal acts with regards to the subject matter of their claims under a preponderance of evidence standard. The trial court here found Wife had not acted in such a manner. Wife's failure to complete the paperwork, the essence of Husband's argument, did not meet standard for unclean hands doctrine. The Court of Appeals ruled this issue was without merit.

Husband next argued Wife waived her rights by waiting 12 years to complete the necessary paperwork. A waiver is a voluntary relinquishment of a party of a known right and can be waived expressly or by acts or conduct which shows intent not to claim said advantage. Husband argues Wife knew of right and neglected and failed to act to claim retirement. The Court of Appeals disagreed, stating Wife attempted to claim her portion to payment once Husband retired in 2010 and was unable to do so with Final Order and MDA as written. Wife also attempted to get Husband to sign papers to facilitate her receipt of her portion but Husband refused to sign. Wife then sought an order from the court allowing her to claim her portion of Husband's retirement. Wife's twelve year wait did not constitute a waiver to the claim because Husband had not retired nor was there an express declaration of Wife to waive her right to the payment. Wife was not eligible to receive her portion of Husband's retirement until 2010. Therefore, the judgment of the trial court is affirmed on both issues.

Tennessee Divorce Litigants Must Show Good Cause To Obtain Mental Health Exam of Spouse

In Herman v. Herman, No. M2012-00395-COA-R10-CV (Tenn. Ct. App. May 9, 2012), the Tennessee Court of Appeals ("CoA") shows Tennessee Divorce attorneys they must establish that mental health is in controversy and that good cause exists before a Court will order a mental health examination.

In 2009, Father and Mother divorced and Mother was named primary residential parent of the couple's child. Father received two days and three nights with child but Mother's mental health issues continued, resulting in Mother's hospitalization. During these periods, the child resided with Father. In June 2011, Father petitioned the court seeking to modify custody and child support based on Mother's continued mental health issues. Father alleged Mother's mental health had worsened and Mother had not been compliant with her medication or treatment. Father's petition maintained that living under the current conditions with Mother was detrimental to the child. Father believed it was not in the child's best interest to remain with Mother whose deteriorating mental health coupled with Father's increase of care for the child represented a substantial and material change of circumstances.

During discovery, Mother's mental health records were sought by Father. Mother objected. Father sought a Motion to Compel and Mother filed to quash. At the hearing, the trial court ordered that the records be filed under seal with the clerk within two weeks. Mother sought review under Tenn. R. App. P. 10 via an interlocutory appeal but the trial court refused to stay the order to produce the records pending this request. In February, the CoA stayed the trial court's order to produce the records and ordered Father to file an answer to Mother's application for the Rule 10 appeal. In March 2012, the CoA granted the application for extraordinary Rule 10 appeal and ordered the trial clerk to transmit the record.

The records sought are confidential under T.C.A. §§24-1-207 and 63-11-213, which Father does not dispute; however, Father is seeking disclosure under T.C.A. § 33-3-105. Title 33 deals with mentally ill people in the care and custody of the state. Mother does not fall within that category and therefore T.C.A. § 33-3-105 does not apply here. Father then argues the records must be produced so that the court can fulfill its job to consider the mental health of parents/caregivers in determining the child's best interest as guided by in T.C.A. § 36-6-106. Although those factors must be considered, statutory privileges regarding disclosure of such records cannot be disregarded.

Father argued that he did not seek a mental health examination under Tenn. R.Civ. P. 35.01 because it would be intrusive, may not determine the mental health concerns, and would require Mother's cooperation (which she would refuse). It would be quicker, more insightful, and less of a burden on Mother to view the existing records. However, Mother has a right to not waive her statutory privileges. Therefore, Father must seek a Rule 35.01 medical examination. In order to do so Father must establish that Mother's mental health is in controversy and a good cause exists for examination. Therefore, the CoA held that Mother did not have to produce her prior mental health records. Therefore, the issue of whether the mental health evaluation under Rule 35.01 will be allowed is left to the trial court to determine.

Each Violation of A Tennessee Order of Protection Equals A Separate Count of Contempt

The Tennessee Court of Appeals recently held that a husband had engaged in separate counts of contempt for every week that he violated his order of protection by not paying his weekly child support. This totaled 69 violations, leading the husband to be found in contempt. The only reason that he was not found to be in criminal contempt was because the trial court failed to give the husband proper notice. This case shows Tennessee Order of Protection Attorneys that each violation may subject their clients to additional jail time.

In Sosebee v. Sosebee, No. E2011-00682-COA-R3-CV (Tenn. Ct. App. May 4, 2012), the trial court entered an Agreed No Contact Order of Protection against the husband. The order of protection also required the husband pay the wife $25.00 a week in child support for their minor child. After failing to pay the weekly child support, the wife filed a petition against the husband for violating the order of protection. The trial court held that the husband had committed 69 violations of the order of protection for each week that he failed to pay and was therefore found to be in criminal contempt. Husband was then sentenced to 690 days in prison (10 days per violation).

On appeal, the husband first argued that he did not receive the proper notice required before he could be found in criminal contempt. Under Tenn. R. Crim. P. 42, a judge maygive notice of criminal contempt to a defendant orally in open court. The appellate court agreed with the husband that proper notice was not given here because the husband only received notice in a prior, separate, unrelated proceeding that violating the order of protection would subject him to criminal contempt. Wife's current petition did not pray for criminal contempt- only for civil contempt. Therefore, Husband was given no notice that this particular contempt proceeding could subject him to criminal contempt. Accordingly, husband should not have been found in criminal contempt and that ruling is modified to a finding of civil contempt.

Next, husband argued that his failure to pay child support should only be considered as one and not multiple violations. Because the husband was ordered to pay $25.00 per week in child support, each and every week that the husband failed to pay constituted its own separate violation of the order of protection. The appellate court noted that if it accepted the husband's argument, it "would be nothing short of absurd, forcing a payee parent to file a separate action for each missed payment or risk giving the violating payor parent a huge and unwarranted advantage with regard to potential punishment for contempt."

Imputation of Income to Determine Child Support in Tennessee Requires Specific Finding

Goodman v. Goodman, No. W2011-07971-COA-R3-CV (Tenn. Ct. App. May 7, 2012), shows Tennessee Divorce attorneys that without a specific finding of fact regarding willful under-or-un-employment, imputation of income to determine child support is not appropriate.

The parties had four children during their 15 year marriage. As part of the divorce process that began in 2008, the parties entered a consent order on temporary support based on Father's projected income. Later in 2008, Father was fired and returned to a previous employer at reduced pay, impairing his ability to pay child support. Mother filed three scire facieses between 2008 and 2010, resulting in an arrearage award and attorney's fees. Subsequently, Father was imprisoned for nonpayment and as a result was terminated by his employer. In order to maintain insurance on his children, Father took a position at a coffee shop resulting in a significant reduction in pay. Father asserted he was unable to make child support payments and in 2011 a trial was held to deal with the issue. Father testified about his income and submitted his 2008-2010 tax returns. The trial court found that Father's earning capacity was 50k and awarded arrearages based upon that figure as well as attorney's fees.

The appeal addressed three primary issues: whether trial court (1) erred in finding the Father's earning capacity at 50k; (2) erred in awarding Mother arrearages based on 50k; and (3) erred in awarding attorney's fees.

At the time of trial, Father was earning $19,000 per year and could potentially make $42,000 if he was promoted to manager. However, the trial court set his income at $50,000, an imputed amount. Tenn. Comp. R. & Regs. 1240-2-4-.04(3)(a)(2)(i) provides that imputation of income is appropriate if a court has found specifically that the obligor is voluntarily unemployed or underemployed. In this case, the trial curt's final order made no finding that the Father was either unemployed or voluntarily underemployed. Although Mother argues this finding may be implied from the final order, the Appellate Court determined that the trial court made no finding that Father's choice to leave his former industry of real estate and work at Starbucks was voluntary or reasonable. Accordingly, without such a finding, no imputation of income may be made. Therefore, the issue was remanded to the trial court to calculate child support based on Father's actual earned income and not a projected amount.

Regarding the appeal of the arrearage finding, the Court of Appeals held that because Father had failed to properly file the record of proceeding that occurred during the Referee's determination of such arrearage, the issue could not be addressed on appeal. When no record of the lower court's proceedings are present, the trial court's decision must be affirmed. Therefore, the arrearage determination of $32,225.00 stands. On the issue of Mother's award of attorneys fees, T.C.A. §36-5-103(c) allows a court to award fees in support and custody cases. Here, because the trial court's judgment of current support to by paid by Father was reversed, the award of fees to Mother is vacated and remanded to be re-determined along with the new support amount by the trial court.

Child Support Stops Accruing in Tennessee When Parties Resume Living Together

The Tennessee Court of Appeals recently held that retroactive child would not be granted during periods when former spouses resumed living together after a divorce. Tennessee divorce attorneys may use this case to argue that child support stops accruing when parties are physically living together even if legally separated or divorced.

In Estes v. Estes, No. M2010-01243-COA-R3-CV (Tenn. Ct. App. Apr. 16, 2012), the parties were married for six years with two children. Wife was given custody of the children and the Husband was ordered to make child support payments. The Wife and children eventually moved back in with Husband. During the four years that they lived together, Husband and Wife opened a joint checking account together. Even though the Wife eventually opened her own account while they were still living together, she still had full access to the joint account. During this time a third child was also born.

In 2006 the parties permanently separated. Wife sought to have Husband pay retroactive child support for all three children and have him pay for the children's medical expenses during the four years they resumed living together post-divorce. The Husband objected to these claims, arguing that during the time that they lived together Wife had full access to their joint checking account. The trial court disagreed, holding that Husband had to pay $32,886 in retroactive child support for the two original children. But because the court refused to have Husband pay for Wife's attorneys fees as well retroactive child support for their third child, Wife appealed to the Tennessee Court of Appeals.

The Tennessee Court of Appeals held that Husband had satisfied the child support order during the period of physical reconciliation, June 2002 through August 2006, and to award Mother child support during those months was in error. This was because during the years that they lived together, Wife had full access to the joint bank account where Husband deposited all of his earnings. Looking to T.C.A. § 36-5-101(f)(1)(2010), the Appellate Court concluded that the purpose of child support is to fulfill the non-custodial parent's obligation to contribute to the child's support. Because the Wife had full access to that account, the Husband met his child support obligation from 2002 through 2006. And while the Wife paid for the children's insurance while they lived together, the Court concluded that she could have easily written herself a check from the joint account to pay for the insurance premiums that were taken out of her paycheck.

In reversing the trial court's order to have the Husband pay retroactive child support for the third child, the court looked to T.C.A. § 36-2-311(a)(11)(A). Because there was no evidence showing that the Husband did not provide for the third child while they were living together, the Appellate Court affirmed the trial court's decision in this matter. As the Appellate Court stated, "The statute and child support guidelines addressing retroactive child support apply in situations where the Father has not provided support for the child, which [was] not the case" here.

Tennessee Preference for Rehabilitative Alimony Highlighted in Recent Appellate Case

The amount and extent to which alimony will be granted in a divorce will depend upon a variety of factors. For example, in Mays v. Mays, No. M2010-02479-COA-R3-CV (Tenn. Ct. App. April 23, 2012), the Tennessee Court of Appeals explained for Tennessee Divorce Attorneys what factors might be relevant in determining whether a spouse should receive alimony in futuro rather than rehabilitative or transitional alimony.
Husband and Wife were married for twelve years with one minor child before they divorced. During the divorce proceedings, the trial court ruled that the Husband had to pay $225 per week in child support, $17,727.30 as alimony in solido (in whole) and $225 per week as alimony in futuro (in the future). The husband appealed the trial court's decision, claiming that the trial court erred when it held that needed to pay alimony in futuro to his ex-wife.

Under T.C.A. § 36-5-121(f)(1), alimony in futuro is granted when there is a "relative economic disadvantage and that rehabilitation is not feasible, meaning that the disadvantaged spouse is unable to achieve ... an earning capacity that will permit the spouse's standard of living after the divorce to be reasonably comparable ... to the post divorce standard of living expected to be available to the other spouse." While trial courts have broad discretion to determine the nature, amount, and duration of spousal support, under T.C.A. § 36-5-121(i), that determination requires a balancing of factors based on the facts and circumstances of each case. Two of the most important factors are the obligor's ability to pay and the disadvantaged spouse's need.

In this particular case, the Appellate Court held that alimony in futuro was improper. During the divorce proceedings, the Wife testified on the stand that she desired to go back to school to pursue a career as a dental hygienist. Wife's education history, prior employment, age and desire to further her education showed that the trial court's ruling that she could not be rehabilitated was in error. In light of the statutory preference in Tennessee for rehabilitative alimony, the Appellate Court vacated the award of in futuro support. However, because Wife's need and Husband's ability to pay were clearly present, the issue was remanded to the trial court or reconsideration of the type, amount and duration of the alimony award. Additional direction was given by the Appellate Court to the trial court to consider the Wife's educational objectives and to award alimony accordingly. The appellate decision also gave the trial court the option of concurrently awarding some alimony in futuro only if the trial court finds Wife can only be partially rehabilitated.