FILED

April 29, 1998

Cecil Crowson, Jr.

Appellate C ourt Clerk

COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

FORTUNEE HOFFMAN ) HAMILTON COUNTY

) 03A01-9706-CV-00220

Plaintiff-Appellant ) 

 )

)

v . ) HON. WILLIAM L. BROWN,

) JUDGE

 )

BARRY LYNN HOFFMAN ) 

) AFFIRMED IN PART; REVERSED

Defendant-Appellee ) IN PART and REMANDED

 

DAVID E. CAYWOOD and DARRELL D. BLANTON OF MEMPHIS FOR APPELLANT

WILLIAM H. HORTON OF CHATTANOOGA FOR APPELLEE

 O P I N I O N

 Goddard, P.J. 

Fortunee Hoffman and Barry Lynn Hoffman both appeal a

divorce judgment rendered by the Hamilton County Circuit Court. 

The parties raise various issues, hereinafter restated, one of

which--relative to alimony--is raised by both parties:
2

Ms. Hoffman's Issues

1 . Whether the Trial Court erred in quashing a subpoena

duces tecum regarding the production of documents relating to Mr.

Hoffman’s ownership interest in Joseph DeCosimo & Co., LLP.

2 . Whether the Trial Court erred in its valuation and

division of the parties' marital property (Mr. Hoffman’s

partnership interest, the Article IX interest of the partnership

agreement, and the marital residence). 

3 . Whether the Trial Court erred in the amount of child

support ordered to be paid by Mr. Hoffman to Ms. Hoffman.

4 . Whether the Trial Court erred in its allocation of the

debts to the parties.

Mr. Hoffman's Issue

1 . Whether the Trial Court erred in awarding Ms.

Hoffman a portion of Mr. Hoffman’s future contingent

interest under his partnership agreement with Joseph

DeCosimo & Co., LLP, and if an award of the future

interest was appropriate, whether that award should be

an after-tax award?

Alimony Issue raised by both parties

Ms. Hoffman insists the alimony awarded is

inadequate and Mr. Hoffman claims that it should have

been rehabilitative rather than periodic.

The parties were married on December 16, 1973. Five

children were born as a result of the marriage. At the time of

trial (December 1996), Jason Hoffman, age 21, was in his last

year at the University of Miami. Brian Hoffman, age 19, was a

freshman at Indiana University. Richie Hoffman, age 18, was a
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junior at Notre Dame High School, and will graduate in May 1998. 

David Hoffman, age 15, was a student at the McCallie School. 

Michael Hoffman, age 6, was in kindergarten at St. Jude.

Ms. Hoffman was born in Morocco and came to the United

States when she was 20 years old. She attended Johnson County

Community College but never received a degree. She can speak

five languages. Ms. Hoffman did not work throughout the course

of the marriage, but stayed at home with the children and acted

as the primary caregiver. She took each of the boys to school,

cooked, cleaned, and shopped for the family. The Hoffmans also

hired help in the home to assist Ms. Hoffman with some of the

cooking and cleaning.

Mr. Hoffman is a certified public accountant and a

senior tax partner in the accounting firm of Joseph DeCosimo &

Co., LLP (hereinafter referred to as “DeCosimo”). He has

continually practiced with the firm since 1973. Additionally,

Mr. Hoffman is one of three members of the firm’s management

committee. The parties have accumulated a substantial marital

estate through the course of their marriage.

The parties separated sometime in 1995. Ms. Hoffman

filed for a bed and board divorce on December 12, 1995. Mr.

Hoffman filed a counter-complaint for an absolute divorce. Ms.

Hoffman hired Gordon Thompson, a certified public accountant, to

attempt to value Mr. Hoffman’s interest in DeCosimo. Ms. Hoffman
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subpoenaed many documents held by DeCosimo. DeCosimo filed a

motion to quash which the Trial Court granted in part. The Trial

Court quashed the portions of the subpoena that required DeCosimo

to produce internal financial statements, client lists, and

productivity reports by client. DeCosimo was required to turn

over complete documentation regarding the calculation of the

husband’s interest in the firm set out in the partnership

agreement, including the valuation of his capital account, the

balance sheet portion of the firm’s tax returns, fringe benefits,

the value of his accrual and cash basis capital account, and the

amount of his bi-weekly salary payments for 1996.

On December 17, 1997, the Trial Court granted the

parties an absolute divorce pursuant to T.C.A. 36-4-129 due to

the inappropriate conduct of both parties. Ms. Hoffman was

granted custody of the three minor children with Mr. Hoffman

receiving visitation rights. The Court granted child support of

$2,000 per month. He also granted alimony of $3,000 per month

payable until the earlier of the remarriage of Ms. Hoffman, death

of either party, or further order by the Court. As additional

alimony, Mr. Hoffman was ordered to pay mortgage payments on the

parties’ house, until sold upon their son David’s graduation from

high school, and the remaining lease payments on the 1996 Acura

used by Ms. Hoffman. 

Mr. Hoffman’s partnership interest in DeCosimo was also

at issue in the divorce. The Trial Court held that Mr. Hoffman’s
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interest in DeCosimo was best valued pursuant to the partnership

agreement. Mr. Hoffman presented evidence that his accrual basis

equity was worth approximately $359,500. Ms. Hoffman presented

evidence that the present value of the accrual basis capital

account was worth approximately $388,000. The Court held that

Mr. Hoffman’s after-tax present value calculation of the accrual

basis capital account, as supported by testimony from two of his

partners, Joseph DeCosimo and Jerry Adams, was the more accurate

valuation. The accrual basis capital account calculation

includes Mr. Hoffman’s proportionate share of the partnership’s

cash, fixed assets, accounts receivable, and work in progress. 

Mr. Hoffman was awarded his partnership interest in DeCosimo,

which was valued at $359,500. To more equitably dispose of the

assets and liabilities of the parties, the Court awarded Ms.

Hoffman an additional property division of a lump sum of

$150,000. This lump sum is to be paid in annual installments of

$15,000 for a period of 10 years. Mr. Hoffman may repay this sum

at any time. Further, the $150,000 obligation shall not earn

interest unless Mr. Hoffman is more than 10 days late with a

payment.

Another contentious issue in the divorce was Mr.

Hoffman’s contingent future interest under Article 9 of the

DeCosimo Partnership Agreement. Mr. Hoffman will receive this

Article 9 benefit upon his retirement after age 62, death, or

disability. The Article 9 benefit is valued as an amount equal

to two times the greater of the terminating partner’s average
1

For example, assume that Mr. Hoffman retires at the age of 70.

Further, assume that the monthly Article 9 benefit received by Mr. Hoffman is

$5,000. The N term would be equal to 17 since Mr. Hoffman was 53 years old at

the time of divorce and worked for an additional 17 years after the divorce. 

Application of the formula would yield the following result:

$5,000 * 0.5 * (12/(12 + 17)) = $5,000 * 0.5 * 0.414 = $1,034.48.

Therefore, Ms. Hoffman would receive $1,034.48 per month while Mr. Hoffman

would receive the remainder of the monthly Article 9 benefit.

6

annual income from the partnership (salary and other) for (1) the

most recent five full calender years immediately prior to the

terminating event, or (2) five full calender years ending with

the year in which the terminating partner attains age 62. This

amount is paid over a period of 10 years. The Court found that

uncertainties exist as to whether the Article 9 benefit will be

received and the value of the benefits. Therefore, Ms. Hoffman

was awarded, under Cohen v. Cohen , 937 S.W.2d 823 (Tenn.1996), a

percentage of the gross amount of each payment when and as

received by Mr. Hoffman under Article 9. The Court developed the

following formula to determine the percentage of the monthly

payment that Ms. Hoffman will receive: one-half of 12 over 12

plus N [0.5*(12/(12 + N))], where N is equal to the number of

years from the date of divorce until the year the first payment

is payable under Article 9, and 12 being the number of years

during the parties' marriage that the benefit accrued. 1 Ms.

Hoffman must pay all tax obligations on her portion of the

Article 9 benefits received.

The remainder of the marital assets and liabilities

were divided by the Trial Court. A copy of the Trial Court’s

division of marital property schedule is attached as Appendix A

to this opinion. The Trial Court found that Ms. Hoffman received
7

approximately $50,000 more than an equitable split of the assets

and debts between the parties. However, the award was justified

since Mr. Hoffman’s earning capacity is much greater than Ms.

Hoffman’s.

Our review of cases tried without a jury is de novo

upon the record with a presumption of correctness as mandated by

Rule 13(d) of the Tennessee Rules of Appellate Procedure. This

Rule requires us to uphold the factual findings of the trial

court unless the evidence preponderates against them. Campanali

v. Campanali , 695 S.W.2d 193 (Tenn.App.1985). Also, trial courts

have wide discretion concerning the division of the parties'

marital estate. Wallace v. Wallace , 733 S.W.2d 102 (Tenn.

App.1987). The trial court’s division of marital property is

entitled to great weight on appeal and is presumed proper unless

the evidence proves otherwise. Batson v. Batson , 769 S.W.2d 849

(Tenn.App.1988); Lancaster v. Lancaster , 671 S.W.2d 501

(Tenn.App.1984). It is with these standards in mind that we

undertake our review of the Trial Court’s decision.

Ms. Hoffman’s first issue on appeal is whether the

Trial Court erred in quashing a subpoena duces tecum regarding

the production of documents relating to Mr. Hoffman’s ownership

interest in Joseph DeCosimo & Co., LLP. The decision to quash a

subpoena duces tecum rests in the sound discretion of the trial

court. Ogrodowczyk v. Tennessee Bd. for Licensing Health Care

Facilities , 886 S.W.2d 246 (Tenn.App.1994); Brown v. Brown , 863
8

S.W.2d 432 (Tenn.App.1993). A subpoena duces tecum may be denied

if the subpoena would impose an undue burden and substantial

expense, if most of the materials sought could be obtained

elsewhere, or if the materials sought are not sufficiently

relevant to the proceedings to justify the burden and expense. 

Ogrodowczyk , supra; Brown , supra.

Before determining whether the Trial Court properly

quashed the subpoena duces tecum, we must first pass upon the

underlying question, whether the Court utilized the proper

valuation techniques for Mr. Hoffman’s partnership interest in

DeCosimo. The Trial Court valued the partnership interest

according to the method set out in the Partnership Agreement,

which excluded any goodwill factor. Courts may utilize several

different methods to value partnership interests. Hazard v.

Hazard, 833 S.W.2d 911 (Tenn.App.1991); Smith v. Smith, 709

S.W.2d 588 (Tenn.App.1985). We find that the Trial Court’s

valuation as established in the Partnership Agreement is

consistent with Hazard and Smith. Although other valuation

variations may be utilized, the Trial Court acted within its

discretion in applying the Partnership Agreement valuation

method.

The portions of the subpoena duces tecum which were

quashed sought internal financial statements, client lists, and

productivity reports by client. These materials were unnecessary

for calculation of the partnership interest under the Partnership

Agreement. We note that the requested materials are confidential

and sensitive materials used for internal business purposes. 
9

Courts should force a company to disclose this information only

when absolutely necessary.

DeCosimo disclosed all documents required to value Mr.

Hoffman’s partnership interest under the Partnership Agreement. 

Since the materials in the quashed portion of the subpoena sought

by Ms. Hoffman were unnecessary for use in the valuation

technique approved by the Court, Ms. Hoffman has shown

insufficient grounds for disturbing the Trial Court’s

discretionary decision.

Ms. Hoffman’s second issue on appeal is whether the

Trial Court erred in its valuation and division of the marital

property. This issue specifically calls into question the

valuation and division of Mr. Hoffman’s partnership interest, the

Article IX interest of the Partnership Agreement, and the marital

residence. We first discuss the valuation and division of Mr.

Hoffman’s partnership interest. As discussed above, we find that

the Trial Court properly valued Mr. Hoffman’s partnership

interest by using the method set out in the DeCosimo Partnership

Agreement. The Trial Court divided the partnership interest by

awarding the partnership interest to Mr. Hoffman and awarding Ms.

Hoffman $150,000 cash, payable in 10 annual payments of $15,000

without interest. The Trial Court found that this division

awarded Ms. Hoffman more than an equitable division of the

marital property but stated that it was fair due to the

difference in the earning capacities of the parties. T.C.A. 36-

4-121(a) provides that marital property must be equitably divided

without regard to fault. An equitable division is not

necessarily an equal one. In light of the overall division of
1 0

the marital property, we find that this division of the

partnership interest is equitable and should stand.

However, Ms. Hoffman raises the additional issue of

whether interest should be awarded on the $150,000 award. T.C.A.

47-14-121 mandates that:

Interest on judgments, including decrees, shall be

computed at the effective rate of ten percent (10%) per

annum, except as may be otherwise provided or permitted

by statute; provided, that where a judgment is based on

a note, contract, or other writing fixing a rate of

interest within the limits provided in § 47-14-103 for

that particular category of transaction, the judgment

shall bear interest at the rate so fixed.

We read this Code Section to mean that if a court does

not otherwise provide and a statutory provision does not

otherwise permit, interest shall be awarded according to T.C.A.

47-14-121. See Brown v. Brown, 913 S.W.2d 163 (Tenn.App.1994);

Inman v. Inman, 840 S.W.2d 927 (Tenn.App.1992). In Brown, this

Court awarded an additional cash award payable over time without

interest. The Inman Court ruled that interest should be awarded

on a cash award payable over time while the trial court had been

silent on the issue. Thus, it appears that in domestic relations

cases, a court making a cash award over time--whether this Court

or the Trial Court--is clothed with the discretion to award or

deny interest thereon. 

In this case, the Trial Court ruled that no interest

would be paid on the $150,000 cash award payable over 10 years. 

The Trial Court acted well within its discretion in awarding no

interest since Ms. Hoffman received $50,000 more than Mr. Hoffman
1 1

after the division of the parties’ assets and liabilities. By

not awarding interest, the Trial Court attempted to more

equitably divide the parties’ assets and liabilities. Therefore,

we uphold the Trial Court’s decision in awarding no interest on

the cash award.

Next, we consider the valuation and division of the

Article IX interest in the Partnership Agreement. Mr. Hoffman

raises the additional issue of whether, if a division of the

future interest is proper, the award should be an after-tax

award. The Article IX future interest is awarded upon Mr.

Hoffman’s death, retirement, or disability while a partner of

DeCosimo. This future interest acts as a retirement benefits

plan. Mr. Hoffman will not receive these future interest

benefits if he retires before the age of 62, he is expelled from

the firm, or the firm is dissolved. Although the likelihood that

Mr. Hoffman will receive these benefits is good, the future

interest is still speculative since events can occur which will

bar the receipt of the future interest. As a result, the Trial

Court devised a formula, set out above, to divide Mr. Hoffman’s

Article IX future interest.

Our Supreme Court has held that a deferred distribution

method should be used to distribute unvested retirement benefits

when the vesting is uncertain. Cohen v. Cohen, supra. The

deferred distribution method allows the court to determine the

formula for dividing the monthly benefit at the time of the

decree while delaying the actual distribution until the future

interest becomes payable. The division method suggested in Cohen

is that the trial court should award a percentage of the marital
1 2

property interest. This percentage may be formulated by dividing

the number of months of the marriage during which the benefits

accrued by the total number of months that the benefits

accumulated. The Cohen Court further instructed that the

valuation method remains within the discretion of the trial court

and that court’s decision should not be disturbed unless the

division is not essentially fair in light of all circumstances of

the case.

Mr. Hoffman’s Article IX benefits are presently

unvested since Mr. Hoffman will not receive these benefits upon

the occurrence of certain events. The value of such benefits is

also speculative since the monthly future interest payments are

based upon an average of the previous five years earnings. Since

these earnings are unknown until the time when the future

interest vests, the Trial Court properly utilized the deferred

distribution method set out in Cohen. We also find that the

Trial Court’s formula is an equitable method of division and

follows the suggestions of Cohen. Thus, we uphold the Trial

Court’s division of the Article IX benefits.

The Trial Court ordered Ms. Hoffman to pay taxes on her

share of the monthly Article IX benefits she receives. Mr.

Hoffman requests this Court to award an after-tax division. This

would allow Mr. Hoffman to receive a tax deduction on the entire

amount of the monthly benefit payment while Ms. Hoffman would

receive theoretically the same amount but without the tax

benefit. We find this request unfair to Ms. Hoffman and uphold

the Trial Court’s order. Ms. Hoffman shall directly receive onehalf of her percentage of the gross monthly benefit payment from
1 3

DeCosimo while Mr. Hoffman shall receive the remainder. The

direct payment from DeCosimo to each party will prevent Mr.

Hoffman from listing on his tax returns that he paid Ms. Hoffman

one-half of the total monthly benefit payment. Each shall pay

the appropriate tax on their share of the monthly benefit

payment.

Ms. Hoffman also appeals the valuation and division of

the marital residence. The Trial Court actually averted

valuation through the division of the residence. The Court

ordered the home sold three years after the decree was issued. 

Ms. Hoffman would then receive 60 percent of the net equity. Mr.

Hoffman must pay the mortgage payments until the house is sold. 

The marital residence of the parties is a large home and only one

child will be living at home with Ms. Hoffman at the time the

house is to be sold. In light of the Trial Court’s overall

division of the marital property, we find this division of the

martial residence equitable to both parties.

The third issue on appeal is whether the Trial Court

erred in the amount of child support ordered. At the time of

trial, three of the parties’ children were minors. Ms. Hoffman

received custody of the children and was awarded $2,000 per month

as child support by decree of the Trial Court. The Court

provided no support nor analysis in reaching a determination of

the amount of child support. Nor did the Court apply the Child

Support Guidelines to formulate the child support amount.

Courts shall apply as a rebuttable presumption the

Child Support Guidelines whenever making its determination
1 4

concerning the amount of child support. T.C.A. 36-5-101(e)(1). 

The court can rebut this presumption if it finds sufficient

evidence and makes a written finding that applying the Guidelines

would be unjust or inappropriate. T.C.A. 36-5-101(e)(1). The

Trial Court did not apply the Child Support Guidelines nor did it

make a written finding on why the Guidelines should not be

applied. Therefore, we must reverse the Trial Court’s decision

on the amount of child support awarded.

In determining the appropriate amount of child support,

we begin with the Child Support Guidelines. Rule 1240-2-4-.04(3)

states:

The court must order child support based upon the

appropriate percentage of all net income of the obligor

as defined according to 1240-2-4-.03 of this rule but

alternative payment arrangements may be made for the

award from that portion of net income which exceeds

$6,250. When the net income of the obligor exceeds

$6,250 per month, the court may establish educational

or other trust funds for the benefit of the child(ren)

or make other provisions in the child(ren)’s best

interest; however, all of the support award amount

based on net income up through $6,250 must be paid to

the custodial parent. 

The percentage of net income is 41 percent for three children and

32 percent for two children. Rule 1240-2-4-.03(5).

Ms. Hoffman contends that Mr. Hoffman’s monthly net

income is $15,226.35, while Mr. Hoffman estimates his monthly net

income as $14,592. After reviewing the record, we note that the

Trial Court made no findings of fact on the amount of Mr.

Hoffman’s net monthly income. However, Mr. Hoffman definitely

earns more than $6,250 of net income per month. Therefore, we

hold that Mr. Hoffman must pay 41 percent of $6,250 per month to
1 5

Ms. Hoffman until their son Richie graduates in May 1998. Thus,

Mr. Hoffman must pay Ms. Hoffman $2,562.50 per month. Mr.

Hoffman must also pay the difference between the $2,562.50 per

month ordered in this opinion and the $2,000 per month ordered by

the Trial Court for all payments previously made. After Richie

graduates in May 1998, Mr. Hoffman must pay Ms. Hoffman 32

percent of $6,250 per month, which equals $2,000 per month.

In light of the division of the marital property and

the alimony awarded, discussed below, we hold that this amount of

alimony should allow the Hoffmans’ children to enjoy an

equivalent lifestyle to that enjoyed before their parents’

divorce. In addition, Mr. Hoffman must continue to pay the

private school educational expenses for all of the minor

children. This award complies with the 1994 version of Rule

1240-2-4-.04(3) since the Court has discretion to award

educational expenses in addition to the child support award when

the net income exceeds $6,250 per month. Either party may

petition the Court for an alteration of the child support award

whenever warranted by changed circumstances.

Ms. Hoffman argues that the child support should also

be increased since Mr. Hoffman did not spend a substantial amount

of time with his children before the divorce. Rule 1240-2-4-

.04(1)(b) allows for such a modification only when the children

are not staying with a parent for the full duration of that

parent’s visitation rights. We have no facts on the issue of

whether Mr. Hoffman is fully utilizing his visitation privileges. 

Ms. Hoffman must petition the Trial Court and put forth

sufficient evidence before the award of child support will be
1 6

altered. Therefore, the child support award stands as previously

stated in place of the Trial Court’s award.

Ms. Hoffman’s fourth issue on appeal, as previously

noted, is whether the Trial Court erred in the amount of alimony

awarded to Ms. Hoffman. Mr. Hoffman also raises the issue of

whether the Trial Court erred in awarding Ms. Hoffman periodic

alimony as opposed to rehabilitative alimony. We begin our

analysis by examining whether the Trial Court awarded the

appropriate type of alimony. Periodic alimony is paid monthly

until the death of either party or the remarriage of the party

receiving alimony. Rehabilitative alimony should be awarded when

the party receiving alimony could never be rehabilitated relative

to the earnings of the party paying alimony. Whenever one of the

parties is economically disadvantaged and rehabilitation is not

feasible in consideration of all relevant factors, then the court

should order payment of support until the death of either party

or remarriage of the party receiving alimony. T.C.A. 36-5-

101(d)(1).

The Hoffmans were married for over 23 years. Ms.

Hoffman has no college degree and worked in the home for the

duration of the marriage as a homemaker. She also has no

vocational skills. Mr. Hoffman, on the other hand, is a senior

tax partner in the DeCosimo accounting firm who earns in excess

of $200,000 per year. Although Ms. Hoffman speaks five

languages, she can never be rehabilitated and will remain

economically disadvantaged in comparison to Mr. Hoffman. 

Therefore, we hold that the Trial Court properly awarded Ms.

Hoffman periodic alimony.
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The Trial Court awarded as alimony $3,000 per month in

addition to $2,000 per month on the house note payment, Ms.

Hoffman’s car lease payments, and health insurance for Ms.

Hoffman for three years at $67.00 per month. This amounts to

$5,467 per month alimony until the house is sold. The Trial

Court found that Ms. Hoffman had excessive spending habits and

could live comfortably on the amount of alimony awarded.

Courts must look to all relevant factors, including

those set out in T.C.A. 36-5-101(d)(1)(A-L) in determining the

amount of alimony. After reviewing those factors, considering

Ms. Hoffman’s excessive spending habits, the disparity in the

parties’ incomes, and the division of the marital property and

debts, we uphold the Trial Court’s award of alimony. The Trial

Court acted well within its discretion and equitably awarded a

sufficient amount of alimony to Ms. Hoffman.

The final issue for consideration, as previously noted,

is whether the Trial Court erred in its allocation of the debts

to the parties. T.C.A. 36-5-121 requires the court to make an

equitable division of assets and debts. After the marital assets

have been equitably divided, the court has the discretion to

order the payment of marital debt in a just and equitable manner

considering the respective earning capacities of the parties. 

Hanover v. Hanover, 775 S.W.2d 612 (Tenn.App.1989). 

Although the parties disagree as to what debt should

properly be considered as marital debt, it is apparent from the

record that the Trial Court ordered Mr. Hoffman to pay the

majority of the debt owed by the parties. Considering Mr.
1 8

Hoffman’s earning capacity is much greater than Ms. Hoffman’s,

the division of the marital property, and the support payments

Mr. Hoffman must pay, we conclude that the Trial Court acted well

within its discretion and equitably divided the marital debt. 

Thus, we affirm the Trial Court’s division of the marital debt.

For the foregoing reasons, the judgment of the Trial

Court is affirmed in part, reversed in part, and the cause

remanded for such further orders, if any, as may be necessary and

collection of costs below. Costs of appeal are adjudged one-half

against Mr. Hoffman and one-half against Ms. Hoffman and her

surety.

_______________________________

Houston M. Goddard, P.J. 

CONCUR:

________________________________

Charles D. Susano, Jr., J.

________________________________

William H. Inman, Sr.J.