### IN THE COURT OF APP EALS OF TENNESS EE AT JAC KSON O CT O BE R 1 1, 200 4 S es sio n MA RY WAR REN KESS ER v. P ETERHA LE KE SSER
Direc t Appeal from the Circ uit Court for Sh elby County No. 147208 R.D. Rober t A. Lanier, Judge

No. W2003-02392-C OA-R3-C V - F iled Janu ary 27, 2005

Following their divorce in 1995, Wife f iled a petition for c ontempt ag ainst Husband in 1997, alleg ing Hu sb a ndfaile d to c omp ly wi th c e rt a in p ro vi sions of the pa rt ie s’ mari ta l di sso lut iona g re e me nt. Husband filed an answe r and submit ted his counter- petition for modification of his child support ob lig a tio n b a se d o n c ha ng e d c ir c ums ta nc e s. Wif e , inturn, fi le d a mo ti on asking the c ou rt to determine Husband ’s ch i l d support obligation following his re ceipt of a larg e seve ranc e payment from his previous e mploy er. A fter holding a hea ri n g o n the parties’ re spective pe titions , the trial court e ntere d one orde r addr essing the visi t at i on of the pa rties’ minor daug hter a nd another order addre ssing the f

inancial issues. In the orde r addr essing the financ ial issues, the trial court increa sed Husband’s ba se child support obl igation, order ed Husband to pay additional child support in various a mou nts pu rs ua nt t o th e ma ri ta l dis so lut ion a g re e me nt, or de re d H us ba ndto p a y a dd iti on a l a mou nts from improperly wi t h h el d t axes on the exercise of c erta in stock appre ciation rig hts, and order ed Hu sb a ndto p a y

Wif e ’s a tto rn e y ’s fe e s. F or

the re a so ns se t f

or th h e re in, we a ff

ir m in pa rt , r e ve rs e in part, and r emand to the tria l court for further proce eding s consistent with this opi nion.

Tenn. R. App . P . 3; Appeal as of Right; Judgme nt of th e Circ uit Court Aff irm ed in Par t, Reve rsed in Par t and Rem anded
A L AN E. H I G H ERS , J. , d e li v e r e d th e o p in io n o f th e c o u r t, inw h ic h W. F RAN K C RAW FORD , P.J ., W.S ., and D AVI D R. F ARMER , J ., joined.

Allan J . Wade, L ori Hac kleman Patterson, Me mphis, TN, for Appe llant
Dar rell D. B lanton, Memphis, TN, for A ppellee-2- OP IN ION
I. F A C TUA L B ACKG ROUND AND P R OC EDU R A L H I S T ORY Mary

Warren K esser

(“Wife” or “A ppellee” ) and Pete r Ha le Kesse r (“ Husb an d ” or “Appe llant”) mar

ried in Smith C ounty , Texas, on March 31, 1984. H usband and Wife ha ve one child of the mar

riag e, Mary Rose Crisp Kesser (“D aug hter” ), born on Oc tober 11, 1991. In J anuary 1993, the fa milymoved to Memphis, Tennesse e, bec ause H usband beg an a ne w job.
On Octobe r 20, 1994, Wife filed a Comp l ai n t for Divorce in the Circ uit Court of Shelby Countyon the g round of irr econc ilable diffe renc es. On July24, 1999, Husband and Wife entere d into a Marital Dissolution Agr eeme nt (“MDA” ) which pr ovided, in rele vant part, that Wi fe be awa rded an absolute divorce on the g round of irr econc ilable diffe renc es, th ep a r ti es would shar e joint custody of Daug hter with Wife being the primary residential pa

rent, an d Hu s b and would have visitation wit h Daug hter in ex ce ss of one-hundr ed day s per y ear . The MDA a lso provided that Hu sb a ndwo uldpay

c hil d s up po rt

a s f oll ow s:
8. Child S upport — Husband sha ll pay child support on or be fo re the 10 th d a y

of e a c h mo ntha s f

oll ow s: a. Ba sic. Husband sha ll pay to Wi fe c hild support for Ma ry Ros e in the a mou nt of $2 ,0 00 .0 0 pe r m on th b e g inn ing Au g us t 1, 199 5 , p l u s 21% of a ll bonus and other income a s defined by the Tenne ssee Child Support Guidelines. Wit hin fifteen ( 15) day s after Husband re ceives any

bonuses or other

income as de fined by

the Tenne ssee Child Support Guidelines, Husband shall provide to Wife a re capitulation or brea

kdown of the g ross and net amounts rec eived along with a che ck from Husband for the child support base d on the ne t a mou nt re c e ive d. Hu sb a ndsh a ll a lso pr ov ide to Wi fepr oo f o f a ll income (a s defined by

the Tenne ssee Child Support Gu idelines) for eac h y ear b y Ap ri l 1 of the following y ear . The re quirement to pay 21% of all other income as define d by the Tenne ssee Child Support Guidelines shall beg in w ith a ny income re ceive d afte r Jul y 25, 1995 and shall not apply to the sale/liquidation of assets which a re subjec t to divisi on pursua n t to T.C.A. § 36-4-121 and w hich assets a re divided elsewhe re in this Ag ree ment. The pa rt ies ac knowledg e the amount o f child support to be pa id complies with the provisions of the Tenne ssee Child Support Guidelines. . . .
I n addition, the M DA required W ife to pay Husband $350.00 pe r month to defray trave l expenses inc ur re d b y Hu sb a ndin e xer c isi ng his vis itatio n rig hts . T he MD A als o awarde d Wif e 70 ,5 64 in c e rt a in S toc k A pp re c ia tio n Ri g hts (“ SAR s” ), statin g that:T h is a m o u n t re p re se n te d the d iff e re n c e b e tw e e n H u sb a n d ’s to ta l ta x liab ili ty fo r 1 9 9 6 ($ 6 8 2 ,0 0 6 .0 0 ) an d his 1
p ro f o rma t ax l i ab i l i t y fo r 19 9 6 excl ud i ng t he SA R s i nco m e ($2 5 9 , 2 9 3

. 0 0 ), as well as M ed i care t ax o f $1 5 , 1 2 6

. 8 8 (t he p ro d u c t o f t h e sta tuto ry M e d ic a re tax ra te o f 1 .4 5 % a n d the S A R s inc o m e o f $ 1 ,0 4 3 ,2 3 3 .1 2 ). -3- 13

. [T]he SAR s c a nn ot b e pla c e d in Wif e ’s na me . H us ba ndsh a ll exercise the SARs immediately u p on their bec oming e x erc isable, wh ic h is e xpe c te d to be on or abo ut A ug us t 8, 19 95 , u nle ss o the rw ise instructed by

Wife in writing in a timely manner
. Husband shall pay to Wi fe an amount equal to the g ross amount of ea ch SAR payment less all taxes applicable ther eto, including, without limitation, feder al income tax, social security tax, and medicare tax.
On J uly 2 5 , 1 9 9 5 , t he trial c ourt enter ed a F inal Dec ree of Absolute Divorc e incor porating by ref ere nce the provisions in the MDA. Following the divorce , Wife and Daug hter moved to Houston, Te x as, while Husband rema ined in Memphis, Tennesse e, whe re he wo rk ed fo r Arc adian Corpor ation, a Memphis base d chemica l company , as Vice President, Gene ral Counsel, and Sec reta ry
. I n Jan ua ry 19 96 , Wif

e , b y le tte r, inf

orme d H us ba ndthat sh e wi sh e d H us ba ndto e xer c ise 64,952 SARs on her beha lf in acc ordanc e with the MDA. O n J anuary 31, 1996, Husband e x erc ised the SARs as reque sted. I n doing so, H usband incurr ed g ross income in the a mount of $1,043,233.12. On Fe bruary 22, 1996, Husband sent Wife a letter notifying he r that he ha d exercised the SARs and attache d a che ck pay able to Wife i n the amount of $584,210.55. The letter stated that, since his 1996 ta x liabil ity

c ou ld n ot b e a sc e rt a ine d a s o f t hat dat e, Husba ndwo uldwi thh old44 % o f the g ro ss amount, or $459,022.57, t o cover his estimated t ax li ability resulting from the transaction. The total amount withheld repr esente d $307,232.15 withheld by Arc adian f

or federal income taxes and $151,790.42 withheld by

Husband to cove r additional tax li ability he antic i p at ed incurring . Wife objected to Husband’s ca lculation of tax withholdings on the 1996 SARs income, and she de manded Husband pay

her the $151,790.42 he withheld as w ell as intere st on that amount. The pa rties subsequently

rea ched an ag ree ment on the tax li ability , wher eby Husband a g ree d to deposit the excess tax withholdings above the estimated a mount on his 1996 t ax return into an int e re st be ari ng a c c ou nt. I n ad dit ion , Hus ba nd a g re e d tha t, af te r fi lin g his 19 96 ta x re turn, he wo uld pay Wif e “ the a mou nt o f s uc h e xce ss, plu s int e re st a c tua lly e arn e d, le ss 30 % o f s uc h in te re st f or his applicable income, socia l security and medicar e taxes.” After filing his 1996 tax return, H usband incurre d a tot al t ax liability on the S ARs exercise in the amount of $437,839.88. I n turn, Husband 1 forwa rded a chec k to Wi fe in the amount of $21,738.73; $21,182.69 of which re prese nted the differ ence betwee n the tax withhol ding on the SARs income ($459,022.57) and the actua l tax liabilityincurre d on the SARs i n come ( $437,839.88), and $556.04 of which re prese nted the net interest owe d Wife.Arca di an C orpo rati o n w i t hh el d $3 0, 76 7. 23 t o cover f eder al i ncome t ax and $1, 59 3. 30 t o cover f eder al 2 M ed i care t ax. H usband wi t hhel d an ad d i t i o nal $1 2 , 7 4 6

. 4 2 t o co ver add i t i o nal ant i ci p at ed f ed eral i nco m e t ax o n t he S A R s e x e rc ise

.

T hi s represent ed t he d i f ference b et ween H usband ’ s act ual t ax l i ab ili ty fo r 1 9 9 7 ($2 5 7 , 3 1 1

. 0 0 ) and hi s p ro 3 f o rma tax l i abi l i t y for 1997 e x cl u di n g t h e SARs i n come ( $211, 622. 00) , a s w el l a s M edi ca r e t ax a t a s t at u t or y r at e of 1 .4 5 % ($ 1 ,5 9 3 .3 0 ) a n d the S A R s inc o m e ($ 1 0 9 ,8 8 2 .9 6 ). -4- I n September 1996, Hu s b an d n eg otiated a se verance c ontrac t with Arca dian Corporation. I n Marc h 1997, another company acquir ed Arc adian Corporation. Following the merg er, the new company did not reta in sever al employ ees, inc luding Husband. Fr om April 1997 until March 1998, Husband re mained unemploy ed. I n t h e i n t erim, W ife sent Husband a letter in Febr uary 1997, reque sting that he exercise the rema ining 5,612 SARs. On F ebrua ry 18, 1997, Husband e x erc ised the S AR s a ndinc ur

re d g ro ss i nc ome tot a lin g $1 09 ,8 82 .9 6. I n tu rn , H us ba ndre mitte d a c he c k to Wife in the amount of $64,776.01 pursuant to the MDA, which amount repr esente d the diffe renc e betwee n the re sulting g ross inco m e an d a proje cted tax liabilit y of $45,106.95. (Exhibi t 29). 2 Pursuant to their prior ag ree ment, Husband deposited the amount withheld into an interest bea ring acc ou n t p en d i n g the determination of his tax liabilityfor 1997. Af ter filing his 1997 income tax return, H usband notified Wife by letter dated September

3, 1998, that his actual tax liabili ty on the SARs ex erc ise amounted to $47,282.30. As such, Husband r equeste d Wife remit $2,175.35, 3 repr esenting the diffe renc e betwe en the tax withheld ($45,106.95) and the ac tual tax l iabilityon the SARs income ($47,282.30). The pre sent dispute beg an whe n Wife filed a P et i t ion for Criminal and Civil Cont empt aga i n s t Hu s b an d i n t h e C i rc u i tC o u rt o f S h el b y C o u n t y o n Ap ri l 1 8 , 1 9 9 7 , al l egi n g t h e f o l l o wi n g: (1) Husband failed to fully disclose his income for

1995; (2) pursua nt to the MDA, Husband owe d additional child support for 1995; (3) Husband failed to pr o v i d e Wife with information reg arding a dd iti on a l inc ome sin c e 19 95 a s r e qu ir e d b y the MD A; a nd(4 ) H us ba ndfaile d to pr ov ide Wif e wi th proof o f income f

or ca lendar

y ear 1996 by April 1, 1996, as re quired by the MDA. Husba nd answe red Wife’ s petition and filed a c ounter-pe tition see king to modify the final divorc e dec ree due to a material chang e in circ umstances. Husband soug ht a re duction in his child support obli g ation by noting the f

ollowing: (1) his rec ent j ob loss and reduction in income; (2) the f act that Da

ug hter’s vis itatio n w ithhim

e xce e de d th e a mou nt o f v isi ta tio n ti me c on te mpl a te d intheTe nn e sse e Chi ld Sup po rt Gu ide lin e s ( “ Gu ide lin e s” ); (3 ) the Ap ri l 1s t de a dli ne fo r pr ov idi ng pr oo f of inc ome sh ou ld be chang ed to May

15th following the applicable tax y ear ; and (4) Wife’ s payments of $350, as
re qu ir e d b y

the MD A in ord e r to de fr a y tr a ve l expe ns e s, ha ve c on sis te ntl y be e n late , th e re fo re , th is amount sh o u l d b e deducted fr om Husband’s monthly child support payment. Reg arding the “additional child support” pr ovision in t he MDA, H usband’s pe tition provided:

9. Pe tit ion e r i s r e qu ir e d u nd e r the MD A to pa y a dd iti on a l c hil d support to Respondent in an amount equal t o 21% of his bonus and other income within 15 d ay s af t er rece ipt of such income. The fre quency of these a dditional child support pay m en t s has ca used Pe tit ion e r t o s uf

fe r a c on sid e ra

ble a dmi nis tr a tiv e bu rd e n, e sp e c ia llyT he t o t al am o unt awar d e d H u sb a n d eq ual ed $5 , 0 9 1 , 5 4 5

. 4 5 , but t he net am o unt recei ved by H usband 4

re p re se n ts d e d u c tio n s fo r ta x e s a n d li tiga tio n e x p e n se s. See Cam pbel l v
. Pot as h Cor p. of Sas kat che wan, Inc
. , 238 F. 3d 7 9 2 (6 th C ir. 2 0 0 1 ). -5-

i n v i e w o f t h e s i z e o f P e t i t i o n e r ’ s o t h e r p a y m e n t s t o R e s p o n d e n t

. In addition, because there is no fede ral or state income tax withholdi ng on Petitioner’s non-employment income, it is lit era lly impossibl e for Petit i o n er to acc urate ly

g aug e his eff

ective ta x liabilityon such income until after his inc ome tax re turns for the y ear are prepa red and f i l e d

. T h er ef

o re , P et i t i o n erre s p ec t fu l l y re q u es t s t h i s C o u rt ch an ge the fr e qu e nc y a nd tim ing of Pe tit ion e r’ s pay me nt of a dd iti on a l c hil d support from the curr ent ar rang ement of multiple payments within 15 day s after the re ceipt of eac h item to one payment on or bef ore June 1 of the following y ear
. After filing his counte r-pe tition, Husband stopped pay ing “ additional child support.”
I n the i n t er i m , Husband a cquire d new e mploy ment and starte d a new family . When the company that acquir ed Ar cadia n Corporation re fused to pay the seve ranc e pac kag e re quired unde r the contra ct, Husband instituted a lawsuit in fede ral c ourt in May 1997. This liti g ation lasted fr om 1997 until 2001, resulting in Husband r ece iving, by wire transfer

on Dec ember

31, 2001, $2,916,186.41. Fr om April 1998 until April 1999, Husband worked for Promus Hotel Corporation, 4 he a dq ua rt e re d inMe mph is, a s Vic e Pr e sid e nt an d Ass ist a nt Ge ne ra l Coun se l. F ro m May 19 99 to pres en t , Husband ha s been a partne r in the Memphis offic e of the law firm of Ba ker, D onelson, B e arm a n, Ca ldw e ll & B e rk ow itz, PC. F oll ow ing the div or c e , H us ba nd remarrie d, a ndhe a ndhis curr ent wife adopted two c hildren; one fr om China and one fr om Guatemala

. I n anticipation of Husba nd’s seve ranc e settlement, Wif e , on October

26, 2001, filed a Motion to D etermine Child Support L iability reque sting an order setting forth Husband’s chil d s u p p ort obligation on the net amount rec eived a s calc ulated under the “a dditional child support” provision in the MD A. On Se pte mbe r 1 9, 20 02 , Wife fi le d a Peti tio n to Modi fy F ina l De c re e of Di vo rc e to Modify the Visitation Sche dule with the trial court. Husband answe red the petition on J uly 3, 2003, raisi ng a s a n a ff

ir ma tiv e de fe ns e that th e “add ition a l c hil d s up po rt ” pr ov isi on in the MD A i s prohibited by

the Guidelines a nd is not an enfor cea ble contra ctual oblig ation, there fore , it should be abolished.
On J uly 9 and 10, 2003, the tria l court, si tting without a jury , held a he aring to addre ss Wi fe’ s contempt petition, both parties’ petitions to modify the child support obligation, and Wife’s petition to alter the visitation schedule

. The trial court hear d testimony from Husba nd, Wife, and Vince nt De Gu tis (“ Mr

. De Gu tis ” ), Hu sb a nd ’s a c c ou ntant. Th e tr ia l c ou rt a lso re vie we d nu me ro us e xhibi ts submitt ed by

the parties. I n addition, the t ri al court also entertained the deposition testimony of Vallette G. Windham (“ Ms. Wi ndham”) , Wife’s acc ountant. Following the hearing, the trial court enter ed two se parate orde rs; the first orde r, ente red on A ug ust 11, 2003, addresse d issues of-6-

visitation, whil e the f

inal judgme nt, entere d on Aug ust 18, 2 0 0 3 , a d dresse d the financ ial issues raised by the parties.
I n th e fi na l ju dg me nt, the tr ia l c ou rt se pa rate d th e fi na nc ia l is su e s r a ise d b y the pa rt ie s in to t h re e ca t egories: (1) child support, (2) a dditional child support, and (3) SARs exercises a nd appropriate tax matters. The trial c ourt also orde red H usband to pay Wife’s attorney ’s fe es in the amount of $43,000.00. Husband subse quently filed a motion to alter or ame nd the final judg ment which the tria l court denie d. Husband filed a timely notice of a

ppeal to this Court pr esenting for our revie w the following issues relate d to various ruling s b y the trial court contained within ea ch cate g ory of the trial c ourt’s orde r:
I

. Whe the r the a dd iti on a l c hil d s up po rt pr ov isi on in the MD A sh ou ld b e abo lis he d b e c aus e it is unlawful and unwor

kable; I I

. Whether the trial court err ed in a pply ing the additional child support provision of the MDA to the se ve ranc e pay me nt; I I I

. Whether the trial c o u rt er re d in refusing to reduc e Husba nd’s income f rom the seve ranc e pay me nt b y

that po rt iona ttribu ta

ble to the sa lary

he wo uldha ve re c e ive d h a d h is employ ment not been terminated in 1997; I V. Whether the trial c ourt err ed in awa rding Wife $90,715.41 in additional chi l d s u p p o rt on “income” earned by

Husband fr om 1995 throug h 1997; V. W h et h ert h e t ri al co u rt erre d i n ca l cu l at i n g fu t u r e m o n t h l y ch i l d s u p p o rt b y

i n cl u d i n g a discretionary , non-re cu r

rin g b o n u s o f

$ 4 0 , 0 0 0 .00 in calculating income of $280,147.00 whe n the court also calc ulated additional child support on the bonus in the a mount of $6,580.00; VI

. Whether t he trial court erre d in calculating f uture monthly

child support beca

use Wife fa iled to meet h er b u rden of proving that child support over $2,100.00 w as nec essary for the rea sonable ne eds of the c hild; VI I

. Whether the trial c ourt err ed in re fusing to r educe Husband’s c hild support obligations based o n t h e f a c t t h a t D au g h t e r s p e n d s m o r e d a ys p e r ye ar w i t h H u s b a n d t h a n t h e n u m b e r o f d a ys c on te mpl a te d b y

the Gu ide lin e s; VI I I

. Whether the trial c ourt err ed in fa iling to fully reduc e Husba nd’s child sup port obligation based upon the fac t he is leg ally obligated to support three additional children; IX. Whe the r the tr ia l c ou rt e rr e d inc a lc ulatin g fu tur e mon thl y c hil d s up po rt ; X. Whether the trial c ourt err ed in fa iling to awa rd Husband amounts properly owed him by Wif e ; X I

. Whether

th e tria l c o u r t e rr e d , b o thp r o c e d u r a ll y a n d s u b s tan ti v e ly , inru li n g th a t H u s band ow e s $ 69 ,1 20 .5 6 inimp ro pe rl y wi thh e ld t a xes o n th e 19 96 a nd19 97 SAR s e xer c ise s; XI I

. Whether the trial c ourt err ed in awa rding Husband $8,199.36 for 1996 and $735.10 for 1997 in interest on the amount he w ithheld on the 1996 and 1997 SARS income; and XII I

. Whe the r the tr ia l c ou rt e rr e d ina wa

rd ing $4 3, 00 0. 00 in atto rn e y ’s fe e s to Wif e a ndin denying H usband’s claim for attorney ’s fe es bec ause f ees should havebeen a war ded base d on the re la tiv e su c c e ss o f the pa rt ie s.-7-

For the re asons set forth here in, w e aff irm in part, re verse in part, and r emand to the tria l court for additional proce eding s consistent with this opi nion.
II. S TA N D A R D O F R EVIEW “[ R ] ev i ew o f fi ndings of fac t by the trial court in civil actions shall be de novo upon the rec ord of the trial court, acc ompanied by a presumption of corr ectne ss of the findin g, u n l es s t he pr e po nd e ranc e of the e vid e nc e is oth e rw ise .” Te nn . R. App . P. 13 (d ) ( 20 03 ); see also W ade v. W ade , 115 S.W .3d 917, 920 (Tenn. Ct. App. 2002). “With respe ct to leg al issues, our re view is conduc ted ‘under a pure de novo standard of revie w, ac cording no defe renc e to the conc lusions of law made by the lower courts.’” El lis v . E lli s , No. E2003-01327-COA- R3-CV, 2004 Tenn. App. L EXI S 319, at * 1 3 (T en n
. C t

. Ap p
. M ay 1 7 , 2 0 0 4 ) ( q u o t i n g S. Constructors, Inc

. v. Loudon County Bd. of Educ ., 58 S.W. 3d 70 6, 71 0 ( Te nn . 2 00 1) ); see also Kendrick v . Shoemake , 90 S.W .3d 566, 569–70 (Tenn. 20 02 ). Ad dit ion a lly , w he n w e un de rt ake a re vie w o f a

tria l c ou rt ’s de te rm inatio n o f c hil d s up po rt , we e mploy ee the following standard of revie w: Setting child su p p o rt is a discre tionary matter. Se e Sta te ex

re l. Coleman v. Clay , 8 05 S.W. 2d a t 75 5. Ac c or din g ly , w e re vie w c hil d support decisions using the defe rential “ abuse of discretion” sta ndard of re view. This standar d requi res us to consider (1) whe ther the decision has a

sufficie nt evidentiary

foundation, (2) whether

the court corr ectly identifi ed and prope rly applied the a

ppropriate leg al principles, an d (3) whe ther the de cision is within t he rang e of acc eptable alternatives. See BIF v. Servic e Constr. Co. , 1988 Tenn. Ap p. LEX I S 43 0, No . 8 7- 13 6- I I , 1 98 8 WL 72 40 9, a t *2 (T e nn . Ct

. App. J uly 13, 1988) (No T enn. R. App. P. 11 application filed)

. State ex re l. Vaughn v. Kaatrude , 21 S.W .3d 244, 248 (Tenn. Ct. App. 2000).
III
. L AW AND A N A L Y SIS
Ea c h is su e raise d b y

Hu sb a ndon app e a l f

oc us e s o n o ne of

the thr e e c a te g orie s a dd re sse d in the trial court’s final j udg ment. Acc ording ly , we will discuss the issues raise d by husband as they relate to (1 ) t h e “a dditional child support” provision in the MDA, (2) the “base ” child support obligation, and (3) issues re lated to t he SARs exercises. In addition, we will discuss issues relating to attorney ’s fe es in a sepa rate section of this opinion.-8- A. The “addition al child su

pport” provision in th e MDA

Re g ard ing a dd iti on a l c hil d s up po rt , th e tr ia l c ou rt ru le d, in r e le va nt p art , a s f oll ow s: Even thoug h Mr. Kesse r h ad re q uested the Court to modify the time of the Additional Child Supp o rt , h e h as re fused to pay any Additional Chil d Support since 1996. One of Mr. Ke sser’s positions at trial is that the Additional Child S upport prov i s i o n should not apply to his sever ance packa g e beca use it was not contemplate d at the time of the Marital Dissolution Ag ree ment, but he acknow ledg ed that the Ad dit ion a l Ch ild S up po rt pr ov isi on wo uldapp ly

to b on us e s. Even so, in 1999, Mr. Ke sser re ceive d a bonus of $31,304.00 and paid no additional child support. In 2001, Mr. Kesse r re ceive d a bo nu s o f $ 55 ,0 00 .0 0 a ndpa id n o a dd iti on a l c hil d s up po rt a ndin 200 2 , M r. Kesser

rec eived a

bonus of $40,000.00 and paid no additional child support. The seve ranc e pac kag e is expressly desig nated as income by the child support g uidelines. It should be considere d income in the y ear rec eived. How ever , as it is far in excess of the $10,000.00 contemplated by

t h e chil d support g uidelines, the sums above the perc entag e applied to the net income above $10,000 should be plac ed in a Trust Fund for the benef it of the child. The Ma

rital Dissolution Ag ree ment alre ady

makes some pr ovision for the colle ge educ ation of the c hild, so that the Trust should not be restric ted to that purpose. The Tr ust s h ould be for the use and be nefit of the c hild until she rea ches the ag e of twenty -five, at which time the re maining principal and intere st should be dis tributed to her. I n the m eantime, the T rustee should pay , in the Trustee ’s discre tion, to or for the be nefit of the child, such sums as s h all be re asonable and nec essary . Mr. Kesse r testified that the net sum which h e received f or his sever ance pa c ka g e , a ft e r liti g a tio n expe ns e s and ta xes wa s $ 1, 47 8, 81 3. 00 . It is upon that fig ure that calculations should be based.
The trial court went on to c onclude that Husband’s arg uments seeking to se t a side the “a dditional c hil d s up po rt ” pr ov isi on in the MD A we re wi tho ut me ri t. Th e tr ia l c ou rt a lso or de re d H us ba ndto pay additional child support as fo l l o ws : $5,304.00 for the 1999 bonus plus intere st acc ruing from J anuary 2000, $8,652.00 for the 2001 bonus plus interest acc ruing from January 2002, $6,580.00 for the 2002 bonus plus interest ac cruing from January 2003, and $90,715.41, pursuant to the testimonyT h e trial c o u rt o rd e re d a ll inte re st o n the se a m o u n ts to a c c ru e a t 1 2 % p e r a n n u m
. 5
-9- of Ms. Windham, for additional income earne d from 1995 throug h 1999 plus interest ac cruing from J anuary 2000. 5 As his first issue, Husband arg ues t hat t he “additional child support” provision in the MDA sho u l d b e abolished, and his child support oblig ation should be ca lculated solely acc ording to the Guidelines. We beg in with Wife’s implied assertion that Husband is estopped f rom raising this iss ue on ap p ea l beca

use his petition to modi fy his child support obligation did not reque st that the trial court a bolish the provision, but he merely asked the trial court to re quire that a dditional child support payments be made only

once a y ear
. As a g e ne ra l rule , “ a

jud g me nt o r d e c re e wh ic h is be y on d the fair sc op e of the ple a din g s is void.” Br own v . B ro wn , 2 8 1 S

. W

. 2 d 4 9 2 , 4 9 7 (T en n
. 1 9 5 5 ) ( ci t i n g Lieberman, Lovem an & Cohn v. Knight , 2 83 S.W. 45 0, 45 2 ( Te nn . 1 92 5) ; Te rre ll v . Te rre ll , 241 S.W .2d 411 (Tenn. 1951) ). The Tenne ssee Rules of Civil Procedure provide:

When issues n o t ra i sed by the pleading s are tried by express or implied consent of the pa rties, they shall be treated in all respe cts as if they had been raised in the pleading s. Such amendment of t he pleading s as may

be nec essary

to cause them to conform to the evidenc e and to r aise these issues may be made upon motion of any pa rty a t a ny tim e , e ve n a ft e r j ud g me nt; but failure so to amend does not affect the result of the trial of thes e is sues . Provided, howeve r, amendment after verdict so as to incr ease the amount sued for in the action shall notbe permitted. I f evide nce is objec ted to at trial on the g round that it is not withi n the issues made by the pleading s, the court may allow the pleading s to be amende d and shall do so free ly when the pre sentation of the merits of the action will be subserved ther eby and the objec ting pa

rty fails to satisfy

the court that the admission of such evide nce w ould prejudice the party in maintaining the action or de fe ns e up on the me ri ts. Th e c ou rt ma y g rant a c on tin ua nc e to e na

ble the objecting party

to meet such e vidence

. Tenn. R. Civ. P. 15.02 (2003) (emphasis adde d). “Thepolicy underlying the rule seems to be that since the purpose of pleading s is to give notice to all conce rned r eg arding what may be adjudicated, a jud g me nt be y on d th e sc op e of the ple a din g s is be y on d th e no tic e g ive n th e pa rt ie s a ndthu s sh ou ld not be enf

orce d.” Br

own , 281 S.W .2d at 497.
Whil e Husba nd did not raise the issue of abolishing the “additional child support” pr ovision in his petiti on to modify

his child support obligation, the re cord r evea ls the parties tried the issue by implied consent. “Trial of an issue by implied c onsent will be found whe n a party opposed to the moti o n k n e w o r

s h o u ldr e a s o n ab ly

h a v e k n o w n o f

th e e v id e n c e r e lati n g to th e n e w is s u e , d idn ot-10-

object to this evidence , and wa s not prejudiced the reby .” Childs v. Roane County Bd. of Educ ., 929 S

. W

. 2 d 3 6 4 , 3 6 6 (T en n
. C t

. Ap p
. 1 9 9 6 ) ( ci t i n g Zack Chee k Builders, Inc . v. McLeod , 597 S.W .2d 888 (Tenn. 1980) ). I n his answer to Wife’s petition to modify the visitation schedule Husba nd raised t h i s issue as an a ffirmative defe nse, and H usband submitted a pre -trial brie f which discusse d the issue in detail. At the hearing , Husband offere d testimony reg arding the issue, testimony which dre w no ob je c tio n f ro m Wif e ’s c ou ns e l. Ac c or din g ly , it wa s pro pe r f or the tria l c ou rt , a ndsu bs e qu e ntl y this Court, t o consider the issue of whe ther the “ additional child support” provision s hould be abolished. See J

ones v. J ones , No. 01A01-9806- CV-00298, 1999 Tenn. A pp. LEXI S 270, at *3–10 (Tenn. Ct. App. Apr . 29, 1999).
We now turn to Husband’s a rg uments on appea l in support of hi s position that the “a dditional child support” provision s hould be abolished. Husband asserts that, with reg ard to the “ additional child support” provision, the trial c ourt simplyheld that, since H usband had fr eely enter ed into the a g re e me nt, he is e sto pp e d f ro m se e kin g a n alt e ratio n. Hu sb a nd c on te nd s the tr ia l c ou rt e rr e d inthi s reg ard f o r t h e fol lowing r easons: (1) the trial court ignor ed the leg al rule stating child support provisions in the M DA merg e into the orde r and r emain subjec t to modification; (2) the sig nificant varia nce r ule in the Guidelines and chang ed circumstance s require modification of his child support obl i gat i o n i n this case; (3) the Guideline’ s approa ch to variable income should ha ve bee n applied in this case; and ( 4) the c hang e in law in J uly 2001 require d the provisi on to be eliminated r etroa ctive to at least that time.
“Mothers and fathe rs ce rtainly are fre e to ag ree that child support payments will be highe r than mandate d by the g uidelines, and a trial court may approve such an a g ree ment.” Cox v. Cox , No. E2002-02 0 3 4 -C OA-R3-CV, 2003 Te nn. App. LEXI S 257, at *7 (Tenn. Ct. App. Mar . 31, 2003). Suc h a g re e me nts are e xpre ssl y pr ov ide d fo r i n th e Te nn e sse e Cod e , w hic h s ta te s: “ No thi ng in this section shall be c onstrued to prevent the affirmation, ratification and incorporation i n a decre e of an ag ree ment betwee n the parties as to support and maintenance of a party or as to child support. . . .” Te nn . Co de An n. § 3 6- 5- 10 1( h) (2 00 3) . A n M DAis e sse nti a lly a c on tr act be tw e e n th e pa rt ie s. Johnson v. J

ohnson , 37 S.W .3d 892, 896 (Tenn. 2001) . The Guide lines constitute the “minimum base f or dete rmining c hild support obligations.” Te nn. Comp. R

. & R eg. 1 2 4-2-4- .02 (5) ( 2003). Th is C ou rt

ha s p re vio us ly

state d: As the Guidelines only

purport to cr eate a m inimum child s upport ob lig a tio n, we fi nd it e nti re ly pe rm iss ibl e fo r the pa rt ie s to e nte r i nto an ag ree ment which provides a method of calc ulating child s u p p ort that is dif fe re nt fr om the pe rc e nta g e ty pe me c ha nis m c on te mpl a te d in the Guidelines. . . . The only limit ation to that right is the court’s responsibilityto insure that the childre n are adequ ately maintained. I n that re gar d , the Child S upport Guidelines provide the re levant standard.
McD onald v . Cowan , No. W1998-00730-COA-R3-CV, 2000 Te nn. App. LEXI S 26, at *11 (Tenn. Ct. Ap p. Jan. 19 , 2 00 0) ; see also Tenn. Com p. R. & Re g . 1240-2-4- .02(4) ( 2003) (stating that, when-11-

the pa rt ie s p re se nt s tip ulatio ns re g ard ing c hil d su pp ort to the c ou rt fo r a pp ro va l, “ the c ou rt

sh a ll u se the g uidelines in review ing the adequa cy of child support orde rs neg otiated by the parties”).
I n the final judg ment, the trial court stated that “[Husband] is estopped from asking this Court to set aside a portion of the ag ree ment simplybeca use [Husband] no longer t h i n k s i t is fair.” Hu sb a nda sse rt s th a t “ by

ru lin g that [Hu sban d] w a s e sto pp e d to arg ue a g a ins t th e a dd iti on a l c hil d su pport pr ov isi on , th e tr ia l c ou rt abd ic a te d it s r e sp on sib ili ty to d e te rm ine if

the a dd iti on a l c hil d support provision should have bee n modified in acc ordanc e with the Guidelines the n if [si c] effe ct.” Hu sb a ndc ite s to ou r d e c isi on in Cox v. Cox , No. E2002-02034- COA -R 3 -C V, 2 0 0 3 Tenn. App. LEXI S 257 (Tenn. Ct. App. Mar. 31, 2003) , for the pr o p o s i t i on that “just because a pa rent a g ree s to pay something be y ond what is requir ed by the Guidelines d o es not mean that this obligation should not be modified to conform to the Guide lines at a late r time.”
The mer e fa ct that the parties entere d into an ag ree ment reg arding chil d s upport does not div e st the tr ia l c ou rt

of its auth ority

to m od if y that ob lig a tio n w he n c ir c ums ta nc e s w arr a nt. State ex rel. W rzesniewski v. Miller , 77 S.W .3d 195, 197 (Tenn. Ct. App. 2001). “A c ourt in which an a ction for divorc e is broug ht and which render s a decre e respecting the care, custody and support of minor children c ontinues to have jurisdiction of such matters until the children re ach ma jority .” Kane v. Kane , 547 S.W .2d 559, 560 (Tenn. 1977) ; see also Sutton v. Sutton , 417 S

. W

. 2 d 7 86, 787 (Tenn. 19 67 ) ( no tin g that th is j urisd ic tio n is e xclu siv e ). As e nu nc ia te d b y ou r s up re me c ou rt :
When the husband and wife contr act with re spect to the leg al duty of chi l d s upport, upon approva l of that contra ct, the ag ree ment of the p ar t i es become s merg ed into the dec ree and loses its contrac tual nature

. . . . [I ]t is clea

r t hat t he re ason for

stripping the a g ree ment of the parties of its contrac tual nature is the continuing statutory power o f t h e C o u r t t o m o d i f

y i t s t e r m s w h e n c h a n g e d c i r c u m s t a n c e s j u s t i f y. Penland v. Pe nland , 521 S.W. 2d 22 2, 22 4 (T e nn . 1 97 5) ; see also Towner v. Towner , 858 S.W .2d 888, 890 (Tenn. 1993) ; W ade v. W ade , 115 S.W .3d 917, 924 (Tenn. Ct. App. 2002). Husband, howe ver, ove rlooks an important aspe ct of o ur treatment of ag ree ments rea ched by the parties in a divorce action:

I t is well established that parties may provide for

child s u p port by a g re e me nt. T. C.A . § 36 -5 -1 01 (h ); Penland v. Pe nland , 521 S.W .2d 22 2 ( Te nn . 1 97 5) ; Bl ac kbu rn v . Black bu rn , 526 S.W .2d 463 (Tenn. 19 75 ). I n thi s re g ard , n oth ing pr e ve nts the pa re nts fr om a g re e ing to a support amount in excess of the r equire d m i n i mum. Ho we v e r, to the ex tent the agree ment ex cee ds the l egal duty of child support over which the court retains the power to modify, it is not merged into the decre e and is enforce able as any other c ontract

. W. Wa lto n G arr e tt, Tenn. Divorce , Alimony and Child Cust ody § 14-6 (1996). Thus, any-12- v olu nta ril y as su me d o bli ga tio n e

x c eed ing the mi nim um su pp or t required is controlled exclusively by the parti es’ agre eme nt

. Bo uti n v . B ou tin , 1996 Tenn. App. LEXI S 770, No. 01A01-9601-CH-00014, slip op. at 4–5 (Tenn. App. D ece mber 4, 1996).
Haas v. Haas , No. 02A01-9604- CV-00073, 1997 Tenn. App. L EXI S 269, at *9–10 (Tenn. Ct. App. Ap r. 22 , 1 99 7) (e mph a sis a dd e d) . H us ba nd ’s ob lig a tio n to pay “ 21 % o f a ll b on us a ndoth e r i nc ome as def ined by the Tenne ssee Child Support Guidelines” derives from a contra ctual oblig ation, not a statutory

one, since this amount is i n excess of that re qui re d u n d er t h e Gui delines. See M ace v
. Mace , No. W2001-00574-COA-R3-CV, 2002 Te nn. App. LEXI S 274, at *7 (Tenn. Ct. App. Apr. 15, 2002) (“[A] c hild support obligation in excess of that which is le g ally mandated re mains ‘c on tr a c tua l’ in natur e e ve n tho ug h it is i nc or po rate d in to the fi na l di vo rc e de c re e .” ). As su c h, thi s pr ov isi on re ma ins a

c on tr a c t be tw e e n th e pa

rt ie s g ov e rn e d by the te rm s of the MD A, a ndwe mus t construe it utiliz ing principles of contr act law

. Bo uti n v . B ou tin , No. 01A01-9601- CH-00014, 1996 Te nn . A pp . L

EX I S 77 0, a t *8 (T e nn . Ct. A pp . D e c . 4 , 1 99 6) ; see also Lovlace v. Lovlace , No. M2003

- 0 1 2 7 4

- COA-R3-CV, 2004 Tenn. A pp. LEXI S 406, at *9–10 (Tenn. Ct. App. June 28, 2004).
Th is r e su lt i s f

urthe r s up po rt e d b y

the pr ov isi on s in the MD A i tse lf, w hic h p ro vid e s:
24

. Ea c h o f the pa

rt ie s e xpre ssl y

c e rt if y that e a c h o f the m ha s enter ed into this Agr eeme nt upon m at u re consideration; that the consent to execution of thi s Agr eement has not been obta ined by duress, fr aud or undue influence ; that no repre sentation of fa cts has been ma de by

either party to the other e x cept a s here in set forth; that the parties fully understand this Ag ree ment; f urthermor e, that ea ch of the said p arties has been r epre sented by able c ounsel who have e xpla ine d to the m th e e ff

e c ts o f t his Ag re e me nt andthe c on te nts

. 25. No modification of this Ag ree ment shall be binding upon e ith e r o f the pa

rt ie s unle ss re du c e d to w ri tin g a ndsu bs c ri be d b y bo th pa rt ie s. Th is A g re e me nt i s in te nd e d as a ful l, f ina l a ndc omp le te settlement of the pr operty rig hts, ma

rital and otherwise, of the pa rties here to.

. . . . 27. Since this Marital Dissolut ion Agreeme nt provides for the payme nt of child support, pursuant to T .C.A. § 3 6 -5 -101(h) , the parties a ffirmatively

acknow ledg e that no action by the parties will be e ff e c tiv e to r e du c e c hil d s up po rt a ft e r the du e date of

e a c h p a y me nt, and the pa

rties under sta nd that Court approva l must be obtained befor e child support can be re duced, u n l es s such payments are automatically

reduc ed or te rm i n ated unde r the terms of the Marital Dissolution Agre ement.-13-

Eac h arg ument raised by Husband seeking to abolish the “additional child support” pr ovision of the MDA constitutes an attempt to ha ve this Court abolish or modi fy the provision by

apply ing va

rious pr ov isi on s of the Gu ide lin e s or statut e s af fe c tin g the m. “ An y a mou nts of su pp ort th a t areno t le g a lly mandated but a

re i m p o sed solely

by the MDA, a

re not subjec t to revision by the court.” Bryan v. Leach , 85 S.W .3d 136, 151 (Tenn. Ct. App. 2001). When the parties ag ree to p ro v i d e a dditional child support not require d by law, the courts of this state wil l not relieve the parties of that obligation when suc h obligations later pr o ve burde nsome or ill conce ived. Id

. at1 5 2 (c i t i n g Marshall v. Jack son & Jones O ils, Inc ., 20 S.W. 3d67 8, 68 2 ( Te nn . Ct . A pp
. 19 99 ))

. We f indthe tria l c ou rt

did not err in r efusing to abolish the “additional child support” pr ovision in t he MDA.
Du ri ngor al ar gumen t, Hus ban d p oi nt ed t o t he l anguage us ed i n t he “ad di ti on al c hi ld sup po rt ” provision in the MDA, noting it re fer s to “21% of a ll bonus or other income a s defi n ed by the Tenne ssee Child Support Guidelines.” He arg ues t hat he never intended to pay more c hild support than an a mount required unde r the Guide lines, espec ially since the MDAsta t es t he child support obligation is i n compliance with the Guidelines. I n addition, Husband conte nds that the Guidelines do no t de fi ne “ oth e r i nc ome ,” on ly “ g ro ss inc ome .” Ho we ve r, the re c or d r e ve a ls that H us ba nddid intend to provide child support in excess of that re quired by the Guidelines. Prior to the final dec ree of div or c e , Hu sb a nd su bmi tte d a me mor a nd um re qu ir e d b y the loc a l rule s o f c ou rt

fo r S he lby

Cou nty which provide d:

7. Husband should pay child support pursuant to the Child Sup po rt Gu ide lin e s to be calc ulate d a s f oll ow s: 21 % o

f hi s b as e salary of $160,000 to be paid m onthly; plus 21%of amounts included
a s i n c o m e , s u c h a s b o n u s e s , e t c
. a s de f i n e d by th e G u i de lin e s u pon Husband’s r ece ipt of same, base d on timely notice to Wife of re ceipt and payment to her within 10 day s of re ceipt.
Acc ording ly , we find Husband int ended to provide additional child support in the amount of 21% on all amounts, other than his base salary , quali fy i n g as i n co me under the Guidelines. The Guidelines provide:

Gross income sha ll include all income fr om any source (bef

ore ta x es and other deductions), whe ther e arne d or unea rned, and includes but is n ot l imi te d to , th e fo llo wi ng : w a g e s, sa lari e s, c omm is sions , bonuses , overtime pay ments, dividends , seve rance p ay , p e ns ion s, interest, trust income, a nnuities, capital gains , benef its rece ived from the S oci al Se c urity

Ad min ist

ratio n, i.e ., Ti tle I I

Soc ia l Se c urity benef its, workers c om p ensation bene fits whether temporary

or perma nent, judg ments rec overe d for pe rsonalin jurie s , u n e mp lo yme nt insurance b en efits, g ifts, prizes, lott ery winnings, a limonyor maintenanc e, and inc ome from se lf-employment. Tenn. Comp. R. & Reg . 1240-2-4- .03(3)( a)1 ( 2003) (e mphasis added)

.T he M D A p ro vid es: “ H usb an d shall p ay t he t uit i o n, ro o m a nd b o ard c o st s, an d ed uc ati o na l f ee s fo r M ary R o se 6
to a tten d fo u r (4 ) ye a rs o f co lleg e up to a m a x im u m a g g re g a te a m o u n t e q u a l to tha t fo r a b o a rd ing stud e n t at D a rtm o u th C ol l ege
. ”

I n h i s br i ef , H u s ban d c i t es t o s ec t i on 36- 2- 101( e) ( 1) ( B ) of t h e T en n es s ee Code. H owe v er , s ec t i on 36- 2- 101 7

o f t he T enness ee C o d e, d eal i ng wi t h p at erni t y , has b een repe al ed b y t he l egi sl at ure. W e p res um e H usband i s ref erri ng to the a b o v e c ited se c tio n o f t h e T e n n e sse e C o d e
. -14- I n his second issue on a

ppeal, Husband alleg es the trial c ourt err ed in applying the “additional child support” provision to the seve ranc e payment he re ceive d from his previous e mploy er. The trial court’ s ord e r

r e s u lt s in Husband pay ing $310,551.00 in a dditional child support on the severance payment. Husband a

rg ues such a n awa

rd constitutes error

for two r easons: (1) it violates section 36- 5-101(e )(1) (B ) of the T ennesse e Code, whic h was in eff ect when Husband rec eived his severance payment, and (2) this “ one-time” event should not cre ate a child support obligation because cre ating an additional trust, when H usband alre ady ag ree d to pr ovide for Daug hter’s education in the MDA, 6 would result in a windfa ll to W ife not conte mplated by the Guidelines. Section 36-5-101( e)( 1)(B ) of the Te nnessee Code provides that, “ if the n et i n co m e of the 7 obligor exceeds ten thousand dollars ($10,000) pe r month, then the custodial parent must prove by a pr e po nd e ranc e of

the e vid e nc e that c hil d s up po rt in ex c e ss o f that a mou nt .

. . is r e a so na bly nece ssary to provide for the needs of t he mi nor child.” Tenn. Code Ann. § 36-5-101(e )(1) (B ) (2003)

. Husband, howe ver, o v e rlo o k s the fac t that he has c ontrac tually obligated himself to pay

child support above the amount mandated by the Guidelines. See H

aas v. Haas , No. 02A01- 9 6 0 4 -C V- 0 0 073, 1997 Tenn. App. LEXI S 269, at *9–10 (Tenn. Ct. App. Apr. 22, 1997) (noting that the amount over that require d by the Guidelines does not merg e into the dec ree , and bec omes enfor cea ble as a ny other co n tr a c t)

. H a v in g d o n e s o , th e tria l c o u r t c o r r e c tl y ma d e th e s e v e r a n c e p a y me n t s u b je c t t o the “additional child support” pr ovision in t he MDA. See B ryan v. Leac h , 85 S.W .3d 136, 151–52 (Tenn. C t

. Ap p. 2001). “The establishment of a trust for educational or other pur poses for the benef it of a child is a discre tionary mechanism or alternative arr ang ement that is available to the trial co u rt in fashioning a support aw ard f or the be nefit of the c hild.” Id

. a t 1 5 3 ( c it a ti o n s omitted). Acc ording ly , we a ffirm the tria l court’s de cision in this reg ard.
I n his third issue raised on a ppeal, Husband arg ues the trial c ourt err ed in re fusing to reduc e Husband’s inc ome from the se verance pay ment by that portion attributable to salar y he would have re c e ive d h a d h is e mpl oyme nt n ot b e e n te rm inate d in19 97 . H us band c on te nd s th a t, b y faili ng to reduc e the c hild support owed on the seve ra n ce b y t hat amount attributable to sala ry , he has be en or de re d to e ffect ive ly

pay c hil d s up po rt

on thesa me so ur c e of

inc ome tw ic e . H ow e ve r, a t tria l, Husband’s a ccounta nt, Mr. DeGutis, testified reg arding the proper amount of child support owed on the seve ranc e pac kag e. In fac t, he pre pare d an exhibit entit led “Calc ulation of Potential Additional Child S upport on Severance and Other Post-Employ ment Ben ef its from PCS ” which show ed the po te n t i a l a d d i t i o n a l c h i l d s u p p o r t t o b e $ 3 1 0 , 5 5 1

. 0 0

. M r
. D e G u t i s t e s t i f i e d t h a t h e p r e p ar e d th is document at Husband’s request, and, in fac t, Husband tol d him what to include or exclude from the document. This document doe s not mention an exclusion f o r s alary previously

owed. HusbandT he T enn es s ee R ul es o f A pp el l at e P r ocedur e p r ovi de as fol l ows: “ E xce pt as provi ded i n Rul e 28(c) , r ef er enc e 8 in th e b rie fs to the re c o rd sh a ll b e to the p a g e s o f t h e re c o rd inv o lve d

. . . .” T e n n . R . A p p . P . 2 7 (g ) (2 0 0 3 ). -15- cannot be hear d to complain when his ow n acc ountant proposes an amount owed on the se verance packa g e as c hild support, and the trial court subsequent l y order s that exact amount in its order. Ac c or din g ly , w e fi ndthi s is su e to b e wi tho ut m e ri t.
I n his fourth issue, Husband a rg ues the trial court e rre d when it ruled: “ That Mr. Ke sser be ordered t o i m m ediately

pay to Ms. Kesser the sum of $90,715.41 plus interest beg inning January 2000, as the a dditional child support amounts due pursuant to the acc ounting err ors and a s testified to by Vallette W indham.” Husband raises numerous sub-issues w ithin the framew ork of this larg er issue. First, Husba nd arg ues that this ruling by the trial court constituted error beca use the trial c ourt failed to de duct from this a mount inter est owed on the SARs withholdings. Husband a rg ues that the trial court, in esse nce, a war ded Wife the same amount twice. Husband states in his brief that he ref uted the ca lculations relied on by Ms. Wi ndham by

“his own testimo n y , ” b u t he dire cts our a tte nti on to a pr e -t

ri a l a ff ida vit a nd a pr e -t

ri a l me mor a nd um he su bmi tte d to the tria l c ou rt . O nly his pre- trial memorandum wa s introduced a s an exhibi t at trial. Howeve r, Husband doe s not direct us to any particula r authority

in his pre-trial memor andum to support a differe nt result. I n addition, we ha ve no t locate d, no r d oe s H us ba nddir e c t ou r atte nti on to, a ny te sti mon y

in the re c or d b y

his a c c ou ntant r e fu tin g the c a lc ulatio ns ma de by Ms. Wind ha m. Matte rs of c re dib ili ty arele ft wi thi n 8 the so un d d isc re tio n o f the tr ia l c ou rt

. Br own y ar d v . B ro wny ar

d , No. 02A01-9803- CH-00063, 1999 Tenn. App. L

EXI S 385, at *18–19 (Tenn. Ct. App. June 22, 1999). Second, Husband arg ues t his amount includes capital g ains ea rned by Husband for

tax y ear s 1995, 1996, and 1997. Husba nd contends the tria l court er red by ref using to off

set these c apital g ains by capital losses. Husband contends the G uidelines’ def inition of gross income is based upon t h e c o n c e p to f

g r o s s i n c o m e i n t h e f

e d e r a l t a x c o d e , w h i c h a l l o w s a n o f f s e tf o r c ap i t a l l o s s e s
. In support of this propositi on, he cites our decision in Alexande r v. Alexander , 34 S.W .3d 456, 462–63 (Tenn. Ct. App. 2000), w here we state d:

We start b y n o t i n g that capital g ains areincluded within the definition of g ross income in the Guidelines. Te nn. Comp. R. & Reg ., ch. 1240-2- 4-.03(3) (a)

. See also Brook s v. Brooks , 992 S.W .2d 403, 407 (Tenn. 1999) (“G ener ally , capital g ains are included in the definition of g ross income.” ). F ather arg ues that “the re i s no ind ic a tio n th a t th e te rm

‘c apit a l g a ins ’ [as us e d in the Gu ide lin e s] is a na log ou s to the te rm

us e d intheI nte rn a l Re ve nu e Cod e .” Whil e thi s c or re la tio n is no t e xpre ssl y

state d in theGu ide lin e s, we fi nda ndho ld t h a ti t i s l o g i c a l t o e q u a t e t h e s e t w o c o n c e p t s
. S p e ak i n g rh e t o r i c a l l y, if we c annot use the de finition of a ca pita l gain ada

pted by the-16- I nterna l Revenue Service, to what source should we re sort? Father does not sug g est an a lternative de finition.
However, in A b e r

c r o m b i e v
. Ab e rc ro mb ie , N o
. E 2 0 0 3

- 0 1 2 2 6

- C O A

- R 3

- C V , 2 0 0 4 T e n n
. A p p
. LE X IS 187, at *22–25 (Te nn. Ct. App. Mar. 29, 2004), westated:

Whil e a fe de ra l in c ome ta x re turn is a va lua ble so ur c e of

data when c alculating an oblig or' s chi l d support obligation under the Guidelines, it is important to recog nize that the object of a ta x return is very differ ent from that of the Guide lines. A tax return is desig ned to determine " taxable inc o m e" under the fede ral tax code; the Gui del in es ar e des igned to det erm in e "netin com e" as tha t c on c e pt i s defined in the Guidelines . T he Gu ide lin e s' " ne t in c ome " c on c e pt i s va stl y dif fe re nt f ro m th e fe de ra l ta x cod e's co nc e pt o f " ta xab le inc ome ." By th e sa me tok e n, theGu ide lin e s' c on c e pt o f " g ro ss income" is not the s ame a s the fede ral tax code' s conce pt of " adjusted g ro ss i nc ome ." Th us , wh ile a ta x r e turn, g e ne ra lly sp e akin g , w ill y ie ld valuable da ta for a

trial court in setting child support, it is a mist ake to use t he federa l tax return as if the concepts mentioned abovewer e int e rc ha ng e able . T he y

areno t. Under the Guide l i n es , "gr o s s i n co m e" i ncludes " capital g ains." Howeve r, the Guide lines' definiti o n of " g ross income" does not include a refe renc e to " capital losses" or to " neg ative ca pital gains," n o r ar e th e s e te r ms me n ti o n e d ina n y o th e r p ar t o f th e G u id e li n e s
. We believe the re is a g ood rea son for this omission. Gene rally speaking , in the typical non-install m ent s ale of a c apit a l a sse t a t a

pr of it, the se lle r i mme diate ly

g e ts ( 1) a re turn o f h is c os t or oth e r b a sis a nd(2) hi s p ro fi t. T he Ge ne ra l A sse mbl y , in a do pti ng the Gu ide lin e s, ma de a po lic y de c isi on that pr of it o n th e sa le of a c apital asset is a pa

rt of an oblig or' s g ross income. This make s sense beca

use, in the typical sale of a capital asset at a profit--say

of a publicly -trade d common stock--t h es e ll e r r e c e iv e s cash r epre senting a re turn o f h is c os t or

other bas is an d h is p ro fi t. Wh e n o ne se lls a capital a sset at a loss, the loss simply erode s the seller' s capital. The se lle r d oe s n ot h a ve " to g o into his or he r poc ke t" to p a y fo r the los s ou t of oth e r s pe nd able fu nd s. I n th e c a se of a c apit a l g a in, a va ila

ble funds to pay

child support are s upplemented while, in the othe r c a s e
- - t h a t o f a c ap i t a l l o s s
- - t h e r e i s n o d e c r e a s e i n s p e n d ab l e m o n e y; rathe r there is an erosion of the seller' s capital a sset base. While the fede ral government has made a policy decision to consider , in a lim ite d f a sh ion , the e ro sio n o f the ta xpa y e r' s c apit a l a sse t ba se in ca l cu lating " taxable income," there is nothing to sug g est that the-17- Guidelines have adopted a simil ar a pproac h to the calc ulation of " net income."
Ac c or din g ly , we fi ndthi s a rg ume nt t o b e wi tho ut m e ri t anda ff ir m th e tr ia l c ou rt ’s de c isi on no t to allow an of

f-se t to this amount for c apital losses.
Th ir d, Hu sb a ndarg ue s th e tr ia l c ou rt e rr e d b y re qu ir ing Hu sb a ndto pay additio na l c hil d suppo rt on capital g ains derive d from the sa le of a ssets awa rded to him under the MDA, which pr ov ide s:
The re q u irement to pay 21% of a ll other income a s defined by the Te nn e sse e Chi ld S up po rt Gu ide line s sh a ll b e g in w itha ny inc ome rec eived a ft er J uly

25, 1995 and shall not appl y to the
sa le /li qu ida tio n o

f as se ts w hic h a re su bje c t to div isi on pu rsu an t to T.C. A. § 3 6- 4- 12 1 a nd

whi c h as set s are div ide d e lse whe re in t his Agreem ent

. Husband c ontends that, within the additional child support awa rd, t h e t ri al court included ca pital g a ins on sto c k h e re c e ived di stribu te d to him un de r the fi na l di vo rc e de c re e . T his , a c c or din g to Husband, violated the above c ited provision in the MDA. Although H usband cites to no authority for this proposition, we find our state ment in Taylor v. Taylor , No. M1999-02398-COA- R3-CV, 2003 Tenn. App. L EXI S 426 , at * 2 9 (Tenn. Ct. App. June 6, 20 03 ), to b e ins truc tiv e :

As a g ener al matter, a ll capital g ains – eve n those rea liz ed from an isolated transac tion – must be considere d as g ross income for the purpose of

determining an oblig or paren t ’s child support oblig a ti o n
. T e n n
. Co mp
. R. & Re g s
. r
. 1 2 4 0

- 2

- 4

- . 0 3 ( 3 ) ( a ) ( 1 9 9 4 ); B ro o k s v
. Brooks , 9 92 S.W. 2d40 3, 40 7 ( Te nn . 1 99 9) . T he on ly judicially cre ated e x ception to this rule involves ca pital gains re su lti ng fr om the sa le of a n a sse t to fu ndthediv isi on of pr op e rty in a divorc e ca se. Alexande r v. Alexander , 34 S.W .3d 456, 464 (Tenn. Ct. App. 2000). The purpose o f t his ex ception is to preve nt the “double dipp i n g” t hat would re sult if capital g ains wer e conside red both as a marital asset and a s income. Having established that the “additional child support” provision is contrac tual in nature, the above cited lang uag e in the MDA c lear ly est ab l i s h es t hat the par

ties did not int end for

the ca pital gains from the sa le of such pr operty to fall within the purview of t he additional child support provision. Acc ording ly , the trial court e rre d to the extent the trial court’s aw ard is base d on such amounts. On rema nd the trial court is inst ructe d to determine that portio n o f the $90,715.41 awa rd which-18-

repr esents ca

pital gains from the sale of property awa rded to Husband in the final divorce decr ee and deduct suc h amounts from the a war d.
Husband’s f

ourth contention with reg ard to the $90,715.41 additional child support awa rd is that it contains certa in non-ca sh, non-taxable compensation credited by Husband’s f

ormer e mpl oy e r t o c e rt a in r e tiremen t ben efi ts. We n e e d n ot d e c ide , a s Wif e su g g e sts , w he the r the se amounts constitute income under the Guidelines. We need only ref er to the a bove cited pr ovision of the MD A, w he re the pa rt ie s e xpre ssl y

a g re e to e xclu de fr om the “ a dd iti on a l c hil d s up po rt ” calc ulat i o n an y income g ener ated f rom the sale/liquidation of prope rty awa rded in the divorc e decr ee. The MDA expressly awa rds Husband his re tirement bene fits. Accor dingly , the trial court err ed in including such amounts in its calculation of additional child support. On re mand, the trial court is to determine those amounts repr esenting contributions to Husband’s retireme nt plans and deduct them f

rom the over all awa

rd.
We now turn to Husband’s fi n al arg ument involving this issue, where he ar g ues that the $90,715.41 includes i ncre ases in Husband’s sa lary above the $166,000 base sa lary at the time of the divorce . We ag ree with Husband in that such amou n t s should not be used to calc ulate additional child support. First, the “ additi o n al ch i l d support” provision in the MDA itself re fer ence s “other income” and speaks of

“b o nuses.” Sec ond, Husband’s ba se child support oblig ation, discussed more fully below, is based solely

upon his fix ed annua l salary . Any chang es to this base child support amount rema in subject to modification under the Guidelines. See P enland v. Pe nland , 521 S.W .2d 222, 224 (Tenn. 1975). Acc ording ly , the t rial court err ed in including within the awar d of additional child support any

amounts attributable to Husband’s incre ases in ba se salary

. On rema nd, the trial c ou rt is i ns truc te d to ide nti fy

su c h amo un ts an d de du c t th e m f ro m th e fi nal a wa

rd of a dd iti on a l c hil d support.
Husband’s f

ifth issue on appea l focuses upon the trial court’ s inclusion of a $40,000 bonus
e arn e d b y Hu sb a nd in 20 02 in c a lc ulatin g bo th H us band ’s ba se c hil d s up po rt ob lig a tio n a ndhis additional child support obligation. Particularly , the trial court held that Husband ow ed $6,580.00 plu s in te re st o n th e bo nu s a s a dd iti on a l c hil d s up po rt . We dis c us s is su e s re la te d to H us ba nd ’s ba se c hil d s up po rt

ob lig a tio n mo re fu lly

be low , b ut f

or ou r p ur po se s h e rewe no te that th e a dd iti on a l c hil d support provision, which re mains contrac tual in nature, clearly states t hat Husband will pay 21% of all “bonus” income as additi onal child support in addition to his base child support obligation. The Guidelines cle arly

mandate that the trial court is to consider “all income f

rom any source ” including “bonuses” when c alculating g ro s s income. Tenn. Comp. R. & Re g . 1240-2-4- .03(3)( a)1 ( 2003). Acc ording ly , we a ffirm the c ourt’s d ec i s i o n to apply the additional child support provision to the $40,000.00 bonus, and the trial c ourt did not err in using this same amount to calculate Husband’ s additional child support obligation.At t he t i me of t he order , H us band an d hi s cu r r ent wi fe were att em p t i ng t o ado pt a t hi r d chi l d f r om Chi na. 9 T h e ir e ff o rts p ro v e d su c c e ssfu l wh e n the y a d o p te d the ir third c h ild in N o v e m b e r 2 0 0 3

. -19- B. Husban d’s base c hild s upport obl igation

Re g ard ing Hu sb a nd ’s ba se c hil d s up po rt ob lig a tio n, the tria l c ou rt ru le d, in r e le va nt p art , a s f oll ow s: Mr. Kesse r filed his Rule 14(c ) Aff idavit on J uly 9, 2003. This Affidavit shows Mr. Ke sser’s gr oss income of $280,147.00 per y e ar. B a se d u po n th e de du c tio ns sh ow n, his ne t in c ome pe r m on th i s $17,341.58. (No provisions nee d be made for his cur rent wife , J anice Kesser ’s income, a lthough it appe ars on the affidavit.) Pursuant to the new provision of the Tenne ssee Child Support Guidelines, since an incre ase in support is a ppropriate , Mr. Kesse r’s net income should be reduc ed by six teen (16%) [si c] because he ha s tw o ( 2) oth e r c hil dr e n at ho me that he is l e g a lly re qu ir e d to su pp ort. 9 Th is r e d u c e s M r
. K e s s e r ’ s n e ti n c o m e t o $ 1 4 , 5 6 6

. 9 3 p e r m o n th ($17,341.58 x 84% = $14,566.93). This bec omes Mr. Ke sser’s ne t income for child support purposes. Apply ing the twenty -one pe rce nt (21%) to his net results i n a base child support amount of $3,059.05 ($14,566.93 x 21% = $3,059.05) per month. S i n ce M r. Ke sser’s ne t income exceeds $10,000 pe r month, the Court must order a

minimum chil d s u p p o rt in the amount of $2 ,1 00 .0 0. Th e re ma ini ng a mou nt o f c hil d s up po rt that is app ro pria te be c ome s d isc re tio na

ry wi th the Cou rt . T his a mou nt, $9 59 .0 5, sh ou ld be pa id t o M s. Ke sse r b e c aus e the c hil d, Ma ry Ros e , atte nd s a

private sc ho ol that , as Ms. K e sse r t e sti fi e d, c os ts $ 12 ,0 00 .0 0 p e r y e ar t o attend. There fore , based upon Mr

. Kesser ’s income, a nd upon the application of the child support g uidelines Mr. Ke sser’s c hild support should be incre ased to $3,059.00 per month beg inning Aug ust 2003. Ms. Ke sse r’ s o bli g a tio n to re imb ur se Mr

. Ke sse r $ 35 0. 00 pe r m on th f o r tr a v e l s h o u ldb e mo d if

ie d to p r o v id e th a t th e r e imb u r s e ment pay me nt b e ma de by

c re dit ing Mr . K e sse r w iththat a mo un t on hi s monthlychild support obligation, ex cluding any month in which no air tra vel for visitation with Mr. Kesse r is involved. Hu s b an d h as ra i s ed s ev er al i s s u es o n ap p ea l co n t es t i n g t h i s as p ec to f t h e t ri al co u rt ’s ru l i n g.
Husband’s s ix th issue on appea l addre sses Wife’s fa ilure to prove that additional support was ne c e ssa ry pu rs ua nt t o s e c tio n 3 6- 5- 10 1( e )( 1) (B ) o f the Te nn e sse e Cod e , w hic h p ro vid e s:Al t houg h r ai s ed as an i s s ue un der t he t r i al cour t ’ s t r eat ment of t he “ addi t i onal ch i l d s uppo r t ” pr ovi s i on, we 10
pau s e h er e t o n ot e, on ce a g ai n , t h at t h e t r i al cou r t pr oper l y i n cl u ded t h e $40, 000. 00 bon u s e ar n ed by H u s ban d i n 2002 in its c a lc u la tio n o f t h e b a se c h ild su p p o rt o b liga tio n
. See T en n
. Code An n
. § 36- 5- 101( e) ( 1) ( B ) ( 2003) ; T en n
. Comp. R. & Reg

. 1240- 2- 4-

. 04( 3) (2003) (“ T h e c ou r t m u s t con s i der al l ne t i n come of t h e obl i g or a s de f

i n ed ac cor di n g t o 1240- 2 -4 -.0 3 o f t h is ru le .” ). -20-

No tw ith stand ing a ny

pr ov isi on of thi s se c tio n or a ny oth e r l a w o r r

ule to the contra

ry , if the net income of t he oblig or excee ds ten thousand dollars ($10,000) per month, then the custodial pare nt must prove by a pre ponderance of

the evidenc e that ch i l d s u p port in excess of the amount, [calculated by

multipl y ing the appropriate per centa g e set forth in the child support g uidelines by a net income of ten thousand dollars ($10,000) pe r month], i s rea sonably nece ssary

to provide for the ne e ds of the min or

c hil d o r c hil dr e n o f the pa rt ie s. I n ma

kin g its determination, the court shall consider all available income of the obligor , as re quired by this chapte r, and shall make a written finding that child support in excess of the amou n t so calc ulated is or is not rea sonably

nece ssary

to provide for

the nee d s o f the minor child or children of

the parties.
Te nn . Co de An n. § 3 6- 5- 10 1( e )( 1) (B ) ( 20 03 ); see also Tenn. Comp. R. & Reg . 1240-2-4- .04(3) (2003). The trial c ourt expressly ref ere nces Wife’s testimony reg arding Daug hter’s private sc hool 10 tuition, which the trial court relied on to justify an amount in excess of the $2,100.00 mandated by the Guidelines. Husba nd contends this is errone ous because Daug hter ha s attended private sc hool since 1996, ther efor e, an inc rea se is not justi fied.
“While we will set aside a discretionary

decision if it re s t s on an inade quate e videntiary foundation or if it is contra ry to the g overning law, we will not substitut e our judgme nt for that of the trial court merely

beca use we might have chosen another a lternative.” State ex re l. Vaughn v. Kaatrude , 21 S.W .3d 244, 248 (Tenn. Ct. App. 2000). The re cord doe s not preponder ate a g ainst the tr ia l c ou rt ’s fi nd ing that a n a mou nt of c hil d su pp ort abo ve that re qu ir e d by the Gu idel in es is war rante d in this case. See Turner v . Y ovanovitch , No. M2002-0 1164-COA-R3-CV, 2003 Te nn. Ap p. LEX I S 65 6, a t *1 0– 12 (T e nn . Ct . A pp
. S ept. 11 , 2 00 3) . In a dd iti on , th e tria l c ou rt c ou ld properly order that any amount above the amount set by the Guidelines be placed int o a trust i n favor of Daug hte r. Te nn . Co mp. R. & Re g . 1 24 0- 2- 4- .0 4( 3) (f ) ( 20 03 ); see also Re dmond v. Hunt , N o. W2004-00127-C OA -R 3 -J V, 2004 Tenn. A pp. LEXI S 830, at *13–15 (Tenn. Ct. App. De c. 10, 2004).
I n his se venth issue, Husband a rg ues the trial c ourt err ed by failing to consider a

downwar d de via tion i n ch il d s up po rtbas ed o n Hu sb and ’s e x cess vi si tat io n wi th Dau ghter . Hu sb and sp e c if ic ally reque sted a downwar d deviation based on excess visitation in his pe tition for modification, y et the trial court’s final judg ment made no mention of suc h reque st. Husband contends the trial court “complete ly

failed to c onsider a dow nwar d deviation base d on excess pare nting a s require d by the Gu ide lin e s. ” Ho we ve r, a t th e he ari ng on Hu sb a nd ’s mot ion to al te r o r ame ndthe fi na l ju dg me nt,H us band al s o ar gu es t hat t he t r i al cour t er r ed by not r educi ng hi s addi t i onal chi l d s uppo r t ob l i gat i on t o re f l ect 11 hi s ne ed t o provi de for hi s o t her chi l dren

. A s st at ed prev i ous l y , t he addi t i onal ch i l d s uppo r t provi s i on i s a c ont r act ual
o b liga tio n w h ic h w e d e c line to m o d ify. See Bryan v. Leach , 8 5 S .W .3 d 1 3 6 , 1 5 1 (T e n n . C t. A p p . 2 0 0 1 ). -21- the tr ia l c ou rt

he ardor a l arg ume nt f

ro m bo th p art ie s r e g ard ing thi s is su e , b ut the c ou rt de c lin e d to modify the child support obligation based upon Husband’ s arg ument.
Th e Gu ide lin e s pro vid e that, “[i]n situatio ns wh e reov e rn ig ht t ime is d ivi de d mo ree qu a lly betwee n the par ents, the courts will have to make a case- by-c ase dete rmination a s to the app ro pria te amoun t o f

s u p p o r t ( r e f

e r e n c e 1 2 4 0

- 2

- 4

- . 0 4 )

. ” T e n n
. Co mp
. R. & Re g
. 1 2 4 0

- 2

- 4

- . 0 2 ( 6 ) (2003) ( e m p h a s i s a d d e d )

. A tr i a l c ou rt“ ma y c onsider a downwa

rd deviation from the g uidelines if the obligor demonstrates that he/she is c onsistently providing more car e and supervision for the childre n than c on te mpl a te d in the ru le .” Te nn
. Comp. R. & Re g
. 12 40 -2 -4 -. 04 (1 )( b) (2 00 3) ( e mph a sis a dd e d) ; bu t see Pa rri sh v . P ar ris h , No. W2004-00021-COA-R3-CV, 2004 Te nn. App. LEXI S 771, a t * 9

– 1 3 ( T e n n
. Ct

. A p p
. N o v
. 1 7 , 2 0 0 4 ) ( n o ti n g th a t a n u p w ar d d e v iati o n is man d a tor ywhen a pare nt fails to exercise visitation for the a vera g e period set forth in the Guidelines) . “De viation from the g uid e lin e s may be appropriate in other cases when the court finds it is i n the best intere st of the child(re n) includ i n g
. . . case s where phy sical custody of the c hild(ren) is more equa lly divided betwee n the parties than occur s in a situation whe re one party has an a vera g e amount of ove rnig ht visitation as defined in 1240-2- 4-.02(6) .” Te nn. Comp. R. & R eg. 1240-2- 4-.04(2) (b) ( 2003) (empha sis added).
I n h is b ri e f, Husb and make s se ve ra l st a te me nts to i nd ic a te he sp e nd s mo retim e wi th Daug hter than c ontemplated by the Guidelines. How ever , Husband doe s not direct this Court to any instance in the r ecor d wher e he de monstrated to the trial court that he “is consistently providing more car e and supe rvision for the c hildren than c ontemplated in the rule .” See T en n
. C o m p
. R

. & R eg. 1240-2-4- .04(1)( b) (2003) ; see also Ten n. R. A pp . P. 27 (g ) ( 20 03 ) ( “ Exc e pt a s p ro vid e d inru le 28(c) , reference in the briefs to the r ecor d shall be to the pag es of the r ecor d involved.”). Acc ording ly , we c annot say that the trial court erre d in this reg ard.
I n his eig hth issue, Husband ar g ues the trial c ourt properly reduc ed his base c hild su p p o rt obligation to reflec t his dutyto provide for his other two childre n, but the court e rre d by not taking into account Husband’s t hird daug hter whom he became leg ally obligated to support in November 2003 afte r the trial court enter ed its fina l judg ment. Husband raised this issue in his motion to alter 11
or ame nd the final judgme nt, and, after the hearing on H usband’s motion, the trial court issued an or de r d e nying the mot ionbu t pr ov idi ng :

2. Reg arding the issue of a child support adjustment for the a do pti on of

a thi rdc hil d, theDe fe nd a nt mus t sh ow that heis l e g a lly ob lig a te d to pr ov ide su pport f or the c hil d. On c e the De fe nd a nt i s leg ally obligated to support the child he may Petition t he Court for a modification of his child supp o rt as provided by the g uidelines andH u sb a n d inc lud e d in h is m o tio n to a lter o r a m e n d a re q u e st tha t t h e trial c o u r t is s u e a r u lin g o n W ife’s 12 obl i g at i on to rei mbu r s e h i m for t h e SARs t ax es h e ov er
- wi t h h el d f r om t h e 1997 SARs e x er ci s e i n t h e amou n t of $ 2 ,1 7 5 .3 5

. H u sb a n d a lso inc lud e d a re q u e st tha t t h e c o u rt issu e a ru ling re g a rd ing W ife’s o b liga tio n to re im b u rs e him fo r $ 7 6 0 .0 0 in o rth o d o n tic tre a tm e n t f o r D a u g h te r. -22- the Petition shall be refe rre d to the Shelby Co u n t ry [ s ic] Divorce Re fe re e a s p ro vid e d inthe loc a l rule s.
Se c tio n 3 6- 5- 10 1( e )( 4) (A ) o f the Te nn e sse e Cod e pr ov ide s:

I n addition to any

other subtractions, calc ulations of net income unde r the g uidelines shall take into consider ation the s u p p o rt of any other c hil dr e n th e ob lig or

is le g a lly re sp on sib le to pr ov ide . T he c ou rt sh a ll consider the children of

the obligor

who are not included in a dec ree of c hil d s up po rt , b ut f

or wh om the o bli g or

is l e g a lly re sp on sib le to provide support a nd is supporting for t he purpose s of re ducing the ob lig or ’s ne t in c ome , in cal culat ing the g uid e lin e a mou nt, or a s a re a so n f or de viatio n f

ro m th e g uid e lin e s.
Te nn
. Cod e An n. § 36 -5 -1 01 (e )( 4) (A ) ( 20 03 ); see also Tenn. Comp. R. & Reg . 1240-2-4- .03(4)( e) (2 00 3) . Wif

e arg ue s th a t th e tr ial cou rt c omm itt e d n o e rr or

be c aus e Hu sb a ndha d n ot l e g a lly obligated himself to support the third child at the time of the he aring . Wife contends that the trial court c ould n o t enter

hypothetical child support base d on an oblig ation Husband may or may not have inc urre d. I n order

to preve nt endless litigation and to promote finality in resolving the issues prese nted on appea l, the trial court is instruc ted to e ntertain any petition f iled by Husband on re mand se e kin g a mod if ic a tio n to his ba se c hil d s up po rt ob lig a tio n— c on sis te nt w iththeGu ide lin e s, thi s op ini on , a ndthe loc a l rule s of c ou rt —b a se d u po n h is i nc ur

ri ng a le g a l ob lig a tio n to su pp ort hi s adopted third c hild. Husband’s ninth issue simply restate s prior ar g uments in support of hi s position t hat the trial court e rre d in setting his futur e ch i l d support obligation. I n this section of his brief, Husband p r o p o s e s a

f o r mu la f o r th is Co u r t t o u s e ins e tt in g h is f u tu r e c h il d s u p p o r t o b li g a ti o n
. We h ave a dd re sse d th e se sa me arg ume nts in the pr e vio us pa ra g ra ph s o f this op ini on , a ndwe ha ve se t f orth thos e in s tan c e s w h e r e a r e man d is n e c e s s ar y
. A c c o r d in g ly , w e f in d H u s b a n d ’ s n in th is s ue to be wi tho ut m e ri t.
I n his tenth issue raised on a ppeal, Husband contends the trial court e rre d in failing to awar d him certa in amounts owed to him by Wife. Husband cla ims the recor d showed that Wife owe d the following sums: (1) $760.00 for Da ug hter’s orthodontic treatment whic h, pursuant to the MDA, the pa rt ie s a re to p a y fo r e qu a lly ; a nd(2 ) $ 2, 17 5. 35 in u nd e r- wi thh e ld t a xes f ro m th e 19 97 SAR s exer c is e
. I n a d d it io n , H u s b a n d n o te s th a t th e tria l c o u r t r e v is e d th e M D A p r o v is io n c o ncer ning

12 Wife’s duty to pr ovide $350.00 per month in travel costs, which the MDArequire d Wife to pay eac h month to defray

Husband’s tra vel expenses incurre d in e x erc ising his visitation with Daug hter. The-23-

tr ia l c ou rt ’s or de r p ro vid e d: “ Ms. Ke sse r’ s o bli g a tio n to re imb ur se Mr

. Ke sse r $3 50 .0 0 p e r m on th for travel shoul d be modified to provide that the reimburse ment payment be made by cre diting Mr. Kesser with that amount on his monthl y child support obligation, ex cluding any month in which no air tra vel for visitation with Mr. Kesse r is involved.”
The trial c ourt order ed Wife, pursua nt to the order r eg arding the v i sitation iss ues, to pay Hu sb a nd“ $1 ,0 41 .4 4 for tr a ve l re imb ur se me nt pa y me nts pr e vio us ly un pa id or , in the a lte rn a tiv e , if she so req u es t s , the father may cre dit those ag ainst one of his monthly child support payments.” Father re quests this Court t o enfor ce the provision in the MDA, y et Father is the one that reque sted the trial court modify

this M DA provision to alleviate Wife’ s late payments. We cannot find that the trial court abused its discretion re g arding the trave l expenses, espec ially in light of the f

act that the court saw fit to adjust the visitation schedule at the pa rties’ re quest. Upon re viewing Father’s petition for modification, we f ind no refe renc e to Daug hter’s ortho do nti c tr e a tme nt or un de r- wi thh e ld SARs ta xes. Ho we ve r, lik e so ma ny iss ue s in vo lve d inthi s case , the record does reve al t hat these issues we re trie d by consent of the parties. See Tenn. R. Civ. P. 15 .0 2 ( 20 03 ); Childs v. Roane County Bd. of Educ ., 929 S.W .2d 364, 366 (Tenn. Ct. App. 1996). Father off

ere d proof at trial, without objec tion by Wife, that Wife owed him $760.00 for D aug hter’s orthodontic treatment and $2,175.35 in under- withheld taxes from the 1997 SARs ex erc ise. Upon revi ew i n g the final judg ment and the c ourt’s ruling on Husband’s motion to alter or amend the judgme nt, we find no de finitive statement by t h e co u rtresolving these issues. Ac cording ly , on rema nd the trial court is inst ructe d to determine w hether these a mounts should be paid by Wife.
C. The SAR s exerc ises
Tu rn ing to the SAR s e xer c ise s, the tria l c ou rt , r e lying on the te sti mon y of Mr . D e Gu tis , found that Husband’ s eff

ective ta x rate for 1996 wa s 34.01%. As such, the trial court rule d that Hu sb a ndow e d Wif

e a dd iti on a l a mou nts on the SAR s e xer c ise s a s f oll ow s: 1996 SARs
Gross amount $1,043,233.12 Effe ctive tax rate 34.01%
I ncome Ta x attributed to SARs 354,803.58 Medica re ta x 1.45% 15,126.87 Social Security 4,960.00
Total Tax Due 374,890.45
Total Net Due to Ms. Kesser ($1,043,233.12 – $374,890.45) $668,342.67-24- L ess orig inal amount paid by Mr. Kesse r 584,210.55 L ess sec ond amount paid by Mr. Kesse r 21,182.69 Total owed by

Mr. Kesse r (not including interest) $62,949.43
The sa me c a lc ulatio n mu st b e ma de fo r the 19 97 SAR s e xer c ise , w hic h is a s f

oll ow s: 1997 SARs
Gross amount $109,882.96 Effe ctive tax rate 29.47%
I ncome Ta x attributed to SARs 32,382.51 Medica re ta x 1.45% 1,593.31 Social Security 4,960.00
Total Tax Due $38,935.82
Total Net Due to Ms. Kesser ($109,882.96 – $38,935.82) $70,947.14
L ess amount paid by

Mr. Kesse r 64,776.01 Total owed by

Mr. Kesse r (not including interest) $6,171.13
As a re sult of Mr. Kesser char g ing Ms. Ke sser more taxes than that cha

rg ed by the I RS and reta ining those additional sums, Mr. Ke sse r o we s Ms . K e sse r the su m of $6 9, 12 0. 56

. I nter e st s ho uld acc rue, at the rate of five pe rce nt (5%) be g i n ning January 1997 (for the 1996 amount due) and January 1998 (for the 1997 amount due)

. I n h is e le ve nthiss ue raise d o n a pp e a l, H us ba ndbe g ins by c on te nd ing the tria l c ou rt e rr e d in ordering him to pay

$69,120.56 in improperly withheld taxes because the issue had not bee n raised in any of the pleading s filed by Wife. First, Husband c ontends the trial court erre d proce durally by e nte rt a ini ng the iss ue wh e n Wif e didno t in c lud e theiss ue in any of he r p le a din g s. Ac c or din g to Husband, the r ecor d d o es n ot support the trial court’ s conclusion bec ause Wife mer ely “floated a theory ” at tria l he had no c hance to rebut

. W e fi n d this aspect of the eleve nth issue raised by Husband to be without merit. Wife’s petition f or contempt did list specific g rounds for r elief, but she also included a

reque st that the trial court order Husband to “c omply with the terms of the Marital Dissolution Agr eeme nt” and f or g ener al re lief. That this issue was prope rly befor e the tria l-25-

court is furthe r evide nced by Husband’s ow n pre- trial memorandum, in which he de votes six pag es to the issue. Throug hout these pag es Husband repe atedly ref ere nces Wife’ s arg uments reg arding the SARs ex erc ises. Acc ording ly , it is disinge nuous for Husband to now ar g ue the tria l court could not properly entertain the issue. Even if Wife f ailed to ade quately plead the issue, we f ind that the issue has bee n tried by

consent of the parties. See Tenn. R. Civ. P. 15. 0 2 (2 0 0 3 ). “Tria l of an issue by implied consent will be found when a party opposed t o the m otion knew or should reasona

bly have known of the e vidence relating to the ne w issue, di d n o t o b j ec t t o this evidence , and wa s not prejudice d there by .” Childs v. Roane County Bd. of Educ ., 929 S.W .2d 364, 366 (Tenn. Ct. App. 1 9 9 6 ) ( ci t i n g Zack Chee k Builders, Inc . v. McLeod , 597 S.W .2d 888 (Tenn. 1980) ).
Ne xt, H us ban d c on te nd s th e tria l c ou rt e rr e d s ub stanti ve ly

in c a lc ulatin g the imp ro pe rl y withheld taxes on the SARs exerc ises. I n calc ulating the amount of taxes im properly withheld by Hu sb a ndon the SAR s e xer c ise s, the tr ia l c ou rt stated : “Vi nce De Gu tis , M r. Ke sse r’ s a c c ou ntant, testified that M r. Kesser’s effe ctive tax rate for 1996 was 34.01%.” Husband c ontends that the court err ed by using e ffe ctive tax rates to re ach the final amount. In this c ase, both parties pre sented e x pert te sti mon y by the ir re sp e c tiv e a c c ou ntants on the pr op e r me tho d to c a lc ulate the imp ro pe rl y wi thh e ld taxes on the SARs ex erc ises. After thoroug hly

revie wing the re cord, w e conc lude that the evide nce prese nted to the trial court re g arding this iss ue does not pre ponderate ag ainst the trial court’s finding of fa ct. When the resolution of the issues in a c ase de pends upon the

c re dib ili ty

of wi tne sse s, the tria l ju dge who ha s th e op po rtun ity to observe the witnesses in their manner and demea nor while testifying is i n a fa r be tte r po sit ion than thi s Cou rt to de c ide tho se iss ue s. See W hitaker v. W

hitaker , 95 7 S.W. 2d 83 4, 83 7 (T e nn
. Ap p. 19 97 ); see al s o Mc C a leb v. Saturn Corp. , 910 S.W .2d 412, 415 (Tenn. 1995)

. The we ight, f

aith , an d credit to be g iven to any witness’s testimony li e s i n t h e f

i r s ti n s t a n c e w i t h t h e tr i e r o f f a c t , a n d t h e c r e dib ili ty acc orded will be given gr eate r we ight by the appe llate court. See I n re Estate of W

alton v. Y oung , 950 S

. W

. 2 d 9 56, 959 (Tenn. 1997) ; McCaleb , 910 S.W .2d at 415. The tria l court will no t be re verse d unless there is found in the rec ord cle ar, c oncre te, and c onvincing e vid e nc e oth e r tha n th e or a l te sti mon y of wi tn esse s th a t c on tr a dic ts t h e t rial cour

t’s finding s. Se e Ha wk ins v . E lli s , 1 9 9 8 T e n n . App. LEXI S 673, at*11, No. 02A01-9708-CH- 00203, 1998 W L7 04521, at* 4 (T en n
. Ap p
. Oc t

. 1 2 , 1 9 9 8 ) ( ci t i n g G a l b r e a th v
. H a rri s , 8 11 S.W .2d 88, 91 (Tenn. A pp. 1990)).
Br own y ar d v . B ro wny ar

d , No. 02A01-9803- CH-00063, 199 9 Tenn. App. L EXI S 385, at *18–19 (T e nn . Ct. App . Jun e 22 , 1 99 9) ; see also Randolph v. Randolph , 937 S.W .2d 815, 819 (Tenn. 1996) ; Morris v. Norwood , No. E 1 9 9 9

- 0 1 3 2 8

- CO A

- R3

- CV , 2 000 Tenn. App. L EXI S 251, at *12–13 (Tenn. Ct. App. Apr. 24, 2000).-26-

I n his twelfth issue raised on appea l, H usband contends the trial court err ed in awar ding Wife $8,199.36 for 1996 a nd $735.10 for 1997 in inter est on the amount Husband w ithheld on the 1996 and 1997 SARs exer cis es. Husband a rg ues the MDA, a long w ith the letter memorializing the parties’ ag ree ment reg arding the t axes withheld on the S ARs income, “established a f rame work for dealing with the SARs income, the applicable tax es , an d the re lated tax withholdi ng s.”

“ Pr e jud g me nt i nte re st .

. . ma y be a wa rd e d by c ou rt s .
. . in a c c or da nc e wi th the princ ipl e s o f e qu ity at any rate not in ex cess of

a maxi mum e ffe ctive rate of ten per cent ( 10%) pe r annum. . . .” Tenn. Code Ann. § 47-14-123 (2003). “The awa rd of pr ejudg ment interest is within the sound discretion of the tr ia l c ou rt

a ndthe de c isi on wi ll no t be dis tur be d by a n app e llate c ou rt

un le ss the re c or d r e ve a ls a manifest and palpable abuse of discretion.” Spence r v. A-1 Crane Serv., Inc ., 880 S.W .2d 938, 944 (T en n
. 1 9 9 4 ) ( ci t i n g Otis v. Cambridge Mut. Fire Ins. Co. , 850 S.W .2d 439, 446 (Tenn. 1992) ). Our ex ami nation of the re cord in this case does not reve al an a buse of discr etion by

the trial court reg arding this iss ue.
D. Attorn ey’s fee s
We now come to Husband’s thirteenth and final i ssue on appea l. Husband contends the trial c ou rt e rr e d ing ranti ng Wif

e $4 3, 00 0. 00 in atto rn e y ’s fe e s b e low

. Hu sb a ndarg ue s th e re c or d r e ve a ls that both part ies p re va ile d o n v ari ou s is su e s; Wi fepr e va ile d o n mo reof the c hil d s up po rt

iss ue s, while Husband pr evailed on m ore of the visitation iss ues. I nstead, Husba nd arg ues the trial c ourt should have re quired e ach pa rty to pay their respe ctive attorney ’s fee s. I n the alternative, Husba nd contends the tria l court should have limited Wife’s attorne y ’s fe es “to those f ees and ex p enses related to those issues on which she w as succ essful.”
The trial c ourt’s final judg ment provided:
Ms. Kesser

has incurr ed attorne y fee s in e x cess of $43,000.00. Mr. Ke sse r ha s a dmi tte d th a t he ha s n ot o be y e d th is C ou rt ’s Or de r. Ms. Kesser ’s Petitions dealing w ith support and visitation were an atte mpt to p ro te c t he r chi ld . M r. Ke sse r s ho uldbe re sp on sib le fo r M s. Ke sse r’ s atto rn e y

fe e s.
I n c a se s in vo lvi ng the e nf or c e me nt o f a c hil d su pp ort ob lig a tio n, the le g isl a tur e ha s p ro vid e d th a t: The plainti ff spouse may

rec over f rom the def

endant spouse, and the spouse or other

person to whom the c ustody of the child, or c hildren, is a war ded may rec over from the other spouse rea son ab l e a ttorney fe e s in c ur

re d ine nf

or c ing a ny

de c re e fo r a lim on y

a nd/o r c hil d support, or i n reg ard to any suit or action conc erning the adjudication of the c ustody

or the c hang e of c ustody of any child, or ch i l d ren, of the parties, both upon the orig inal d ivorce hearing and at any subsequent hea

ring , which fe es m ay

be fixed and allowe d by the-27- court, before whom such ac tion or proce eding is pending , in the dis c re tio n o f the c ou rt

. Tenn. Code Ann. § 36- 5-103(c ) (2003) . “The decision to awa rd attorne y ’s fe es t o a party in a divorce proce eding is within t he sound discre tion of the trial court and will not be disturbed upon ap p e a l u n le s s th e e v id e n c e p r e p o n d e r a te s a g a in s t s u c h a d e c ision.” S t o rey v . Storey , 835 S.W .2d 59 3, 59 7 ( Te nn . Ct . A pp. 19 92 ) (c itatio ns omi tte d) . We c a nn ot f indthat th e tria l c ou rt

abu se d it s discretion in this reg ard.
I n turn, Wife requ es t s that this Court award he r attorne y ’s fe es incurr ed on appe al. “The determination of whether

to awar d attorney ’s fe es for an appeal is within our discretion.” Harris v. Ha rri s , 83 S.W .3d 1 3 7 , 1 4 1 (Tenn. Ct. App. 2001) ( citing T enn. Code Ann. § 36- 5-103 (2000) ). Since bot h parties have been partially succe ssful on appea l, we decline Wife’s re quest. Se e Ba gg e tt v . B ag ge tt , 5 12 S.W. 2d29 2, 29 4 ( Te nn . Ct . A pp . 1 97 3) ; se e als o Pa rri sh v . P ar ris h , No. W2004- 00021-COA-R3-CV, 2004 Te n n
. Ap p
. L EXI S 771, at *24–26 (Tenn. Ct. App. Nov. 17, 2004).
IV. C ONCL US I ON
For the re asons set forth here in, we af firm in part, reve rse in pa

rt, and rema nd this case to the trial court f

or further proc eeding s consistent with this opi nion. Costs of this appea l are to be born equally betwee n the Appellant, Peter Hale K esser , and his surety , and the Appellee , Mary Warren K e s s e r , f o r w h i c h e x e c u t i o n m a y i s s u e i f n e c e s s ar y.

___________________________________

ALAN E. HI GHERS, J UDGE