Court Opinion

ID: 1081026
Source: CourtListenerOpinion
Date Created: 2013-10-09 20:45:24.3791+00
Date Added: 2024-06-11T12:48:31.757384
License: Public Domain

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

JUDY MARGARET JACKSON                        Shelby Chancery No. 21460-2
VIROSTEK,                                    C.A. No. 02A01-9601-CH-00019

       Plaintiff,                                                           FILED
                                                    Hon. Floyd Peete, Chancellor
v.                                                                                May 6, 1997

JAMES R. VIROSTEK,                                                          Cecil Crowson, Jr.
                                                                             Appellate C ourt Clerk
       Defendant.

MIMI PHILLIPS, Norwood, Philips, Deboo, Howard & Grubb, Memphis, Attorney
for Plaintiff.

ROBERT A. TALLEY, Brown, Brasher, & Smith, Memphis, Attorney for Defendant.

REVERSED IN PART AND AFFIRMED IN PART

Opinion filed:
______________________________________________________________________________

TOMLIN, Sr. J.

       Judy Margaret Jackson Virostek (“Wife”) filed suit for divorce in the Chancery

Court of Shelby County against James R. Virostek (“Husband”). Following a bench

trial the chancellor entered a decree awarding Wife a divorce on the grounds of

irreconcilable differences. The divorce decree also incorporated therein by reference a

Marital Dissolution Agreement (“MDA”) awarding custody of the parties’ minor child

to Wife as well as providing that Husband would pay child support along with

rehabilitative alimony to Wife. Thereafter Husband filed a motion to modify the

divorce decree relative to the payment of child support and alimony. Wife responded

with a counter-petition seeking to have Husband held in contempt for failure to abide

by the terms of the MDA. Following a hearing the chancellor denied Husband’s

petition to modify relative to the payment of alimony and child support. The court also

found Husband in contempt of court for failing to abide by the provisions of the MDA,

ordered Husband to disperse funds from the trust account of the parties’ minor son to

satisfy an outstanding tuition balance at the son’s private school and ordered Husband

to pay Wife’s attorney fees, approximating $15,000.00.

       On appeal Husband presents four issues for our consideration: whether the

chancellor erred in: (1) denying Husband’s petition to modify the MDA relative to
paying alimony and child support; (2) finding Husband in contempt of court for failure

to pay child support and alimony; (3) requiring Husband to pay his minor son’s high

school tuition from a trust fund under his control; and (4) awarding Wife attorney fees.

For the reasons hereafter stated, we reverse the decree of the chancellor in part and

otherwise affirm.

       The basic facts are not in dispute. The parties were married for twenty-six years

prior to their separation and divorce in the spring of 1993. A son was born to the

marriage, who was sixteen years old at that time. At the time of the separation,

Husband was employed as Senior Vice-President of Retail Banking at Community

Bank in Germantown, and was earning $79,500.00 per year. Husband had been

employed in the banking business since 1966. He had worked his way up in the

industry at banks throughout the nation, having changed jobs ten times over the course

of twenty years. Wife, slightly younger than Husband, remained a homemaker during

the course of the marriage. Following the divorce, Wife was granted a four-year

college scholarship at Carnegie-Mellon University in Pittsburgh, Pennsylvania, which

necessitated that she and the parties’ son move to Pennsylvania. Upon moving to

Pittsburgh, Wife enrolled their son in a private high school. The annual tuition

approximated $7,500.00 per year.

       Some six months following the divorce in September 1993, Husband was

involuntarily terminated from his position at Community Bank. He negotiated a

severance package worth $21,000.00 that was paid to him two weeks after his

termination. Three days after termination Husband signed a Petition to Temporarily

Suspend Child Support and Alimony Payments and to Modify the Final Decree, which

was filed three weeks later. Husband asserted his involuntary termination as grounds

for modification.

       Three weeks after his termination Husband left Memphis for Pompano Beach,

Florida, where he moved in with his paramour, Ms. Gwyn Huggins. In January 1994,

Husband accepted a job as a securities broker selling stocks and bond mutual funds on a

straight commission. Husband earned approximately $8,000.00 from this employment

over the next three months. At that time he accepted a similar position with the

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brokerage subsidiary of First Union Bank, where he was paid a draw of $3,000.00 per

month. In addition he received nearly $15,000.00 in March 1994 from the sale of stock

options he held in Community Bank, his former employer.

       By March 1994, Husband had fallen behind in making his child support and

alimony payments to Wife. Wife filed a counter-petition to Husband’s petition to

modify, seeking to have Husband held in contempt of court for failing to timely comply

with the terms of the MDA, as well as seeking attorney fees and costs incurred in

contesting Husband’s petition.

       Following a hearing the chancellor entered an order denying Husband’s petition

to suspend or modify alimony and child support payments, finding that Husband failed

to carry the burden of proof showing a substantial and material change in

circumstances, and also finding that while Husband showed a reduction in income, he

failed to show a reduction or alteration in his earning capacity. The chancellor found

Husband in contempt of court, but held punishment in abeyance. The amount of past

due alimony and child support was reduced to judgment, totaling $8,075.00. At that

hearing the chancellor failed to act on Wife’s request for attorney fees.

       Wife subsequently filed a motion seeking to have the court order Husband to

disperse funds from their child’s trust account to pay an outstanding balance for tuition

owed to a private school in Pittsburgh. Husband filed a notice of appeal from the

original order of the trial court. This court dismissed Husband’s appeal on the grounds

that the order appealed from was not a final judgment.

       After the court granted Wife’s motion to require Husband to pay their son’s

delinquent high school tuition, Wife filed a motion calling upon the court to issue a

final, appealable order, noting that the court had not ruled on the matter of Husband’s

contempt, nor had the court acted upon Wife’s request for attorney fees. The motion

additionally recited that Husband was still in contempt and that he had married his

paramour.

       Following a hearing the chancellor entered a final order that reaffirmed his

previous orders, found Husband in contempt of the orders of that court, with

punishment set at three days confinement in the Shelby County jail, with sentence

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suspended. In addition, the court ordered Husband to pay Wife’s attorney fees in the

amount of $14,859.67 and ordered Husband to encroach upon the investment funds in

his control to pay the delinquent tuition fees relative to his child’s education. This

appeal followed.

                     I. The Failure to Reduce Alimony and Child Support.

       For the sake of judicial convenience and economy we will consider Husband’s

first two issues together—that of the trial court’s refusal to modify the alimony and

child support payments. The MDA entered into between the parties provided that

Husband would pay Wife rehabilitative alimony in the amount of $1,750.00 a month

for two months, followed by $1,500.00 per month for the next 46 months. Thereafter,

Husband would pay Wife $1,800.00 per month as periodic alimony for 72 months, with

the payments then reduced to $1,200.00 per month for the next 60 months. Payments

would thereafter be reduced to $700.00 per month and would be paid as alimony in

futuro, with a condition that the monthly payments would decrease dollar for dollar as

Wife’s earnings exceeded $1,200.00 per month.

       Paragraph 9 of the MDA provides in pertinent part as follows:

       It is the express intention of the parties that this award of alimony is for
       the purpose of rehabilitating Wife, assisting with her education and living
       expenses while she prepares for her career. The parties expressly intend
       that this award shall not be modifiable for any future circumstances,
       except that all payments will cease in the event of the Wife’s death. Said
       temporary alimony may be subjected to modification in the event of an
       involuntary termination of Husband’s current employment.

       Husband contends that in accordance with the language in the paragraph set forth

above, inasmuch as the proof shows that he was involuntarily terminated from his

employment, the provisions of paragraph 9 became effective leaving as the only matter

left for the court to determine how much his alimony payments would be reduced. He

contends in the alternative that should his interpretation of this agreement be incorrect,

then and in that event he has shown a substantial and material change in circumstances.

       In finding that Husband had failed to carry his burden of proof in this regard, the

trial court obviously did not construe this paragraph in the same manner as Husband

did. We agree with the construction rendered by the trial court. The language in

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question merely provided that if Husband was involuntarily terminated, he could

petition the court to modify the alimony payments. Accordingly, this court will look at

this matter in light of the statutory and case law of this state—that is, whether Husband

has carried the burden of proving that there had been a substantial and material change

in his financial circumstances.

       We give wide latitude to an alimony award of a trial court. Cranford v.

Cranford, 772 S.W.2d 48, 50 (Tenn. App. 1989). Our scope of review of findings of

the trial court in this regard is de novo review of the record presented to us. Absent an

error of law, the findings of fact of the trial court come to this court with a presumption

of correctness and we must affirm unless we find that the preponderance of evidence is

otherwise. 13(d) T.R.A.P..

       Husband’s motion before the trial court sought to temporarily suspend his

alimony and child support payments for a reasonable period of time until he obtained

new employment and, in addition, to modify the child support and alimony payments

that were to begin some time in the future “to a reasonable amount based upon the

financial circumstances of the parties.” In his argument before the chancellor

Husband’s attorney conceded that there was no question but that the needs as shown by

Wife were real and deserving. Therefore in examining this sub-issue we look only at

any real changes in the ability to pay on the part of Husband and to ascertain whether or

not these changes, if any, were both substantial and material.

       It is undisputed that immediately following his loss of employment with

Community Bank in September 1993, that his earnings declined substantially. The

record reflects that at this time Wife and the parties’ son had moved to Pittsburgh,

where she had begun her college education. Shortly after his employment was

terminated Husband broke the lease on his apartment in Memphis and moved to

Pompano Beach, Florida where he moved in with his girlfriend. Husband testified that

after reaching Florida he sent out resumes all over the southeast, but received no

favorable responses.

       Eventually he obtained a job with a brokerage firm in Florida where his only

compensation was straight commission, with no draw. He testified that for the first

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three months of 1994 he earned $500.00, $3,600.00 and $3,000.00, respectively. In

May 1994, Husband took a similar job with the brokerage division of First Union Bank,

which paid a $3,000.00 per month draw for the first three months. Also during this

period he exercised his stock options on Community Bank stock, receiving

approximately $33,000.00 from the sale of that stock. Of this amount he paid

$17,000.00 to his brother to repay a loan taken out to purchase the stock. He paid no

alimony in February, but paid some child support. With the money from the sale of the

bank stock, while he paid some arrearage, he used a substantial amount to pay debts

and loans.

       Husband admitted that shortly after his termination Community Bank paid him

$21,000.00 in severance pay, but that nevertheless he proceeded to file this petition. He

further admitted that the total deposits to his bank account from October 6, 1993 to

August 15, 1994 were $61,262.00. He states that of this amount $32,250.00 came from

the exercise of his stock option with the ensuing sale thereof, with $17,000.00 as

aforesaid being paid to brother. He paid $6,800.00 to American Express. He stated

further that he was current at that time on child support and alimony, but from March

1994 to the date of trial in August 1994, he fell into arrears some $7,600.00. The

record reflects that for the period January through August, he owed a total of

$12,500.00 in combined alimony and child support, but paid only $4,900.00.

       While Husband’s monthly income had been substantially reduced, nonetheless,

during this period of time Husband found himself with substantial amounts of cash on

hand, both from his severance pay and the sale of Community Bank stock. Husband,

along with Wife, negotiated and agreed to the provisions in the MDA relative to the

payment of alimony. While he had petitioned the court for temporary termination and

reduction, he had no clearance from the court to renege on his obligation to his former

Wife for the sake of paying debts. We resolve this issue in favor of Wife.

       We now address the other sub-issue involved in this particular matter, that of the

refusal of the chancellor to grant Husband relief in his child support payments, which

had been set by the MDA at $1,000.00 per month. In the chancellor’s order on the

petition to temporarily suspend and modify, the court said:

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       The Court further finds that the Petition to Suspend or Modify Alimony
       and Child Support Payments should be denied. Again, in so finding, the
       Court notes that the burden of showing a substantial and material change
       in circumstances was not met. . . .

       In Jones v. Jones, 870 S.W.2d 281 (Tenn. 1994), our supreme court held that the

Child Support Guidelines (hereafter “CSG”) codified as T.C.A. § 36-5-101(e)(1) et seq.,

expressly provide that they are to be applied in any action brought to establish or

modify child support. Prior to July 1, 1994, trial courts could modify existing child

support orders based upon a showing of “a substantial and material change in

circumstances.” See T.C.A. § 36-5-101(a)(1)(1991)(Amended 1994). However, the

legislature replaced this standard in 1994 with a more precise one now popularly known

as the “significant variation” test, which requires the court to decree “an increase or

decrease of such allowance when there is found to be a significant variance, as defined

in the Child Support Guidelines . . . between the guidelines and the amount of support

currently ordered. . . .” Turner v. Turner, 919 S.W.2d 340, 343 (Tenn. App. 1995).

       In accordance with the amended statute, the Department of Human Services

promulgated a public necessity rule that set forth a “significant variation” rule for the

courts to employ under these circumstances. Both the amended statute and the

amended rule became effective July 1, 1994.

       The earlier of the two hearings that led to the trial court’s order took place on

August 18, 1994. It is conceded by Wife in her brief and we likewise affirm that the

“significant variation” test set out in the current CSG as amended should have been

applied by the chancellor, rather than the earlier guideline of “substantial and material

change in circumstances.” Accordingly, we reverse the decree of the chancellor

denying Husband’s petition to temporarily terminate and modify the MDA as it relates

to child support, and upon remand, respectfully direct the chancellor to conduct an

evidentiary hearing under the current CSG in order to ascertain what, if any,

modifications need to be made in the child support payments for the specific period

involved under the proof as presented. While we see nothing in this record to justify a

complete temporary termination of child support payments, we leave this matter to the

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chancellor as well.

                                  II. The Contempt of Court Issue.

          Husband contends that the trial court erred in finding him in contempt of court

for failure to timely pay alimony and child support pursuant to the MDA. At the time

of trial the record reflects that Husband owed $3,040.00 for child support and $4,560.00

for alimony.

          A finding of contempt by the trial court comes to us on appeal with the

presumption of correctness. Johnson v. Johnson, 499 S.W.2d 268 (Tenn. App. 1973).

In addition, a failure to comply with a decree for the payment of alimony places the

obligor prima facie in contempt of court and puts upon him the burden of proving his

inability to make the payments as directed. Chappell v. Chappell, 261 S.W.2d 824, 831

(Tenn. App. 1952).

          Following the hearing on contempt, as well as other matters, the chancellor

entered an interim order, which contained the following pertaining to the contempt

charge:

          1. That the Petitioner James R. Virostek is in willful contempt of this
          Court’s Order on the payment of alimony and child support. In so
          finding, the Court specifically notes that the burden of proof was upon
          Mr. Virostek to show his inability to make the Court Ordered payments,
          and that Mr. Virostek failed to show an ability to make payments, while
          clearly showing the ability to discharge his personal debts.

                 In so finding, the Court further notes that the public policy of
          Tennessee is to punish by contempt the party who, through willful
          disobedience or obstinacy, refuses to comply with a Court Order.

The chancellor held in abeyance the specific punishment for contempt pending further

orders of the court. In its final order, the chancellor sentenced Husband to three days

confinement in the Shelby County jail, but with the sentence to be suspended.

          From reviewing this record, we are of the opinion that the evidence does not

preponderate against the finding of the chancellor that Husband was in willful contempt

of that court’s orders relative to the payment of alimony as well as child support. This

failure by Husband is a “civil contempt proceeding” and the court had no authority in

our opinion to commit Husband to jail for a definite period of time, but only could have

committed him for an indeterminate sentence until the amount of alimony in arrears

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was paid. While the chancellor did not ever place the label “criminal contempt” on the

conduct of Husband, by this determinate sentence he did affix such a label. In addition,

the appropriate notice requirements pertaining to a criminal contempt proceeding were

not complied with. Accordingly, we are of the opinion that while the chancellor was

correct in finding Husband in contempt of court, he was in error in making the

contempt criminal in nature. We therefore reverse the chancellor insofar as the

determinate jail sentence is concerned, notwithstanding the fact that it was suspended.

                                  III. The Custodial Trust Fund.

        Husband contends that the trial court was in error in requiring him to encroach

upon a trust fund of the parties’ son for the purpose of paying an outstanding tuition

balance incurred at a private high school after Wife and son moved to Pittsburgh.

Husband contends that the funds in this account were a gift to their son from a great-

aunt for the express purpose of assisting the parties in paying the son’s college

education.

        During the marriage the parties had by choice sent their son to a private high

school in Memphis. The record shows that on previous occasions, while yet married,

the parties had invaded this trust fund in order to pay high school tuition for their child

when living in Memphis. The contention by Husband that this fund was for the sole

use of the son’s college education is not persuasive. Under the circumstances, we are

of the opinion that the trial court did not abuse its discretion in directing in this one

instance that the balance of a year’s tuition be paid from this fund. This issue is

without merit.

                                     IV. Wife’s Attorney Fees.

        The trial court is given wide discretion in the allowance of attorney fees,

considered in divorce cases to be a form of alimony. This court will not interfere

except upon a showing of an abuse of discretion by the trial court. Threadgill v.

Threadgill 740 S.W.2d 419, 426 (Tenn. App. 1987). It is Husband’s contention that the

trial court abused its discretion in directing Husband to pay Wife’s attorney fees

incurred in defending the petition to modify filed by Husband.

       We are of the opinion that this issue is without merit. In Cranford v. Cranford,

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772 S.W.2d 48 (Tenn. App. 1989) this court reversed the trial court’s decision to award

wife only one-half of her attorney fees in connection with her resistance to husband’s

efforts to terminate the court-ordered alimony, and awarded wife the full amount of her

attorney fees, including those fees incurred on appeal, noting that wife in that case

lacked the resources to pay her legal fees and incurred them only because of husband’s

efforts to terminate his support obligation. Id. at 52.

       In the case before us, the record is clear that Wife has virtually no assets to speak

of from which to pay these fees. She is currently seeking to obtain a college degree so

as to develop her financial independence. Wife has been forced to incur these expenses

only because of Husband’s efforts to terminate and/or modify his child support and

alimony obligations, the grounds for which are suspect, to say the least. In our opinion

the trial court did not abuse its discretion in ordering the payment of Wife’s legal fees

for expenses incurred.

       Wife has also asked this court to award her attorney fees for legal expenses

incurred in connection with this appeal. We are of the opinion that she is entitled to be

compensated for these expenses. Upon remand, the trial court is directed to hold an

appropriate hearing and ascertain the amount of her attorney fees Husband should be

ordered to pay.

       The decree of the trial court sentencing Husband to three days in jail is

reversed. The decree denying Husband’s petition to terminate and modify child

support payments is reversed. This matter is remanded to the Chancery Court of

Shelby County for a hearing in keeping with the provisions of this opinion. The

decree of the trial court is otherwise affirmed.

       Wife is entitled to attorney fees for service rendered on appeal. The

chancellor is directed on remand to conduct a hearing to determine the

amount. Costs in this cause on appeal are taxed to Husband, for which

execution may issue, if necessary.

                                               ________________________________________
                                               TOMLIN, Sr. J.

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________________________________________
CRAWFORD, P. J.         (CONCURS)

________________________________________
FARMER, J.              (CONCURS)

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