October 2013 Archives


Parenting Plan Provision Requiring Payment of College Tuition Upheld in Tennessee Appeal

October 21, 2013 by The McKellar Law Firm, PLLC

In the case titled Hill (Bowron) v. Hill, No. M2012-02699-COA-R3-CV Slip Copy, 2013 WL 5604359 (Tenn. Ct. App. Oct. 11, 2013) Knoxville family law attorneys learn how parenting plans containing provisions for children's college expenses are handled in regards to contract law, and when prejudgment interest awards are appropriate when a party has lost the use of funds.

Facts

Mother and Father divorced in 2003. In anticipation of their three children attending college, the couple's parenting plan addressed future out-of-pocket college expenses, stating that any college expenses not covered by grants, scholarships, or other funds were to be divided equally among the parties, and that both parents could participate in their children's choice of college. The parenting plan was incorporated into the parties' MDA.

When the youngest daughter chose the University of Alabama, Father claimed that he was not consulted and believed it to be too expensive. Therefore, he chose to pay only $2,500 per semester toward his half of the child's out-of-pocket college expenses. Mother filed a petition to enforce the parenting plan in Chancery Court. The Chancellor found that "the Father should not be relieved of his contractual obligation simply because the obligation proved to be more burdensome than anticipated." Mother was awarded $23,750.60 for Father's unpaid portion of the daughter's college expenses, and she was also awarded attorney fees. Father appealed.

Analysis

According to Pylant v. Pylant, 174 S.W.3d 143, 151 (Tenn. Ct. App. 2003), an MDA is a contract and is treated as such on appellate review. The interpretation of a contract is a question of law with no presumption of correctness of the trial court's interpretation when on appeal. Id. at 150. However, the trial court's factual findings are reviewed de novo with a presumption of correctness unless the record indicates otherwise. Id. at 151; Tenn. R. App. P. 13(d).

Penland v. Penland, 521 S.W.2d 222,224-25 (Tenn. 1975) set a precedent that a parental agreement providing for a child's college expenses after the age of majority is a valid contractual obligation. According to Pylant, "where the parties have unambiguously set out the terms of their agreement, courts will enforce those terms as written, regardless of any inequity arising from that enforcement."

Although the trial court found the words "jointly participate" in the parenting plan to be ambiguous, the appellate court did not agree, finding that according to Pitt v. Tyree Org., Ltd., 90 S.W.3d 244, 252 (Tenn. Ct. App. 2002), the words in a contract should be read with their natural meaning. The appellate court interpreted the meaning of "jointly participate" to mean that Mother and Father would jointly take part in their children's college choice process. Further, it found that the phrase did not grant veto power to either parent regarding the choice of the children's college.

Father argued that the phrase "jointly participate" gave him and Mother joint decision making in regards to their children's choice of college to find one that was within his or her budget and met the child's college interests. The appellate court found the phrase did not mandate joint decision making. Instead, it simply allowed each parent to be involved in the process of choosing a college if he or she chose to do so. It did not mandate that participation, nor did it grant veto power to either parent.

Father further argued that he was not consulted on his youngest child's choice of the University of Alabama. However, when reviewing the record the appellate court found that Father testified that he and his daughter had discussed the college, and Father never investigated the cost of the school until his daughter had made her decision.

Apparently, when Mother's and Father's first child was deciding on a college, both parents refused to pay for an online class at ITT. Father averred that this denial was evidence of Mother's and Father's intention regarding the "jointly participate" language in their parenting plan. The appellate court did not agree with him. It averred that the denial of payment for ITT course was both parent's decision acting in accord for the child's best interest and not one parent's unilateral decision to not pay their half. Therefore, the appellate court found this argument not to support Father's position. Father also maintained that Mother refused to pay for their oldest child to live near MTSU while taking classes there. The appellate court found that the "jointly participate" language only dealt with the choice of a college, not with mitigating expenses once a college was already chosen.

Tennessee courts have read an implied condition of reasonableness into agreements to pay for children's college. To determine this reasonableness, the courts must determine if the college meets the child's needs, and the parent's ability to pay for same. Father admitted in his brief to the court that he believed the University of Alabama was a good fit for his daughter. Therefore, the court determined that portion of the reasonableness standard was met.

However, Father questioned the reasonableness of the cost of the University of Alabama when compared to his income of $96,000 per year. Father calculated that to pay half of the college expenses would constitute 32% of his take home income. However, per the record, Father testified that he had $150,000 in equity in his home, and he had the ability to borrow money via a second mortgage or student loan to pay the college expenses. The court explained to determine a parent's ability to pay in regards to college expenses the court must look at available assets, income, and expenses. It was found that due to Father's ability to get a loan, he had the ability to pay one-half of the child's college expenses.

Finally, Mother requested the appellate court to reverse the trial court's denial of her request of prejudgment interest. According to Scholz v. S.B. Int'l, Inc., 40 S.W.3d 78, 81 (Tenn. Ct. App. 2000), an award of this type of interest is discretionary. The intent of prejudgment interest is "to fully compensate a plaintiff for the loss of the use of funds to which he or she was legally entitled, not to penalize a defendant for wrongdoing." Myint v. Allstate Ins., 970 S.W.2d 920, 927 (Tenn. 1988).

The trial court based its denial of the prejudgment interest on the fact that the dispute was made on reasonable grounds and such an award would be inequitable. The appellate court reasoned that Mother had to make up Father's portion of the college expenses since he was only paying $2,500 per semester. Because Mother lost the use of her funds and was never compensated for same, the appellate court reversed the trial court's ruling on the matter and remanded it back to the trial court to calculate and award Mother prejudgment interest. Costs of the appeal were taxed to Father.

Conclusion

The appellate court found that Father must incur half of the out-of-pocket expenses for his daughter's college expenses due to the language in the parenting plan. Mother was awarded prejudgment interest for the loss of funds for the portion of expenses she had to pay to make up Father's difference of these expenses. Mother was awarded her attorney's fees for the appeal.



Contempt Reversed Due To Inadmissible Bank Statement in Tennessee Divorce

October 17, 2013 by The McKellar Law Firm, PLLC

In the case titled Patton v. Patton, No. M2012-02747-COA-R3-CV, Slip Copy, 2013 WL 5434668 (Tenn. Ct. App. Sept. 25, 2013) Tennessee family law attorneys learn how a bank document must be authenticated to qualify as a business record exemption in regards to hearsay rules; what is needed to prove criminal contempt in regards to non-payment of pendente lite support in a divorce matter; and when the court is required to set bond in regards to detaining an individual for criminal contempt.

FACTS

Husband and Wife filed for divorce, and an agreed order was entered ordering Husband to pay $1,000 per month in pendente lite support. However, Husband never made these payments. Wife filed a Petition for Contempt and a hearing was set for the same day as the divorce.

At the hearing for the contempt, Wife was the only witness to testify. She stated that she never received any pendente lite support payments from Husband. Wife's attorney showed her documents garnered via discovery that included a tax return and photo copy of what was purported to be Husband's bank statement. Husband's attorney objected to the bank statement being entered into evidence; however, the court overruled the objection. Wife did not provide any information to authenticate the documents, and, while Husband was at the hearing, he did not testify.

The court found Husband to be in contempt for failure to remit five pendente lite support payments. Husband was sentenced to ten days for each count. However, the court stayed all but fifteen days of jail time. The court then ordered Husband detained during a lunch recess, and advised they would hold the divorce hearing after the break. During the lunch recess, Husband's attorney filed a notice of appeal from the findings of the court on the contempt hearing. Upon returning from the lunch break, Husband was brought back into court, and the hearing for the divorce was held. Wife was granted the divorce, the court acknowledged that Husband's counsel filed the notice of appeal for the contempt and granted a stay of the sentence pending the appeal.

ANALYSIS and CONCLUSION:

On appeal, Husband raised three issues. He averred the trial court erred in allowing the bank statements into evidence without being properly authenticated, in finding Husband in criminal contempt, and in detaining Husband in a holding cell following the finding of the criminal contempt without immediately setting bond.

According to Tennessee Rules of Evidence 803(b) or 901, "[t]he determination of whether a hearsay statement is admissible through an exception to the hearsay rule is left to the sound discretion of the court." State v. Stout, 46 S.W.3d 689, 697 (2001) states that an appellate court "will not reverse the ruling of the trial court absent a showing that this discretion has been abused."

Tennessee Rules of Evidence 803(6) sets the standard regarding hearsay exceptions involving "records of regularly conducted activity. It mandates that business records may be submitted into evidence when properly authenticated and the document(s) otherwise satisfy the other rules of evidence. Tennessee courts have recognized five criteria that must be satisfied in order for documents to be admissible under the business records exception. They are as follows:

1. The document must be made at or near the time of the event recorded;
2. The person providing the information in the document must have firsthand knowledge of the recorded events or facts;
3. The person providing the information in the document must be under a business duty to record or transmit the information;
4. The business involved must have a regular practice of making such documents; and
5. The manner in which the information was provided or the document was prepared must not indicate that the document lacks trustworthiness.

Simpkins v. Simpkins, 374 S.W.3d 413, 419 (Tenn Ct. App. 2012) (quoting Neil P. Cohen, Sarah Y. Sheppard, Donald F. Paine, Tennessee Law of Evidence § 8.11(10) (6th ed.2011)). Further, "[a] business record may be authenticated by either providing the testimony of a qualified person or by using a certification process either in compliance with Tennessee Rule of Evidence 902(11) or a statue authorizing such certification." Id.

In the case at bar, the disputed bank document was a statement from Regions Bank for one month titled "Transactions," but it did not have the account holder's name on the document. The appellate court reviewed Wife's testimony at the contempt hearing and found that her testimony was insufficient to authenticate the document. This coupled with no identifying markers on the document to designate that it belonged to Husband led the appellate court to determine that the trial court erred in allowing the statement into evidence.

In regards to the criminal contempt, once a person is held in criminal contempt the presumption of innocence is no longer in effect. Therefore, on appeal, the court had to determine, when considering the evidence in a light most favorable to the prosecution, any trier of fact could have found the essential elements of the crime beyond a reasonable doubt.

In this case, the appellate court found Wife's testimony established that Husband failed to pay the pendente lite support obligation. However, Wife also had to establish that Husband had the ability to pay said support and that his failure to do so was willful. Due to the bank statement being deemed inadmissible and Husband's tax return showing an income of $8,138, the appellate court found that no trier of fact would find beyond a reasonable doubt that Husband had the ability to pay $1,000 per month in pendente lite support to Wife. The trial court's decision was reversed.

As far as no bond being set, the appellate court found that the issue was moot as the court could offer no meaningful relief. However, it pointed out that Husband's attorney did not request or bring up the issue of the bond with the trial court and, therefore, could not be heard on appeal.


Long-Term Alimony Award Upheld Despite Lack of Documentation at Trial

October 15, 2013 by The McKellar Law Firm, PLLC


In the case titled Parrish v. Parrish, No. W2013-00316-COA-R3-CV (Tenn. Ct. App. June 21, 2013), Knoxville divorce attorneys learn when 1) disadvantaged spouses are entitled to in futuro alimony and 2) awards are not solely determined by proper documentation or benefits obtained from the distribution of marital assets.

Facts
The parties of the case were married in December 1982. Husband filed for divorce in June 2010. Wife did not answer the complaint and Husband moved for a default judgment and was granted a divorce by the Chancery Court in September 2010. Wife filed a motion to set aside the divorce in October 2010 and filed a counterclaim for in futuro alimony. The court granted Wife's motion and set the original judgment aside. At that time the parties agreed on an equal division of most marital property and debt. However, a settlement could not be reached on the distribution of Husband's retirement account and alimony. The parties' pursuit of the case stalled until the court ruled that the case would be dismissed if an agreement was not reached in a timely manner. Wife filed a motion for non-dismissal and requested that alimony be granted. The Chancery Court granted the divorce and awarded Wife in futuro alimony in the amount of $850.00 per month based on the length of the marriage, physical and mental health of Wife, disparity of earning potential and education levels, and no means of feasible rehabilitation by Wife to sustain a standard of living above poverty. Husband appealed the trial court's decision on the grounds that the ruling was based on the lack of documentation substantiating Wife's inability for rehabilitation and did not consider the sizable monetary relief that was awarded to her by the distribution of marital assets.
Analysis and Conclusion
Husband averred the trial court was in error when it awarded Wife alimony in futuro. He argued that the court ruled without the proper documentation that supported the need for the specified amount and length of alimony. He also stated the lower court granted the in futuro alimony without regard to the sizable monetary relief that Wife obtained through the distribution of martial assets. The trial court based its decision on the following facts: that the parties had been married for 29 years; that the husband was gainfully employed as a skilled laborer; Wife had been a stay at home parent for the majority of the marriage; Wife, when employed outside the home, had earned a meager income; Wife suffered from physical and emotional ailments that prevented her from being employed; and by her own, undisputed testimony that she relied on the assistance of family members for housing, government food assistance and by "begging" for the basic needs of survival. Husband did not dispute any of Wife's circumstances. While important, it was not necessary for the evidence to be officially documented in order for in futuro alimony to be awarded. The undisputed testimony Wife outlined the need for the requested alimony. Husband had the ability to provide and the divorce action should not decrease Wife's standard of living. The trail court's decision was appropriate based on the individual needs and circumstances of the disadvantaged spouse under the required guidelines. The Court of Appeals held the opinion that the lower court did not err in its discretion by awarding the type or amount of alimony to Wife. Therefore, the Court of Appeals affirmed the trial court's decision.

Child's Preference Not A Deciding Factor in Tennessee Custody Decisions

October 11, 2013 by The McKellar Law Firm, PLLC

In the case titled Carter v. Carter, No. M2013-00193-COA-R3-CV Slip Copy, 2013 WL 5568360 (Tenn. Ct. App. Oct. 7, 2013) Knoxville divorce attorneys learn how much bearing a minor child's preference has on the court in regards to modification of a parenting plan and when it is appropriate to disqualify an attorney from representation in a matter.

Facts

The parties divorced in 2006. Mother was named the primary residential parent ("PRP"), with Father awarded 85 days of parenting time per year. In July 2009 Mother filed a petition to modify child support, and then filed a notice of appeal of the trial court's findings on the matter in February 2012. However, just prior to filing the notice of appeal, she filed a motion to modify parenting time alleging a material change in circumstances.

In her petition to modify the parenting plan, Mother alleged that the parenting schedule (which gave Father Tuesdays and every other weekend) "inappropriately interfere[d] with the school, extracurricular and social activities in which the minor child of the parties engage[d] and/or wishe[d] to engage in at [that] time."

The attorney that filed Mother's petition to modify was her new husband. Father filed a motion to disqualify him as counsel for "any matter related to the modification of the parties' permanent parenting plan." The trial court agreed with Father and, subsequently, entered an order ruling that, "[Mother's attorney] shall be disqualified from representing [Mother] in any pending or new matters in this case." After the trial court disqualified Mother's counsel, a hearing was held on her petition to modify the parenting plan. The trial court ruled that Father's Tuesday night parenting time be eliminated. Mother filed a motion to alter or amend the trial court's order, but it was denied. She immediately appealed.

Analysis

On appeal, Mother averred that the trial court erred in refusing to allow the parties' 16-year-old daughter the ability to determine when and whether she would have parenting time with Father and in disqualifying her new husband as her counsel in the petition to modify and any new filings in the matter.

Trial courts have broad discretion in regards to parenting arrangements due to the unique circumstances in each case. See Eldridge v. Eldridge, 42 W.W.3d 82, 85 (Tenn. 2001); Chaffin v. Ellis, 211 S.W.3d 264, 286 (Tenn. Ct. App. 2006). An abuse of discretion occurs "only when the trial court's ruling falls outside the spectrum of rulings that might reasonably result from an application of the correct legal standards to the evidence found in the record." Id. at 88.

Tenn. Code Ann. § 36-6-101(a)(2)(C) states that with respect to a change in parenting time (but not the PRP), "[a] material change of circumstance does not require a showing of a substantial risk of harm to the child." Instead, it "may include, but is not limited to, significant changes in the needs of the child over time, which may include changes relating to age; significant changes in the parent's living or working condition[s] that significantly affect parenting; failure to adhere to the parenting plan; or other circumstances making a change in the residential parenting time in the best interest of the child." Per Rose v. Lashlee, No. M2005-00361-COA-R3-CV, 2006 WL 2390980 at *2 n.3 (Tenn. Ct. App. Aug. 18, 2006), the threshold to prove a material change of circumstances requires showing the court that the current plan is not working for the parties.

Whether this case had a material change of circumstances warranting a modification of the parenting plan was not an issue before the appellate court. However, Mother averred that the trial court erred in disallowing the minor child to determine when and how she will spend parenting time with Father as this was not in the best interest of the child. While Tenn. Code Ann. § 36-6-404(14) does allow a child that is age 12 or older to express their preference regarding parenting time to the court, there is no statute or precedent that gives a minor child discretion to determine when he or she will or will not see a parent. A child's preference is one of many factors the trial court may consider. Therefore the trial court's ruling is affirmed.

The next issue before the court was to determine if the trial court erred in disqualifying Mother's husband as her counsel in the petition to modify hearing and any subsequent filings in the matter. Per Clinard v. Blackwood, 46 S.W.3d 177, 182 (Tenn. 2001), an abuse of discretion standard is used by the appellate court when reviewing a trial court's decision to disqualify an attorney.

In the trial court's order disqualifying Mother's husband as counsel, it cited Rule 3.7 of the Tennessee Rules of Professional Conduct. This rule provides that a "lawyer shall not act as an advocate at a trial in which the lawyer is likely to be a necessary witness..." Tenn. Sup. Ct. R. 8, RPC 3.7. Father's counsel notified the trial court that he did intend to call Mother's husband as a fact witness in the modification matter. In her appeal, Mother pointed out that her husband/counsel was never called or deposed as a witness. The appellate court found this argument to be invalid, as the rule does not require the attorney to be called as a witness; it simply requires it to be shown that he was likely to be a necessary witness.

The trial court did not simply disqualify Mother's new husband from representing her in the modification hearing. In its ruling it stated that he was also disqualified from representing her in any "new matters in the case." The appellate court found this to be an abuse of the trial court's discretion, because disqualification of counsel must be determined based on the specific matters being litigated in a case at that time, and not future matters.

Conclusion

The appellate court affirmed the trial court's ruling in regards to the modification of the parenting plan. It also affirmed the trial court's ruling disqualifying Mother's new husband from acting as her counsel in the modification proceeding. However, the appellate court reversed the trial court's ruling disqualifying Mother's husband as counsel in any "new matters in the case," as that will need to be determined as the issues arise.