### IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE August 5, 2003 Session DENICIA GAY BU LLION WILLS v. RUSSE LL BOYD WILLS Direct Appeal from the Circuit Court for Sumner C ounty

No. 20675-C C. L. Rogers, Judge

No. M2002-02167-COA-R3-CV - Filed Septem ber 25, 2003

This case inv olves a

n appeal from an order of the trial court modify ing the father’s child support obligation and deny

ing the f ather’ s reques tfor cha

nge of custody . We affir

m in part, revers e in part , and remand. Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed in part; Reversed in part; and Remanded
D AV ID R. F ARMER , J., delivered the opinion of the court, in which W. F RANK C RAWFORD , P.J., W.S., and H OLLY M. K IRBY , J., joined. Joseph Y. L

ongmire , Jr., Hend

ersonvil le, Tennessee, f

or the ap pellant, Russell B oyd

Wills. Paul A. Ruth

erford , Nashvill e, Tenne ssee, fo r the app ellee, D enicia G ay Bullion Will s. OPINION Russell Wills (Mr. Wills) and Dencia Wills (Ms. Wills) divorced in December of 1993. Pursuant t

o the divor

ce decr ee, the t rial cou rt awar ded custo dy o f their tw o sons to Ms. Wills while Mr. Wills was allowed visitation and ordered to pay child support in the amount of $120.00 per week. In 2001, Mr. W ills petit ioned for a ch ange in custo dy. As par t of th e same p roceed ing, the court adopted a permanent parenting plan submitted by Ms. Wills. The adopted plan denied any cha nge in custody

and increased Mr. Wills’ child support obligation to $175.81 per week. In March 2002, Ms. Wills petitioned the trial court to find Mr. Wills in contempt for failing to pay his child su

pport ar reara ge and request ed an aw ard for

attorne y’ s fees incurred

in obtaining such child support. In Mr. Wills’ answer to the c ontempt petition, he counter-filed making another request for chang e of custody. Ms. Wills subsequently amended her petition and sought an increase in child support.-2-

The tria l court de nied Ms. Will s’ conte

mpt reque st becau se, prior to trial, M

r. Wills pai d his child su

pport ar reara ge. I n support o f Ms. Wills’ a mended pe

tition for increa sed child support, Ms. Wills offered evidence of Mr. Wills’ income, $25,000, and Mr. Wills’ present wife’s i ncome, $6 0,000, ba sed on the ir tax retu rns for th e 2001 fis cal y

ear. At t rial, Mr. Wills testified that his and present wife’s jointly owned electrical business, Wills Electric (Business), generated the $85,000 household income. I n addition, Mr. Wills testified that it was his present wife who determined how to a

llocate t heir re spective

salarie s. The tri al court

found the

income structure of Mr. Wills and his present wife not credible. As a result, the cour t imputed $60,000 of the hou sehold inc ome to Mr. Wills and use d that amount in dete rmining Mr. Wills’ child support obligation of $267.23 per week. The trial court re fused to award Ms. Wills her reasonable attorney ’s fees incurred in seeking a modific ation of child support. In support of Mr. Wills’ petition for change of custody, he a

lleged that his impending move to Mon

tana pre sented a

materia l chang e of cir

cumstanc es warr

anting a compara tive fitne ss analysis. I

n the trial court’s final order entered Aug ust 7, 2002, the court found Mr. Wills’ plans to move as purely spec

ulative. Accordingly , the trial court determined that there had been no material change of circumstanc es to warrant a change of custody. I

t is from this order of the trial court that this appeal arises.
Issues Presented Mr. Wills ra

ises the f ollowing issues fo r revie w by

this Court:
1. Did the trial court err in determining future child support oblig ation of Mr. Wills based upon the evidence in the record.
2. Did the trial court err in finding no material chang e of circumstances had occurr ed since the last or

der of custody

thus not co nsiderin g a cha nge in the residential parent for the minor children. Ms. Wills ra

ises the f ollowing additiona l issues fo r revie w by

this Court:
1. Whether th

e trial c ourt err

ed in fai ling to a

ward Ms. Wills her r

easonab le attorne y’ s fees?
2. Whe

the r M s. W ill s sh oul d be

aw ar de d a tto rn ey ’s fe es fo r th

is a ppe al ? Standard of Review
Our review of a t

rial cou rt’s con clusions o n issues of law is de novo , with no presumption of correctness. Kendrick v. Shoemake , 90 S.W.3d 566, 569 (Tenn. 2002). Our review of a trial court’s finding

on issues o f fact is de novo upon the record, accompanied by a presumption of correctness unle ss the evi dence p reponde rates oth erwise. Tenn. R. A

pp. P. 13(d

); Kendrick , 90-3-

S.W.3d at 56 9. Where t

he trial c ourt make s no speci fic findings of f act on a matter, w e must review the record to determine wher e the preponderance of the evide nce lies and accord no presumption of correctness to the conclusion of the court below. Kendrick , 90 S.W.3d at 569. Child Support Modification Mr. Wills as serts tha

t it was er ror for the trial court to im

pute $60, 000 as his 2 001 income rather than the $25,000 found in that year’s tax return. Mr. Wills relies upon the holding of Mitts v. Mitts in argu ing that the reta ined cor porate e arning s of Mr. Will s and his pr esent wif e should not be considered in his child support obligation when “the obligor is a minority shareholder and thus lacks control over the distribution of the corporation’s income.” Mitts. v. M itts , 39 S.W.3d 142, 148 (Tenn. 2000). The rationale underly ing the Mitts decision was the ability of the oblig or to control the reported income that one receives f rom the corporation. See id. The court noted that in cases where the obligor can c ontrol the salary one receives, the court has held that the corporation’s retained earning s may be consider ed in determining one’s child support obligation. Id. (citi ng Sandusky v. Sandusky , No. 01A01-9808-CH-00416, 1999 WL 734531, at *4 (Tenn. Ct. App. Sept. 22, 1999) ( no perm. app. filed )). The r easoning behind co nsiderin g the inc ome under the obligor ’s contr

ol is to pre

vent the o bligor f rom hiding

income a vailable for their child support obligation. Id. (quot ing Sandusky , 1999 WL 734531, at *4). However, when the obligor is a minority shareholder with no control of income distribution, the concern for potential manipulation by the obligor dissipates, fr eeing the court from considering the corporation’s retained earnings. See id.
In Mitts , the oblig or owned 9.44% inte

rest in the business. Mitts , 39 S.W.3d at 148 n.2. The distribution of income was vested in the majority shareholder, his father. Id . From the se facts, th e court f ound that t

he oblig or had no

ability to contro l income d

istributio n and as a

result there was no threat of income manipulation. Id . at 148. The fac ts of the p

resent c ase are

readily distingu ishable f rom Mitts . Here, Mr. Wills and his prese nt wife a re co-o wners of

the busine ss, owning

49% and 5 1% respectively . Mr. Wills is a skilled master electric ian while his prese nt wife ha s no elec trical kn owledg e and pe rforms clerical and administrative duties for the business. I t is hard to imagine that Mr. Wills would not have the ability to control the a mount of income that he receives from the business. Unlike Mitts , this rela

tionship be

tween the obligor , majority

shareho lder, an d businessis ripe fo r income manipulation. In its final order, the trial court stated: With regard to child support, this is troubling in that the Court is of the opinion that Mr. Wil ls and his c

urrent w ife are

not cred ible or be lievable as to their income str

ucture o r claims. . . . The Court is of th e opinion t

hat the in come is generated through the e

fforts, knowledge, and skills of Mr. Wills, an electrician, with the Court not buying the theory that they are

both in this as equal partners and trying

to assign all sorts of income to the Wife who stay s at home, but supposedly sometimes claims to help in the business.-4-

Trial courts are

in the bes t position to

“observ e witness es as the y te stify and to ass ess their demeanor, which best situates trial judges to evaluate witness credibility.” Wells v. Tenn. Bd. of Regents , 9 S. W.3d 779, 7 83 (Te nn. 19 99) (ci ting State v. P ruett , 788 S.W.2d 559, 561 (Tenn. 1990)). A

ccordin gly , we will n ot re-evaluate a trial ju dge’s a ssessmen t of witne ss credi

bility absent clear and convincing evide nce to the contrary

. Id. The evidence in this case does not run contrary to the trial judge’s assessment of the witnesses. We affirm the trial cour t’s determin ation to impute $60,0 00 of the Wi lls’ $85,0 00 househ old income to Mr. Wills’ in calculating the child support obligation of $267.23 per week. Material Change of Circumstances A valid child custody order may be modified whe

re a material change of

circumstances has occurred such that a chang e of custody is in the best intere st of the child. Rial v. Rial , No. M2002-01750-COA-R3-CV, 2003 Tenn. App. Lexis 553, at *2 (Tenn. Ct. App. Aug . 7, 2003) (citing Cranston v. Combs , 106 S.W.3d 641, 644 (Tenn. 2003)). Thus the court must utilize a two-part test in determining whether a chang e of custody is war ranted. Id. First, it m

ust determine whethe

r a mater ial chan ge of c ircumsta

nces has occurr ed that a ffects t he child’ s well being. Id .; Kendrick, 90 S.W.3d at 570. Seco nd, if it finds a mate rial cha nge of circumst ances, the court must utilize the factors enumerated in Tenn. Code Ann. § 36-6-106 to determine whether a change of c

ustody is in the best interests of the child. Id. (citi ng Cranston , 106 S.W.3d at 644). The Tennessee Supreme Court has observed that no “br ight-line” rule exists for determining whether a material cha nge has occurred. Id. However, the court has identified several considerations including 1) whether a change has occurre d subsequent to the order from which modification is sought; 2) whether such a chang e was not known or reasonably anticipated when the order was entered; 3) whe ther the change is one which aff ects the child in a “meaningful” way

. Id. (citi ng Kendrick , 90 S.W.3d a t 570; Blair v. Badenhope , 77 S.W.3d 137, 150 (Ten n. 2002)) . Absent f

rom these consider ations is th

e requir ement tha t the cha nge must pose a threat of substantial harm to the child in order to justify a change of custody

. Id. As Mr. Wills points out, the tri al court incorre ctly

require d that the

curren t custody causes o r will ca use substantial harm to the children for a material chang e in circumstance to be found. Rather, Tenn. Cod

e Ann. § 30 -6-101 ( a)(2)(B) (200 1 & Supp. 2 002) stat es “[a] mat

erial ch ange in circumstance does not require a showing of a substantial risk to the child” (emphasis added). Despite this error, the trial court’s finding of no mater ial change of circumstances is a f inding of fact which we will review de novo accompanied by a presumption of correctness. Upon reviewing the record, the evide nce does not preponderate ag ainst the trial court’s finding that Mr. Wills’ plans to move to Montana was purely specula tive. As heretofore noted, the trial court found Mr. Wills’ credibility to be lacking . Accordingly , we affirm the trial court’s finding of no materia l chang e of cir

cumstanc es, ther

eby eliminating any

need for a compar ative fit ness analysis.-5- Attorney’s Fees Tenn. Cod

e Ann. §36 -5-103( c) (2001 ) provide s, in pert inent par t: (c) The plain

tiff spous e may

recove r from the defenda nt spouse . . . reaso nable attorne y f ees incu rred in e nforcin g any

decree for alimo ny a

nd/or chi ld support. While the r

ecord de monstrate s that Mr. Wi lls paid hischild supp ort arre arage , the pay ment was made only afte

r Ms. Wills petitioned the court to find Mr. Wills in contempt for such arrearage. Upon review of the record, we be lieve that it establishes a proper basis for an award of reasona ble attor ney ’s fees . Accor

dingly , we rev erse the

trial cou rt’s den ial of Ms. Wi lls’ requ est for attorney ’s fees incurred in enforcing the permanent parenting plan. Ms. Wills has also asked this court for an award of attorney ’s fees incurred on this appeal. It is clear that, if proper , courts have the authority to award additional attorney ’s fees incurred on appeal. Seaton v. Seaton , 516 S.W.2d 9 1, 93 (Te nn. 1974) . The re cord est ablishes a proper

basis for an award to Ms. Wills of her reasonable attorney ’s fees incurred on appeal. Thomas v. Thomas , No. E1999-00563-COA-R2-CV, 2000 WL 276886, at *2 (Tenn. Ct. App. Marc h 15, 2000) ( no perm. app. filed ). We remand to the trial court for a determination of the amount of reasonable attorney ’s fees. Conclusion We affirm the trial court’s modification of Mr. Wills’ child support obligation and denial of Mr. Wills ’ petition

for cha nge in custody . We reve

rse the tr ial cour t’s denia l of Ms. Wills’ request for attorney ’s fees incurred in enforcing the permanent parenting plan and re mand to the trial court for a determination of the attorney ’s fees incurred on appeal. Costs of this appeal ar e taxed to the

appella nt, Russell

Boy d Wills, and h

is surety , for whic

h executio n may

issue if necessary .

___________________________________ DAVID R. FARMER, JUDGE