### IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE July 8, 2004 Session

KENNETH MORGAN JOHNSON v. DOROTHY LYNN

JOHNSON (HOLT)
Appeal from the Chancery Court for Coffee County No. 98-4 John W. Rollins, Judge

No. M2003-00866-COA-R3-CV - Filed October 1, 2004

Kenneth Morgan Johnson(“Father”) and Dorothy Ly nn Johnson (“Mother”) were divorced in 1998. The parties have two mi

nor child ren and i nitially agree d to equal

co-par enting t ime and that neither party would seek child support from the other. A house owned by Father was severe ly d

amage d if notdestroyed by

fire, and the proceeds from a fire insurance policy

were deposited with the Trial Courtin a sepa

rate lawsuit. After Father was sentence d to be incarcerated for seven years for federal drug violations, Mother filed a petition claiming entitlement to the insurance funds being held by the Trial Court because the minor children were in need of support. The Trial Court concluded Mother should be paid $1,034 per month out of the fire insuranc e proce eds as ch ild suppor t for the p arties’ two minor chil dren. F ather a ppeals c laiming t

he Trial Court err ed in dete rmin ing the a mount of child support he should be required to pay each month out of the fire insurance proceeds. We affir m the deci sion of the

Trial Cour

t.

Tenn. R. App. P. 3 Appe al as of Right ; Judgme nt of the Chancery Court Affirmed; Case Remanded

D. M ICHAEL S WINEY , J., delivered the opinion o f the court, in which H ERSCHEL P. F RANKS , P.J., joined, and C HARLES D. S USANO , J R ., J., filed a separate concurring opinion.

Roger J. Bean and John R. LaBar, Tullahoma, Tenne ssee, for the Appellant Kenneth M organ Johnson.

Gerald L. Ewell, Jr., Tullahoma, Tennessee , for the Appellee Dorothy Ly nn Johnson (Holt).1 This was Mo ther’ s s econd petition seeking t o modify the custody arrangement i nitial ly agreed to when the

parti es were divorced. The fir st pet iti on was fi led in 1999 and was deni ed aft er the Trial Court concluded Mother had fail ed to prove a s uff

icie nt “c hange of c ircumst ances t o justi fy a modific ation of the origi nal cus tody order ....”
-2- OPINION
Background

The parties were married on August 17, 1990, a nd have two childr en who are
curren tly nine and thirteen ye ars old. Father filed for divorce in January

of 1998. A

pproximate ly two months later, a Final Decree was ente red granting the parties a

divorce based upon the stipulated grounds of irreconcilable difference s. In the Marital Dissolution Agreement, which wasapproved b y the Trial Court, the parties agreed to joint custody of their two minor childre n with equal co

parenting time. The Marital Dissolution Agreement further provided that “[s]ince th e partie s will have joint custody and each pa rent will have the children every other week, neither party

seeks child support from the other.”

In January

of 2002, M other fil ed a Petit ion to Modif

y a nd for Con

tempt. 1 In thi s petition, Mother claimed

Father was using illegal drug s, had been fi red fro m his job af ter fai ling a drug test, and that she believe d Fathe r “may be suppor

ting himse lf

through the sale or distribution of drug s.” Mothe

r also maintained that Father was having an “ inappropriate relationship” with an under age female who was spending the night with Fa ther in the presence of the children. Mother requested, among other

things, to be designated the primary residential parent for their two minor children and that the Trial Court enter a temporary restraining order prohibiting Fa ther from taking the children out of the state or otherwise interfering with her custody and control of their children. The Trial Co urt enter ed a temp orary restrai ning ord er prohi biting F ather f

rom inter fering with Mother’s custody

and control of their children. Father re sponded to the petition, generally denied the pertinent allegations contained therein, and moved to qua sh the temporary r estraining order.

OnFebruary

5, 2002, the Trial Court

conducted a hearing on sever al issues, including whether a tempor ary injunction

should be i ssued. At

the hear ing, Fa ther was questione d about his employment

hist ory as well as his use of ille gal dru gs. Fat her adm itte d to u sing d rugs in the past and contracting

Hepatiti s C from intr

avenous drug u se. According to Father, he be gan working for Nissanin October of 1991. In 1993, Fa ther was convicted of felon y possession

of cocaine and sentenced to sixty day s in jail. Father informed Nissan that he needed a sixty day leave of absence, buthe lied to

Nissan ab out the re ason he n eeded to be absent from work for such an extended period of time. Father’s request for a leave of absence was approved. Fa ther then r eturned

to work at Nissan af ter serv ing sixty da ys in jail. Father testified that by early 2000, he

was drug-free except for one instance when he took “three hits off of one joint with another f ellow Nissan employee ....” As luck would have it, two weeks later Nissan required Father to undergo a drug test, and he tested positive for marijuana. Father realized his employ ment with Nissa

n was in je opardy . Accor

ding to Father:2 Fathe r had a felony c onvic tion from 197 8 for in volun tary ma nslaug hter.

3 Father w as held without bail after a United Stat es Magistrate Judge concluded Father was a danger to the

com munity a nd a fligh t risk.
-3-

Ilied on my application [for empl oym ent] and said I wasn’t ... a felon. 2 When we left this courtroom last November, within two months, [N is sa n] as ke d m e t o s ig n a re le as e o f m y backgro und . In 1993, I lied to them to get a 60-da y leave of absence ....

After Father f ailed th e drug -test, Ni ssan informed him that he wou ld have to complete
a thirty day

drug rehabilitation program if he wa nted t o remain employed w ith Nissan. Father testified that bec ause he b elieved

Mother wo

uld attemp t to seek full custody of their children if she found out he was in a drug reh abilitati on program, he chose to voluntarily resign his employme

nt with Nissan. After

quitting Nissan, Father worked for two y ears in the dry

wall business and a

lso repa iredsma ll engines. Father described himself a s a “handyma n.” According to Father, he was unable to continue workin

g in the d ry wall business due to med ical pro blems with

one of hishands. Onthe day of the he aring, Father was set to beg in a new job as a truck driver earning $9.50 per hour.

At th e F eb ru ar y 5 th he aring, Father specific ally denied havi ng any current involvement with illegal drugs. Father

was arrested the following week for violations of federal drug laws. When Mother learned Father was in jail, she

filed a mo tion to ame

nd her pe tition to modify custody

and br oughtF ather’ s incarc eration to the Tri al Court’ s attention. A hear ing on Mo ther’s p etition to modify was cond ucted in April whil e Fathe

r was he ld in jail

without bail after being indicted under federal law for conspiracy to sell fifty or more g

rams of methamphetamine. 3 Not surprisingly, the Trial Courtconclude d that a ma terial change

incircumstances had occurred and de signated Mother as the primary r

esidential parent of the two minor children. Since Father was in jail, the matter of child supp ort was st

ay ed pendin

g furth er orde

rs of the court.
Prior to th e F eb ru ar y 5 th hearing, a house owned by F ather suffered extensive fire damage. The insurance company still was investigatingthe fire at the time

of the he aring. A lawsuit regarding the fire insurance proceeds eve ntually was filed and

was pendingin the same court as the present custody matter. T he proce eds from

the fire insuranc e policy

eventua lly were dep osited wit

h the Trial Court. In January of 2003, M othe r filed a Petition to Establish Child Support. Mother claimed she was entitled

to the funds being held by the Trial Court bec ause the minor children were inneed of support. In addition to Mother’s claim for child support, it appears there were at least two other claims b eing made against the fire insura nce proceeds. The record is unc lear exactly how much money was remai ning a fte r these o ther cla ims were satisfie d, althoug

h it appea rs there is in excess of $70,000.

A hearing was held on Mother’s Petition to Establish Child Support and, while Father
was not present because he was in the feder al penitentiary, he

was represented by

counsel. After the-4-

hearing the Trial

Court entered an Order

requirin g Fath er to pay

child supp ort. As re levant to this appeal, the Trial Court stated:

[Based upon Father’s] own testi mony at t he las t heari ng, February 5, 2002 and in his deposition, [Father’s] after tax e arnin gs were $ 788 .80 per week on November 1, 1999 and that [Father]
earn ed over $100,000 for the two y ears next preceding Februa ry 4, 2002....

The Court thus f

inds [Fath er’s] ea

rnin g abili ty for the three years ne xt preceding his incarceration was $51,733.33 or $4,311.00 per month. This computes to a child support obligation of $1,034.00 per month.

Father appeals, claiming only

that the Trial Court erred whe n it conc luded his monthl y child support payment should be base d on the average of his ear nings for the thr ee ye ar s immediate ly

preceding the Februa

ry 5, 2002, hear

ing. According to Father, his child support payment should be based on wages of $9.50 per hour, which is how much he was earning at the truck driving job he started on the day of the hearing and worked for approximately one week be fore being arrested. If Father is c orrect, his child support pay ment would be reduced to approximately $435 pe r month. While the pa rties disa gree on the amou

nt of the monthly

pay ments to wh

ich Mothe

r is entitled, they are

in agreement that the remaining fire insurance proceedsheld by the Court should be used to satisfy F ather’s monthly child support obliga tion.

Discussion

In State ex rel. Vaughn v. Kaatrude , 21 S.W.3d 244 (Tenn. Ct. App. 2000), this Court acknowledged

the Trial Court’s discretion in setting the appropr iate amo unt of child support payments , stat ing: Having found that the juvenile court

properly de

termined that Mr. Kaatrude should pay

back child support, we turn to the question of the proper amount of the support. Setting child supp ort is a discretionary

matter. See State ex rel. Coleman v. Clay , 805 S.W.2d at 755. Acc ordingl

y, w e revie

w child sup

port dec isions usin g the deferential "abuse of discretion" standa rd of review. This standard requires us to consider (1) whet her the decision has a sufficient evidentiary

foundation, (2) whether the court correctly identified and properl y applied the appropriate legal principles, a nd (3) whether the decisionis within the

range of acce ptable a lternati ves. See BIF v. ServiceConstr. Co. , No. 87-136- II , 1988 WL 72409, at *2 (Tenn. Ct

. App. July 13, 1988) (No Tenn. R. App. P. 11 application filed). While we will set aside a discretionary decision if it rests o n an-5- inadequa te evidentiary f

oundation or if it is contrary to the governing law, we will not substitute our judgment for that of the trial court merely bec ause we might have chosen another a lternative.

The goal of the statutes and r egu lations g overning child support is to assure that children receive s u pport re asonably consistent with their

parent or paren

ts' fina ncial re sources

. See She ll
v. Law , No. 03 A01-9608-CV-00251, 1997 WL 119581, at *4 (Tenn. Ct. App. March 18, 1997), perm. app. dismissed ( Tenn. Jan . 29, 1998). The statu

tes and regulations promote this goal by requiring the courts to set child support using guidelines developed by the Tennessee Departm

ent of Hu man Servi ces to pr

omote both efficient child support proceedings and dependable, c onsistent child support awards

. See Tenn. Code Ann. § 36-5-101(e) (Supp. 1999); Tenn. Comp. R. & Regs. r. 1240-2-4-.02(2)(b), (c) (1994).

Kaatrude , 21 S.W.3d at 248-49.

At the hea

ring to e stablish F ather’ s child sup port pay ments, the parties and

the Trial Courtdiscussed the impact of the decision in Coates v. Coates , No. M2001-01928-COA-R3-CV, 2002 Tenn. App. LEXI S 803 (Tenn. Ct. App. Nov. 15, 2002), no appl. perm. appeal filed , a recent unreported

opinion fr

om the Midd

le Sectio n of this Court. In Coates , when the parties were divorced t he fat her was serving a 200 month sentence in fe deral prison for drug trafficking . The father was ear ning $5. 00 per mon

th while in

prison. The trial c ourt dete rmined the

fath er’s child support obligation should be based on an annual income of $80,000, which was his ave rage annual income for the three y

ears preceding his incarc eration. Using the child support guidelines, the trial court concluded that the father’s monthly c hild support payment should be $1,497. 2002 Tenn. App. LEXIS 803, at *2. The trial court also determined that the marital re sidence should be sold, with one-half of the proceeds going directly to the mother, and the r emaining one-hal f to be pla

ced in a trust accoun t for pay ment of the

father ’s monthly

child supp ort oblig ation. The trial cou rt then he ld that if the funds in the account were insufficient to pay

the child support throughout the minority of the youn ger child, t

he father’s child support obligation would, nevertheless, continue to a ccrue. 2002 Tenn. App. LEXIS 803, at ** 2, 3. Afte r the tria l court’s judgmen t became final, the father filed a petition for reduction on his child support payme nts, which the trial court denied. Id ., at *3.

Onappeal, the judgment of the trial court was reverse d in part a nd affir med in par

t. This Court discussed the standard to be applied when determining if a c urrent child support order should be modified. After discussin g the ap plicable standar d, this Court concluded that the father in Coates had esta

blished he

was entit led to a r eduction in his child support, stating it was clear that the “dif f erence b etween the am ount which would be due under the gui delin es bas ed on Fa ther's current monthly income of $5.00 and the amount of current support under the court's or iginal order is more than 15%.” 2002 Tenn. App. LEXIS 803, at *5. This Court then addressed the trial court’s apparent conclusion that, even though the father was e arning only $5.00 per month

while in ja

il, he-6-

still should be required to pay $1,497 per month in child support becaus e he wa s willfully and voluntar ily unemployed as

a result of the conduct whi ch lead t o his inca rcera tion. We re

jected th is conclusi on by

the trial court, st ating a s follows:

The [trial] court's language mirrors that of the g uidel in es provision which allows the setting of supp ort base d upon potential income where an obligor is willfully and voluntar ily unemploy

ed or underemployed. T enn. Comp. R. & Regs., ch. 1240-2-4-.03(3)(d).
However, w illf

ul and voluntary unemploy ment or underemployment

mus t resu lt from an

intent to r

educe o r termina

te income. Wilson v. W

ilson , 43 S.W.3d 495, 497 (Tenn. Ct. App. 2000). This cour

t has reje cted th e pr oposi tion that a parent 's dishonest acts whic

h lead to u

nemplo ym ent constitute willful and volunt ary une mployment. Id. As a logical extension of that principle, we have also held that unemploy ment or underemployment resulting from incarceration is not willful and voluntary. Pennington
v. Pennington , No. W2000 -005 68-COA-R3-CV, 2001 Tenn. App. LEXIS 193, at *13 (Te

nn. Ct. App. Mar. 14, 2001) (no Tenn. R. App. P. 11 application filed).

Co ns eq ue nt ly, we con cl ude that Father has demonstrated a significant

variance under Tenn. Code Ann. § 36-5-101(a )(1) and was entitled to a reduction in his child support obligation.

Coates , 2002 Tenn. App. LEXI S 803, at ** 6, 7.

Inlight of the foregoi ng, we concluded that since the father was entitled to a reduction in his child support obligation, arrearages c ould not accrue based on his inab ility

to pay due to his incarceration. However, we went on to add that this did not mean the trial court' s order that the father’s one-half of the net proceeds from the sale of

the marital residence could be used to support the children was error. This was so because the trial court had authority to enter an order for the support of the children via property owned by the fa

ther. See Tenn. Code Ann. § 36-5-10 1(a)(1). We then stated:

We interp ret th e tria l cour t's ord er as aw ardin g Father 's

interest in half the

procee ds from the

sale of the marital residence as child support. Know ing F ather was not available for ga inful employment

and wou ld rem ain incapable of earning more tha n a nominal salary

for the d uration o f his sentence, the trial court awarded child suppo rt out of Fath er's property, in ac cordance with Tenn. Code Ann. § 36-5-101(a)(1). The fact that the c ourt ordered regular4 Of co urse, this as sume s Fathe r has no mea ningful inc ome and h as no t been release d from priso n.
-7- pay ments from the fund established with the proceeds does not alter the fundamental nature of the order.

Based upon the foregoing

analysis , we aff

irm t he tri al cou rt's denial of a reduction in support with regard to that portion of the trial court 's order a

warding Father 's half of the proceeds from thesale of the house as chi ld su pport . We re verse t he tri al cou rt's order denying
a prospective reduction based upon F ather' s actual income and remand for a determination of his obligation, if any , based upon that current income.
2002 Tenn. App. LEXI S 803, at * *8, 9.

Inreliance on the Coates opinion and the relevant statute, the parties here ag reed at the trial court level and on this ap peal th at the funds being held by the Trial Court constituted propert y of Father that could be used to support his two children. Mother does not claim that Father’s child supp ort oblig ation will continue to accrue if the remaining fire insurance proceeds are exhausted. 4 Like

wise, Mother does n

ot argue that Father is willfully and voluntar ily unemploy

ed
as a result of his actions leading to his incarceration. As stated previously, the sole issue pr esented by Father is whether

the Tria l Court er red whe n it deter mined the

amount of

his monthly

child support payment should be $1,034.

The Court in Coates co rr ec tl y ob se rv ed th at typ ic al ly, “[t]he appropriate amount of support is determined by apply

ing a flat percentag e, based on the number of children to be supported, to the obligor parent's net income. Tenn. Comp. R. & Reg ., ch. 1240-2-4-.03(5).” Co ates , 2002 Tenn. App. LEXI S 803, at* 5. In their briefs, the par ties devote most of their argument to whether
or not Father was voluntarily

underemployed w

hen he accepted employ

ment as a truck driver earnin g $9.50 per hour . Along t

his line, w e notethat Fat

her’s tr uck drivi ng job on ly r equired him to work 36 hours per week, although he was pa id for 40 hours of work. Thus, he had some a dditional t

ime each week to perform “handy

man” work on the side, and in fact admitted at the hearing that he was continuing to repai

r small en

gines. T here is a mple proo f in the re cord to c onclu de that Fa ther’s income was not li mi ted to th e $9 .50 per hou r he was mak in g as a tr uck dri ver . In any event, we are reluctant to hold tha

t Father ’s earn

ing pote ntial was defined solely by wages e arned a

t a job which he held for only one

week before being ar

rested.

Father is incarcerated and

presuma bly now has ve

ry little income. His child support is being p aid from p

roperty held by t he Trial Court. Be cause hi s monthly child supp ort pay

ment is
no tbeing made from any “income”, an argument could be made that his child suppo rt oblig atio n need not be intertwin ed with the guidelines which seem to focus on child support derived fr om income. However, we need not and do not reac h this issue for two re asons. Firs t, even if the guidelines require a trial court to base child support being pa id from property solely

on a flat-8-

percen tage of the obl igor pa rent’s in come or p otential i

ncome, a trial cou rt never theless mu st deviate upward in certain circumstances. As relevant to this case, the guidelines provide that the amount of child support “ shall”be increased when the obligor is not providing he alth insurance for the children and when the obligor parent is not exercising the minimum a mount of visitation contemplated by the guidelines. See Tenn. Comp. R. & Regs. 1240-2-4-.04(1)(a) and (b). Accordingly, even if the Trial Court shou

ld have ba sed Father’s ch

ild support pa

yme nt solely on his hourly earning s of $9.50
as argued by

Father , the Tria

l Court wou

ld have be en requi

red to increase that pay

ment after taking both of these factors into account. Second, even if the Tr ial Court wa s not required to determine Father’s monthly earning

capacity and then apply the f

lat percentage, we nevertheless are unable to conclude that the Trial Court abused its discretion by doing so. Given the facts and circumstances of th is ca se , w e f

in d n o a bu se of

di sc re ti on by t he Tri al Court in setting Father’s child support payment at $1,034 per month

to be paid

from the fire insurance proceeds he ld by the Trial Court.

Conclusion

The judgment of the Trial Court is affirmed, and this cause is remanded to the Trial Courtfor collection of

the costs below. Costs on appeal are taxed to the Appellant, Kenneth Morgan Jo hn so n, an d h is su re ty.

__________________________________ D. MICHAEL

SWINEY, JUDGE