# FILED
May 7, 1999 Cecil Crowson, Jr. Appellate Cou rt Clerk IN THE COURT OF A

PPEALS OF TENN ESSEE AT JA CKSON ANNETTE WILLIS CLAY, ) ) Plaintiff/Appellant, ) Shelby Circuit No. 149721 R.D. ) VS. ) Appeal No . 02A01-9803-CV- 00059 ) KERRY CLAY, ) ) Defendant/Appellee. )
APPEAL FROM

THE CIRCUI T COURT OF SH ELBY COUN TY AT MEMPHIS, TENNESSEE THE HONORABLE D’ARMY BAILEY, JUDGE

KIM G. SIMS Memphis, Tennessee Attorney for Appellant

J. LOGAN SHARP BATEMAN GIBSON & CHILDERS, LLC Memphis, Tennessee Attorney for Appellee

AFFIRMED IN PART, REVERSED IN PA RT AND REMA

NDED

ALAN E. HIGHERS, J.

CONCUR: W. FRANK CR

AWFORD, P.J., W.S . DAVID R. FA

RMER, J. Annette Clay ( “Wife” or “Appellant”) appeals the jud gment of the trial court which2

granted a divorce to An nette Clay and Kerry Clay (“ Husband” or “Appellee”) , awarded to Husband $17,270.00 of Wife’s total retirement benefit, awar ded to Wife $ 212.00 of Husband’s $28,460.80 workers’ compensation settlement, and failed to awar d any amount of Husband’s workers’

compensation settlement aschild support for the partie s’ children.

I. Factual and Procedur al History

The parties were marri ed on May 29, 1985. Two children were born to the parties. Wife was employed by the City of M emphis six years pr ior to her marriage and accumulated retirement during this time.

The Complaint for Divorce was filed on August 2, 1995. An Order of Reconciliation
was entered March 1, 1996 and rev oked on January 22, 1997. Husband washurt on the job in July of 1996 during the period of reconciliation. Husband was unable to w ork and remained in the home until Augus t of 1997.

The matter was tried to the bench on July 7, 1997. The Court hear d testimony and disposed of the issues of chi ld custody and support (aw arding custody to Wife), divisi on of marital real property, divisio n of Wife’s pension, and items of personal property. There
was discussion of a pending cla im by Husband for his on-the- job injury, Wife advancing
a claim that such was a mar ital asset subject to eq ual division. A final decree was no t entered at that time as the parties w ere still waiting

on Wife’ s pension information and Husband’s workers’

compensation settlement.

On January 14, 1998, attorney for Husband and at torney for

Wife appeared be fore the tria l cou rt to seek additional time t o submit a Final Decree of Di vorce and to seek guidance on issues upon which recollections differed. W ife’s p ension information was obtained and a final decree of divorce w as entered nunc pro tunc on February 4, 1998. The final decree ordered Husband to advise counsel for W ife wh en his pending workers’ compensation action was conc luded.3

On February19, 1998, Wife filed “Motion to Alter Final Decree to Give Chil dren 41% of OJI Final Settlement or in the Alte rnativ

e Set Asi de Final

Decree .” In th is moti on Wife alleged that the trial cou rt, at the original divorce hearing, accepted the agreement giving children 41% of final OJI (On Job Injury ) settlement and Wife 50% of all assets, but these itemswere no t includ ed in the Final Decree. Wife filed an affidavit s tating the same. A hearing was held on Fe bruary 27, 1998 and the tri al court found that the motion was not well taken and denied the moti on. Wife filed a Notice of Appeal on March 4, 1998.

Affidavits we r e later filed by attorney for Wife and attorney for Husband. The affidavits of the attorneys disagr ee with respect to the tr ial court’s instruction with respect to any division of the possib le aw ard or settlement of Husband’s pending workers’ compensation claim. Wife’s attorney statedthat the Court announced at the January 14, 1998 appearance that each party would receive one-half of the other’s pension, and that Wife would be entitled to 50% of H usband’s workers’ c ompensation benefits retroactiv e to July 1997.

Husband’s attorney stated in his affidavit that the court decreedthat Husband was entitled to a spousal one-half interest in Wife’s pension to the extent it accumulate d during the marriage. He stated that Wife advan c ed a claim to one-half interest in any workers’ compensation settlement at the original trial, the January 14, 1998 appearance, and the hearing on the motion to alter final decr ee in February 19, 1998 , but the cl aim was not allowed by the court. He further stated that he had urged the court that, if Wife was entitl ed to any portion of Husband’s w orkers’ compensationsettlement, theentitlement would be limited to one-half of the portion of the settlement allocable to the few

months between the cessation of temporary total benefits and the granting of div orce in July, 1997 (a pe riod of five months). Husband’s attorney unequivocally stated that the Court did not award Wife a 50% share of Husband’s eventua l award or settlement.

Wife filed a Rule 24(c) Statement of the Evidence on June 4, 1998. H usband filed
a motion to strike the statement, which was gra nted by the trial court in an order dated4

September

24, 1998 . The tri al cour t found th at the st

atement f

a iled to satisfy the req uirements of the Rule and did not convey a “fair, accurate and complete acc ount o f what transpired wi

th respect to the issues that are the basis of appeal.”

The worke rs’ com pensati on matter ultimat ely cam e befo r e the trial court again in connection wi t h certifying the recor d for appeal. (Husband was aw arded a lump sum workers’ compensation settlement in the amount of $28,672.80 on March 23, 1998). Upon reconsideration, the court recognized an interest by Wife i n Husband ’s workers’ compensation settlement to the extent that the income was attributable to the months while the parties were marri ed and subsequent to the terminati on of Husband’s temporary total benefits. An Order Modi fying Final Decree was enter ed to this effect on September 24, 1998.

II. Division of Pension

Two issues raised by Wife on appeal deal with the trial court ’s treatment of the parties’ pension s. Wife alleges tha t her pen sion fu nd was sp lit 50/50 and this was er ror because she accrued 6 years of pensi on before the marriage. Husband contendsthat the court ordered the par

tie s to split only the por tion of the pension acquired dur ing the marriage and that was

what was done. The final decree of divorce states in pertinentpart: 10. That the Court finds that the value of the pension accumulated by Plaintiff/C ou nter-Defendant through her e mpl oymentwith the City of Memphi s to be marital property subject to an equal division, and fin ds the value of that marital assetto be $34,540.25 before income taxes. Th e Court awar ds to Defendant/Counter-Plaintiff on e-half of said asse t , $17,270.12, less income taxes.

In his brief, Hu sband st ates tha t the City o f Memph is provide d a letter in wh ich i t detailed Wife’s contributions to the p ension fund duri ng the ma rriage and set forth a multiplier of 2.5 due to her leng th of servic e. (Cash-out value for mar ital period = $34,540.25). Husband asserts that had the mu ltipli er been applied to Wife’s total contributions, her

pension would have been v alued at $45,429.30. Husband claims to have5

received no portion of her pre-marriage contributions.

Wife also alleges that the tr ial court erred in faili ng to award her one half of Husband’s retirement or pension. In his brief, Husband contends that he has no pension or retirement and that is the reason Wife was not awarded such.

The letter from the City of Memphi s regardingWife’s pension is not included in the record before this court. There is no evidence in the record of any pension or retirement fund belonging to

H usband. Furthermore, Appellant did not file a Transcript of the Proceedin g s within 90 days of appeali ng the judgment, as requi red by Rule 24(b) of the Tennessee Rules of Appel l ate Proc edure. The State ment of th e Evide nce filed by Wife
was stricken from the record by the tri al court for nonconformity wi th Rule 24(c) and no other statement of the evidence has been filed by the parties. Without any evidence in the record regarding the calcul ation of Wife’s pension , and without any evi dence of the existence of Husband’s pension, this Cour t does not have before it a fair, a c curate and complete account of what transpi red with respect to thes e issues.

It is well-established tha t in the absence of a transcript of the evidence, this Court must conclusively pr

esume there was sufficient ev idence t o sup port the trial court’s judgmentand must, therefore, affirm. Reagor v. Dyer County , 651 S.W.2d 700, 701 (Tenn. 1983); Leek v

. Powell , 884 S.W.2d 118 (Tenn. Ct. App. 1994); Coakley v. Daniels , 840 S.W.2d 367, 370 (Tenn. Ct. App. 1992). Accordingly, the tr ial court’s judgment on the issues of the parties’ pens ions is affirmed.

III. Property Division and Workers’ Compensation Settlement

I n an Order Modifying F inal Decree, the trial court awarded to Wife a portion of Husband’s workers’ compensation settlem ent in an amount equal to $212.00. The trial court found Wife had an interest in the work ers’ compensation claim to th e extent that the incomeis attributable to the months while the

parties were marri ed and subsequent to the1 Although not incl uded in the r ecord on appeal, the “Orde r Awarding Workers’ Compe nsation Benefi ts” was attached t

o the Brief

of Appell ant and labeled “Exh ibit 1". N o obj ectio n wa s rais ed by A ppe llees. W e sha ll therefore t reat the workers’ compensation or der as a matter of r

ecord by sti pulati on. 6 termination of Husband’s temporary total payments.

In calculating this amount,the trial court found that any award or settlement on the workers’ compensation action is to relate to di minished capacity from March, 1997, for the remainder

of Husband’s working career, which is expected to extend throug h April, 2025 (Husband to achieve age 65 in May 2025). Of the three hundred thirty-eight(338) months between termination of temporary total benefit s and Husband achieving sixty-five (65) years of age, the parties were married for five (5) months. The cour t then he ld that Wife shall share equally w

ith Husband in the compensation for those five (5) months. Wife was awarded a sum equal to one-half of the proportio n o f Husband’s settlement as five ( 5) months bears to three hundred thir ty-eight (338) months,being 0.7396449 percent.

Wife contends that the award of $212.00 of Husba nd’s work e rs’ compensation settlementwas inequitable. Wife claims that her award of $212.00was less than one week of Husband’s compensation awar d w h ich was evaluated at $ 358.00 per week. Husband assertsthat he was receivi ng temporary payments for the majority of

time the parties were still together and the family deri ved benefit from that. Husband urg es that the $28,672.80 award can be construed only as compensation for loss of future earning

capacit y and Wife is not entitled to a share of his future earnings.

The order awarding w orkers’ compensation benefits 1 fo und that Husband was entitled to an award of 20% impai rm ent to the body as a whole , constituting eighty (80) weeks of compensation at $358.41 per week for a total award of $28,672.80. It w as further found that Husband co uld wisely manage a lump sum award and that it was in Husband’s best interest to receiv

e a lump sum award.

The workers’ compensa t ion statutes set out specific schedules over whic h a workers’ compensation award is to be paid. Injuries to cert ain limbs or areas of the body2 W hile Husband elected t o receive a l ump sum set tlemen t, s uch lump sum settlement was based upon the ori ginal or

der of $358.41 pe r week, consti tutingeighty (80) weeks of compensation.Any award of alimony should take i nto consider ation t hat thi s income imputed to Husb an d will terminate af

ter eight y (80) months. The trial

court may also consider any other rel ev ant factor s, includ ing th e rea lity that th is aw ard is designed to replace lost i ncome of Husband for the remainder of his work ing ca reer base d upo n Hu sba nd’s twenty pe rcent (20%) i mpairment to the body as a whole. 7 are pai d out over a preset amount of weeks. Injuries not enumerated in the statute are apportioned to the body as a whole, which has a value of 400 weeks, and are paid out over the amount of time of 400 weeks multiplied by the impair ment percentage. In the case at hand, 20% impairment, with a v alue of 400 weeks, results in c ompensation payments for
a period of 80 weeks. Husband then had this amount converted to a lump sum pay ment.

Based upon these figures provided in Husband’s worker s’ compensation order, the
sum which Husband was e ntitled to receive dur ing the marriage w

ould be equal to t h e proportion of Husba nd’s sett lement a s five (5) months bears to eight y (80) weeks, rather than the proportion as

five (5) months bears to th ree hundred thirty-eight (33 8) months, as set out by the trial court . While the workers’ compensation award does

relate to Husband’s diminish ed capacity for the remainder of his working career, pursuant to the worker s ’ compensation order Husband was entitled to receive $358.41 per week for a period of 80 weeks.

We find that the trial court erred in calcula ting Husband’s workers’ compensation incomefor said period of time and methodically dividing said amount eq ually between the partie s as marita l propert y. The over all purpo se of worke rs' compe nsation law i s th e replacement

of lost wages. See Van Hooser v. Mueller , 741 S.W.2d 329, 33 0 (Tenn.1987). In keeping with this general principa l, all wo rkers’ compensation income r eceived by Husband should ha ve been treated as income available for payment of alimony and child support (as will be discussed more fully later in this opinion). As the trial court err ed in its treatmen t of Husband’s workers’ compensation income, we reverse the aw ard of $212.00 to Wife and remand this issue to the trial court fordetermi n ation of Wife’s en titlement to alimony considering Husband’s workers’ compensation award ($358.41/w eek) as additional income of Hus band. 23 Tennessee Code Annotated §50-6-223 has been amended effect ive May 19, 1998. While much of

the language is changed, the amendment does not appear to clari fy the issue presented i n this case. 8 IV. Child Support and Workers’ Compensation Settlement

Wife’ s final contention is that the children should receive 32% of the workers ’ compensation settlement as child support. The trial court set child support a t the sum of eighty-two ($82.00) dollars per month for each minor

child. The trial court did not cons ider Husband’s workers’ compensation settlement as income for the purposes of settingsuch child support. Husband asser ts that the trial court was correct and that Tenn. Code Ann. §50-6-223 exempts com pensation cl aims from cla ims of creditors with tw o exceptions that do not apply in this case. The Child Support Guidelines state in pertinent part: Gross income shall

include all

incomefrom any

source (before taxes and other

deductions), whether ear ned or unearned, and includesbut is not limited to, the following . . . workers’ compensation benefits whether tempor ary or permanent . . . Tennessee Department of Human Services Child Support Guidelines

Chapter 1240-2-4- .03(3).
Tennessee Code Annotated §50- 6-22 3 3 deals with the assig nability of compensation claims. §50-6-2 23 Exemption and n onas sign abil ity o f

compensation c laims - Exc eptions to nonassignability - (a) No claim for compensation under this chapter shall be assignable, and all compensation and claims therefor s hall be exempt from claims of creditors. (b) Notwit hs tanding the provisions of subsection (a) to the contrary, the court may assign up to fifty percent (50%) of such compensation made by period paymentsto fulfill a valid presentand pro spect ive child support obli gation; provided, that such assig nment is administered in accor dance with §50-2- 105. However , no such assignment may be made for arrearage in child su pport. (c) Notwithstanding the provisions of subsect i on (a) to the contrary, the court may assign upto twenty percent ( 20%) of a lump sum settlement to satisfy a judgmen t for ar rearage in child support.
Subsection (a) states that workers’ compensation is not assignable and is exempt from claims of creditors, w hile sections (b) and (

c) spell out

the exceptions to that ge neral principle. The l anguage of section (b) allows a court to assign up to 50% of workers’9

compensation benefits made by periodic pay ments to fulfill a present and prospective child support obligation. Nowher e in the statute does it specifically state that a l u mp sum settlementcan be simil arly assi gned. Some courts have thus refused to c onsider a lump
sum workers’ compensation settlementas income for the purpose of setting child support. However, such a reading of this statute would be cont rary t o the spirit of the statute and contrary t o public p olicy.

The objects of the Workers’ Compe n sation Act prohibiting assignment of compensation claims and exempting them from creditors claims, are to insure application of awards to necessities of injured employees or thei r dependents and prevent them from becoming public charges

. Prime v. Dunaway, 50 S.W.2d 223 (Tenn 1932). Although the statute is worded in terms of periodic workers’ compensation payments, it is illogica l t o conclude that the legislature i ntended lump sum awards to be ex empt when used for the same purpose.

The provision s found in the guid elines an d Tenn. Code Ann . §50-6-2 23 we r e addressed by the Tennes see Supreme Court in Gonsalves v. Robert s , 905 S.W.2d 931 (Te nn. 1995). In that case the trial court refused to consider the father’s wor kers ’ compensation permanentdisability benefits as income and the wif e appeal ed. Ultim ately, the Supreme Court reversed the lower courts and hel d t hat w orkers’ compensation permanentdisability benefits w ere income for

the calculation of

child support obligations. Id . at 932.
Although the Gonsalvescase dealt with periodic w orkers’ compensation payment s rather than a lump

sum settlement, the Supreme Court spoke on the purpose of the child support except ions to the gene ral rul e of nonas signab ility . The Cou rt fo und that t he legislature enacted Chapter 224 of the Public Ac ts of 1991, adding subsection (b) and (c) to Tenn. Code Ann. §50- 6-223, in rec ognition of the du ty to supp ort and th e pervasive tendency in recent times by parents responsible for child s upport to av oid that responsi bility.10

The Illinois A ppellat e court ad dressed t he issue o f lump su m wo rke rs’ compensation settlementsand concluded that a person’s lump sum work ers’ compensation settlement
was income for the purposes of determining child support. The court reasone d that it would be illogical to treat

the two methods of payment differently

. To reach this unreasonable res ult, one must conclude that the legislature in t ended to require a p arent who elects to receive a workers’ compensatio n award in the form of periodic payments to include theaward as income for the purposes of meeting his child support obligations, while, at the same time, permitting another paren t, mer ely because he elects a lump s um workers’ compensation award, to escape the duty o f applying the award to his child support obligati ons. Statutes are to be construed in such a w ay that they have a reasonable meaning and are accorded an int erpretation that will not lead to absurd consequences. In re Marriage of Dodds , 583 N.E.2d 608 (Ill.App. 1991).

As stated above, the object of the Tennessee statute is to insure the worke rs ’ compensation award will be availa ble f or use by the injured party and his dependents. Subsections(b) and (c) of the statute ex cepting child support from the gene ral r ule of nonassignability

were enacted in recog nition of a parent’s duty to s upport his or her children. These goals are the same whether the injured w orker receives peri odic payments or elects to receive a lump sum settlement.

Husband could have taken his settlement in periodic payments. Instead, Husband elected to transform his right to receive periodic pay

ments into a lump sum present day cash value pursuant to Tenn. Code Ann . §50-9-229. Husba nd shou ld not be allowed to escape the duty o f applyin g this award to his child support obligati on merely because of this election . The ele ction to r eceive a lump sum settlement rather than per iodic payments should not eliminate Husband’s duty to pay child sup port on that amount.
Furthermore, it is the State’s polic y that parents support thei r children. If the parties had not divorc ed, the c hildren wo uld have shared, at least in part, in Husband’s improved economic status. As recogniz ed in Nash v. Mulle , 846 S.W.2d 803, 80 4-05 (Tenn. 1993),
one purpose of the gu idelines is to ensu re that whe n parent s live separate ly, the economic11

impact on the children is minimiz ed to the extent that either parent enj oys a higher standard of living, the childr en share in that higher st andar d. Nash furt her held such purpose consistent with the l ong established common law rul e requiring a parent to provide support in a ma n ner commensurate with his means and station in life. Klemets rud v. Klemetsrud , No. 02A01-9306-CV-00150, 1994 Tenn. A pp. LEXIS 565, at *4 (Tenn. Ct. App. October 12, 1994).

For all the above stated

reasons, this Court holds that Husband’s lump sum workers’ compensation settlem ent is i ncome for the purp

oses of d eter mining Husband’s child support obligation.
V. Calculation of Child Support Obligation

Husband argues that the award is compensation for reduced earning capacity for 338 month s. Th e net received by Hus band proved to be $22,938.24, the eq uivalent of $67.8 6 for each of those months. Husband arg ues child support on this amount woul d equal approximately $9.27 per month per child under the Child Support Guide lines.

It is true that the award is intended to compensate Husband for red uced earn ing capacity over the remainder of his workin g ca reer. However, pursuant to the workers’ compensation statutes, and as set out in the order awarding workers ’ compen sation benefi ts, Husband was entitled to an award of 20% impairment to the body as a who le , constituting eighty (80) weeks of compensation at $358.41 per week.

Had Husband not

chosen to commute the periodic payments to a lump sum awar d,
a court would be

free to assign up to 50% of such compensation made by perio d payments to fulfill a valid present an d prospective child s upport obligation pursuant to Tenn . Code Ann. §50-6-223(b). While the periodic payments constit uting eighty w eeks of compensation
are equally intended to compensate Husband for reduced ea rn ing capa city over the remainder

of his working career, the legislature ch ose to make s uch periodic payments4 This approach may not work in the ar ea of settl ements of disputed workers’ compensation cl aims. Tennessee Code Annotated §50-6 -206 gives i nterested par ties t he right to settl e all matte rs of compensation between themselves. In these case s it may be difficult, or impossible, fo r the trial cour t to ascert

ain the equivalen t period ic pay ments. As such a matter is no t before t his Court, we leave t hat issuefor another time. 12 subject to income assignment for child support. We see no reason to calculate the amount of support due differently when based upon periodic payments or a l ump sum settlement.

In setting Husband’s chil d s upp ort obliga tion, the trial cour t will, in ess ence, ha ve to convert th e lumpsum settlement back into the equivalent periodic payments. 4 This can generallybe done by looking to the original order awarding w orkers’ compensation. After determi ni ng the correct monthly award, the appropriate child support percentage should be applied to this amount. The result will be the obligor’s monthly

support obligation. If the obligor has other monthly income, the child supp ort obligation shall be based upon the obligor’s total monthly

income.

This process is necessary to arrive at the correct child support oblig ation. The trial court shal l not merely

apply the appropriate child suppor t percentag e to the entir e lump
sum. Such a procedure would r esult in the overpayment of child support in situati ons where the obligor’s child su pport obligation is set to terminate before the period ic worker s’ compensation payments would terminate.

In the recent case of Hobbs v. Hobbs , No. 01A01-9808-CH-00418, 1999 WL 86973 (Tenn. App. Feb. 23, 1999) this Court dealt with this issue of whether a lump sum workers’ compensation settlement is income for the purp oses of child support. In dicta explaining why the child support percentage should not be applied directly to

the lump sum amount this Court gave the foll owing example:

Take for example an obligor w

ith a twelve (12) y

ear old child, who receives a lump sum workers compensation award designed to compe nsate hi m for the next fif t ee n (15) years. The obligor’s child support obligation will legally terminate in six (6) years when the chil d reaches age eighteen (18 ). If the trial court were to apply the child support percentage to the entire lump sum, the child would be r ec ei ving a share of obligor’s incomef o r the entire fifteen (15) year award, rather than the six (6) years t

o which he is entitled.13

Id. at *4. This Court wishes to cl arify that the language found i n that exam ple “designed to compensate him for the next fifteen (15) years” envisioned an award w hich, when broken down into the original periodic payments, would extend over a period of fifteen (15) years. Said fifteen (15) year period does not represent the

period of time betwee n injury and age sixty-five (65). It should also be noted that this particular example, while sound in pri nciple, could only occur in the case of permanent total injury. Al l oth e r workers’ compensati on payments are made during a pr escribed period of time not to exceed four hundred (400) weeks, or approximately 7.7 years.

This Court is mi ndful that Hus band may dimi ni sh or deplete the lump sum settleme nt before his children reach th e age of majority and before his child suppo r t oblig ation is fulfilled. We theref ore note that, after determining the correct monthly child support obligation, the trial court may wish to ca lculate the total amount of support du e (based upon the workers’ compensati on award) for the remainder of the children’s minority and award a lump sum to the obligee if the court believes there is a potential for loss of the funds. Naturally, the obligor would remain ob liga ted to pay monthly chil d support in the appropriate percentage based upon his other monthly income.

VI. Conclusion

The judgmentof the trial court with regard to the division of the parties’ pensions is hereby affirmed. The judgment of the trial cour t regarding the divisio n of H usband’s workers’ compensation award and regarding Husband’s child support ob ligation is rev erse d and remanded fo r further proce edings consistent with this opinion. Costs of this appeal are taxed equall

y agai nst Hus band and Wife,each li able for one-half, forwhich execution may issue if n ecessary. HIGHERS, J. CONCUR: CRAWFORD, P.J., W.S.14

FARMER, J.