1 The parties have two daughters together. Both daughters were eight een years of age or older at the ti me the tri al c ourt ’s Fina l Decr ee of Divorc e was ent ered. 

### IN THE COURT OF APPEALS OF TENNESSEE

AT JACKSON May 21, 2003 Sessi on KATHLEEN A NNE EARLEY v. ROBERT KEITH EARLEY A Direct Appeal from the Circuit Court for Shelby County No. CT-003076-00 The Honorable John R. McCarroll, Jr., Judge

No. W2002-01354-COA-R3-CV - Filed August 26, 2003

In this divo rce cas e, the final decree gr antin g w ife adivorce made a division of marital propert y but faile d to includ

e as par t of the ma

rital est ateseveral expenditures made by the husband. Wife asserts that such expenditures constitute a dissipation of assets by the husband andshould

have been inc luded as p art of the marital p roperty . Wife app eals. We a ffirm.

Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Circuit Court Affirmed

W. F RANK C RAWFORD , P.J., W.S., delive red the opinion of the c ourt, in which A LAN E. H IG HERS , J. and H OLL Y M. K IRBY , J., jo ined.
David E. Caywo od, L aurie W. Hall , Memphi s, For Appell ant, Kathl een Anne Earl ey Earl ey
Michael L . Robb , Dawn Davi s Carso n, Sus an T. Hunt, Memphis, For Appellee, Robert Keit h Earley
OPI NION Appellant Kathleen Anne Earley

(“ Wife”) and appellee Robert Keith Earley (“Husband”) were married in Elmont Long I sland, New York on September 29, 1973. The parties separated on May 7, 2000. 1 Throughout most of the marriage, Husband se rved as the sole financial provider, and Wife acted as the primary caregiver and homemake r. Husbandwas hire d as V ice Pre sident of Distribution for Williams-Sonoma Corporation (“Williams-Sonoma”) in June 1983. In July 1984, Husband wa s transferred f rom WilliamsSonom a’s offices in California to the corporation’s distribution center in Memphis, Tennessee

. Husband was eventually

promoted to the position of Senior Vice President of Distribution.2 Pro Tra ns was c reated as a freigh t forwar ding c orp oratio n. W illiams-So nom a was a Pro Tra ns client.
3 Husb and co ntends that he did not reveal his involvem ent in Pro T rans beca use he con sidered P ro T rans a “st ock investment” rat

her than a business interest , on the basis that he had no responsibili ty for t he day-to-day operations of the corporation.

4 At tr ial, an Agreed Dissi pation l ist was ent ered as an exhibi t. Thi s li st r epresent s the totalamount by wh ich Hu sban d dissip ated th e par ties’ marita l assets thro ugh gifts an d pa ymen ts to M s. Payn e. -2- In addition to his annual salary asSenior Vic e Preside nt of Distr

ibution, Hu sband wa s also awarded a ten percent interest in the Hewson-Memphis Partnershi p in the early 1990’ s. The Hewson- Memphis Partner ship was a partner ship that o wned the land and building w

here Willi amsSonoma’s Shelby County distribution c enter

was located. Husband maintains that the interest he recei ved in this partnership was a “gift,” and not an eleme nt of his annual compensation from Williams-Sonoma. Shortly after h is arriva l in Memphis , Husband

entere d into a bus iness ag reemen t wit h Bill Norris to form Prof

essional Transpo rtation Se rvices, Inc. (“Pro Trans” ). 2 Husband testified that he was a silent partner

in Pro Trans, and as such was entitled to a fifty perc ent share of the corporation profits. Accord

ing to Hu sband, Pr

o Trans g enerat

ed very littleprofit in its early

years of inception. However, as the business continued to grow, Husband testified that the c orporat

ion’s pro fit margin increased to between $90,000.00 and $200,000.00 per y ear. Husband testified that Wifeknew about Pro T rans, and further insists that his family be nefitted financially

from his interests in th e corporation.
As an ex ecutive employ

ee of Willi ams-Sonoma, Husba nd was required to

sign a Y early Officer’s Statement and truthfully answer several questions, including inquiries regarding outside business interests. Husband admits that he was required to reveal his interests andinvolveme nt in Pro Trans; however, despite th is knowled

ge, he consciou sly

chose not to rev eal this in

formatio n in vi ol at io n o f W il li am s- So no ma po li cy. 3
In Februa ry 1993, Husb and beg an an extramarital affair with his Williams-Sonoma coworker, Bobbye Pay

ne (“Ms. Payne ”). H us band admitted to purchasing jewelry , trips, various household

goods, and a res i dence for Ms. Pay ne with marital funds during his marriage to Wife. Husbandfurther admitted to pay ing several of Ms. Pay

ne’s debts o r bills with marital funds. He calculated

the total “agreed dissipation” amount at $440,233.97. 4 At the time of trial, Husband and Ms. Payne were

still involved.
Husbandresigned from William s-Sonoma in January 1997. In e arly 1999, Willia

ms-Sonoma filed a complaint against Husband and Ms. Pay ne in the United States District Court for the Western5 Williams -Sonoma speci fica lly contended that Hus ban d and M s. Payn e “dive rted W illiams-So nom a cor por ate

funds for their own p ersonal use and benefit. ” According to W illi ams-Sonoma’s First Amended Co mplaint, Husband opened an unauthorized corporate account at a Memp his bank. Husband pl aced the acc ountin t he name of

“W illiamsSonoma, Inc. E mplo yee Fu nd.” The account was refer enced to Husband’s own social securi ty nu mber, and he r eceived all acco unt statem ents at his p rivate re siden ce. W illiams-So nom a allege d that H usba nd fun ded the acc ount w ith Will iam s- Sonomamoney, an d furt her asserted that

Husband “wrote checks, drawn on the unauthorized account, to cash, to himself a nd to defe ndant Payne, and t o othe r pers ons an d ent it ies , as paymen t f or his and defendant Payne’s res pective perso nal exp enses a nd fo r their resp ective p erson al ben efit.”

6 Ms. Payne was in cluded as a defendant only as t o W illi ams-Sonoma’s actions for conversion, money had and receiv ed, frau d, co nspira cy to d efraud , and u njust en richm ent.

7 In her te stimon y befo re the trial c ourt, W ife ad mitted that she knew about Pro T rans, but denied any knowledge that

Husb and’s participation in this corporation w as a viola tion of Williams -Sonoma policy . Wife f urther denie d any knowl edge r egardi ng t he una uth oriz ed and i ll egal “Employ ee Fund” est abli shed by Husband. -3- District of Tenne ssee, alleging

corpora te theft. 5 Williams-Sonoma’s Fi rst Amend

ed Co mpl aint, entered as a trial exhibit in this matter, alleged eight causes of action against Husband, to wit : (1) conversion; (2) money ha

d and received; (3) fraud; (4) cons piracy to defrau d; (5) unj ust enrichment; (6) breach of fiduci ar y duty ; (7) fraud, in connection with the Settlement Agreeme nt and General Release of July 5, 1997; a

nd (8) re scission o f contra ct. 6 Williams-Sonoma later filed an amendment to its First Amended Complaint, alleging a ninth cause of action agains t Hu sband for unjust enrichment

and brea

ch of fid uciary duty . Pursuan

t to this ninth c ause of a ction, re lating to Husband’s interest and involvement in Pro Trans, Williams-Sonoma alleged:

A s a direct and proximate result of Earley ’s brea ch of hi s fiduciary duty as here

in alleged, E arley ha s received substantial benefit s which co nstitute secret pr ofits and which havea value of at least $2, 000,000.0 0 in the fo rm of distr

ibutions a nd benef its paid or pr ovide d to him by

ProTran s. Earle

y isfully liable to Wi lliamsSonoma for all suchsecret

profits th at he obta

ined in violation o f his fiduciary duties. The exact amount of Earley ’s secret profits will be proven a t the time o f trial. 7
Husbandretained the Memphis law firm of Armstrong Allen to repr esent him in the W illiams-So noma

suit. On December 10, 1999, Husband and Williams-Sonoma entered int o a Mutu al Release

and Settlement Agreement in the above cited ac tion. The Settlement Agreement provided:
Not la te r t ha n t we nt y (20) days following the full execution anddelivery of this Relea se by the parties h ereto, E arley

shallcause the sum of $4 million Dollars ($4,000,000) (the “Settlement Amount”) to be wire transferred in immediately available funds to the account of Williams-Sonoma in accordance with the wire transfer inst ructions provided by W illiams-So noma. Add itionally , Earley

will8 Wife test ifi ed that she onl y met wi th Mr. Lathram once , and sta ted tha t she did not spe ak w it

h hi m atany ti me after the S ettleme nt Agr eem ent was reach ed o r prio r to her signing o f said ag reem ent. -4- d onate his 10% interest in the Memphis Hewson partnership to a qualified charity

of Williams-Sonoma’s choice....
This agreement further specified that the $4,000,000.00 paid by Husba nd represented a “return of co mp en sa ti on ” a s t o W il li am s- So no ma ’s ni nt h c au se of ac ti on fo r b re ac h o f f

id uc ia ry d ut y. The SettlementAgreement between Husband and Williams-Sonoma included the signatures of Wife, and the parties’ children. With reg ard to her knowledge of the litigation and se ttlement agreement details, Wife

admitted t

hat she a nd Husband discussed the laws uit during its pe nd en cy, andfurther conceded that, at the sugg estion of Husband’s attorney, she spoke with attorney B rook Lathram (“Mr. L athram” ) on one o ccasion regar ding the Williams-Sonoma lawsu it. 8 Wife noted, however , that she

did not spe ak with

Husband about

the Settle

ment Ag reemen t prior to s igning

it, andfurther asserted

that she w as never

advised o f the poss ibility that this a

greem ent could be used agains ther interests in a future divorce proceeding. Wife acknow ledged th at she did not read the Settlement Agreement prior to affixing her signature.
When questioned as to whether he explained the terms and consequences of the Settlement Agreement to Wife prior to giving fina l approval to the agreement, Husband testified: Q: And did y

ou talk to her about the settlement when that issue came up?
A: Yes. We we

nt to media

tion in Dallas. Dallas, Texas was thesite that Williams-Sonoma insisted th at we meet in. And when we – when we arrived at a mediation number or an ag reement number, I calledKathy and e

xplained to her what the number was, h ow much Williams-Sonoma stock we would hav e to sell in order to meet that number and also explained the – that we – what assets we would have left.

****************************************************** Q: Did she a gre e wit h [the Settl emen

t Agr eeme nt]? A: Yes, she did. Q: Did you tell her about also the c haritable gift of the partnership? A: Yes, I did.9 In her C omp laint, W ife also so ught alim ony p end ente lite and alimony in futuro . On September 12, 2000,

W ife filed a M otion Pen den te Lite for al imony, chil d support, and att orney’ s fees . On March 12, 2003, aft er the tri al court ent ered i ts Fina l Decr ee of Divo rce an d W ife filed a N otice o f App eal of the cour t’s orde r, this Court ent ered an Order stati ng that i t did not have juris diction to hear the appeal as the t rial court’ s decree was not a finalorder. In support of our finding, this C ourt no ted tha t there wa s nothin g in the re cord to show th at the trial co urt adj udica ted W ife’s claim fo r alimo ny. As a re sult, this Co urt dism issed W ife’s app eal.
W ife fi led a Peti ti on for Rehear ing wit

h th is Courton March 24, 2003. The pe ti ti on, u nopposed by appellee, acknowledged that

Wife as ked f

or ali mony in h er orig inal complaint . However, des pite h er ini tial pleading , Wife ci ted to an exc hang e betw een the trial cou rt and a ppe llant, do cum ented in the trial tran script, w here “i t was s tipul ated Appellant was no t seeking any reh abilitative or pe riod ic alimo ny.” O n this ba sis, W ife asked this Co urt to “remand the issue of th e al imony cl aim back to the Trial Court so that an appropriate Order might be entered in t he Trial Court adju dicatin g the cla im for a limon y base d up on the stipulatio n of the p arties.”

Soon therea fter, this Co urt enter ed an Ord er giving W ife thirty days in which to supp leme nt her p etition with
a trial cou rt ord er ad judic ating he r claim fo r alimo ny. W ife supp leme nted h er pe tition in co mplia nce w ith this Co urt’s Order on April 8, 2003. Attach ed to her pet iti on was a Consent Order Amendin g Final Decree of Absolu te Divorce, fil ed in the trial co urt, stating tha t the co urt’s M ay 2, 2 003 decr ee “sho uld b e am end ed to add th at Pl aint if f wa s not awarded any al imony by the t

rial court. ” The foll owing day, thi s Court en tered an Order vacati ng it s March 12, 2 003 Ord er in its entirety.

10 The dissipation argument ass ert ed in Wife’ s Compla int is premi sed on appell ant’ s al lega ti on that Husband “gave, conveyed and otherwise transfer red substantialproperty and funds [ to Payne] which fa r exce ede d a q uarter o f a mil li on dollar s, whi ch funds were, i n fact , mari tal pro perty a nd/o r pro perty o f anothe r,” the reby const it uti ng a di ssi pati on of the parties’ marital assets. -5-

Q: Did she

know all th

e terms a bout the se

ttlement?
A: Yes.

****************************************************** Q : Did y ou make a specific point of calling her be fore you consumma

ted the me diated se

ttlement?
A: Yes, I did. I

wanted her to understa

nd about th

e settlem ent and to – t o g et he r a pp ro va l b as ic al ly.
In addition to

these assertions, Husbandfurther maintained that Wife was aware that he w as using marital funds to pay his attorney ’s fees in the Williams-Sonoma litigation.
On June 12, 2000, Wife filed a Complaint fo r Absolute

Divorce and I njunctive Relief in the Circuit Court of Shelby

County, Tennessee. Wife sought a divorce on the g rounds of irreco ncilable differences and, in the alternative, inappropriate mar ital co nd uc t a nd ad ul te ry. 9 Pursuant to her Complaint, Wife asked the court for a fair and equitable distribution of the pa rties’ ma rital ass ets, su ch di st ri bu ti on ta ki ng in to co ns id er at io n H us ba nd ’s al le ge d d is si pa ti on of ma ri ta l p ro pe rt y. 1011 Husband moved for a continuance on the gr ound that he would be prej udice d by th e pending criminal proceedi ngs bu t the t ria l cou rt de nied.

12 These docum ents are requir ed by Rules of Practi ce and Procedure 14 (c) and 14 (d), Circuit Court for t he Thirtieth Judicial D istrict at Memp his. -6- Husbandfiled a Motion to Stay Divorce Proceedings in the trial court on February

23, 2001. As the basis for his motion, Husband asserted that he was at that time a target of a federal criminal investigation. In su

pport of t his motion, H

usband filed the Af

fidavit of Kemper B. Durand, his attorney in the c rimina l matter. Mr. Durand averred that he advised H usband not to answer any questions posed in th

e course of a civi l p rocee ding that “could be the subject of the criminal investigation or subsequent charges.”
On June 8, 2001, Husband filed an Answer and Counter-Complaint. In his Answer, Husband admitted Wife’s alleged grounds for div orce, a nd furthe r acknowledged

his extramar

ital rela tionship withMs

. Payne. Husba

nd moreov er admitt

ed “tra nsferr ing some propert y”to Ms. Pay

ne, but did notadmit to the monetary value of the property tra

nsferred. Husband t

hereby asked the

court to grant a divorce on theground s of irre concila ble differences. I

n the event that the parties could not reach a marital dissolution agreement, Husband aske d that he be allowed to proceed with his Counter-Complaintwhich sought a divorce on the groundsalterna ti vely, of inappropr

iate marital conduct.
A non-jury

trial wa s held

from February

25, 2002 through February 26, 2002. 11 Prior to tr

ial, Wife filed an

Affidav it of I ncome, E

xpenses, A ssets, and Lia bilities a nd a Memor

andum. 12 Husband, in turn, also filed a Rule 14(D) Memorandum. A Final Decree of Absolute Divorce was entered in th e t ri al co ur t o n M ay 2 , 2002. I n its Order, the court declared the pa rties divorced pursuant to T.C.A. § 36-4-129, and, regarding division of marital property, stated:
The marital propert

y shall be valued as set out below, and the Courtfinds the total value of the ma rital est ate is Three Million Seven HundredThir

ty-E ight Thousand Eight Hundred Fifty-Four Dollars andSixteen Cents ($3,738,854.16). The ma rital property sha

ll be divided equal ly, but wife shall receive an additional Five Hundred Thirty-Three

Thousand

One Hund

red For ty- Fiv e Do llars and Seventy-Four

Cents ($533,145.74) because of Husband’s dissipation of marital assets in that amount. In s um ma ry, Wife shall receive Two Million One Hundre d T hi rt y-F iv e T ho us an d N in e H un dr ed Ni ne tyNine Dollars and Ninety- Five Cents ($2,135,999.95) of the marital prop er ty more specifically

set out below and Husband shall receive One Million Six Hundred Two Thousand Eight Hundred Fifty -Four Dollars an d T we nt y- One C ents ($1,602,854.21) of the marital property a s described below.-7- ******************************************************
The Courtfinds tha

t Wife did not dissipa

te any marital a ssets andthe Court further finds no further dissipation of marital assets by Husbandother than the Five Hundred Thirty -Three Thousand One HundredForty-F

ive andSeventy-Four

Cents ($533,145.74) referred to herein above.
Alth ough the court did no t specifically de tail in its Final Decree how it arrived at the dissipatio n total of $ 533,145.7 4, the tria l judge’ s commented from the bench:
All right. I

think that t

he dissipa tion numbe

rs that I gave y ou as far as theissues wit

h Mrs. Payne – or Ms. Pay ne – are the correct numbers. And those numbers being the 440,233.97 that’s on Exhibit 27 [Ag reed Dissi patio n Li st].
The Courtfurther finds that 85,298 dollars and 48 cents wo rth of jewelry wa s purchased for Ms. Pay ne, and I think I ’ve gone throu gh the recitation of

how I came up with that number, but I ’ll do it again just so we have every thing right in the record.

****************************************************** Further, I think

that ther e is an additional dissipation of 7,613 dollars and 28 cents. I

went thro ugh Exhibit 11 previ ously , and I told you how I arrived at that number , and going through the va rious items, broke down exactly how I cam e up w ith the number, but the number is 7,613.28.
The court further noted:

The real is sue for me is whether or not then to add the $207 ,277.50 in attorney fees that were paid in connection with the civilsuit to the dissipation. And I find that the civil – prepara tion for defense of and settlement of the civil suit was something Ms. Earley knew ab out al l alon g.
It is certainly not a c ommendable cour se of action that gave r ise to the civil case, but I don’t think that it amounts to lega l dissipation, so I’ m not going to include the $207,277.50 in the dissip ati on figure. Therefore, the figure I c ome up with for the amount that was dissipated i s 533, 145 dollar s and 74 c ents [$533 ,145. 74].13 Exhibi t 11 i nclu des a “ Diss ipation of Marital Assets ” li st compil ed by Wife wit h regard t o her allegati ons of dissi pation ag ainst

Husband. Included in this l ist is t he $4,000,000.00 wir e tran sfer from Husban d to W illiamsSonoma, Hus ban d’s ten p ercen t interest in the He wson -M emp his Partner ship valued by Wife at $2,187,000 .00, and various fee s adva nced by Husband to Armstrong All en for pay ment

of l egal ser vi ces ren dere d in th e Will iam s- Sonoma liti gation. -8- The record reflects that the court did not factor Husband’s ten percen

t interes t in Hewso n-Memphi s Partnership, the $4,00 0,000.00 p ayment to Will iams-Sono ma pur suant to the Settleme nt Agreement, and the a bove note d attorne

y f ees into th

e dissipa tion total. 13 Wife appeals, presenting the following issue for r eview, as stated in appellant’s brief:
Did the trial court err

in holding that the Four Million Dollar ($4,000,000.00) return of c o mpensation to Williams-Sonoma, the donation of Mr. Earley ’s ten p ercent (10%) interest in HewsonMemphis Partnership to charity va lued at Two Million, One Hundred Eighty Seven Th ousand ($ 2,187,000 .00), and the atto rney ’s f ees spen t by Mr. Early

in his def ense of the Williams-Sonoma lawsuit totaling Two Hundred Thirty- Three Thousand, Eight Hundred Ninetee n Dollars and Fourteen Cents ($233,819.14) were not a dissipation of marital a ssets?
Since this case was tried by the court sitting without a jury, we review the case de novo upon the re cord with

a presum ption of c orrect

ness of the finding s of fac t by the trial court. Unless th e evidence prepond

eratesagains t the findings, we must affirm, absent error of law. See Tenn. R. App. P. 13(d).
Alth ough there is a presumptionthat marital property is owned equally, there is no presumption th at ma ri ta l p ro pe rt y sh ou ld be di vi de d e qu al ly. Bookout v. Bookout , 954 S.W.2d 730, 31 (Tenn. Ct. App. 1997). Thus, an equitable divisionof the marital property need not be an equal division of the property

. Id . A trial court is afforded wide di scre tion when dividing the marital pr op er ty, and its distribution will be given “great weight” on a ppeal. Ford v. Ford

, 952 S.W.2d 824, 25 (Tenn. Ct. App. 1997). Guidelines for the equitable division of marital p roperty are set forth in T.C.A. § 36-4-121 (c) (Supp. 2002). Among the factor s to be considered by the court in making an equitabl e division of marital property is the “contr ibution of each party

to the acquisition, preservation, appreciation, de preciation or dissipation of the marital or se parate pro

perty , including the contribution of a party to the marriage as homemaker, wage ea rner or parent, with the contribution of a party

as homemaker or

wage earner to be g

iven the same weight if each party has fulfilled its role.” See T.C.A. § 36-4-121(c)(5) (Supp. 2002) (emphasis added).
This Court set forth the standard for determining whether a

party to a divor ce acti on is guil

ty of dissipati ng mari ta l assets in Ward v. War d , No. W2001 -010 78-CO A-R3 -CV, 2002 W L 31845229, at *3 (Tenn. Ct. App. Dec. 19, 2002). We quote at length from the Ward decision:14 The tr ial court cal cula ted Hus band’ s attorn ey’ s f ees a t $207, 277.50. -9- The court notes dissipation is not definedin [T.C.A. § 36-4- 12(c )]. In such

circumstances, courts must look to th e plai n langu age of the statute and apply the or dinary meaning

of the words. Cohen v. Cohen , 937 S.W.2d 823, 827 (Tenn. Ct. App. 1996). “Dissipate” is defined

“[t]o destr

oy o r waste, as to expend funds fo oli shly .” Black’s Law Dictionary 473 (6th ed. 1990). This Court finds instructive an artic le by

Lee R. Russ examining how courts around the country

have de alt with

the difficult task of making the fine-line distinction between dissipation and discretionary spending. See Lee R. Russ, Annotation, Spouse’s Dissipation of Marital Assets Prior to Divorce as a Factor in Divorce C ourt’ s Determination of Property Division , 41 A.L .R. 4th 416 ( 1985). Tr ial cour ts must di st inguish

between what marital expenditures are wasteful a nd self-serving and those which may be ill-advised but not so f ar removedfrom “normal” expendi tures occ urring previously within the marital relationship to render them destructive.
In determining whether dissipation oc curre d, we find trial courts should consider the following: (1) whether the evidenc e presented at trial supports the alleged purpose of the various expenditur

es, and if so , (2) whether the alleged purpo se equat es to dissipation under the

circumst ances. Id . at 420-421. The first prong is an obje ctive test. To satisfy this test, the dissipating spouse can bring forward evidence, such as receipts, vouc he rs, claims, or other similarevidence that independently s u pport the purpose as alleged. The second prong requires the court to ma ke an eq

uitable determination basedupon a num ber of f actors. Those

factors include: (1) the ty

picality of the expe

nditure to this marriage; (2) the benefactor

of the ex pen diture, namely, whe ther it primarily benef

itted the marriage o r primarily bene fitted the sole dissipating spouse; (3) the pr oximity

of the expe

nditure to the brea kdown of t

he marita l relationship; (4) the amount of the expenditure. Id . at 421.
Ward v. Ward , No. W2001-01078-COA-R3-CV, 2002 WL 31845229, at *3 (Tenn. Ct. App. Dec. 19, 2002). Sp ec if ic al ly, Wife contends that the t rial court erred in finding that the following did not constitute a dissipa tion of mar

ital asse ts: (1) the $4,000,00 0.00 pay

ment a nd chari table gift of the Hewson- Memphis p artnership made by Husband pursuant to the Williams-Sonoma settlement agree ment; and (2) the $233.819.14 14 in attorney’s fees incurred and paid by Husband for repres entation

in the Willia

ms-Sonoma

civil law suit.15 When questioned about his annua l prof it shar e in Pro Trans , Husba nd te sti fi ed:
[I]n our e arly year s – som e of the e arly years , we did n’t have but a little pro fit. But as we grew, the profi ts wentfr om anyw here – my sh are, fr om [$]90, 000 to up ove r [$]20 0,000 in our better years. -10- Ap plying the standard set forth in Ward , we first consider whether the $4,000,00 0.0 0 payment and charitable gift made

by Husband pursuant to the settlement agreement amounted to a dissipation of marital assets, thereby entitling Wife to an additional award of marital property . The parties do not dispute that Husband’s $4,000,000.00 payment and cha ritable gift were relinquished for the purpose of satisfy

ing the conditions of the settlement agreement. Theref

ore, we procee d to the second prong of the Ward analysis, and consider

whether Husband’s pay

ment and gift con stitute d a dissipation of marital assets in light of the four factors introduced by the Ward court.
Under the first factor, we find that Husband’s pay ment and char itable gift were not expe ndit ures t ypical to the pa rties ’ marri age. Al thou gh Husband was the subject of a separate but related criminal investigation at

the time of the trial in this matter, there is no evidence that payment of civil or criminal penalties, settlement agreements, or la wsuits was typical to the marria ge. With regard to the second factor, Wife contends that the expenditures made by Husband in accordance

with the settlement

agreement were made

solely for Husband’ s benefit. In reac hing this conclusion, W ife notes that she was never a party to the Williams-Sonoma lawsuit and further sugge sts that she d

id not bene

fit “fro m the actscomp lai ned of by Williams-Sonoma aga

inst [Husband] and Ms. Payne in the Complaint for Dama ges alleging

rescissi on of con

tract, conversion, money had and received, fraud, conspira cy to defrau d, unjust enrichment, and breach of fiduciary duty.”
We disagree

with Wife’s assertion that she did not benefit from Husband’s pay ment and gift under the settlement agreement. Recognizing that Wife was not a party to the law suit, nor was she directly or indirectly invol ved w ith the und erly ing wro ngful c onduct, th

e evidence is none

theless undisputed that Wife knew of Husband’s involvement in Pro Trans and further received sig nificant financial bene fits as a r esult of H usband’sbusiness v enture a nd his lucr

ative emp loyment with Williams-Sonoma. Accord ing to his b usin ess arr ange ment with Bill N orris, Hu sband received a fifty percent share of Pro Tra ns’s annual profits. Husband testified that the profit total varied, but ac knowle dged

that his annual share totaled more than $200,000.00 on at least one occa sion. 15 Moreover, there isno eviden ce in the record , aside f

rom pay ments and gif

ts made in a

ccorda nce with the settleme

nt agreement, th at Husba

nd’s involvement in

Pro Trans resulted in financialloss to his fa mi ly.
Husbandoffered unrefuted testimony that his family benefit ted fina ncially from his involvement

in Pro Trans. Husband testified that Pro Trans allowed his fam il y t o maintain a privileged

lifestyle, as profits fr

om the business funded racquet club memberships, cars for the parties’ children, and provided extra family income. Additionally, because Wife w as not employed16 W ife’s reply b rief recogni zes th at set

tlement of th e controver sy wi th Willi ams-Sonoma prevent ed greate r liability and loss of marital assets. -11- outside of the home, Husband’s compensation from Williams-Sonoma and his profit share from Pro Tr an s p ro vi de d t he on ly i nc om e for th e p ar ti es ’ f am il y. Having found that Wife directly bene fitted from the business venture that led to the breach of fiducia ry duty claim upo n which the settlem ent agr eement was based, w e also find that Wife benefittedfro m and cons e nted to the expenditur

es made pursuant t

o the settl ement ag

reemen t. Finalized on December 10, 1999, the Williams-Sonoma settlement agreement provided t hat the ent ire $ 4,000,000 .00 pay ment be a

llocated to the cor

poration ’s ninth c ause of a ction for Unjust Enrichment

and Breach of Fiduciar

y Duty , stemming fr om Hu sband’s involveme nt in Pro Tr

ans. As s uch, no par t of the $4 ,000,000. 00 was as signed t o any of the co rporation’s other

eight c laims agains tHusband. Husband asserts that Wife benefitted from the settlement ag reement expenditures as said expenditures helped to preserve the parties’ estate

. 16 We are inclined to agree.
Entered as an exhibit at trial, Williams-Sonoma’s First Amended Complaint sought punitive andexemplary dam ages as to fi ve of the eight causes of action levied a gainst Husband. The corporation’s First Amended Complaint also sou ght comp ensatory da mages on each of the eig ht claims in excess o f $500,00 0.00. I n its amend

ment to thisFirst Ame

nded Compl aint, Willia

msSonoma added c laims for

compensa

to ry, punitive, and exemplary damag es based on Husband’s breach of fiduciary

duty, resulting fr

om his involvement with Pro Trans. Considering the corp oration’ s multiple c laims for damag es, both compensatory a nd punitive, we find that i

t is entire ly p ossible tha

t the William s-Sonoma l

iti gation, ha d it proceeded to tr ial, could have depleted t

he part ies’ esta

te by more tha

n the amou

nt settled upon by the part ies. Moreover, Husbandand Wife’ s willing ness to se ttle appe ars to ind

icate a n acknow ledgme

nt that a trial of the Willia

ms-Sonoma

suit could

have pro ven eve

n more co stly

to th e Ea rl ey f am il y. Furthermore, we note that the parties satisfied the $4,000,000.00 payment required by

the settlement agree ment

in its entirety by

“paying back” Williams-Sonoma stock options. As such, the partie s acted in full com

plian ce with the settlement agreement without further de pleting marital funds or being forced

to sell the marit al home or

any other sub stantial marital a ssets. For these reasons, we are persuad

ed that the expendit

ures mad e in acc ordance

with the se

ttleme nt agreemen t provided insurance against further depletion of the parties’ e state, thereby constituting a benef

it to the marriage, and not just Husband as the “dissipating”spouse. Fi na ll y, with regard to the second Ward factor , we note

that Wife a

ffixed he r signa ture tothe settleme nt agreement, thereby

authorizing and c onsenting to the expend

itures ma de in accordance thereto. The fact that Wife was required to sign the settlement a greement indicates to this Courtthat Wife had a significant intere st i n the resolution of the Williams-Sonoma suit. Therefore, we are unable to conclude that the expenditures made pursuant to the settlement agree ment, esp ecially

in light of Wife’s signature authorizinga nd consenting to such expenditures, were not made for the primary purpose

of benefitting the parties’ marriag e.17 On cross exami nati on, Hus band’ s coun sel quest ioned Wife as to t

he steps taken b y the pa rties to reconcil e: Q: Al l right. A ll ri ght, Ms. Earley. And you and your husband were actu ally in c ounse li ng f or probabl y a y ear or

two be fore the Willi ams- So nom a lawsuit, we re you not?
A: Ye s. Q: And during that counseling, your husband acknowledge d that he had an affair w ith Bo bbye Payn e; cor rect?
A: Ye s. Q: And you and your

husban d atte mpted throug h counsel ing and ot her
mea ns to try to w ork o ut your r elation ship; co rrect?
A: Ye s. Q: And once aga in , t

hat cont in ued t hrou gh t he Wil li ams- Sonomalawsuit, as you all were togeth er du ring that law suit up to the time it wa s settled; c orre ct?
A: Ye s. Q: A nd the n you sta yed to gether for som e time a fter that?
A: Ye s. -12- The third factor in Ward

require s a court

to consider

the proximit

y of the expenditures to the brea kdown of the marit

al relat ionship. I

t is undispu

ted that H usband be gan an

extramar ital aff air withMs. Payne in 1993. Husband’s on-a gain-of f-again relationship with Ms. Pay ne continued throu gh Decemb er 10, 19 99, the da te of the settle ment ag

reemen t, and wa s still intact at the time of trial in this matter. From the record, it is apparent that Wife was aware of Husband’s marital indiscre tions years pr

ior to the s ettlemen

t agre ement.
The record indicates that Husband and Wife were still living tog ether at the time

of the settlement

agreement and

expenditur

es. Wife testif

ied that th e partie s were a

ttempting to reconcile at the time of

settleme nt. 17 Husbandacknowledged that the parties were attempting to reconc ile at the time of the settlement, and added that they attended c

hurch and coun seling s essions to gether in an effort to mend their marital relationship.
Wife offered conflicting testimony as to whether she had entertained thoughts of d i vorce prior to meeting with her

attorney, Mr. L

athram. Wife conceded, however, that she ne ver discussed or considered discussing the possibility of divorce in her meetingwith Mr. Lathram. Wife did not file her Comp laint for

divorce until June 12 , 2000, ap

proximatel

y si x months afte

r the Willia

msSonoma lawsuit was settled, and several years after first learning of Husband’s affair.-13-

While it is appar ent that th e partie s’ marita

l relatio nship beg an to break down the moment Husbandbegan

his affair with Ms. Payne , we are unable to make a finding of dissipation based on this factor in light of the particular facts of this case. We find no evidence t hat the expenditures mandatedby the settlement agree ment wer e motivated by

or rela ted to the brea

kdown of t

he parti es’ marriage. We are further convinced that Husband’s involvement in Pro Trans waspremised solely on Husband’s concern for his own financial stability , and that of his family. While we do not find that dissipation requires an intent to dissipate, we areunwilling to find that the expenditures made by Husband in an eff

ort to preserve the greate

r part of the marital estate while attempting to save the marriage constitutes dissipation of marital assets. Concerning the third Ward factor, we no t e Husband’s reliance on thedecision of the Illinois Supreme Court in In Re Marriage o f O’Nei ll , 563 N.E.2d 494 (Ill. 1990), where the Court c onstrued the Illinois statute deal ing with d istribution of marital property re

quiring that, among other things, dissipation of assets by eachparty

is a fac tor to be co ns id er ed in di st ri bu ti ng ma ri ta l p ro pe rt y. This statute is similar to the Tennessee statute dealing with the same subject. In O’Neill , the Court stated:

We theref

ore hold t

hat the te rm “dissip ation,” a s used in section 503 (d)(1) of the Illinois Marria ge and Dissolution of Marri age Ac t, re fe rs to th e “ us e o f m ar it al pr op er ty fo r the sole benefit of one of the spouses for a purpose unrelated to themarri age at a time that th

e marria ge is und

ergoing an irr

econcil abl e breakdown.”
Id. at 498-99 (citations omitted).
H usband asserts that the evidence in the record pre ponderates against a find ing that th e parties’ marriage was underg oing an irreconcilable breakdown, citing to e vidence t hat the parties were still living together at thetime of the settlement agree ment expenditures, were pa rticipat ing in marri age counseling, and even attended churc h together. While we find that the evi de nce relied upon by Husband strongly

suggests that the

parties were putting forth every effort t o reconcile at the

time of the settlement agreement expenditures, we are unwilling to adopt the definition set forth by the Illin ois Supreme Court requiring a finding of a n irreconci lable breakdown. Ward sets forth no requirement

of ir re co nc il ab il it y, and we find no case law in Tennessee explicitly providing for such require ment.
The final Ward

factor requi res a re vie wing court to consider the total amount of the expenditur

e(s) in determining whe th er said e xpenditure (s) cons tituted a d issipation of marita l assets. It is u ndisputed that Husband made a $4,000,000.00 pay ment to Williams-Sonoma in accordance withthe settle

ment ag reemen t. Althoug

h the par ties offe red conf lic ting tes timony as to the purported v alue of th e Hewson -Memphis P artner ship, it is a pparent from the r

ecord th at the pa

rtnersh ip represented

a substan

tial fina ncial w orth to the parties. However, in recognizing the substantial value of the parties’ maritalestate, and cons idering the fac t that the p ayments made by H usband to Williams-Sonoma

repres ented le ss than fif ty p ercent of the pa rties’ total estat

e , we find t hat the-14-

pay ments, under the circumstances of this particular ca s e, were not so as to

require or sugg est a finding of dissipation.
In weighing the Ward

fac tors, as they apply

to the facts in this case, we find that the $4,000,000.00 expenditure and charitable gift made by Husband pursuant to the settlement agreement

do not constitute a dissipation of marital assets. W e premise our deci sion spec ifically upon our findings with regard to the second, third, and f ourth factors set forth in Ward . Ha vin g found that Wife dire ctly benefitted f rom the expenditures, and that said expenditures were not related to or the product of the breakdown of the parties’ marital relationship, we are unable to conclude that these expe

nditureswere a

dissipatio n of marit

al assets

. The final issu e prese

nted for review b efore t

his Court isthe quest

i on of whet her the attorn ey’sfeesincu

rred and p aid b y H

usba nd in e xchange f or se rvic es re nder ed in the Wi lliams

Sonoma civil law suit

constitute a

dissipation of marital assets. In his ruling from the be nch denying Wife’s claim for inclusion of the Williams-Sonoma attorney’s fee s in the dissipation total, the trial judge stated:
The r eal issue for me is whether or not then to add the

$207,277.5 0 in at torney fees that were paid in connection with the civilsuit to the dissi

pation. A nd I f ind that the

civil– preparation for defense of and se ttlement o f the civil suit

was something Ms. Earley knew ab out al l alon g.
It is c er tainly not a commendable c ourse of action that gave r ise t o the civil case, but I don’t think that it amounts to legal dissipation, so I’ m not going to include the $207,277.50 in the dissipation figure. Therefore, the figure I c ome u p w ith for the amount tha

t was dissi

pate d is [$5 33,14 5.74]

. Wife assertsthat the trial court erred in refusing to include Husband’ s attorney’s fees in the dissipation total. In presenting this arg ument, Wife

relies he avily

on a footnote conta

ined in the case of Pennington v. Pennington , No. W2000-00568-COA-R3-CV, 2001 WL 277993 (Tenn. Ct. App. Mar. 14, 2001). In Pennington , a divorce case inv olving c

hild suppor

t and mar ital prope rty issues, Mr. Pennington was a

former d octor who had bee

n arres ted and c onvicted

severa l times f ordrugrelated offense s, including posse ssion of c ocaine a nd illeg ally

writing prescr ipti o ns for controlled substan c es. Id . at *1. Mrs. Pennington filed for and was awarded an absolute divorce on the grounds of

inappropriate marital conduct and adultery

. Id . at *1-2. In dividing the parties’ ma rital pr op er ty, the court considered evidence of the husband’ s dissipation of marital assets. Id

. at *2. The appella te court included the following footnote with rega rd to the trial

court’sfinding s as to dissipation:
The trial cou rt cited t he following as examples of Mr. Penning to n’s dissipation of assets: (1) $3,200 in attorney’ s fees for one of the women with whomMr. Pennington was having an affa ir,-15- and(2) thousands of dollars in attorney ’s fees for Mr. Pennington’s various l egal in

fractio ns. Id . at *2 n.6.

The appella

te court made no other reference and engaged in no

further analy sis of Mr. Pennington’s alleged dissipation.
Based on our reading of Pennington , and in considera tion of the

factor s set fort

h in Ward , we find that the attorney’ s fees incur red by Husb and, under the specific facts of this case, do not constitute a dissipa tion of mar

ital asse ts. Addre ssing fi

rst Wife’s assertion that Pennington requires a finding of dissipation, we note that the issue of dissipation was not before orconsidered by the Pennington court. Further , the appe llate cou rt did not p

rovide a sufficie nt factu al backg

round with regard to the legal charges for

which Mr. Pennington incurred “thousands of dol lars i n attorney’s fee s,” there by prevent ing us from a ccurat ely compa ring an d/or a nalogi zing Pennington with this particular case. Finally , we n ote that the legal infractions referred to in Pennington appear to be strictly criminal in nature. In contrast, the nine counts listed in Williams-Sonoma’s complaint, and specific ally

the corporation’s action

for breac h of fiduciary

duty , were in

itiated a s part of

a civil lawsuit. We ar e u nw il li ng to in te rp re t o r a pp ly Pennington as a blan ket rule that attorney ’s fees incurred in a civil l awsuit, by a

nd as a re sult

of the legal indiscretions of a single par ty to the marital relation ship, nec essarily

constitute

a dissipa tion of mar

ital asse ts. Applying the factors set forth in Ward , we reiterat e our finding that the attorney ’s fees incurred by Husband do

not constitute a dissipation of marital property . With regard to factor two, whether the expend

it ure “primar

ily b enefitted the mar

riage or primar

ily b enefitted the sole dissipating spouse,” we no te that the attorney’ s fees at issue in this case were incurred solely for Husband’s defense in the Williams-Sonoma lawsuit. Although the fees were incurred for Husband’s defense, Wife also

benefitted from this expenditure when considering that the parties, both Husba nd andWife, were able to reach a settlement ag reement in a lawsuit that could have res ulted in a substantially gre ater financial loss to the parties’ estate. We reiterate that Husband’s involvement in Pro Trans was premised on a desire to increase the financial resource s of his family. As for the expenditures made and

fees incurred as a result of the settlement agr eement and lawsuit, we find that all such expenditures a

nd fees w ere pai d for the

purpose of preserving the marital estate. Moreove r, we find that Wife admitted that she knew Husband had retained counsel to r epre sent him in the Williams-Sonoma

litigation, and authorized and consented to the terms of the settlement agreement by affixing her sig nature. Becau se Husba nd was the

sole fina ncial pr ovider f or the fa mil y, it is unlikely that Wife was unaware that marital funds were be ing used to secure representation in the Williams-Sonoma lawsu

it.
The ev idenc e in th e recor d does not p repon derate agains t the t rial c ourt’ s find ing t hat th e attorney’sfees pa

id by Husband in connection with the Williams-Sonoma lawsuit and the settlement th er eo f d o n ot co ns ti tu te a d is si pa ti on of ma ri ta l p ro pe rt y.-16-

The decree of

the trial court is aff

irmed and th e case i s rema nded f or suc h furt her pro ceedin gs as nece ssary . Costs of th

is appea l are as sessed a

gainst K athleen Anne Ear

ley and her s ureties.

__________________________________________ W. FRANK CRAWFOR D, PRESIDING JUDGE, W .S

.