# FILED

January 28, 1998

Cecil Crowson, Jr. Appellate C ourt Clerk IN THE COURT OF AP PEALS OF TENNESSEE WESTERN SECTION AT JACK SON

ELLEN MARIE MUZI M ARCUS, )

) Plaintiff/Appellee, ) Shelby Circuit No. 149744 R.D. ) v. ) ) Appeal No. 02A01-9611-CV-00286 LOUIS EDWARD BERG MARCUS, ) ) Defendant/Appe

llant. )

APPEAL FROM THE CIRCUIT COURT OF SHEL BY COUNTY AT MEMPHIS, TENNESSEE

THE HONORABLE ROBERT L. CHI LDERS, JUDGE

For the Plaintiff/Appellee/Appellant : For the Defendant/Appellant/Appellee : Kay Farese Turner Stevan L. Black Charles W. McGhee Kimberly Harris Jordan Memphis, Tennessee Memphis, Tennessee

AFFIRMED IN P

ART, REVERSED IN PART AND REMA

NDED

HOLL Y KIR BY LI LLA RD, J.

CONCURS: W. FRANK CRAWFORD, P. J., W.S.

DAVI D R. FAR

MER, J.OPINION

This is a divorce c

ase. Both partie

s appeal certai

n determinations regarding c hild support, ali mon y, the division of property, and attorney’s fe es. We affirm in part, reverse in part and remand. De fe ndant/Appellant

Louis Marcus (“Husband”) and Plaintiff/Appellee Ellen Marcus (“Wife”) were married f

or approximately

twenty y ears, and had a fiftee

n year old so

n, Daniel. At the t ime of the divorce, Husband was fifty-eight y ears old and Wife was fifty-two years old

. Husband stipulate

d that he was at fa

ult for the divorc

e based on inappr

opriate marital c

onduct. At the time of the marriage, Wife hada college degree and a masters degree in library science. Wife’s work history during the marriage was sporadic . At various times during the

mar riage she was employed a s a librarian, a p

rogram director

for a public tele

vision stati on, a secretary, a

substitute teacher, and an owner of a small needle work business. Many years during the marriage Wife e

arned little

or no income. Since November of 1994, Wife has been employed in a clerical position by Memphis University School (“MUS”), a private boys ’ school, and earns approximately

$1,500 per month. Because Wife is employed by MUS, the parties’ son’s tuition at MUS is free. In addit

ion, Wife earns a

pproximately $450 p

er month from a

sewin g business that she owns. Husbandhas a college degree and has been the primary wage earner f or the family. Throughout

the marriage, Hu

sband was primar

ily involved in the r

etail clothing business. Husband

was employed by Majest

ic Athletic Wear

(“Majestic ”) in Pennsylvania in 19 87. Ultimately Husband

was promoted to President, and earned an annual sal a ry of $185,000 plus bonuses. Husband’s employment

with Majestic was terminated in 1992. Husband then accepted a jo b in Memphis as Senior Vice-President o

f Sal es and Marketing for Wang’s International (“Wang’s”). In this position, he earned between $125,000 and $150,000 but his employmentat Wang’s was terminated in 1994. After a search for oth

er employment, Hu

sband formed his ow

n Internet bus iness, Magibox Incorpora ted (“Ma gibox”). Husband owns ninety (90%) of the shares of Magibox. The parties dispute Husband’s earnings from Magibox. Husband testified that he draws $4000 per month from Magibox. Wife asserts that Husband began drawing at least $8,000 per month from Magibox, and that this amountdropped to $4,000 per month after the parties had a discussion about child support and alimony.2

Following an extensive hearing, the trial court divided the marita

l estate so that Wife

would receiveapproximately sixty percent of the marital property and Husband would receive approxim ately

forty perc

ent. Husband was o

bligated to make

monthly child

support pay

ments o f $1,185, based on the trial court’s determination that his “ear n ing ca pacit y” equal ed $97 ,200. In addition, Husband was ordered to pay Wife alim ony pay ments of one thousa

nd dollars per mont

h for three years. Husband was also ordered to mai ntain a $100,000 life insurance policy for three yearsfor the benefit of Wife in order to secure the child support and alimony payments. Finally , the trial court ordered

Husband to pay

Wife $20,000 as a “

partial award”

for attorney ’s fees. From thi s order, both parti

es appeal. On appeal, Husband

contends that the t

rial court erre

d in basing his chil

d support obligations

on his earning capacity instead of his actual income. Husband ar gues that the trial court

utilized the earning capacity f

ig ure without making a threshold determination that he was willfully and voluntarily

underemplo yed. Husband al so challenge s the tri al court’s allocation of the marital estate. He asserts that th

e estate was divid

ed inequitably

and that many of the determinations made to assess the value of the estate were based on improper calculations. Hu sband further contends that the award of rehabilitative alimony was err o r. He als o challenges his obligation to mainta in a $100,000 life in

surance policy

. Husband argue

s that this amount of life insuranc

e secures more t

han his alimony

and child support o

bligati ons and is no t feasible in light of his fina

ncial status. Finally, Hus band maintains tha t the trial court e

rred in awarding Wife a

ttorney’s f

ees. On appeal, Wife arg

ues that th

e trial cou rt e rred by no t aw ardi ng he r per man ent ali mon y. Wife also contends that the t rial court erre

d in classify

ing certain

stock as marital property instead of separate property owned by Wife. Husbandfirst argues that the trial court erred in awarding child support based on his earning capacity rather than his actual earnings, where there was no threshold finding that he was willfully and voluntarily

underemploy

ed. Our review o

f a child support or

der is de novo on the record. The trial court’s findings are presumed correct, “unless the preponderance of the evidence is otherwise.” Tenn. R. App. P 13(d). No presumption of correctness attaches to the trial court’s conclusions of law. Carvel

l v. Bot toms , 900 S.W.2d 23, 26 (Tenn. 1995).3

In setting child supp

ort, courts l

ook to the guidelines promulgated by the Tennessee Department

of Human Services. Tenn. Code Ann. § 36-5-101 (1996). Un der the guidelines, the amount of child support is calculated based on a percent ag e of the obligor spouse’s net income. Tenn. Comp. R. & Regs. 1240-2-4-.03 (1994). The percentage for one child is twenty-one percent of the net income. Id. The guidelines further state: If an obl igor is willfully an d voluntarily unemployed or underemploy ed, child support shallbe calculated based on a determination of potential in come, as evidenced by educational level and/or previous work experience. Id. § 1240-2-4-.03(d). In determining Husband’s child support obligation, the trial court’s Final Decree states that “based on Defendant’s past earning history, the Court finds that he has an earning capacity of at least ninety-seven

thousand two hundred dollars per year ($97, 200).” Based on this finding, child support payments were set at

$1,185 per month, which is approximately twenty-one percent of $97,200. The trial court’s oral ruling also indicates that the child support award was determined after

“considering the earning capacity” of Husband. Husbandargues that the

trial court erre

d by basing

his support pay

ments on his earni ng capacity rather than his actual net income because the trial court failed to make an initial finding that he was “willfully and

voluntarily unemployed or underemploy ed.” Id. Husband argues that there is no evidence in the

record that he ha

s been willfully

or voluntarily

underemp loyed. I

n fact, Husbandmaintains that he made efforts to seek employment before starting his ow n business , Magibox, approximately two years before the he aring. He contends that for t he pas t nine months he has drawn only $4,000 per month from Magibox, and that his ye arly net income is $48,000. Wife argues that there was sufficient evidence for the trial court to conclude that Husband had hidden income and that he actually made more than $48,0 00. Wife notes that Husband drew $8,000 per month from Magibox, during June and July, 1995, and claims that this amount decreased only after the partie

s had a conversation regarding child support in the course of an attempted mediation of their d

ivorce. Wi

fe also p oints to evidence in the record that Husband had made business deductions for personal expenses. She emphasizes that the trial court’s determination of child support was b

ased on its assessm

ent of the credib

ility of the pa

rties. The trial court’s aw

ard of child suppo

rt in this case was

clearly based on Husband’s “earning capa cit y” or potential income, rather than hidden income. The trial cou rt d oes not allude to an4

alleged attempt by Hu

sband to dis guise his actual net income. I nstead, the trial c

ourt refers to Husband’s “past earning history.” Indee d, the record does not cle arl y show that Husband had “hidden income” in Magibox; Wife’s own expe rt admitted at trial that he could not identify other money in Magibox available to Husband. The $97,200 figure utilized by the trial court in calculating child support reflect

s a finding of earning capacity or potential income , rather thanhidden income. Nothing in the record indicates that the trial court determined that Husband was “will

fully and voluntarily” underemployed. Tenn. Comp. R. & Regs. 1240 -2-4-.03(d). In fact, the record does not contain evidence that would support such a finding. To c a lculate a child support award based on earning capacity rather than a ctual net income, there must be a threshold finding that the obligor parent is wi llfully and voluntarily underemploy ed or unemployed. Id.; Stephenson v. Stephenson , No. 01 A01-9 212-C H-004 88, 19 93 WL 2 9 8908, *4 (Tenn. App. Aug. 6, 1993). Conseq uen tly, the trial court’s award of child su

pport payme

nts in the amount of $ 1,185 mu st b e reversed. Husbandargues that his annual net income is $48,000, based on m onthly draws of $4,000 from Magibox. Consequently, he proposes that he should be obligated to pay $614 per month, based

on the guidelines. The trial court’s findings of fact do not include a determinat i on of Husband’s actual net income. The record contains conflicting evidence regarding Husband’s actual income and assertions of hidden income. Therefore, we remand this case t o the trial court to determine Husband’s actual net i

ncomeand make an award of child support based on Husband’s actual net inc ome rat her t han pot ent ial inc ome or ea rni ng ca paci ty. Husbandnext appeals the trial court’s division of the marital estate. The trial court allocated approximately sixty percent of the estate to Wife and forty percent to Husband. A property division award is reviewed de novo wi th a pr esumption that the trial court’s factual findings arecorrect, unless the preponderance of the evidence is otherwise. Jones v. Jones, 784 S.W.2d 349, 352 (Tenn. App. 1989); Tenn. R. App. P. 13(d). The trial court’s division will be altered only if the tri al courtmisapplied the law or if the evidence preponderates against the trial court’s finding. Wade v. Wade, 897 S.W.2d 702, 715 (Tenn. App. 1994). In Harrington v. Harrington, 798 S.W.2d 244, 245 (Tenn. App. 1990), it was held that the “ownership of the marital estate should be presumed to be equal unless proven otherwise.” Our5

Court has also stated in Barnhill v. Barnhill, 826 S.W.2d 443, 449 (Tenn. App. 1991): [M]arital property sh

ould be equitably

divided without reg

ard to fault. An e

quitable division, however, is

not necessarily an equal one. The trial courts are afforded wide dis cret ion in d ivi din g the int eres t of part ies in j oin tly- own ed p rop ert y. In dividing the marital estate, trial courts are guided by the factors set forth in Tennessee Code Annotated § 36-4- 121 (1996). This sta tute states that t he trial court should consider factors such as the length of

the marriage, the age, employability , and earning capacity of the parties, and the contributions of each party to the marriage. Id. Husbandcontends that these factors indicate that the estate should be divi ded equ all y. Husbandnotes the marriage lasted for twenty-one y ears, Husband is older

and in poorer health than Wife, and Wife has a more advanced education. Husband also maintains that the trial court erred by determining his earning capacity to be $9 7 ,200 per year rather than the $48,000 per y ear he currently makes. The evidence prep ond erat es i n fav or o f th e tr ial cou rt’ s di vis ion of t he p rop ert y. The record indicates that Wife essentially gave up her career during the marriage. At the time of trial, she was earning a monthly income of $1,1583.33 while working for MU S; this benefits bo

th parties because Daniel may attend t

he school with fre

e tuition. The evide

nce clearly

demonstrates t

hat Husband enj oys a greater “earning capacity ” than Wife and that Husband ha s a far greater ability to accumulate “future acquisitions of capital assets and income.” Tenn. Code Ann. § 36-4-121(c)(2) and (4). Therefor

e, the trial cour

t did not err in its ove

rall equitable

division of the marital estate. Husbandalso disputes seve ral aspects

of the trial court’s division of the property. Husband first challenges the trial court’s valuation of Magibox. The court valued the business at

$84,000 and awarded ninety percent of this amount ($75,600) to Husband since he owns ninety percent of the business. The trial court’s valuation was based on an appraisal of the business performed by Wife’s expert, David Harris (“Har ris”). Harris appraised the business by using sixty perc ent of the company’sasset value and forty percent of its earnings value. Harris used only the last eight months of Magibox’s earnings, annualized to a period of one year, to ca lculate its earnings value. Husbandalleges that the trial cour t erred by relying on Harris’ appraisal. He cites Blasing ame v. American Materials, Inc., 654 S.W.2d 659 (Tenn. 1983), for the proposition that the trial court should have considered only Magibox’s asset value. Blasingame discusses three different valuation methods: the asset value method, the earnings value method, and the market value method.6

Id. at 665-67. The parti es agree that, in the present case, market value should not be considered since Magibox is a

closely held corporation. See Wallace v. Wallace, 733 S.W.2d 102, 107 (Tenn. App. 1987). Husbandasserts that Blasing ame holds that asset value is the only method of valuation that should have been c onsidered in this case. Blasingame states that “any valuation of earnings that does not take into consideration a minimum of three y ears corporate

earnings experience should be reje cted, unless the expert opinion clearly and convincingly establishes the validity of a lesse r period.” Blasingame, 654 S.W.2d at 665. Since Magibox had not existed for three y ears at the time of trial, Husbandmaintains that Har ris’ appraisal do

es not “clearly

and convincingl

y” demonstr

ate that the use of the earnings value method for a lesser period was accurate. Id. Husband emphasizes that Harris used only the last eight months of ea rni ngs, even tho ugh M agib ox h ad ex ist ed fo r tw ent ytwo months at the time

of the trial. Because the valuation of marital property is a question of fac

t, the “trial cour

t’s decision with regard to the value of a marital asset will be given great weight on appeal.” Wallace, 733 S.W.2d at 107. After reviewing the record, we find that there is sufficient evidence by which the trial court could have “clearly

and con vin cin gly” found that Harris ’ appraisal was b ased on an adequ

ate length of time. To explain his use of earnings value as forty percent of his valuation of Magibox, Harris testified: Earnings

. . . ge nerate the primary value in a business. A business is just an investment, and the only thing the shareholders have to look to is either a liquidation of the as s ets or a future earnings or dividends; . . . so if the company is making money, generating earnings, even for a short period of time, that can’t be ignored. The fact that Magibox is primarily a service company with minimal tangible assets must be a factor in determi ning whether the u se of the earning

s is appropriate.

Moreover, the ri

sk of utiliz

in g earnings value in light of

the company’s short earning history is ameliorated by the fact that earnings value was only forty

percent of

Harris’ overal

l valuation. Husba

nd had ample oppor

tunity to cross examine Harris and provide counter vailin g expert testimony. Considering the record as a whole, sufficient evidence exists t

o support the trial c

ourt’s decision to

value Magibox bas

ed on Harris’ appraisal. Husbandalso challenges the trial court’s decision to include a $3,750 loan to Magibox in the marital assets awarded

to Husband. This fig

ure equals the re

mainder of a $17, 500 lo an t hat7

originated

from Smith Barney that had not been paid back as of the date of the trial. Husband contends that this loan was also considered by Wife’s expert, Har

ris, in appraising

Magibox. Thus, Husbandargues that the value of this loan was erroneously counted twice in determining the amount awarded to Husband. There is conflicting testimony on this iss ue. The record indicates that the trial court was made fully aware of th

e parties’ argu

ments while rende

ring his ruling. Based on a thorough review of the record, we cannot conclude that the evidence preponderates against the trial court’s finding that Harris’ appraisal of Magibox included the $3,750 loan. Husbandnext contends thatthe trial co urt erred by char acterizin g a debt owed to Magibox by one of its former customers as a marital asset and awarding it to Husband. At the time of trial , N ew Horizons, a customer, owed Magibox the sum of $10,000. Because Husband own s ninet y percent of Magibox, the trial court awarded $9,000 of this debt to Husband. Husband asserts that this debt is not a marital asset but insteada business asset owed to the c ompany, and

that it is contingent since it was in litigation. Wife counters t hat through out the li tiga t ion she characte rized the debt as a

marital asset. From our examination of th

e testimony o

f Wife’s expert Ha

rris on his apprai

s al of Mag ibox, this debt was not included a

s a business

asset. Had this debt been included as an asset of Magibox, the valuation of Magibox would have increased by $10,000. Therefore, any error by the trial c

ourt in characterizing this debt as a marital asset rather than business debt is harmless. Husband next contends that the trial courterred by considering the gross value of a joint bank account owned by the parties, even though the parties stipulated that the net value should be used. The parties maintained a joint bank account with Prudential Securities that had a gross value of approximately

$59,828. Both par

ties were respon

sible for a loan a

gainst the account in

the sum of approximately $17,452. Husband claims that the parties stipulated t hat the net value of $42,376.18 should be used. However, the trial court in its Final Decree, calculated the account based on grossvalue and assigned $38,639.91 of the account to Husband and $21,188.09 of the account to Wife. In its oral ruling, the trial court also held that Husband was responsible for the $17,452 debt against the account. As a result, Husband contends that he received less than a forty-three perce nt share of the mar

ital estate conte

mplated by th

e trial court.1 This provision state s as follows: "Marital pro pert y" means all real and personal property, both tangible and intangible, acquired by either or both s pouse s during the cour se of the marriag

e up to the date of the final divorce hearing and owned by either or both spouses a s of the date

of filing of a complaint for divorce, ex cept in the case of fr audulent convey

ance in anticipation of filing, and including any property to which a right was acquired up to the date of the final divorce hearing, and valued as of a date as near as reasonably possible to the final d

ivorce hearing da

te . Tenn. Code Ann. § 36-4-121(b)(1)(A) (emphasis added).

2 Wife argues in her brief that there was no stipu

lation, but the rec

ord reflects a

stipulation. 8 In discussing the percentage of the marital estate awarded to each party, the trial court stated onl y, “I have those figures roughly at about almost fifty

-seven percen

t of the assets, mar

ital assets to Mrs. Marcus and about forty-three per cent to Mr. Marcu s.” Without consider

ing the debt, Husbandwas allocated 43 .3% of the marital estate. After f

actoring in the debt, Husband was allocated 39.6% of the estate. Neverth eless, the record clearly indicates that counsel for the parties discussed the debt with the trial judge while the ruling was made. The trial court was aware of the issue regardin

g the debt and the

valuation of the a

ccount in making its ruling, and we find that the trial court’s determination on this issue was not error. Husbandalso contends that the trial court erred by valuing a Union Planter’s B ank account assigned to him at $1,752.89. This value was appraised by Wife’s expert, Har

ris, approximately one month before the trial. A few days before the trial, Husband filed a Rule 14 aff idavit which listed

a balance of $284 in the account. Husband argues that the trial cou r t erred by not relying on the value closest to the date of the hearing as set forth in Tenn. Code Ann. § 36-4-121(b)(1)(A). 1 However, apart from Husband’s Rule 14 affidavit, the record contains no documentation of

a balance in the account other than the $17,752.89 utilized by Ha rris. The trial co

urt did not abuse its discretion in determining that Harris’ valuation of the account was more credible than Husband’s valuation. Husbandargues that the trial court erred by failing to a wardhim certain items of artwork of the marital estate, contrary to the parties’ stipulation. 2 In Mast Advertising & Publishing, Inc. v. Moyers , 865 S.W.2d 900, 903 (Tenn. 1993), the Court stated that “[l]egitimate stipulations that are within the range of poss

ibly true facts

and valid litigation

strategies cann

ot be ignored or c

ast aside.” The Co urt held that “stipulations will be rigidly enforced by the courts of this State.” Id. In it s9

ruling, the trial court

did not specifically address the artwork; it appears to be included in the trial court’s ruling that Wifewould be awarded “[a]ll furnishings, furniture, household goods, accessories and appliances lo

cated in the marital residence.” Since nearly all of the artwork had remained the marital home in

Wife’s possession, this resulted in Wife being awarded the artwork, contrary to the parties’ stipulation. The record does not include a valuation of the artwork. Therefore, the record do es not indicate that allocating the artwork in accordance with the parties’ stipulation woul d materially

alter the overa

ll pro perty division alloc ation implemented b

y the trial court. Consequently, we modify the property division to award the artwork in acco rdance with the p

arties’ stipulation. Both parties appeal the trial court’s award of rehabilitative

alimony to

Wife in the amount of $1,000 per month for three years. Husband contends that Wife should not receive any alimony whatsoever. Husband notes that Wife has a Master’s de gree and has be

en in the workforce f

or some time. He observes that the trial court stated in its oral ruling t

hat Wife is capable

of finding a better job than her current one. Husband also maintains that his ability to

pay is less than perceived by the trial court, in light of the trial court’s determination that his earning capacity was $97,200. Wife argue s on appeal that she should have been awarded permanent alimony. Sh e emphasizes that she was fifty-two y ears old at the time

of the trial,

has been sporadically employed,

was accustomed to livin g comfortably

, and that Husband

stipulated th

a t he was guilty of inappropriate ma

rital conduct. Appellate r eview of the tria

l court’s award o

f alimony is de novo on the record wit h a presumption of correctness of its factual de termin ations. Tenn. R. App. P. 13(d). Decisions “concerningwhether alimony should be awarded and, if so, the amount , dep end upon the unique facts of each case.” Luna v. Luna, 718 S.W.2d 673, 675 (Tenn. App. 1986). The intent of alimony is for “a spouse who

is economically

dis ad vantaged, relative to the other spouse, be rehabilitated whenever possible by the granting of an order for pay ment of rehabilitative, temporary support and maintenance.” Tenn. Code Ann. § 36-5-101(d)(1) ( Supp. 1997). In this case, the evidence supports the trial court’s finding tha t W ife is capable of finding employment

m ore lucr ative than her cu rrent employ

ment at MUS. Howeve

r, both parties be

nefit from her current employment since their fifteen-ye ar-old son is able to attend the school tuition-free. The evidence supports the trial court’s award of rehabilitative

alimony for

three yea rs as a reasonab

le10

determination. Husbandalso appe als the trial court’s mandate that he maintain a $100,000 life insurance policy for three y

ears to secure h

is alimony

and child support o

bligations. Husba

nd argues that th

is obligation is excessive for a fifty-eight y ear old man with a heart condition. He reiterates the trial court’s error in calculating the amount of the child support award, and notes that the policy amount exceeds the amount that the polic y was intend

ed to secure. Husband also asserts that the trial court

er redby failing

to provide for a g

radual decline i

n the policy a

mount as his support o

blig ation s decrease. In light of our reve

rsal and remand f

or a determinatio

n of the appropria

te amount of child support, we also reverse the trial court’s ruling on the amount of the life insurance policy and remand for a determina

tion of the appropr

iate amount in line w

ith the recalcula

tion of the child sup

port. Husband’s final issue on appeal is the trial court’s order that he pay $20,000 toward Wife’s attorney’sfees. Husband contends that this was inappropriate since Wife received $267,444 of

the marital estate, had a separate estate in excess of $50,000, and is currently employed. Husband cites Fox v. Fox, 657 S.W.2d 747 (Tenn. 1983). In Fox , the Supreme Court held: The right to

an allowance of legal expenses is not absolute. It is conditioned upon a lack of resources to prosecute or defend a suit in good faith.

This rule is to enab

le the wife, when destitute of means of her own, to obtain justice an d to prevent its denial. If a spouse does not ha

ve separate pro

perty of he

r own which is ade

quate to defray the expenses of suit

, certainly she should not be de

nie d a ccess to the cour

ts because she is un

able to procure c

ounsel. Id. at 749 (internal citation omitted). Wife respond s by citing Hazard v. Hazard, 833 S.W.2d 911, 917 (Tenn. App. 1991), which held: In the property division, Wife will receive approximately $118,000 and has only an earning capacity at present of about $35,000 per year. Husband, on the other hand, earns over $200,000 per year an d has the educational bac kground and tra

ining to increase his earnings co

nsiderably

in the future. A la

rge p art of the marita

l estate awarded to Wife consisted of the furnishings of their home, and there were very few assets readily convertible to cash. Wife should not be required to spend the assets that could help as a future source of income in order to pay attorney fees. “The decision to award attorney’s fees to a party in a divorce proceeding is within the sound discretion of the trial court and will not be disturbed upon appeal unless the evidence preponderates against such a decision.” Storey v. Storey, 835 S .W.2 d 593, 597 (T enn. A pp. 19 92). In the present case, the preponderance of the evidence does not indicate that the trial court abused its discretion by11

requiring Husband to compensate Wife for a portion of her attorney’s fees. Wife’s earning capacity is substantially less than Husband’s, and Husband stipulated that he was at fault for the pa rties’ divor ce. In addition, Wife shoul d not be required

to deplete

her assets that could “help as a future source of income.” Hazard, 833 S.W.2d at 917. On appeal, Wife asserts that the trial court erred in classifying ce rtain stock dividends obtained after the marriage as marital property. Prior to the marriag e, Wife separately owned 894 shares of Old Forge Bank stock. This amount incre ased by 823 s h ares during the marriage in the form of stock dividends. During this time, the bank issued both stock dividends and cash dividends to its shareholders. The trial court found that the 894 shares of stock owned before the marriage was separate property owned by Wife and that the 823 shar es resulting from

divi dends were marital property. These 823 shares were valued at $47,734 ($58 per share) and assigned to Wife. Section 36-4-121 of the Tennessee Code provides that “income from and appr eciation of property owned by a spouse before marriage” is separate property unless the ot her spou se “substantially

contributed” to the stock’s “preservation and appreciation.” Tenn. Code Ann. § 36-4- 121(b) (1)(B) and (b) (2)(C). The statu te further states that “ ‘substantial contribution’ may include, butnot be limited to, the direct or indirect contribution of a spouse as homemak er, wage earn er, parent or family financial manager.” Id. § 36-4-121(b)(1)(C). Wife cites Sherrill v. Sherrill, 831 S.W.2d 293 (Tenn. App. 1992), and Crews v. Crews, 743 S.W.2d 182 (Tenn. App. 1987), in support of her assertionthat Husband did not contribute in any way to the appreciation of these shares. In Sherrill, the Court affirmed the trial court’s decision that the wife’s contribution as a homemaker did not have any “direct

or indirect connection whatsoever to the preservation and appreciation” of the stock at issue. Sherrill, 743 S.W.2d at 295. In Crews, the wife owned separate shares of stock before the marriage. Crews, 743 S.W.2d at 189. During the marriage she accumulated cash dividends from this stock. Id. She used a portion of these dividends to p ay f or household expenses and deposited the remainder in a personal bank account. Id. Concluding that the stock and its profits were separate property, the Court found “no evidence that (the husband) in any way contributed to the preservation or appreciation of the value of the stock.” Id.12

The issue of spousal co

ntribution is a ques

tion of fact, and t

he trial c ourt’s factua l finding will be upheld unless it

is against the preponderance of the evidence. Sherrill, 831 S.W.2d at 295; Tenn. R. App. P. 13 (d). In this case, Husban d was the primary

“wage earne

r” and served in

some capacity as a “financial manager” for the family

. Id. § 36-4 -121( b)(1) (C). In addition, the stock was pledged as collateral when Husband started a business in Colorado. Furthermore,the cash dividends from the Ol d Forge Bank stock were placed in a joint account. There is evidence from which the trial court could conc lude that taxes for the dividends were paid by marital funds. Overall, we cannot say that the evidence preponderates aga inst the trial court’s finding that Husband contributed to the “preservation or appreciation” of the s tock or the classification of the stock dividends as marital property. Thu s, the trial court did not err in classifying these stock dividends as marital pro pert y. In sum, the trial cou rt’s a ward of alimony a nd attorney’s fe

es are affirme

d. The property division is modified to award the artwork in accordance withthe parties’ stipulation; the remainder of the property division i

s affirmed. Beca

use the award of child support was based on Husband’s earning capacity rather

than his actual earnings, without a threshold determination that Husband was willfully and voluntarily unemployed or underemployed, t

he award of chil

d support is

reversed. The

cause is remanded for a determination of Husband’s actual earnings and a commensurate awar d of child support. The trial

court’s order th

at Husband main

t ain a $100,000 life

insurance policy

is reversed because it was based in part on the child support awa

rd, and the cause

is remanded for the trial court to determine an appropriate amount for the life ins ura nce policy in light of the revised child support award. The decision of th

e trial court is af

firmed in part, reversed in part and remanded. Costs on app eal are t axe d to bot h pa rti es eq ual ly, f or w hic h ex ecut ion may i ssu e if nece ssa ry.

HOLLY KIRBY LILLARD, J. CONCUR:

W. FRANK CRAW

FORD, P. J., W.

S.

DAVID R. FARMER, J.