Court Opinion

ID: 4423162
Source: CourtListenerOpinion
Date Created: 2019-08-06 18:49:10.859554+00
Date Added: 2024-06-11T14:49:33.813992
License: Public Domain

08/06/2019
               IN THE COURT OF APPEALS OF TENNESSEE
                          AT KNOXVILLE
                                 July 19, 2019 Session

      JAMES RUSSELL VAUGHN, JR. V. SANDRA PIERCE VAUGHN

                Appeal from the Chancery Court for Sullivan County
                   No. 18-139(B)     William K. Rogers, Judge
                     ___________________________________

                           No. E2018-00794-COA-R3-CV
                       ___________________________________

Husband and wife were divorced in 2004. The parties’ marital dissolution agreement
obligated husband to pay wife $950 a month in alimony. Husband failed to make
payments for over ten years. In 2015, wife filed a motion for contempt and order for body
attachment seeking to recover the alimony arrearages. At trial, husband argued that the
equitable doctrines of laches, waiver, and unclean hands barred wife’s claim. The trial
court disagreed and awarded wife $114,000 in past due alimony and $1,000 in attorney’s
fees. Husband appeals. We affirm.

      Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
                           Affirmed; Case Remanded

CHARLES D. SUSANO, JR., J., delivered the opinion of the court, in which D. MICHAEL
SWINEY, C.J. and JOHN W. MCCLARTY, J., joined.

Robert M. Asbury, Knoxville, Tennessee, for the appellant, James Russell Vaughn, Jr.

Frank L. Slaughter, Jr., Bristol, Tennessee, for the appellee, Sandra Pierce Vaughn.

                                       OPINION

                                            I.

       On July 31, 2001, husband filed for divorce. On April 6, 2004, due to
irreconcilable differences, a final divorce decree granted the parties an absolute divorce.
A marital dissolution agreement was attached to the final divorce decree. The MDA
required husband to provide $950 a month in alimony to wife, on the following terms:

             Husband agrees to provide alimony on a permanent basis by
             way of cash or credit at no less than $950.00 monthly, of

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                which $475.00 is due at the first of the month and $475.00
                due at the 15th of the month, for wife’s support and
                maintenance that is subject to yearly review and adjustment
                where Husband agrees to an increase of alimony to wife, not
                to exceed 10% of Husband’s yearly income beginning on the
                15th day of April, 2004 and each year following the execution
                of the Marital Dissolution Agreement the Husband agrees to
                provide his tax return on April 15th of each year to Wife. Said
                increase shall occur subject to an increase in Husbands (sic)
                net income.

                [Husband agrees to provide to wife alimony on a permanent
                basis until her death.]1

                Husband shall be entitled to a reduction in the amount states
                (sic) as alimony in the event his income decreases. In no
                event shall this paragraph be interpreted to allow for
                modification of other provisions of this agreement. In no
                event is alimony to be reduced by greater than 10% per year
                due to Husbands (sic) decrease in income.

Husband also agreed to cover numerous additional expenses for wife.

       Following the divorce, wife filed a motion to reconsider or in the alternative for a
new trial. She alleged that the MDA attached to the April 6, 2004 decree was not
consistent with the parties’ intention. In husband’s response, he alleged that a hearing on
wife’s motion was necessary, and he requested a new trial only as to the property and
support issues. However, on July 3, 2006, wife’s motion was dismissed due to inaction by
the parties.

       On November 23, 2015, wife filed a motion for contempt and order for body
attachment. She requested husband be held in contempt for failure to pay $775,751 to
wife in arrearages, including past due alimony. On January 15, 2016, she filed an
amended motion. The matter was set for a hearing on April 5, 2016. On April 4, 2016,
husband filed for a continuance due to his colon cancer, blood clotting disorder, and back
injury. His doctor provided a letter stating that the medical conditions preclude husband
from traveling, and affects his clarity as a witness.

      Following a November 7, 2016 hearing, the parties exchanged correspondence
wherein husband’s counsel informed wife’s counsel of a ten year statute of limitations on

      1
          Handwritten on the MDA and initialed by four individuals.

                                                  -2-
judgments that applies to alimony awards. On December 15, 2016, wife filed an amended
motion withdrawing her claim for interest2 and limiting her claim for alimony to the
previous ten years; wife also requested recovery for numerous other expenses husband
had agreed to pay on wife’s behalf under the MDA. The amended motion requested
husband pay wife a new total of $234,519 in arrearages, and also attorney’s fees and
costs.

       On June 6, 2017, husband again requested a continuance. He stated that there was
“a tragic accident involving his mother and brother.” His brother was in the ICU and his
mother had been placed in a nursing facility as a result of the trauma.

        On July 27, 2017, husband filed his answer. He denied wife’s claims for attorney’s
fees, costs, and body attachment; he requested his own attorney’s fees and costs. He
raised the defenses of laches and waiver on the basis of wife’s ten year delay in seeking
recovery of the arrearages. He stated that he had not hidden from wife, and that his
whereabouts have been ascertainable by a simple google search for years. Husband also
alleged that wife was not entitled to the relief she sought under the doctrine of unclean
hands based on wife allegedly having transferred her marital residence to her son prior to
the divorce in order to conceal the asset. Subsequent to the transfer, wife filed for
bankruptcy. Husband alleged that she did not list the marital home as an asset, nor did she
list her “extensive antique collection, valued in excess of One Million Dollars [] as
assets.” Husband further stated that five mediated agreements were ignored by wife
during the pendency of their divorce. The fifth motion to set aside the mediation was
ultimately dismissed due to wife’s inaction for over two years. After the two-year period,
husband alleges that wife “quietly transferred the title of the marital home back to herself
for a fee of [o]ne [d]ollar.”

       Additionally, husband alleged that wife’s testimony that she had not been
employed since the 1990’s and had lived off the generosity of friends was not true and
that wife had actually been selling off the antique collection, which would have been a
marital asset. Husband further stated that

                [husband] has been unjustly prejudiced by the [wife’s]
                acquiescence as to the actual terms of their 2004 divorce in
                that the [husband] retained assets that were marital in nature
                in exchange for not enforcing the terms of the April [] 2001
                Marital Dissolution Agreement and that any obligation on the
                part of the [husband] was moot given his acquiescence to the
        2
         Wife stated at the hearing that this claim was withdrawn “in the event that the Court was going
to find laches would apply.” Gross laches occurs where there has been a long and unreasonable
acquiescence in adverse rights; “gross laches requires prejudice to the defendant such as [] a considerable
accumulation of interest resulting from the unjustified delay of the plaintiff.” Finova Capital Corp. v.
Regel, 195 S.W.3d 656, 660 (Tenn. Ct. App. 2005).

                                                   -3-
              [wife] retaining the marital home and antique collection as
              well as her failure to prosecute and ultimate dismissal of
              Motion to Modify the April 2004 Marital Dissolution
              Agreement.

Husband ultimately claimed that the doctrines of “laches, waiver, voluntary
relinquishment[,] and unclean hands” all serve to bar wife from the relief sought.

       On August 2, 2017, the parties appeared for a hearing; the court ultimately ordered
the parties to attend mediation. The court held that if the matters were not agreed upon
through mediation, then the parties were to submit proposed findings of facts and
conclusions of law to the court within forty-five days following the failed mediation. In
addition, at the close of proof at the August 2nd hearing, husband moved for a directed
verdict; the court took the matter under advisement.

       Prior to the ordered mediation, wife filed a motion to be declared indigent alleging
that her only source of income is Social Security Disability. She moved the court to have
husband pay the entire cost of mediation. Husband’s responsive motion stated that wife
had testified at the hearing that she had no outstanding debt and that her monthly bills
were paid in full. The court ordered the parties to split the cost of mediation.

       On October 12, 2017, husband submitted a brief in support of his motion for a
directed verdict, which was made at the August 2, 2017 hearing. On November 22, 2017,
the court denied husband’s motion. On January 24, 2018, wife filed a “notice” that she
was “now [] asking for interest on past due support as she has not received same.”

       On April 3, 2018, the court entered its Memorandum and Order. It stated that two
mediations were held that resulted in an impasse as to all issues. Following the
unsuccessful mediations, neither party filed the proposed findings of fact and conclusions
of law ordered by the court. However, the parties did file motions following the hearing;
husband filed a brief arguing for his previously requested directed verdict, and wife filed
a “supplement to post trial brief” requesting twenty-one additional awards based on the
parties’ MDA.

       The court held that neither party had a credible recollection of any alimony
payments having been made, and that no proof was presented regarding the same. The
testimony indicated that husband moved several times and did not notify wife of his new
mailing addresses. Wife testified that she had unsuccessfully tried to find husband
following the divorce. Husband admitted that he did move several times, but argued that
he was not hiding and could have been easily found. The court held that wife’s testimony
indicated that she is under some sort of disability and has “special needs” based on the
MDA terms.

                                            -4-
       The court held husband’s testimony that he is under financial constraint was not
credible. It held that his tax returns indicate that he has received substantial income
through his successful sales commission business. The court then reviewed husband’s
equitable defenses, including gross laches, waiver, and unclean hands.

        Husband argued that gross laches applies to bar wife’s claims, because her
extensive delay caused him to be unjustly prejudiced. Husband cited Briceno v. Briceno
for the proposition that even where the

              action is governed by a statute of limitations, [] the doctrine
              of laches may shorten that time period if the plaintiff is guilty
              of gross laches. Gross laches occurs where the plaintiff
              unreasonably acquiesces in adverse rights for a long duration
              of time…gross laches requires prejudice to the defendant
              such as the loss of evidence and witnesses or a considerable
              accumulation of interest resulting from the unjustified delay...

Briceno v. Briceno, 2007 WL 4146280, at *4 (Tenn. Ct. App. Nov. 21, 2007).

        Husband argued that witnesses were rendered unavailable and that financial
records had been destroyed as a result of wife’s delay. He further alleged that he was
prejudiced because a considerable amount of interest had accrued ($48,000) on the past
due alimony. The court held that husband’s arguments were not credible. It considered
Briceno, and noted that the “Court of Appeals in [Briceno] reversed the trial court[’]s
application of gross laches, using an abuse of discretion standard;” Briceno held that the
trier of fact must conclude that it would be inequitable or unjust to enforce the claimant’s
rights. See Id. Here, the court determined that it would not be inequitable or unjust to
enforce wife’s rights.

       The court also reviewed husband’s argument for the application of Brewer v.
Brewer in support of his waiver argument. See generally Brewer v. Brewer, 869 S.W.2d
928 (Tenn. App. 1993). The court held that the Brewer case is “decidedly different from
this case and does not lend credence to the waiver defense.”

       The court denied husband’s request for the application of the doctrine of unclean
hands. The court held that there was insufficient proof presented to place weight on this
argument, because the deed was executed prior to the divorce and it was undisputed that
husband knew about the property.

       Lastly, the court denied wife’s claim for twenty-one additional items allegedly
owed to her under the MDA. The court held that wife had not presented sufficient proof
of these items. The court further held that these items are distinguishable from alimony
payments, because they concern incidental expenses, such as telephone services, vehicle

                                             -5-
insurance, vehicle maintenance, gas services, utilities, membership fees, etc. The court
ordered that wife receive $114,000 in past due alimony ($950/month for ten years). Wife
was also awarded $1,000 in attorney’s fees. Husband appeals.

                                                     II.

       Husband asks this Court to consider whether the trial court erred in refusing to
apply the doctrine of laches, waiver, or unclean hands to bar the wife’s claim.

                                                    III.

                                                     A.

       The parties engaged in several mediations before their divorce was finalized in
2004. As an initial matter, husband argues that the trial court erred, because it failed to
rule on which mediated agreement should be applied in the present matter. Husband
alleges that mediations occurred on: December 19, 2001, June 16, 2003, July 3, 2003,
September 19, 2003, March 5, 2004, and April 6, 2004.

       In the final divorce decree, the trial court ratified and incorporated the “March 5,
2004” “Marriage Dissolution Agreement.” However, the MDA attached to the divorce
decree was dated April 6, 2004. The divorce decree itself was also dated April 6, 2004.3
On appeal fifteen years later, husband argues that the mention of the March 5, 2004
MDA in the final divorce decree is not a scrivener’s error, but instead evinces the fact
that an improper version of the parties’ mediated agreement was filed with the court
along with the April 6, 2004 final divorce decree.

       Interestingly, in wife’s May 4, 2004 motion to reconsider or in the alternative
request for a new trial, she had alleged that the “April 6, 2004 [MDA] [did] not reflect the
parties’ agreement;” she stated that the wrong MDA was attached to the divorce decree.
Husband instead stated, in his May 10, 2004 response, that

                 The Marital Dissolution Agreement was entered without any
                 undue influence or otherwise by two consenting adults under
                 their counsel’s direction.

                 The Marital Dissolution Agreement entered by the Court has
                 many changes and additions agreed to by both parties through
                 much negotiation.

       3
           The “5” on the divorce decree is marked out and a “6” is penned in its place.

                                                     -6-
              No claim as to the validity of the Divorce itself has been
              made but only to the terms of the Marital Dissolution
              Agreement.

              To the extent the Motion claims counsel for the Plaintiff in
              any way deceived or the Court or the Defendant in believing
              the Marital Dissolution Agreement was other than as agreed
              to counsel strongly denies such allegations. It is important to
              note that counsel for the Plaintiff was not present when the
              Defendant testified that she accepted the terms of the
              Agreement and would have acknowledged the agreement was
              in fact that as agreed to between the parties.

In 2004, husband requested a hearing on wife’s motion or for the court to declare a new
trial only on the property and support issues, if it saw fit. However, as previously stated
in this opinion, on July 3, 2006, wife’s motion was ultimately dismissed, because neither
party took any action to pursue the motions.

        While the record indicates that complaints arose, in 2004, regarding which MDA
should have been attached to the final divorce decree, neither party sufficiently pursued
motions to alter or correct any alleged inaccuracies. This inaction left the MDA dated
April 6, 2004, which was notarized and signed by both husband and wife, as the filed
MDA accompanying the final divorce decree. It is therefore evident that the April 6, 2004
MDA was, or has become, the final MDA between the parties. Accordingly, we hold that
the trial court properly referenced the April 6, 2004 dated MDA filed along with the final
divorce decree while resolving the parties’ present dispute regarding alimony arrearages.

                                            B.

       Next, husband argues that the trial court erred because it failed to apply the
doctrine of laches to bar wife’s claim. The parties agree that the present matter is
governed by a ten year statute of limitations applied to judgments. The doctrine of laches
may be applied, even where the action is governed by an applicable statute of limitations,
when the party is guilty of gross laches; gross laches requires prejudice to the defendant,
such as a loss of evidence and witnesses. See e.g., Finova Capital Corp. v. Regel, 195
S.W.3d 656, 660 (Tenn. Ct. App. 2005). The Supreme Court stated, in John P. Saad &
Sons, Inc. v. Nashville Thermal Transfer Corp., that

              [r]elief is generally refused by courts of equity, because of
              lapse of time, only in such cases where the loss of evidence,
              death of witnesses or parties, and failure of memory resulting
              in the obscuration of facts to the prejudice of the defendant,
              render uncertain the ascertainment of truth, and make it

                                            -7-
             impossible for the court to pronounce a decree with
             confidence... The doctrine of laches... is not an arbitrary or
             technical doctrine. No hard and fast rule for its application
             can be formulated.

             The application of the doctrine in the first instance lies within
             the discretion of the trial court and it will not be reversed
             except upon a showing of an abuse of discretion. Such
             application depends upon the equities at stake in each
             individual case…

John P. Saad & Sons, Inc. v. Nashville Thermal Transfer Corp., 715 S.W.2d 41, 46
(Tenn. 1986) (internal citations, quotations, and italics omitted).

       Husband argues that he has been unjustly prejudiced by wife’s ten-year delay. He
alleges wife’s delay has resulted in: accumulated interest, in excess of forty-eight
thousand dollars; the loss of a key witness, Mary Davis, who could have attested to
wife’s “true financial situation;” and the destruction of insurance documents and bank
records from 2001-2004.

       Husband’s argument that the delay has resulted in the loss of insurance documents
pertaining to wife’s alleged antique collection, and husband’s bank records from years
preceding the divorce is of minimal, if any, relevance to the present dispute. In addition,
any prejudice resulting from accrued interest on the overdue alimony is not pertinent to
our review, because the trial court did not award wife any interest.

        Despite husband’s allegation that essential documents regarding his financial
situation have been destroyed, the trial court was able to review tax returns produced by
husband for years 2012-2016 in order to adequately assess his finances. The court
determined that husband has a successful sales business and had earned substantial
income during those years. The record supports this conclusion. The trial court therefore
did not abuse its discretion in holding that husband’s arguments that he did not have the
ability to pay the alimony, was out of money, and was under tremendous financial
pressure was not credible.

       Husband also argues that wife failed to take sufficient action to seek the
arrearages, and, as a result, wife has now waived any potential claim. Wife testified that
she had unsuccessfully sought husband for many years. She testified that attempting to
locate husband was “like leap frog. He’d go one place and then all of [the] sudden that
address would disappear and you’d find another one.” The record indicates that husband
moved from Bristol, Tennessee to Cornelius, North Carolina; he then moved to Denver,
North Carolina, and then another house in Denver; and then husband moved to Florida.
The MDA obligated husband to notify wife of these several mailing address changes, but

                                            -8-
he never fulfilled that obligation. Husband’s several address changes and failure to fulfill
his obligation to communicate his address to wife, renders husband’s argument that wife
waived, or voluntarily relinquished a known right, untenable. See Chattem, Inc. v.
Provident Life & Acc. Ins. Co., 676 S.W.2d 953, 955 (Tenn. 1984) (holding that waiver
is a voluntary relinquishment by a party of a known right).

       The foregoing indicates that there was sufficient evidence to support the trial
court’s holding that husband has not been prejudiced by the delay and that wife has not
waived her claim for support. Therefore, we hold that the trial court did not abuse its
discretion in failing to apply the doctrine of laches or waiver to bar wife’s claim.

                                            C.

       Lastly, husband argues that the trial court erred because it failed to apply the
doctrine of unclean hands to bar wife’s claim. Husband argues that wife engaged in
unscrupulous conduct regarding her assets at the time of the parties’ divorce. The trial
court held that there was insufficient proof to place weight on this argument, and that the
deed husband alleges was improperly transferred was executed in 1999, two years before
husband filed for divorce. It was also uncontroverted that husband knew about the
property at issue.

       As stated by husband in his brief on appeal,

              [i]t has long been the maxim that a party seeking equitable
              relief must not be guilty of unconscientious conduct or
              committed any wrong particular (sic) relevant to the
              transaction sought to be enforced.

The doctrine of unclean hands is a fundamental tenet of the courts of equity; it is based
on the principles that he who seeks equity must do equity, and that he who has done
inequity cannot have equity. In re Estate of Boote, 265 S.W.3d 402, 417 (Tenn. Ct. App.
2007).

       After a review of the record and the conduct subsequent to the divorce, it is clear
to us that this is not a proper instance in which to apply the doctrine. Accordingly, we
hold that the trial court did not abuse its discretion in failing to apply the doctrine of
unclean hands to bar wife’s claim.

                                            -9-
                                         IV.

       The judgment of the trial court is affirmed. Costs on appeal are taxed to the
appellant, James Russell Vaughn, Jr. Case remanded for enforcement of the trial court’s
judgment and collection of costs assessed below.

                                                 _______________________________
                                                 CHARLES D. SUSANO, JR., JUDGE

                                         -10-