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Father's Obligation to Pay For Private School Reversed; Award of Attorney's Fees Denied to Mother Due to Allocation of Assets

In the case titled Kraus v. Thomas, No. M2012-00877-COA-R3-CV, 2013 WL 2612458 (Tenn. Ct. App. June 7, 2013) Knoxville family lawyers learn when an upward deviation of child support is appropriate regarding educational expenses as well as what test should be applied when ordering a party to pay attorney's fees.

Facts: Husband and Wife were married for fifteen years and had four minor children ages 12, 10, 8, and 7 at the time of their divorce. In its Final Order, the trial court decided the following:

• Wife was designated the primary residential parent ("PRP") and awarded Wife 280 days of parenting time per year and Husband 85 days;
• Wife was awarded sole decision-making regarding the children's non-emergency health care and extracurricular activities and the children's education including whether they would continue to be enrolled in private school, and the parties were awarded joint decision-making regarding religious upbringing;
• Husband was ordered to pay $625 per month in child support until the youngest child finished pre-school at which time it would increase to $1,252 per month; Husband was also ordered to make an application for financial aid for the children's private schooling;
• Husband and Wife were ordered to seek financial assistance to cover further expenses for private schooling from an irrevocable trust for which Husband and the children were beneficiaries. (If the Trustee did not cover the full balance for the private schooling it was ordered that Husband pay 75% of any remaining cost or $16,875, whichever was less, per school year for the three oldest children); Wife was required to pay any additional expenses associated with private schooling over and above the court's ruling on the matter;
• Wife was awarded 60% of the marital property and Husband was ordered to pay Wife's attorney's fees of $50,000.00.

Husband appealed the trial court's ruling in regarding the expenses for private school and the award of attorney's fees to Wife.

Analysis & Conclusion: On appeal, Husband argued the trial court erred in ordering him to pay an upward deviation in child support to accommodate private school expenses and did not apply and/or consider Tennessee Child Support Guidelines in its decision on same. Father argued that the trial court's decision regarding these expenses represented more than one-fourth of his gross income.

A court may order a deviation on the amount of child support so long as the deviation complies with Child Support Guidelines and the amount of the deviation is within the scope of the court. Tenn. Comp. R. & Regs. 1240-2-4-.07(1)(b). However, the court must stipulate in its order the reason for the deviation and the amount the child support would have been without the deviation. Tenn. Comp. R. & Regs. 1240-2-4-.07(1)(b). The court must also explain how the application of the presumptive amount of child support was not appropriate in the matter, and how the deviation supports the best interests of the child(ren). Tenn. Comp. R. & Regs. 1240-2-4.07(1)(a)-(c).
When a trial court deems a deviation from the presumptive amount of child support to be appropriate, it must consider all income of the parents. It must also make a written finding that the deviation is reasonably necessary to provide for the needs of the children. Tenn. Comp. R. & Regs. 1240-2-*4-.07(2(a) (2008).

The Tennessee Child Support Guidelines specifically address extraordinary educational expenses, and allow these expenses to be added to a child support order as a deviation. However, to determine the amount of the deviation, the Guidelines provide that any "scholarships, grants, stipends, and other cost-reducing programs received by or on behalf of the child shall be considered." Tenn. Comp. R. & Regs. 1240-2-4-.07(2)(d).

The appellate court here noted that the trial court never referenced the Tennessee Child Support Guidelines in its order, only mentioning that private school was in the best interest of the children. It also found no analysis for the deviation by the trial court as is required by the Guidelines. Because of this, the appellate court had to determine if the facts supported a deviation for the extraordinary educational expense should the Trust not cover all of the private school expenses for the children.

The appellate court determined that Husband had a monthly gross income of $4,138.55 plus $1,083 in monthly IRA distributions. This made his monthly gross income $5,221.55 or $62,658.60 annually. It also factored his child support obligation of $1,252 per month ($15,024 annually), his obligation to pay life insurance premiums ($4,400 annually), his obligation to pay one-half of summer camp expenses for the children ($2,465 annually), and his obligation to pay one-half of any out-of-pocket medical expenses for the children ($600 annually). When adding these expenses together, Husband's annual obligations totaled $22,500. The court determined that Husband's potential obligation for private schooling would be $16,875 for the older three children. This would make Husband's total annual obligation $39,000 if the cost of private schooling was added. The appellate court determined this to be 74% of Husband's net income ($52,220). The Court of Appeals determined that this percentage was not appropriate and reversed the upward deviation for private schooling.

On the issue of attorney's fees, Husband argued that the trial court erred in ordering him to pay Wife's attorney's fees of $50,000 from his share of the marital property.

An award of attorney's fees is appropriate when a disadvantaged spouse's income is not sufficient to cover the costs. This type of award is treated as alimony in solido, and trial courts are given wide discretion when awarding it. When alimony issues are on appeal it must be proven that the trial court abused its discretion in its award. To prove abuse of discretion it must be shown that an incorrect legal standard was used, an illogical result was reached, there was an erroneous assessment of the evidence, or the trial court relied on reasoning that caused an injustice to a party.

During trial, it was determined that Wife did not have the income to pay for her attorney's fees; however, she was awarded 60% of the marital property including 60% of the cash proceeds from the sale of the marital home valued at $207,033.95. The appellate court also noted that Wife's income was more than Husband's. For these reasons, the appellate court found that the trial court made an erroneous assessment of the evidence and reversed the award of Wife's attorney's fees.