### IN THE COURT OF APPEALS OF TENNESSEE AT KNOXVILLE July 12, 2001 Sess

ion

CATHERINE DEAN JACKSON v. BR UCE LANE JACKSON
Appeal from the Circuit Court for Hamilton County No. 95-DR-1170 Samuel H. Payne, Judge

FILED SEPTEMBER 5, 2001

No. E2001-00287-COA-R3-CV

Catherine Dean Jackson (“Pla intiff”) filed a

Complaint for divor

ce against her husband, Bruce

Lane Jackson (“Defendant”). The parties entered a stipulation, which was approved by the Trial

Court, in which they agreed both parties were entitled to a divorce and agreed that Plaintiff be granted custody of their minor child. The parties, however, did not agree on the remaining issues of alimony and the division of marital property and liabilities. Over approximately four years, the Trial Court referred these issues to

a Special Master on

three occasions . Upon each ref erral by th

e Trial Court, the Special Master held a h earing in which he heard argu

ments and, during

the first two hear

ings, heard testimony fr

om the parties and

witnesses. After ea ch hearing, the Special Master f

iled his report, but did not file a tra nscrip t o f the hearing w

ith the report as r

equired by

Tenn. R. Civ. P. 53.04(1). Among other findings, the Special Master recommended that Plain tiff receive “rehabilitative alimony for life . . . ”in the amount of $1,000 per month and that Defendant pay the parties’ entire 1994 tax liab ility . With the e xception of modifying the Special Master’s alimony recommendationto a lim ony in futuro , the Trial Court adopted the Special Master’s recommendations which precipitated Def endant’s appeal. Due to the Special Master’ s failure to comply with Tenn. R. Civ. P. 53.04(1), we vacate the portion o f the the T rial Court’s judgment relative to alimony and the 1994 tax liability, affirm the remainder of the judgment, and remand.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court

Vacated In Part; Case Remanded

.
D. M ICHAEL S WINEY , J., delivered the opinion of the court, in which H OUSTON M. G ODDARD , P.J., and H ERSCHEL P. F RANKS , J., joined.

John P. Konvalinka and Mathew D. Brownfield, Chattanooga, Tennessee, for the Appellant, Bruce Lane Jackson.
Grace E. Daniell, Chattanooga, Tennessee, for the Appellee, Catherine De an Jackson.1 For simplicity’s s ake, we use round numbers in this opinion.
-2- OPINION
Background

Catherine Dean Jackson filed a divorce Complaint in 19 95 against her husband, Bruce Lane Jackson. Thereafter, the parties fi led a Stipulat ion of Mutual Divorce in which the parties agreed both were

entitled to a divorce and agreed that Plaintiff should have custody of their minor child. The Trial Court en tered an Order

granting th

e p arties’ divorce

and awarding c

ustody to Plaintiff. The Trial Court, in this O rder, referred the remaining issues, including division of the parties’ assets and liabilities, the valuation of Def endant’s business , alimony, an d child support to a Special Master.

Ther eafter, a Special Master’s Report (“1995 Report”) addressing all of the issues assigned to the Special Master by the Trial Court was fil

ed. The 1995 Repor

t stated that an eig

hthour hearing was he

ld in October

1995, but no transc

ript of the hearin

g was attached

to the report,

as is required by Tenn. R. Civ. P. 53.04(1). The 1995 R eportreviewed the parties’ respective educational backgrounds, present and past employment, and current earnings. The Special Master found that Plaintiff earned $19,000 gros s annual income as a dental assistant and that Defendant earned approximately $16,190 gross monthly income a nd $10,500 net monthly income as a selfemployed insurance broker. 1 The Special Master also found in his re port that the parties owed approximately

$40,000 in federal tax liability for 1994, and recommended, that Defendant pay the entire amount of 1994 tax liability. The Special Master also recommended in his 1995 Report that rehabilitative alimony of $2,000 per month

be awarded to Plaintiff which would be modified by the Trial Court in a future hearing once the parties’ home was sold and the equity divided between the parties.

Defendant fi led a M otion to Confirm the 1 995 Report without a ny objection

s. Plaintiff filed Objections to Special Master’s Report. The Trial Court entered an Order confirming the 1995 Report. The Order does not state t hat the Trial Court had access to the transcript of the hearing in its re

view of the Specia

l Master’s Report

.
In June 1997, Defendant filed a motion, raising a number of issues for t he Tria l Court’s consideration, inc luding a request for termination of Plaintiff’s award of rehabilitative ali mon y. The Trial Court referred this issue, along with the issues of child support and the amount Plaintiff should reimburse D

efendant for the

joint tax liability

previously p

aid by Defe

ndant, to the Special Master.

In February 1998, the Special Master filed a report (“1998 R eport”) in which he addressed the issues referred to h im by the Trial Court, agai n without attaching a transcript from the hearing. The Special Maste r stated in his repo

rt that, due to the f

ault of both partie

s, he did no t consider the issue of fault in the determination of alimony. The 1998 Report stated that Plaintiff’s2 The Sp ecial Ma ster, in his thir d and final

report, again

addressed the 1994 tax l iabilit y issue al though the Trial Court did not specifically re fer this particular issu e to the Spe cial Maste r in its 1999 O rder.
-3- income from her job as a dental assistan t had increased f

rom $19,000 to

approximately

$22,000 to $24,000 per year.

The Special Maste

r found that Defe

ndant’s gross mon

thly in come h ad not changed from the time of the 1995 Report as Defendant still was earning $11,000 per month but that Defendant

had shown that he could

, at times, earn up

to $16,000 per month. The 1998 Report stated that in light of the duration of the parties’ marriage, Plaintiff’s relative economic disadvantage, the parties’ standard of living during their marriage and Plaintiff’s then-depression, the Special Master recommended

Plaintiff receive $1,000 per month in “rehabilitative alimony for life.” Plaintiff filed

a Motion to Confirm Special Master’s Report. In response, Defendant objected to a number of the Special Master’s recommendations and factual findings, including the award of alimony

to Plaintiff and the Special Ma

ster’s failure t

o prorate the tax lia

bility betwe

en the parties.

In March 1999, the Trial Court entered an Order adopting the 1998 Report, with the exception of the Special Master’s recommendation that Plaintiff receive rehabilitative alimony for life. The Trial Court modifiedthe alimony award to “permanent alimony f or life until the death or

re marriage of

[P]laintiff” but approved the amount of the alimony award of $1,000 per month. Further, the Trial Court, in its 1999 Order, referred the issue of the allocation of the 1995 and 1996 tax liability to the Special Master.

The Special Master fi led a t hird report in Nov ember 1999 (“199

9 Report”), aga

in withoutattaching a transcript of the hearing, in which he addressed the allocation of the 1994, 1995 and 199 6 ta x li abi lit y. 2 In his1999 Report, the Special Master confirmed his previous finding from his 1995 Report that De

fendant pay

the entire 1994 joi

nt tax liability

and found that Defendant should pay his tax liability from 1995 and 1996. Thereafter, Plaintiff filed a Motion to Confirm Special Master’s Report. Defendant objected to the 1999 Report. The Tr ial Court held a hearing rega rdi ng th e 19 94 a nd 1 995 tax lia bil ity i ssu e at whi ch t he p art ies pro vid ed t est imo ny.

The Trial Court confir

med the 1999 Report in a Final Order whic h disposed of all pending issues, again a

pparently without having the opportunity to review a copy of the transcript from the Special Master’s hearing. Thereafter, Defendant

filed a Notice of Appeal, a Designation of the Record, an

d along with tran

scripts from the Trial Court’s hearings, a partial transcript from the 1995 Special Master hearing and the full transcripts from the 1998and 1999 hearings with the Special Master. The partial transcript from the 1995 Special Master

hearing included only Plaintiff’s testimon y. Defendant als o filed exh ibits from the Trial C ourt’s and t he Special M aster’s hear ings withoutdesignating the particular hearing for each exhibit. T

his apparently

was the first

time that any of the transcripts and exhibits from the Special Master hearings were made a part of the record. In her responsive pleading, citing Tenn. R. App. P. 24, Plaintiff objected, contending that the entire transcript from the 1995 hearing should be made a part of the record on appeal.

Thereafter, the Trial Court entered an Orde r holding that no further transcripts needed to be filed. The Trial Court held tha t the parties had filed all transcripts known to exist from the-4-

Special Master hearings and that a transcript of Defendant’s testimony from the 1995 hearing “no longer exists and cannot now be transcribed.” The Trial Court further held that the transcripts filed “are, under these circumstances, the most fair, accurate and

complete account of what has transpired

. . . .” No Tenn. R. App. P. 24(c) Statement of the Evidence wasfiled for the missing portionof the 1995 transcript. This matter then came to this Court on Defendant’s appeal. We vacate, in part, and remand.

Discussion

On appeal, and although not exactly stated as such, Defendan t argues: 1) the Trial Courterred in

ordering Defendant to pay all of the parties’ 1994 tax liability; and 2) the Trial Court erred in modifying

the Special Maste

r’s award of “r

ehabilitative ali

mo ny for life” to an award of alimony in futurosince, Defendant argues, an award of alimony is not warranted.

Plaintiff raises no additional i ssues on appeal but contends the Special Master’s findings and conclusions as adoptedby the Trial Court are conclusive on appeal when supported by material evidence. See Manis v. Manis , 49 S.W.3d 295, 301, 2001 WL 60616 (Tenn. Ct. App. Jan. 25, 2001). Plaintiff also argues that since only a partial transcript from the 1995 Special Master hearing was filed by Defendant, Defendant has waived all issues re quiring a reference to the transcript. Moreover, and most importantly , Plaintiff states “ [t]he tr anscrip t of evidence was not consid ered by the trial judge in any of the he arings which resulted in acceptance of the Special Master’s repor

t.” We find this fina

l point to be dispositiv

e of this appeal.

Tenn. R. Civ. P. 53 provides t hat a trial court m

ay appoint a sp ecial master, an d in its order of reference, set the issues to be addressed by the special master at a proceeding where the special master

may hear counsel’s a

rguments and wit

ness testimony

and review exhibits . Tenn. R. Civ. P. 53.01-.03. Rule 53.04 addresses the special master’s report which is to be prepared

after the proceeding, in

pertinent part, a

s follows:

The master shall

prepare a report upon the matters submitted by the

o rder of reference and, if required to make findings of fa ct an d conclusions of

law, the master sh

all set them forth in

the report. The master shall file the repo rt w ith the clerk of the court and, unless otherwise directed by the order of reference, sha ll file with it a transcript of the proceedings an d of the evidence and the original exhibits

. . . . Tenn. R. Civ. P. 53.04(1) (emphasis added).

The record on appea

l shows that the Tria

l Court referre

d matters to the Spe

cial Ma ster on three occasions. The

Trial Court’s three orders of reference did not exempt the Special Master from the mandate of

R ule 53.04(1) that a copy of the transcript of the proceeding s and of the3 The technical r ecord on appeal only cont ains these documents for both part ies for 1995, and only contains Plaintiff’s Affidav

it of I ncome and Expens es for 1997. It should also be noted that after the t hird Special Master hearing, the Trial Court

held a hear

ing rega rding Defe

ndant’s objection s to the

1999 Report. A fter this hearing, the Trial Court allowed Plaintiff to f

ile supplemental exhibits, including tax returns

and portions of the trans cript from t

he second

Special Master hearing.
-5- evidence and the exhibits shal l be filed with the Sp

ecial M aster’s report . The Special Master, however, failedto file transcripts and exhibits with any of his reports. The record on appeal shows that it was only after Defendant filed his Notice of Appeal that Defe ndant filed the transcripts and numerous exhibits fr

om the Special Mast

er hearings.

Our Supreme Court found that Tenn. R. Civ. P. 53.04(1) clea rl y places the responsib ility of fili ng the trans cript on th e special ma ster, hold ing:

[W]e are compelled to conclude that because the master does have the responsibility

of filing a transcript unless specifi call y directed otherwise by the order of

reference un

der the current

Rule 53.04(1), the master in this case erred by failing to file a transcript. . . .
In re Estate of Tipps , 907 S.W.2d 400, 403 (Tenn. 1995).

In this matter, we hol

d that it was error for the Special Master to fail to f

ile transcripts of the proceedings and evidence with his reports. Our inquiry, howe ver, does no t end here. A special master’s failureto comply with Rule 53.04(1) is

not always reversible error. In re Estate of Tipps , 907 S.W.2d at 403. “‘[F]indings of fact by the master concurred in by the [Trial Court] are conclusive on appeal if support ed by any material evidenc

e. . .[,]’” and the ma

ster’s failure t

o comply withTenn. R. Civ. P. 53.04( 1) is harmless error if there is material evidence in the record to support the master’s report. Id. (quoting Glenn v. Gresham , 602 S.W.2d 256, 258 (Tenn. Ct. App. 1980)).

The record on appea

l shows that, when the Trial Court adopted the Special Master’s reports, it did not have, for its review, the pr

oof submitted by

the parties to the S

p ecial Ma ster. Instead, the Trial Court had before it onl y t he Special Master’s reports, a few previously-filed documents, including the parties’ Affidavits of Income and Expenses and their Assets and Liabilities Statements. 3 By contrast, the transcripts and partial tr anscript fr om the thre e Special Ma ster hearin gs contain witness testimony regarding the issues on appeal, alimony and tax liability.

This Courtexplained the purpo se of the require

ment of Tenn. R.Civ. P. 53.04(1) that the special maste

r file the transc

ript and exhibits with h

is report as follow

s:

On ce objections were timely filed to the Master’s report, it wa s incumbent

upon the Trial Judge to review the e vidence a nd any exhibits and if he disagreed with the findings of the Master, make independent

findings. The Judge could not do this in thi s case4 We ac knowledg e that upon D efendant’s o bjection to the Special Master’s final report, the 1999 Report, the Trial Court it

self h eard test imony fr om the part

ies reg arding t

he 1994, 1995 and 199 6 tax liability issue. The record on appeal, neverth

eless, shows th

at wit h respect to the 1994

tax liability, the Spe cial Maste r decided that Defend ant should be assigned the ta x liability in his first report which was

adopted by the Trial Court . The transcri

pt from the f

irst Special Master hearing con tains testimony fro m the parties re garding the issu e of their 199 4 tax liability, but the Trial Court did not have ac cess to this transc ript at any time this issue was raised.

-6- because he did not have the evidence heard by the Master

before him when he confirme

d the Master’s re

port.

Fillers v. Cash , No. 03A01-9705-CV-00186, 1997 WL 694948, at * 2 (Tenn. Ct. App. Oct. 31, 1997).
Likewise, in this case, the Trial Court did not have the evidence considered by the Special Master when it reviewed and adopted the Special Master’s reports. See id. Accordingly, the Trial Cou rt h ad n o va lid way t o decide if it disagreed with the Special Master’s conclusions and whether it needed to make independent findings. See id. In light of the comparatively scant amount of evidence available to the Trial Court when it reviewed and adopted the Special Master’s reports, and to us in

the record on ap

peal, we hold

there is a lack of material evidence in the record to support the Special Master’ s reports. 4 See In re Estate of Tipps , 907 S.W.2d at 403. Therefore, considering the facts and circumstances presented by the reco

rd on appeal, it wa

s reversible

error for the Special Master to fail to f

ile the transcrip

ts and exhibits with

each of his reports. See id. ; Tenn. R. Civ. P. 53.04(1).

Conclusion

The portion of t he Tria

l Court’s judgment pertaining to alimony and the 1994 tax liability is vacated. The remainder of the judgment is affirmed. This matter is remanded to the Trial Courtfor further

proceedings c

onsistent with this

Opinion to resolve the remaining issues of alimony and the 1994 tax liability, and for collection of costs below. Costs of this appeal are assessed equally against the parties, the Appellant, Bruce Lane Jackson, and his surety , and the Appellee, Catherine Dean Jackson.

___________________________________ D. MICHAEL SWINEY, JUDGE