Court Opinion

ID: 1079219
Source: CourtListenerOpinion
Date Created: 2013-10-09 20:30:38.501376+00
Date Added: 2024-06-11T13:10:21.817202
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE

                                   AT KNOXVILLE                    FILED
                                                                        July 9, 1998

PHYLLIS ANN FRAZIER HAMBY,                                      Cecil Crowson, Jr.
                                            ) C/A NO. 03A01-9708-CV-00346
                                                                Appellate C ourt Clerk
                                            )
       Plaintiff-A ppellant,                ) POLK CIRCU IT
                                            )
v.                                          ) HON . JOH N B. H AGL ER,
                                            ) JUDGE
JOSEPH DEW IGHT HAM BY and                  )
ANTHONY HAMBY,                              ) AFFIRMED
                                            ) AND
       Defendants-Appellees.                ) REMANDED

GRA CE E. D ANIE LL, ST ARR & DA NIELL , Chattano oga, for P laintiff-Ap pellant.

CHARLES B. BURNS, JR., VARNEL L, BURNS & SH ARP, P.C., Cleveland, for
Def endant-App ellee Anthony Ham by.

ROGER E. JENN E, JENNE, SCOTT & JENNE, Cleveland, for Defendant-Appellee
Jose ph D ewight H amb y.

                                      O P I N IO N

                                                           Franks, J.

              In this divorce action, the wife appeals from the Trial Court’s Order of

child support and the evaluation of the marital estate and its distribution.

              Husb and an d wife were m arried in 1976 a nd hav e two m inor ch ildren.

They separated in August 1994, and at the time of trial the husband was 43 and the

wife was age 40.

              The husband holds an associate degree in respiratory therapy, while the

wife has an associate degree in nursing. The wife worked full time until the birth of

their first child. A fter terminatin g her emp loyment in 19 87, she beg an work ing part-
time in 1988. The husband works as a respiratory therapist at Copper Basin Medical

Center in Cleveland. He also owned a one-half interest in Cleveland Home

Respiratory Care Inc., which he co-owned with his brother, defendant Anthony

Hamby. This business provides and services respiratory care equipment for patients’

use in their own homes.

              The wife filed this action on September 16, 1994, and on November 16,

1994, effective as of October 31, 1994, the husband sold his 50% interest in Cleveland

Home Respiratory Care, Inc., to his brother for $100,000.00. The wife then amended

her comp laint to add the brother as a defenda nt.

              After trial, the T rial Court aw arded cus tody of the tw o minor ch ildren to

the wife and ord ered the husband to pay $600.00 per mo nth child support. The C ourt

also held that the husband was to serve as custodian for investment accounts for the

children. The Court also valued husband’s interest in Cleveland Home Respiratory at

the am ount he was p aid for h is stock.

               The wife co ntends that the Trial Cou rt erred in setting the child support

at $600.00 per month. First, she contends that the Trial Court should have based

payments on an annual income in excess of $200,000.00, rather than the $32,914.00

that the husband earn ed as a respiratory therapist, and further, even if the husband’s

income was only the amount of his salary, the Trial Court erred because it made a

downward deviation from the Child Support Guidelines without giving written

reasons for the deviation.

               The husband earned a much larger income when he was part owner of

the business, but he testified that he sold his share of the business because of long

hours and his desire to spend more time with his children, and at the time of the

divorce his only income was his salary as a respiratory therapist. Additionally, he

offered m edical testimo ny that he wa s depressed before the sale and w as advised to

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reduce his workload. The Trial Court determined that “Mr. Hamby certainly was

depressed clinically, as the medical evidence shows, that he was overworked when he

sold his share of the business.” The Child Support Guidelines provide that if an

obligor is “willfully and voluntarily” underemployed, child support is to be calculated

based on a determination of potential income. Tenn.Comp.R.& Regs. 1240-2-4-.03

(3)(d). The Trial Court did not consider the sale of the business as a “willfully and

voluntarily” move to become under-employed. The Trial Judge credited the reasons

given by the husband, as well as the medical testimony, as a basis for his actions, and

we cannot say the evidence preponderates against these findings.

                 The wife argu es that the Trial Court mad e no written findings to su pport

his variance from the g uidelines as re quired by T.C .A. § 36-5 -101. The transcript,

however, shows that the Trial Court was aware of the deviation. The Court noted that

although the child supp ort amount deviated sligh tly from the guidelines, “that’s

justified con sidering the a mount o f time that the non-custo dial parent is sp ending w ith

the children.”

                 The parties offered differing estimates of the time that the husband spent

with the children. The wife estimated that it was only a third of the time, while the

husba nd testif ied that it w as close r to one -half. T he guid elines, in pertinen t part,

provide that they are:

                 designed to apply in situation s where c hildren are liv ing primarily
                 with one parent but stay overnight with the other parent at least as
                 often as every other weekend from Friday to Sunday, two weeks
                 in the summer and two weeks during holidays throughout the
                 year . . . In situations where overnight time is divided more
                 equally between the parents, the courts will have to make a case-
                 by-case determ ination as to th e approp riate amou nt of supp ort.
                 1240- 2-4-.02 (6).

Thus, “[d]eviation from the guidelines may be appropriate . . . where physical custody

of the child(ren) is more eq ually divided . . .” 1240-2-4-.04(2). Wh ile the Trial Court

did not make a written finding on this issue, the transcribed record shows the reason

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for the deviation. This C ourt has held that an “oral pro nouncemen t by the court

subsequently transcribed” ma y suffice to avoid sending a case back to the trial court

“solely for the purpose of written findings.” Koch v. Koch., 874 S.W.2d 571, 578

(Tenn.App. 19 93). The evidence does not prepond erate against the Trial Court’s

determination, T.R.A .P. Rule 13(d).

              Appellant argues that the Trial Court erred in establishing the value of

Cleveland Home Respiratory Care, and argues that the transfer was a fraudulent

conveyance. A conveyance is fraudulent if it is made without fair consideration,

leaving the grantor inso lvent or if the conveyanc e was m ade with th e actual inten t to

hinder, delay or defraud creditors. Macon Bank and Trust Co. v. Holland, 715 S.W.2d
347, 349 (Tenn.A pp. 1996 ); See also T.C.A. §§ 66-3 -305, 66-3-308. W hether a

transfer is fraudulent is determined by the particular facts and circumstances of each

case. Macon Bank, at p. 349 .

              The v alue of marital p roperty is a fact qu estion. Wallace v. Wallace, 733

S.W.2d 102,107. (Tenn.App. 1987). The burden is on the parties to produce

comp etent ev idence of valu e, and th ey are bo und by th e evide nce the y present. Id. The

trial court is free to place a value on a marital asset that is within the range of evidence

submitted.

              In this case, the parties prese nted testimo ny from three experts

concerning the value of the business. The wife offered the testimony of an

accountant, who testified that the fair market value of the company was

$1,189,860.00 on the date of sale. The hu sband offered the testimony of Harry

Trewhitt, who served as accountant for the corporation and Ronald Arnett, who made

an independent evaluation. Trewhitt valued the corporation at $181,987.00, and

Arnett valued the corporation at $288,000.00.

              This Co urt has note d that “[d]e termining th e value of a closely held

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corporation is not an exact science.” Wallace, 733 S.W.2d at 107. In Wallace, the

Court cited factors for th e court to co nsider wh en determ ining a close ly held

corporation ’s value. Th e Trial Co urt took the re levant facto rs into accou nt in

assigning a value to the husband’s interest in the corporation. The experts had

differing views concerning the nature of the business, the proper method of valuation

and ho w imp ortant th e individ ual skill a nd con tacts of the hus band w ere to its s uccess .

Moreover, the experts differed on their projections for the future stability of the

industry. The Trial Court made an extensive analysis and assigned a value that was

within the range of evidence submitted. The evidence does not preponderate against

this dete rminatio n. T.R.A .P. Rule 13(d).

               The Court concluded the transaction was not fraudulent and determined

that Anthony Ham by had paid fair consideration o f $100,000.00 f or his brother’s

interest. The h usband a lso retained a storage fac ility that had been built with

corporate funds.

               The Trial Court noted that “[t]here’s no doubt there’s some red flags

here.” He noted that th e transaction involved a sale to a fam ily member w ithout a

noncompete agreement and must be “carefully scrutinized.” The Trial Court found

Anthony Hamby “to be a very credible witness.” “The weight, faith and credit to be

given the witnesses’ testimony lies in the first instance with the trier of fact, and the

credibility accorded will be given great weight by the appellate court.” Whitaker v.

Whitaker, 957 S.W.2d 834, 837 (Tenn.App. 1997. The trial court found that “[t]he

wife has shown no evidence of fraud . . . except for those red flags, but other than that

there’s no evidence whatsoever that there was any fraud involved in this transaction or

that $100,000 was not a fair consideration for this business.” The weight to be given

to any particular “ badges o f fraud” is g enerally a ques tion for the trial c ourt. Macon

Bank , 715 S.W.2d at 349-50. The evidence does not preponderate against the trial

                                               5
court’s decision.

               Next, the wife contends that the Trial Court erred in dividing the parties’

estate. T rial cour ts have broad d iscretion in divid ing ma rital estate s. Kincaid v.

Kinca id, 912 S.W.2d 140, 142 (Tenn.App. 1995). We generally do not disturb a trial

court’s divisio n unless “th e distribution la cks prope r evidentiary sup port or results

from an error of law or a misapplication of statutory requirements and procedures.”

Thompson v. Thompson, 797 S .W.2d 599, 60 4 (Ten n.App . 1990) .

               T.C.A. § 36-4-121(a)(1) provides that marital property shall be divided

equitably, witho ut regard to f ault. An eq uitable divisio n, howe ver, is not nec essarily

an equ al one. Batson v. Batson, 769 S.W.2d 849 (Tenn.App. 1988). In reaching a

decision, a trial court should not mechanically apply the factors listed in § 36-4-121

but rather consider the most relevant factors in light of the unique facts of each case.

Id. In this case, the Trial Court basically adopted the husband’s Proposed Distribution

of Marital Assets, with some modifications. In their briefs, the parties provide

differing totals for each share. Based on the values set forth, and the other items

included in the trial court’s order, the wife’s share totaled approximately $276,893.50

while th e husb and’s s hare w as appr oxima tely $320 ,686.50 .

               As the Trial Court found, both parties are of similar age and educational

level. The T rial Court also found th at the parties’ ea rning capa cities were re latively

equal. The record shows that Joseph Hamby was a founder of Cleveland Home

Respiratory Care, and worked diligently to make the company a success. He also

worked at Copper Basin Medical Center as a respiratory therapist. While the wife was

not directly involved in running the company, the trial court found that she made

“great tangible and intangible contributions to this marriage over the years.” The Trial

Court considered the factors in T.C.A. § 36-4-121 in reaching its decision, and we

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conclu de that th e Trial C ourt ma de an e quitable distribu tion of th e marita l prope rty.

               Finally, the wife argues that the Trial Court erred in allowing the

husband to continue to serve as custodian for accounts which he set up for the minor

children. The record contains no evidence that the husband was guilty of any

misconduct in managing these accounts. Additionally, the Trial Court provided

safeguards for distributions f rom the accoun ts. We find no basis to d isturb the Court’s

ruling on this issue, as we ll.

               The judg ment of th e Trial Co urt is affirme d and the c ost of the ap peal is

assessed to the appellant, and the cause remanded.

                                              __________________________
                                              Herschel P. Franks, J.

CONCUR:

___________________________
Charles D. Susano, Jr., J.

___________________________
William H. Inman, Sr.J.

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