# FILED February 12, 1999 Cecil Crowson, Jr. Appellate C ourt Clerk IN THE COURT OF APPEALS OF TENNESSEE WESTERN SECTION AT JACKSON

______________________________________________ JOLEEN DANIELLE BEDDOW CRESON, Plaintiff-Appellee, Shelby Equity No. D25936-1 Vs. C.A. No. 02A01-9801-CH-00002 TAMMY LYNN CRESON, Defendant-App

ellant.

__________________________________________________ __________________________ FROM THE CHANCERY COURT OF SHELBY COUNTY THE HONORABLE NEAL SMALL, CHANCELLOR

James D. Causey, J

ean E. Markowitz

of Memphis For Appellee Eugene G. Dougla

ss, Jr. of Barlett For Appellant

REVERSED IN PART, AFFIRMED IN PART AND REMANDED Opinion filed:

W. FRANK CRAWFORD,

PRESIDING JUDGE, W.S.

CONCUR: DAVID R. FARMER,

JUDGE DAVID G. HAYES, JUD GE This is a divorce case concerning the allocation of mari tal debts, a ttorney’s fees, and child support. D ef

endant-Appellant, Tammy Lynn Creson (Husband), appeals from the judgmentof the trial court awarding Plaintiff-Appellee, Joleen Danielle Beddow Creson (Wife),2

$5,000.00 in attorney’s fe es, $586.43 in monthl

y child sup port, and ordering him to pay the marital debts. The parties were married on January 27, 1993. At the time of the marriage, Wife was twenty-three years of age, and Husband was thirty-five. A son, who was four and a half at the time of the divorce hearing, was born of the marriage. It was the second marriage for bo th parties, and neither party had children from prior marriages. The parties both have high school educations and are in good physical and mental condition. Wife is twenty-eight years of age and is employed at Equitable Agri-Business. She earns approximately $21,000.00 per year with a gross monthlysalary of $1,750.00 and a net monthly salary of $1,506.36. Husband is forty-one years of age and is employed as a truck driver for Keebler Company. His gross monthly salary is $2,399.00 with a net monthly salary of $970.00 after monthly d edu ctions including a deduction of $760.00 due to his Chapter 13 bankruptcy filing. M oreover, Husband has additional income of $300.00 per month from a r enter residing in

his residence, and he also has additional income of approximately $400.00 per month during the spring and summer months earned from his l

awn service busi

ness. On June 31, 1995, the parties separated, and on July 20, 1995, Wife filed a complaint for divorce alleging irreconcilable differences and inappropriate marital conduct. On December

19, 1996, Husband filedan answer admitting i rreconcilable

differences w

hile denying inapp

ropriate marital conduct. In a dditio n, on January 21, 1997, Husband filed a counter-complaint for div orce alleging irreconcilable differences and inappropriate marital conduct. Wife’s an swe r denies the inappropriate marital conduct allegation. After a hearing, a Final Decree of Divorce was en te red by the trial court on December 4, 1997. The trial court granted both parties a divorce pursuant to T.C.A. § 36-4-129. Joint custody of

the parties’ child was ordered by consent of the parties with Wife designated as the primary custodial parent and Husband awarded visitation. Wife was awarded child su

pport in the amount of $586.43 per month and was awarded $5,000.00 in attorney’s fees as alimony in solido

. Moreover, Husband was ordered to pay W ife $5,000.00 as he

r portion of the eq

uity in the marital residenc

e inreturn for Wife’s execution of a quit claim deed transferring all of her right, title and interest in the residence to Husband. The court ordered that Husband be responsible

for the payment of all marital debts as support and maintenancefor Wife and ordered3

Husbandto reimburse Wife for money she had paid on a Chevy Chase Mastercard account and a NBC bank loan. Husband perfected this appeal and presents the following issues for our review: (1) Whether the trial court erre d in ordering Husba

nd responsible for all of the mar

ital debts. (2) Whether

the t rial court erred in ordering Husband to pay $5,000.00 to Wife for

a portion of her attorney’s fees as alimony in solido

. (3) Whether the trial c ourt erred in aw arding Wife $586 .43 in monthly child support based on Husband’s income. Since this case was tried by the court sitting without a jury, we review the case de novo upon the record with a pre sumption of cor rectness of the f indings of fact by t

he trial court. Unless the evidence preponderates against the findings, we must affirm, ab sent err or of law. T.R.A.P. 13(d). Marital Debts Husbandcontends th at the trial court erred in ordering him responsible for all of the marital debts and ordering him to reimburse to Wife any amount that she had previously pai d toward them. He submits that the proof at trial revealed that the two debts at issue, the Chevy CaseMastercard debt and the NBC debt, were j oint ma rital bills. He argues that most of the debts involved either the parties’ child, the p arti es jointly, or Wife individually and that there

was n o proof that he alo ne used or individu

ally benefitted f

rom the charges.

Furth ermore , Husbandsubmits that Wife is in much better financial condition to pay al l or a port ion of the marital debts give

n the financial sta

tus of the parties. Wife assert s th at the evidence does not preponderate against the trial court’s decision concerning the division of the marital debts. She argues that there was no proof that she solely benefittedfrom the debts in qu estion. She als o contends that Husband is in better financial condition to pay the debts in question since most of the remaining marital debt will be discharged

in bankruptcy and since Husband has t he financial ability to pay the debts. Wife argues that she does not have the ability to pay the debts given the fact that she has other debts which she is responsible

for and should not b

e forced to use

the child support award

to pay the debts. Trial courts have broa d discretion in divid

ing the marital est

atein a divorceproceeding. Kincaid v. Kincaid, 912 S.W.2d 140, 143 (Tenn. App. 1995). Marital debt should be allocated4

in the same manner a

s marital assets a

nd should

b e considered whe

n making an equitab

le division of property. Herrera v. Herrer a , 944 S.W.2d 379, 389 (Tenn. App. 1996). Marital debts are those debts incurred during the marriage for the join t benefit of the parties. Mondelli v. Howard , 780 S.W.2d 769, 773 (Tenn. App. 1989). The tr ial court should first separate individual debts from marital debts, Herrera , 944 S.W.2d at 389 (citing Batson v. Batson , 769 S.W.2d 849 (Tenn. App. 1988)), and then divide only the marital debts. Mondelli , 780 S.W.2d at 773. Whe n dividing marital de

bts, courts should

consider the following factors: “(1) wh ich party incurr

ed the debt and the

debt’s purpose; (

2) which party be

nefitt ed fro m incurring the debt; and (3) w hich party is best a

ble to assume

and repay the debt.” Id. (citations omitted). From a review of the record, th e debts in question are marital debts. Given the nature of the debts in question and in consideration of the above enumerated factors, we find that the trial court abused its discretion in holding Husband solely responsible for the debts in question and in ordering Husband

to reimburse

Wife for amounts paid toward such debts. Even though there is conflicting testimony b y both parties concerning the debts, it is apparent that both parties incurred the debts, both benefitted from the debts, and both have the ability to assume and repay the debt s. Thus, Husband and Wife should be held equally responsible for the Chevy Chas e Mastercard

debt and the NBC debt. As to the amount that Wife has paid toward such debts, this amount should be taken into considerationin a llocating the marital debts equally between the parties. Attorney’s Fees The trial court ordered Husband to pay $5,000.00 of Wife’s attorney’s fees leaving her witha balance of

approximately $3,500.00 to pay. Husband contends that the trial court erred in ordering him to pa

y Wife $5,000.00 in

attorney’s fees as alimony in solido . He argues that Wife is not in

need of such given the fact that she received appr

oximately one-ha

lf of the parties’ assets but none of

the marital debt, the amount of her monthly net income, and the amount she received from the equity of

the marital residence. Furthermore, Husband contends that he does nothave the ability to pay the attorney’s fee award in that he has no assets except the house, he has filed for

Chapter 13 bankruptcy, and he has only approximately $1,670.00 in net income per month out of which he must

pay child support o

f over $500.00 in a

ddition to his living ex

penses.5

Husbandalso contends that the trial court failed to make a ny finding as to the cr

iteria used in determining an award of attorney’s fees especially fault on the part of Wife. He argue s that although both parties were at fault for the demise of the marriage, Wife should not be rewarded for contributing to the divorce and should therefore

be responsible

for her own attor

ney’s fees. Husbandfinally argues th at Wife’s action

s protracted the

lit igation res ulting in the amount of her attorney’s f

ees. On the other hand, Wifeasserts that the trial court did not abuse its discretion in ordering Husbandto pay a portion of her attorney’s fees since she is in need of such an award. She states that, contrary to Husba

nd’s figures, she

received a neg

ative amount from t

he division of prope

rty in that she received the $15,000.00 debt on her vehicle while Husband received almost all of the value as a result of the division of property. In further suppor t of her contentio

n, Wife asserts that the only liquid asset she received was the $5,000.00 payment for her interest in the equity of the home, that

she did not receiv

e periodic or rehabilitative

alimony, and that, i

n addition to the debt on her car,

she was left with a

$2,858.00 credit c

ard debt and owing

approxima

tel y $3,500.00 in attorney’s fees. Thus, she contends that she does not have the r

esources to

pay the attorney’s fees and that she should not be re quire d to use the child support payments or her meager wages from her employment to pay the fees. Wife further asserts that Husband has the greater income, that he has the capability to earn additional monies, and that if she is ordered to pay the fees she will deplete all of the assets she received in the divorce. Finally, Wife argues that many of Husband’s

actions, rather

than actions on he

r part, caused th

is m atter to be protracted

thereby increasing the amount of her attorney’s fees. Wife also requests that this Court award her a

ttorney’s fees in

curred on this app

eal. Attorney fee awards are trea ted as alimony. Gilliam v. Gilliam , 776 S.W.2d 81, 86 (Tenn. App. 1988). In determining whether to award attorney’ s fees, t he trial court sho uld consider the relevant factors in T.C.A. § 36-5-101 (d)(1). Houghlan d v. Houghland , 844 S.W.2d 619, 623 (Tenn. App. 19 92). Where the w

ife demonstrates

that she is financ

ially unable to afford counsel, and where the husband has the ability to pay, the court may properly order the husband to pay the wife’s attorney’s fees. Id. ; Harwell v. Harwell , 612 S.W.2d 182, 185 (Tenn. App. 1980). Furthermore, the award of attorney’s fees is within the sound discretion of the trial court, an d unless the evidence preponderates against the award, it will not be disturbed on6

appeal. Lyon v. Lyon , 765 S.W.2d 759, 762-63 (Tenn. App. 1988). Consi de ring th e record as a whole, and all

factors involved, and in view of our decision regarding the material debts we do not feel that the trial court abused its discretion in ordering Husband to pay a portion of Wife’s attorney fees. Given the status of the parties and the division of property, Wife does not have t he resources or ability to pay these fees while Husband has the ability to pa y such

. Husband’s income is greater than Wife’s, thou g h not by much, and Husband’s bankruptcy paymentsshould be complete thereby increasing his net income. However, we believe that the respective par

ties should bear th

e expense of the

ir own attorney’s

fees for this app

eal. Child Support In the Final Decree of Divorce, the trial court or dered Husband to

pay Wife child support for the parties’ child. In the decree, the trial court stated:

3. Child

Sup port . H usband shall pay to Wife the sum of 21% of his current income or $586.43 as child sup

port per month until the child graduates from high school or attains the age of 18, whichever is later. . . . Husbandcontends that the c hild support awar

d was improperly

calculated. He states that his gross earnings from Keebler Company are $2,399.00 per month. He asserts that according to the child support gu

idelines, th

e chil d support award sh

ould have been $4

03.00 per month b asedon his monthly salar y. Furthermore, h

e states that the tr

ial court also took

into consideration his income of $300.00 per month from the renter a

nd $400.00 per month

from his lawn service business . Husband submits tha t such is self-employment income, and, utilizing the guidelines,the child support should have been $124.53 per month from such income. Adding the two amounts

together, Husbands avers that the proper amount of child support is $527.53 per month. Wife submits that the amount of child support awarded was essentially correct. She states, however, that the trial court erred when it failed to us e Husband’s earning capac ity to determine the amount of child support. Wife asserts tha t Husband is willfull

y and voluntarily underemployed, and, given this circumstance, child support should have been calculated on the potential income of Husband accordin g to the child support guidelines. She bases this contention on testimony elicite

d from Husband in w

hich Husband testi

fied as follows: The last time we were

in Court, which was

January of ‘95, I

told the judge, the refere e, that I would not do it anymore because I7 didn’twant her to

have the money wit

h me just working my

tail off all the time. So I hav

en’t gone back to

the same amount of people that I’ve had before. Wife further bases this contention of willful and voluntary underemployment in thatHusband had been earning approximately $200.00 per week from his lawn service bu siness and is now only earning $100.00 per week. She submits that the trial cou rt should have bas ed Husband’s gross income for child support purposes on his monthly i ncome from Keeb ler Company of $2,3 99.00, his monthly rental income of $300.00 and his potential income from his lawn service business of $866.67. Furthermore, Wife contends that Husband’s net income from the following is $2,752.13 and that 21% of such would result in a child support award of $587.39. However, Wife submits that if this Court does not fi nd th at Husband was wil lfully and voluntar

ily underemployed

, she will accept Husband’s figure regarding child support of $527.53. Child support in Tennessee is statutorily governed by T.C.A. § 36-5-101 (Supp. 1998). Section 36-5-101(

e)(1) provides t

hat “[i]n making it

s determination concerning theamount of

su pport of any minor child or children of the parties, the court shall apply as a rebut tabl e presumption the child support gu ideline s as provided in this subsection.” The guidelines referenced

are promulgated by the Department of Human Services in

Chapter 1240-2-4 of the Official Compilation of the Rules and Regulations of the State of Tennessee. The pres umptively correct amount of support is based upon the obligor’s net inco me . Gross income is calculated in accordance with Tenn. Comp. R. & Regs. Ch. 1240- 2-4-.03(3 ), and net income is calculated by subtracting only the deductions allowed by rule 1240-2-4-.03(4). After net income is determined, the presumptively correct amount of s upport i s calculated by taking the percentage of net income that is specified in rule 1240-2-4-.03(5) for the number of children the obligor is to support. For o ne child, the percentage of net income is 21%. Tenn. Comp. R. & Regs. Ch. 1240-2-4-.03(5). Tenn. Comp. R. & Regs. Ch. 1240-2-4-.03(3)(a) provides, in pertinent part, asfollows: Gross income shall include all income from any source (before tax es and other deductions), whether earned or unearned, an d includes but is not limited to, the following: wages, salaries, .

. . and income from self-employment. Income from selfemplo ym ent

includes income from business operations and rental properties,

etc., less reasonable expenses necessary to produce such income. . . .8 As for net income, Tenn. Comp. R. & Regs. Ch. 1240-2-4-.03(4) provides, in pertinent part: Net

income is calculated

by subtracting from gross income of the obligor FICA (6.2% Social Secu rit y + 1.45% Medicare for regular wage earners a

nd 12.4% Social Sec

urity + 2.9% Medicare for self-employed, as of 1991, or any amount subsequently set by federal law as FICA

tax), the amount of withholding tax deducted for a single wage earner claiming o n e withholding allowance . .

., and the amount of

child support ordered pursuant to a previous order of child support for other children. . . . The guidelines also pr

ovide that “[i]f a

n obligor iswillfully and volunt arilyunemployed

or underemployed, child support shall be calculated based on a d etermination of potential income, as evidenced by e ducational level

and/or previous w

ork experience . Tenn. Comp. R. & Regs. Ch. 1240-2-4-.03(3)(d). Husband’s gross income

from his employment at Keebler Company is $2,399.00. From this amount, $1,429.00 is deducted. However, part of the deductions encompass a deduction of $760.00 for bankruptcy payment, a deduction of $26.02 for hea lth insu rance, and a deduction of $8.94 for union dues. These deductions are not inc luded in the guidelines a s deductions to be considered in calculating net income. See Tenn. Comp. R. & Regs. Ch. 1240-2-4-.03(4). As

su ch, these d eductions are not to be considered in determining Husband’s net income for purposes of calculating child support. From a review of the record, it is unclear whether or not these deductions were taken into account in determining Husband’s child suppor t obli gation. Moreover, Husband has income from a renter of $300.00 per month and income of $400.00 per month

from his lawn serv

ice business. Acc

ording to the guidel

ines, these amounts should be taken into account in deter mining gross income . The trial court p roperly took these amounts into consideration in determining the amount of child support to be awarded. However, it is unclear from th

e record whethe

r or not these amou

nts were reduce

d to take into consideration the amount of withholding to be deducted from this income. Wife’s contention th

at Husba nd is willfully under employed in that he

has reduced his number of clients with regard to the lawn service business

is rejected. Husba

nd is employed fulltime as a truck driver

with the Keebler

Company. The lawn s

e rvice business was a par t-time endeavor on Husband’s part. Inessence, Husband has two jobs. Taking this into consideration, this Court does not view Husband’s reduction of the number of clients he services in his lawn9

service business as willful underemployment o

n his part given the fact that he is a full-time truck driver. Thus, the amount of income de rived from the law

n service busines s to be taken into consideration is approximately $400.00 per month rather than his potential income from such.

From the record we are unable to determine how the trial court calculated Husband’s net in order to set the c

hild support awar

d. As such, it is uncl

ear how the tria

l cour t reached the conclusion that child support should be $586.43 per mon th . However, it does appear that the trial court improperly calculated the amount of child support to be awarded in light of the foregoing. Thus, the decision of the trial court with regard to the amount of the child support award is re versed and r emanded for a pr oper calculatio

n. On remand, the t

rial court is to determine the amount of Husba nd’s net inco me from his employment at Keebler Company withoutconsidering the ba nkruptcy deducti

on, the health

insurance deduction or the deduction for union dues. Furthermore, the trial court is to de

termine Husband’ s net

income from his selfemployment endeavors (i.e., the income from the renter and the lawn service business). Once these two amounts are dete

rmined, they are

to be added togethe

r and then multiplie

d by 21% to determine the proper amount of the child support obligation . Pendi ng the trial court’s determination of the child support award, the amount presently awarded shall be paid. Accordingly, the judgment of the trial court concerning child support and ma rital debts is reversed. The cas e is remanded for further proceedings consistent with this opinion for the division of the marital deb ts and the award o

f child support. Th

e judgement of the

trial court is affirmed in all other

respects. Costs of

the appeal are a

ssessed one-half

to appellant and on

e-half to appellee.

_________________________________ W. FRANK CRAWFORD, PRESIDING JUDGE, W.S. CONCUR:

____________________________________ DAVID R. FARMER,

JUDGE

____________________________________ DAVID G. HAYES, JUD GE