Court Opinion

ID: 1078201
Source: CourtListenerOpinion
Date Created: 2013-10-09 20:26:09.651927+00
Date Added: 2024-06-11T15:45:47.242411
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                         WESTERN SECTION AT JACKSON
                 ______________________________________________

THOMAS HENRY CAMPBELL,

       Plaintiff-Appellant,
                                                                         FILED
                                                   Shelby Chancery No. D12056-2
Vs.                                                C.A. No. 02a01-9803-CH-00073
                                                                       November 4, 1998
RUTH CAROLINE CAMPBELL,
                                                                         Cecil Crowson, Jr.
      Defendant-Appellee.                                    Appellate C ourt Clerk
____________________________________________________________________________

                 FROM THE SHELBY COUNTY CHANCERY COURT
                THE HONORABLE FLOYD PEETE, JR., CHANCELLOR

                          David E. Caywood, Marc E. Reisman
                Causey, Caywood, Taylor, McManus & Bailey of Memphis
                                     For Appellee

                              Dennis J. Sossaman of Memphis
                                       For Appellant

                              AFFIRMED AND REMANDED

                                      Opinion filed:

                                                          W. FRANK CRAWFORD,
                                                          PRESIDING JUDGE, W.S.

CONCUR:

DAVID R. FARMER, JUDGE

HEWITT P. TOMLIN, JR., SENIOR JUDGE

       This appeal involves a motion to modify an alimony award. Appellant, Thomas Henry

Campbell (Husband), appeals from the Chancellor’s order denying his motion to modify alimony

and awarding Appellee, Ruth Caroline Campbell (Wife), attorney’s fees and costs.
        The parties were married on March 1, 1953 in Reno, Nevada. In December of 1982, the

couple separated and on August 21, 1984, Husband filed a complaint for divorce on the grounds

of irreconcilable differences. The parties entered into a Property Settlement Agreement

(Agreement) on April 22, 1985. Subsequently, a final decree of divorce was entered on May 6,

19851 which approved and incorporated the Agreement.

        The Agreement provides in pertinent part:

                 Husband agrees to pay to Wife the sum of $1,500.00 per month
                 as periodic alimony until Wife’s death or remarriage. It is
                 anticipated Wife may seek gainful employment and the fact she
                 is receiving wages in an amount not to exceed $800.00 per month
                 net pay after FICA and Federal taxes will not be a material change
                 of circumstances so as to warrant a decrease in the amount of
                 periodic alimony paid to her by Husband.

In addition, the Agreement required Husband to convey all of his right, title and interest in the

marital residence to Wife with Wife to assume payments on the first mortgage. The Agreement

also requires Husband to maintain a life insurance policy with Wife as beneficiary until she dies

or remarries. Furthermore, the Agreement requires Husband to provide a hospitalization and

major medical insurance policy for the benefit of Wife until she dies or remarries or becomes

eligible for such through employment which is comparable to that available through Husband’s

employment at the time of the divorce.

        On March 20, 1995, Wife filed a Petition for Scire Facias because Husband had

unilaterally reduced and eventually terminated his alimony payments. On March 31, 1995,

Husband filed a Motion to Modify the Decree specifically requesting the Chancellor “to reduce

his support payments to $200.00 per month, with medical payments to $300.00 per month.”2 In

support of his request, Husband alleges that there have been material and substantial changes in

circumstances since the entry of the divorce decree warranting a reduction in his alimony

obligation. Husband asserts that Wife’s financial upswing, which included an inheritance from

her mother’s estate, coupled with his financial downturn, which resulted in filing for bankruptcy

on his part, constitutes a substantial and material change of circumstances to justify the requested

        1
            At the time of the divorce, there were no longer any minor children in the couple’s
home.
        2
          In his brief before this Court, Husband’s concludes by requesting that his alimony
obligation be reduced to $300.00 per month.

                                                 2
reduction in alimony. In response to Husband’s motion, Wife asserts that Husband is able to

afford the support obligation and that she at all times has been in need of the support.

       In late July of 1995, a Divorce Referee denied Husband’s motion to modify the divorce

decree and awarded attorney’s fees to Wife in the amount of $20,000.00 plus costs in the amount

of $685.10. Subsequently, Husband filed a motion in Chancery Court requesting the Chancellor

to vacate the Referee’s ruling with regard to the motion to modify and the award of attorney’s

fees. On June 6, 1996, the Chancellor entered an order denying the motion to modify, affirming

the ruling of the Divorce Referee, and awarding Wife an additional $5,000.00 for attorney’s fees

incurred in defending the appeal.3

       Husband appeals and presents the following issues for review: (1) whether Wife’s

inheritance coupled with Husband’s bankruptcy constitute substantial and material changes of

circumstances to warrant a reduction in alimony, and (2) whether the Chancellor erred in failing

to overturn the initial award of attorney’s fees and in awarding additional attorney’s fees.

       Our review of this case is governed by T.R.A.P. 13(d), which provides that review of

findings of fact by the trial court shall be de novo upon the record of the trial court, accompanied

by a presumption of correctness of the findings, unless the evidence preponderates otherwise.

T.R.A.P. 13(d); Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993).

                                             Alimony

        Modification of an alimony obligation is authorized only if such is periodic alimony, as

opposed to alimony in solido. Brewer v. Brewer, 869 S.W.2d 928, 934 (Tenn. App. 1993).

T.C.A. § 36-5-101, which provides for spousal support, states, in pertinent part, that “on

application of either party for spousal support, the court may decree an increase or decrease of

such allowance only upon a showing of a substantial and material change of circumstances.”

T.C.A. § 36-5-101(a)(1) (1996 & Supp. 1998) (emphasis added). Whether there has been a

sufficient showing of a substantial and material change of circumstances is in the sound

discretion of the trial court. Wilkinson v. Wilkinson, 1990 WL 95571, at *4 (Tenn. App. W.S.

July 12, 1990) (citing Jones v. Jones, 784 S.W.2d 349, 352 (Tenn. App. 1989)).

       3
          The Chancellor determined that Wife had incurred $10,196.00 in attorney’s fees in
defending the appeal. However, in light of the fact that Wife had already been awarded
attorney’s fees incurred in the original hearing on this matter, the Chancellor reduced this amount
to $5,000.00.

                                                 3
       The party seeking relief on the grounds of a substantial and material change in

circumstances has the burden of proving such changed circumstances warranting an increase or

decrease in the amount of the alimony obligation. Seal v. Seal, 802 S.W.2d 617, 620 (Tenn.

App. 1990). The change in circumstances must have occurred since the entry of the divorce

decree ordering the payment of alimony. Elliot v. Elliot, 825 S.W.2d 87, 90 (Tenn. App. 1991).

Furthermore, the change in circumstances must not have been foreseeable at the time the parties

entered into the divorce decree. Id. If the change in circumstances was anticipated or in the

contemplation of the parties at the time they entered into the property settlement agreement, such

change is not material to warrant a modification of the alimony award. Jones v. Jones, 784
S.W.2d 349, 353 (Tenn. App. 1989).

       The decision to modify the alimony obligation is factually driven and requires a careful

balancing of several factors. Cranford v. Cranford, 772 S.W.2d 48, 50 (Tenn. App. 1989). The

factors set forth in T.C.A. § 36-5-101(d), applicable to the initial grant of spousal support and

maintenance, where relevant, must be taken into consideration in determining whether there has

been a change in circumstances to warrant a modification of the alimony obligation. Threadgill

v. Threadgill, 740 S.W.2d 419, 422-23 (Tenn. App. 1987).

       While T.C.A. § 36-5-101(d) enumerates several factors for the court to consider, the need

of the spouse receiving the support is the single most important factor. Cranford, 772 S.W.2d

at 50. In addition to the need of the spouse receiving support, the ability of the obligor spouse

to provide support is taken into consideration. Id.

       As part of Husband’s contention that his support obligation should be reduced, Husband

asserts that Wife’s inheritance of approximately $125,000.00 from her mother’s estate

subsequent to the divorce constitutes a substantial and material change in circumstances.

Husband also contends that a reduction is justified because, in addition to the inheritance, Wife

now owns the former marital house mortgage-free, purchased a new 1994 Honda vehicle with

cash, and is now receiving Social Security benefits along with proceeds from a V.A. Dependent

and Indemnity Fund.4 Furthermore, Husband avers that his financial downturn, which includes

his company’s and his joint bankruptcy in 1990 and the loss of numerous property rights to

       4
           Wife receives the V.A. fund for being a widow of a Korean War veteran.

                                                4
foreclosure, warrants a reduction in alimony.

          On the other hand, Wife asserts that Husband is a man of substantial wealth and earning

potential. Wife contends in her brief that since the divorce Husband has substantially increased

his assets:

                 by acquiring an interest in a valuable Cadillac lease which is paid
                 in full, an interest in a $30,000.00 Chevrolet Suburban which is
                 titled in his live-in lady friend’s name, an interest in real property
                 in Shelby County, Tennessee, an interest in at least 4 parcels of
                 real property in the State of Colorado, an interest in 107
                 condominiums in Memphis, Tennessee, an interest in two pieces
                 of property in Mississippi, an interest in a limited liability
                 corporation which, at least for the next 8 months, will pay him
                 $4,000.00 per month as a return in capital and cash value in a life
                 insurance policy.

          Furthermore, Wife asserts that, along with the accumulation of numerous assets,

Husband’s income has increased since the time of the divorce, and that one of Husband’s

business entities substantially contributes to his living expenses which is not charged to him as

income. According to Wife, despite the fact that Husband has gone through a bankruptcy

proceeding, his financial situation and lifestyle have improved since the entry of the divorce

decree.

          Wife argues that even though her income has increased due to the inheritance she

received and various other investments, Husband failed to prove that these matters were not in

the contemplation of the parties at the time of the divorce decree. In addition, Wife asserts that

while her income may have increased, the cost of living has substantially increased, and, as a

result, she is barely able to afford her reasonable expenses even with the full amount of alimony.

          It is true, as Husband argues, that inheritance may constitute a substantial and material

change warranting a reduction in the award of alimony. See Brewer v. Brewer, 869 S.W.2d 928

(Tenn. App. 1993). However, as previously stated, the determination of whether there has been

a change in circumstances to justify a modification in the support obligation is a factually driven

inquiry determined on a case-by-case basis. So while inheritance by one spouse may constitute

a change in circumstances in one case, inheritance under a different set of circumstances may fail

to constitute such. See Claiborne v. Claiborne, 1988 WL 5684 (Tenn. App. E.S. Jan. 29, 1988).

          While it is true that Wife has improved her financial status since the time of the divorce

due in part to the receipt of the inheritance from her mother’s estate, Husband has failed to carry

                                                   5
the burden thrust upon him in proving that such has constituted a substantial and material change

of circumstances. It must have been foreseeable to the parties in a marriage of thirty-two years

that Wife would receive an inheritance from her mother’s estate. Regardless, Husband failed to

carry his burden of proving that such was unforeseeable or that such was not within the

contemplation of the parties at the time of the Agreement.

        In addition, the Agreement suggests that the parties did not contemplate that $1,500.00

would be all the support that Wife would need. As noted above, the Agreement provides that

if Wife received future income from employment, such would not constitute a change in

circumstances. This suggests that the alimony agreed to was not contemplated to constitute all

that Wife truly needed.

        Furthermore, this Court does not believe that alimony of $18,000.00 per year was all that

Wife truly needed to support herself nor is it sufficient for Wife to maintain the standard of living

to which she was accustomed prior to the divorce. The record indicates that the parties enjoyed

a comfortable standard of living during their marriage and there is no evidence presented to

indicate that Wife is now able to enjoy a higher standard of living based on her alimony

combined with the proceeds from the inheritance.5 Wife’s Affidavit of Income and Expenses

establishes that she is just able to afford her reasonable expenses even when in receipt of the full

amount of spousal support.

        With regard to the marital residence, ownership of such mortgage-free was obviously

foreseeable and within the contemplation of the parties at the time of the divorce decree. The

Agreement provides for Wife to receive the marital residence and to assume the first mortgage.

Surely it was foreseeable that the mortgage would be paid-off and Wife would thereafter own

the home mortgage-free. Furthermore, the increase in equity in the marital home awarded to

Wife cannot be considered to constitute a substantial and material change in circumstances. See

Norvell v. Norvell, 805 S.W.2d 772, 775 (Tenn. App. 1990) (“[T]he increased value of marital

assets received in a divorce decree is not to be considered as a factor constituting a substantial

change in circumstances to support an alimony award reduction.”). In addition, Wife’s receipt

of monthly Social Security benefits and proceeds from a V.A. Dependent and Indemnity Fund

        5
        The record reveals that Wife receives through interest income and dividends from the
investment of the inheritance approximately $610.00 per month.

                                                 6
were foreseeable and, thus, presumably within the contemplation of the parties at the time of the

Agreement.

       With regard to Husband’s financial status, Husband’s protestations of poverty are not

supported by the record. At the time of the divorce, Husband had an income of approximately

$75,000.00. Following the divorce, Husband’s financial situation improved substantially

according to the record. At the beginning of 1990, the year in which Husband filed the Chapter

11 bankruptcy, Husband’s corporation, Professional Development Corporation, had a value of

approximately $3,100,000.00. In addition, according to a financial statement prepared in 1994,

Husband, approximately four years after the bankruptcy filing, had a net worth of approximately

$2,700,000.00, and according to a 1994 W-2 form from Campbell Management Company,

another business entity of Husband’s, his wages were $84,700.00 which did not account for the

numerous individual bills and debts paid for by the company. At the proceedings below,

Husband contended that his salary was $2,467.00 per month which is approximately $30,000.00

a year. However, this amount does not include the substantial contributions his business entity

provided for his living expenses which Wife asserts equals, at a minimum, approximately

$88,000.00 a year when added to his salary.

       Furthermore, in January 1995, during the time when Husband began to unilaterally

reduce his support obligation, Husband’s live-in girlfriend became an employee at his company

with a $30,000.00 salary, and Husband tendered a check to her in the amount of $5,500.00. Also

during this time, Husband leased a 1995 Cadillac and purchased a 1994 Chevrolet Suburban for

$30,000.00.6 Finally, there are numerous assets, such as, to name a few, a house in Memphis

valued at $285,000.00 and two houses in Colorado valued at $385,000.00 and $415,000.00

respectively, that Husband has acquired since the Agreement.

       The record indicates that while Husband may have suffered some financial setbacks due

particularly to his profession as a real estate developer, Husband’s financial situation has

improved, not deteriorated, since the execution of the Agreement. After extensive discovery on

the part of Wife, thwarted by evasive actions on the part of Husband, it was revealed that

Husband’s financial situation is not as disastrous as he claims. As previously stated, Husband

       6
          Even though Husband’s live-in girlfriend did not contribute financially, her name was
listed on each of these transactions.

                                               7
has acquired numerous rights in property and assets and has had significant increases in income

since the divorce decree. The record simply does not support Husband’s contention that there

has been a substantial and material change of circumstances when consideration is given to

Husband’s entire financial situation. The record taken as a whole does not reveal a man who

does not have the ability to provide $18,000.00 per year in alimony for which he is liable.

        Husband’s bankruptcy does not automatically constitute a substantial and material change

of circumstances. See Lampley v. Lampley, No. 01A01-9708-CH-00423, 1998 WL 44938

(Tenn. App. M.S. Feb. 6, 1998).    In Lampley, the husband had, since the entry of the divorce

decree, filed a Chapter 7 bankruptcy, suffered several financial downturns, and had acquired

numerous financial commitments. In contrast, the wife had acquired, as gifts from her mother

and son-in-law, three real estate properties which were used as rental property, had built a new

house for herself, and had numerous other financial upswings since the date of the divorce

decree. In an attempt to reduce his alimony obligation, the husband contended that he could no

longer pay the agreed alimony and that the wife was no longer in need of such. The wife

responded by noting that the husband’s earnings had increased since the divorce decree, that he

had purchased a new home with his paramour and her children, and that he had numerous other

assets unaffected by the bankruptcy. The Court, refusing to alter the husband’s alimony

obligation, said:

               Alimony is not a required provision in the marital dissolution
               agreement. . . . Nevertheless, the parties saw fit to include
               alimony in their agreement. It must be presumed that the alimony
               provision was part of the inducement or consideration for the
               other provisions regarding division of the marital estate. The
               Courts are justified in being reluctant to disturb an alimony
               obligation assumed under such conditions.

Id. at *5.

        We agree with the trial court that the changes in circumstances since the entry of the

divorce decree are not substantial or material insofar as Husband’s ability to pay and the Wife’s

needs. Accordingly, we affirm the Chancellor’s denial of Husband’s motion to modify the

divorce decree.

                                        Attorney Fees

        Husband contends that the Chancellor erred in affirming the Divorce Referee’s awarding

Wife $20,000.00 for attorney’s fees. Moreover, Husband contends that the Chancellor

                                               8
committed further error in awarding Wife an additional $5,000.00 for attorney’s fees incurred

on appeal of the Referee’s ruling.

       T.C.A. § 36-5-103(c) authorizes recovery of reasonable attorney’s fees incurred in the

enforcement of a decree for alimony. Brewer, 869 S.W.2d at 936. The trial court has wide

discretion in matters involving the awarding of attorney’s fees. Thus, this Court will not

interfere absent a showing of an abuse of that discretion. Threadgill, 740 S.W.2d at 426.

Husband has failed to establish that the evidence preponderates against the Chancellor’s

affirmance and additional award of attorney’s fees. It was Husband who unilaterally reduced and

subsequently terminated his alimony obligation, causing Wife to take action to enforce payment.

Husband’s response included the motion for reduction, requiring Wife’s counsel to enter a

defense.   Furthermore, the record indicates that Husband’s evasive actions and attitude

contributed significantly to the attorney’s fees incurred by Wife. Thus, we find that the

Chancellor did not abuse his discretion in the award of attorney’s fees in the amount of

$25,000.00 to Wife.

       The judgment of the trial court is affirmed, and the case is remanded to the trial court for

such further proceedings as may be necessary. Appellee’s motion for attorney fees on appeal is

denied. Costs of appeal are assessed against Appellant.

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

CONCUR:

____________________________________
DAVID R. FARMER, JUDGE

____________________________________
HEWITT P. TOMLIN, JR.
SENIOR JUDGE

                                                9