# FILED
October 3, 199 6 Cecil Crowson, Jr . App ellate C ou rt Clerk IN THE COU RT OF A PPEA LS OF TENN ESSEE WESTERN SECTION AT JACKSON
PAMELA

LEMOINE FORD, ) ) Plaintiff/Appellant, ) Dyer Chancery No. 92-5 ) VS. ) A ppeal No. 02A 01-9507-CH- 00153 ) MICHAEL BU RKE FORD, ) ) Defendant/Appellee. )
APPEAL FROM THE CH ANCER Y COU RT OF D YER C OUNTY

AT DYERSBUR G, TENNESSEE THE HONORABLE JOE G. RILEY , JUDGE

MA RTIN B. D AN IEL Memphis, Tennessee Attorney for Appellant
MA RK D. JOHN STON Dyersbur

g, Tennessee Attorney for Appellee

REVERSED IN PA RT, A FFIRMED IN PA RT & REM AN DED

ALAN E. HIGHERS , J.

CONCUR: W. FRA NK CRA

WFORD, P.J., W.S. HOLLY K IRBY LIL LA RD, J. In this post-divorce proceeding, Pamela Ford ( “wife”) filed a petition to modify child2

su pport and alimony. Although the trial cour t declined to i ncrease alimony , the cour t increased the amountof child support that M ichael Ford (“husband”) was obli gated to pay based upon his incr

eased income. Wife has appealed and argues t hat the trial court erre d in several respects. F irst, she as serts that the trial cour t erred i n holding that the husband’s receipt of principal from an irrevocable trust is not “gross income” as that term is defined withi n the child su pport guidel ines. Nex t, she contendsthat the tri al court improperly failed to consi der the value of the tr ust in increasing chi ld support. Furthermore, wi fe argues t hat the trial court should have imputed incom e to husband based u pon his
v ol untary unemployment. F inally, wife argu es that the tri al court err ed in denyin g her request for an increase in alimony . For the reasons stated bel ow, the judg ment below is affirmed in pa rt, reversed in part, and remanded f or further proceedings.

The parties to this action married in 1986, and divorced six years l ater. The parti es had two minor

children. In conne cti on w ith the d iv orc e procee ding s, h usba nd an d wi fe entered into a marital di ssolution ag reement. The agreement provide d as herein per tinent that wi fe w as t o have sol e custody of t he children a nd that husband was to pay child support in the amount of $173.87 per week, plus 32% of his annual bonus. The agreement obligated husband to maintai n health insur ance for wife for a period ofthree years, and to maintain car insurance for wife for as long as sheowned the car . The agreement di d not make any other

provisi on for rehabili tative or periodic al imony.

At the time of the div

orce, husband ser

ved as vice- pr esident of Ford C ontracting Comp any, one of several companies ( “ the Ford companie s”) in w hich husband held an ownershipinterest. A

fterthe divorce in 1993, husband sold his ow nership inter est in the Ford companies to his

brother and si ster

for $900,000.00. In addition, husband so ld his interest in another of the Ford companies for $404,539. 00. Husband placed the proc eeds from the two sal es into an ir revocable living trust at Fi rst Tennessee Bank

. Husband also placed various stocks into a custodial account at First Tennessee Bank.

The termsof the tr ust provid e that h usband is to recei ve al l inc ome from the trust3

and is allowed to withdr awup to 3% of the trust principal each year. During 1994, the trust produced income in the amount of $58,775.05, and husband w ithdrew $2 6,973.05 from the trust principal. Husband received approximately $7,500. 00 in income from the custodial account. Husband has no t been employed since he sold his inte rest in the Ford companies in 1993.

Wife filed a petitio n to modify child support based upon the increase in husban d’s incomethat resulted from the sale of his i nterest in the Ford companies. She also filed a petition to modify

the final divorce decree, r equesting an increase i n alimony.

Followi ng a trial on the mat ter, the trial cour t denie d wife’s re qu est for alimony modification. In ad diti on, t he co urt b elow held, without explanation, that husband ’s withdraw al of $26,973.05 of trust pr incipal did not constitute “ gross income” under thechild support guidelines . In order to as sess child support, the court calculated husband’s incomeby adding the amount of income that husband received from the custodial account to the amount that husband received from the trust account. Then, t he court deducted adm inist rative expenses from that figure to y ield an annual i ncome of $62,079.00. The tri al court ultimately held that, pursuant to th e guidelines, husband should pa y child support in the amount of $1,146.00 per month, or $326.77 per week, adjusted upw ard by $400.00 per month for ten monthsfor extraordinary educational expenses. Th e trial court declined to impute income to hu sband based upon his potenti al income because , according to the court, husband had not w illfully rendered himsel f unemployed in or der to avoid paying child support.

We review

child suppor

t decisionsin accordance with T.R. A.P. 13(d), affordi ng the tri al cou rt’s factual find ings a pres umption of correct ness. How ever, no presumption of correctness applies to the trial court’s interpreta tion of the child suppo rt guidelines.

W ife’s first contention on app eal is that the husband’s w ithdrawal of $26,973.05 of trust principal constitutes “ gross income” withi n the meaning of the child support guidelines.4

Neither part y has d irect ed us to, n or ca n we f ind, any Te nne ssee auth ority specificall y addressing this issue.
The child support guidelines def ine “gross income” as follows: [A]ll income from any source (befor e taxes and ot her deductions), whether ear ned or unearned, and includesbut is not limited to, t he following : wages, salar ies , commissions, bonuses, overtime payments, div ide nds, sever ance pay, pensions, interest, trust in c ome, annuities, capita l gains, benefits r eceived from the S ocial Securit y Administration...workers compensation bene fits wh ether temporary or permanent, j udgments recov ered for personal injuries, unemployment insurance b enefits, gifts, prizes, lottery winn ings, alimony or

maintenance, and i ncome from sel f
employment.... Tenn. Comp. R. & Regs., ch. 1240 -2-4-.03(3)(a) (1994).
In our opinion, husband’s withdrawal of trust principa l constitutes “gro ss income” within the meaning of the g uidelines. O ur interpre tation is consis tent with both the broad definition of “gross inco me, ” wh ich includes all income from an y source, and with on e of the primary goals expressed in the guidel ines, whi ch is “[t]o ensure that

when p aren ts live sepa rate ly, th e e conomic impact on the child is minimized a nd to the extent that either parentenjoys a higher standard of living, the child share in that hig her standard.” Tenn. Comp. R. & Regs., ch. 1240-2-4-.02(2)(e) (1994).

Acco rdin gly, if and when any distributi ons of the trust corpus are made to husband, husband shall pay 32% of that amoun t to wife as child support. Sinc e husband has already exercised his option to withdraw principal from the tru st in 1 994, he thereby became subject to his obligations u nder the guidelines for that cale ndar year.

Wife next urges this court to hold that the trust principal should be considered as a valuable resource of the h usband meriting an upward dev iation from the guidelines . The provisi on upon whic h she relies states: (f) Valuable asset s and resourc es (ex pe nsive home or automobile which s eems inappropri ate for theincomeclaimed bythe obligor

) of the oblig or should be co nsidered for the purpose of imputing income and increasing the support award5 in any cas e if the court finds that equity

requires it. Tenn. Comp. R. & Regs., ch. 1240 -2-4-.04 (1)(f) (1994).

In our opinion, e quity do es not require the imputation of income to husband based on the trust ac count under the facts of this case.

We agree w ith wife, however , that the tri al court erre d in failing to impute income t o husband based up on his voluntary unemployment. The relevant provision state s:

[ I]f an obligor i s will fully and voluntarily unemployed or underemployed, child support shall be calculated based on a determination of p otential income, as evidenc ed by educat iona l level and/or

previous

work ex perience. Tenn. Comp. R. & R egs., ch. 1240 -2-4-.03(3) (d) (1994).

The tria l judg e state d in hi s Memo randum Opi nion, “It does not appear that the father is avoi ding employ ment simply t o lessen his child support . This is not an appropriate
case to increase support due to willful unemployment.” Th e trial judge’s statements in this regard suggest that he misconstr ued “wil lfully and v oluntarily unemployed ” to mean that incomemay be imputed to an oblig or only w hen he or she becomes unemployed w ith the intentto avoid c hild support obligations . Alth ough we do not deem the trial judge’s interpretati on to be unreasonable in light of th e guidelines’ use of t he wor d “willf ully, ” we respectfully disagree t hat there mus t be such an i ntent in order to impute income t o an obligor s pouse.

On the contrary, there are several cases in which courts of this state have i mputed incomebased on earning capacity to an unem ployed or underemployed obligor w ithou t any showing of an intent to avoid child suppo rt obli gations. Se e , e.g. , Luna v. Luna , 718 S.W.2d 673 (Tenn. Ap p. 1986); Harwell v. Harwell , 612 S.W .2d 182 (Tenn. App . 1980); Riley v. Ril ey , No. 03A01-9408- CH-000268, 1995 WL 311331 (Tenn. App. May 22 , 1995); Keckv. Keck , No. 03A01-9102- CH-00 069, 1991 W L 94395 (Tenn. Ap p. June 6, 1991); Gutknechtv. Gutknec ht , No. 01A01-9101- CH-00015, 1991 WL 7 9560 (Tenn. App. May 17, 1991).6

Examining the languag e of the subject pr ovision in light of the policies underlyin g the guidelines

and applicable case law, we h old that there is no requirement that there exist evidence of an obligor’ s intentto avoid su pport oblig ations in order toimputeincome to the oblig or based upon his or her potenti al income.

The recor

d reveals t hat hus band was 35 years o ld at t he timeof trial. H e graduated from hi gh school and attended colle ge for approx imately thr ee years. H usband testified that he worked as a superintendent on constructi on jobs, and ser ved as v ice-presi dent of Ford Contracting Corporation for a period of time. At trial, husband testif ied as follows:

Q. Are yo u currently

employed, M r. Ford? A. No, sir. Q. Why not? A. I don’t--I don’t see w hy I have to be. Is there a law that says I have to be employed? * * * * Q. Are there any physi c al disabili ties that would prevent you from getting a job? A. No.

Prior to his decis ion to discontinu e worki ng in 1993, hus band’s salary was $650.00
a week. It is th us appa rent tha t althou gh husband is disinclined to work, he possesses t he ability to earn a subst antial income. On remand, thetrial court shall consider husband’s previouswork

experienc e and educat ional backg round i n deter mining his po tentia l inc ome and calcu late child supp ort a ccord ingly.

Fina lly, wife seeks an increase i n alimony bas ed upon her alleg ed increased need s and husband’s inc reased income. Wife argues that the provi sions of the origi nal decree failed to provi de her wi th enough money to enable her to

mainta in the same standard of living that she enjoyed when she was married or t o rehabilitate herself by g oing back to school.

Init ially, we note that contrary to husband’s as sertion, his obligatio n to contributethe monthly paym ents for wi fe’ s hea lth a nd au to in sura nce i s alim ony in futuro, a n d is thus subject to modificatio n upon a showing of a change in circumstanc es pursuant to T.C.A.7

§ 36-5-101. Carter v . Carter , No. 01-A-01 -9005-CV-0088, 1990 WL 166596 (Tenn. App. Nov. 2, 1990).

The party seek ing modificati on of an alim ony awar d bears the burd en of proving that, since the ti me of the original award, there has bee n a subst antial a nd mat erial cha nge of rel eva nt c irc umst ance s th at was no t foresee ableat t he ti me of t he entry of the final decree. McCar ty v . McCarty , 8 63 S.W.2d 716 (Tenn. App. 1992); Elliot v . Elliot , 825 S.W.2d 87 (Tenn. App. 1991 ). The factors delineat ed in T.C.A. § 36- 5-101 that apply to the determination of theinitial al imony award also apply in determinin g whether there has been a change of

circumstanc es justifyin g a modificatio n of the award. Brewer v . Brewer , 869 S.W.2d 928, 935 (Tenn. Ap p. 199 3). The two most important factor s in awar

ding alimony are need and abilit y to pay
. Elliot , 825 S.W.2d 87.

Our review of the record reveals ins ufficient proof of a substant ial an d mater ial change of circumstances occurring since the entr y of the final dec ree. Although husband’s incomehas increase d, wife has not demonstrated to thi s court’s s atisfaction that she has experienced any materia l change in circumstances that was unforeseeabl e at thetime of the o rigina l dec ree. W e the ref ore a ff irm th e jud gmen t bel ow with r espe ct to alim ony.

The wife also asks this court to award her attorney’s fees incurred i n connection w ith her appeal. We deem this to be an appropr iate case for husband to pay one-half ofwife’s legal ex penses for this a ppeal. Therefore, on remand, the tr ial court s hall determine the amount of attorney’ s fees reasonably incurred in this appeal and enter judgment against husband for one-half of the amoun t so ascertai ned.

In accordance with the foregoing opinion, the j udgment of the tri al court is reverse d in part, affirmed in par

t, and remanded for further a nd necessary proceedings

consistent with thi s opinion. C osts on appeal are taxed to hus band.8 HIGHERS, J.

CONCUR:

CRAWFORD, P.J., W.S.

LILLARD, J.