Court Opinion

ID: 1073707
Source: CourtListenerOpinion
Date Created: 2013-10-09 20:00:42.481442+00
Date Added: 2024-06-11T12:50:12.104272
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                                 AT JACKSON

          NANCY M. ARMSTRONG ERWIN v. RICHARD V. ERWIN
                  Direct Appeal from the Chancery Court for Shelby County
                         No. D28628-3 D. J. Alissandratos, Chancellor

                   No. W1998-00801-COA-R3-CV - Decided June 26, 2000

        This is a divorce case. The trial court awarded custody of the parties’ minor child to the wife.
The husband was ordered to pay child support and alimony in futuro based on his earning capacity
rather than his actual earnings, because he voluntarily retired early. The order included an automatic
increase in alimony when the minor child reached majority and the husband’s child support
obligation ended. The trial court awarded more than half of the marital property to the wife and
ordered the husband to pay a portion of her attorney’s fees. The husband appeals, arguing that the
trial court awarded excessive alimony and child support, that the trial court erred in ordering an
automatic increase in alimony when the child support ended, that the division of marital property was
inequitable and that the award of attorney’s fees was an error. We affirm, finding that the evidence
and undisputed facts support the trial court’s order.

Tenn. R. App. P. 3; Judgment of the Chancery Court is Affirmed.

HOLLY KIRBY LILLARD , J., delivered the opinion of the court, in which DAVID R. FARMER , J., joins,
and in which W. FRANK CRAWFORD , P.J., W.S., concurs in part and dissents in part by separate
opinion.

John S. Richbourg, Memphis, Tennessee, for the Appellant, Richard V. Erwin

Kathryn A. King, Memphis, Tennessee, for the Appellee, Nancy M. Armstrong Erwin

                                              OPINION

        Appellee Nancy M. Armstrong Erwin (“Wife”) and Appellant Richard V. Erwin (“Husband”)
were married on February 11, 1967. The parties had a son and a daughter; at the time of the divorce,
the son had reached majority but the daughter, April, 17 years old, was scheduled to graduate from
high school on May 26, 1999.

       At the time of trial, Wife was 50 years old and Husband was 51 years old. Wife had a high
school education and had worked in various clerical positions during the course of the marriage. At
the time of trial, Wife worked for Memphis Obstetrics and Gynecological Association, P.C., with
gross earnings of $2,817 per month. Husband worked for Memphis Light, Gas & Water Division
for 30 years. In 1997, his gross income was $60,214. Shortly before the parties’ separation,
Husband voluntarily elected to retire. In 1997, he received over $60,000 gross annual income from
all sources, including pre-retirement earnings, pension benefits and income from the farm he owned,
through inheritance, with his brothers.

        The parties separated in July 1997. Wife filed for divorce shortly thereafter, and Husband
filed a counterclaim for divorce. The trial was held on July 7 and August 25, 1998.

        At trial, it was undisputed that Husband exercised little visitation with the parties’ daughter.
At the time of trial, the daughter was a senior in high school and was expected to have additional
expenses associated with her graduation.

        It was also undisputed at trial that, prior to the parties’ separation, Wife was diagnosed with
Human Papilloma Virus, otherwise known as genital warts, a sexually transmitted disease. Husband
admitted to an extramarital relationship during the marriage, in which he engaged in unprotected sex.
Wife testified that she had sexual relations only with Husband. Husband testified that he had no
symptoms of the disease. The nurse practitioner who had examined Wife testified that a male
partner could carry the disease while exhibiting no symptoms. It was undisputed that the disease put
Wife at increased risk for vaginal cancer and might require future treatments.

       The parties agreed on the value of most of the property at issue, with the exception of
Husband’s pension. There was dispute as to whether some property should be deemed marital, such
as Husband’s interest in a farm owned jointly with his brothers and the related bank accounts.
Regarding Husband’s pension, Wife submitted expert testimony that the present value of Husband’s
pension was $381,231. Husband’s expert stated that he had no idea what the present value of
Husband’s pension was, but that Husband had paid $47,382 into the plan during the course of his
employment and would receive that amount upon his death.

        At the conclusion of the trial, the trial court awarded the divorce to Wife, finding Husband
at fault for the demise of the marriage. Husband was ordered to pay $1,000 per month in child
support until the parties’ daughter graduated from high school, as well as $500 per month as alimony
in futuro. The order provided that when Husband’s child support obligation ended, less than a year
after entry of the order, the alimony in futuro payable to Wife would increase to $1,000 per month.
The trial court did not make a finding on the present value of Husband’s pension, but awarded Wife
40% of Husband’s pension payments, with 60% awarded to Husband. The trial court divided the
remainder of the marital estate; Husband asserts that he was awarded 25% of the marital property
with 75% to Wife, while Wife maintains that Husband was awarded approximately 60% with 40%
awarded to Wife. Finally, the trial court ordered Husband to pay $7,000 of the $12,000 in attorney’s
fees requested by Wife. From this order, Husband now appeals.

       On appeal, Husband argues that the trial court erred in ordering an automatic increase in
alimony upon the cessation of Husband’s child support obligation. He contends that the award of
alimony and child support was excessive, that the distribution of marital property was inequitable,
and that the trial court erred in ordering him to pay $7,000 of Wife’s attorney’s fees.

        Since this case was tried by the trial court sitting without a jury, we review the case de novo

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upon the record with a presumption of correctness of the findings of fact by the trial court. See
Tenn.R.App.P. 13(d).

        Husband argues first that the trial court erred in ordering an automatic increase in alimony
when his child support obligation ended. Husband asserts that there was no proof that Wife’s need
for alimony would increase upon the daughter’s graduation from high school.

        In determining the amount of alimony, the need of the obligee spouse and the ability to pay
of the obligor spouse are the most critical factors. See Umstot v. Umstot, 968 S.W.2d 819, 823
(Tenn. Ct. App. 1997); Watters v. Watters, 959 S.W.2d 585, 593 (Tenn. Ct. App. 1997) In this case,
Husband’s ability to pay alimony is directly affected by the termination of his child support
obligation. His ability to pay increases once he is no longer obliged to pay child support. Provided
the overall amount of the alimony was not excessive, the trial court’s order of an automatic increase
in alimony upon the conclusion of Husband’s child support obligation was not erroneous.

        Husband contends that the amount of alimony and child support awarded was excessive. He
argues that there was no evidence to support the trial court’s finding that Husband had the ability to
earn over $60,000 per year. He also contends that there was no evidence that he did not exercise
overnight visitation with the parties’ daughter, the trial court’s justification for an upward deviation
in child support. He asserts that the trial court erroneously awarded alimony and child support while
also awarding Wife 40% of the pension he is currently drawing. He maintains that the trial court
awarded Wife an excessive amount of alimony and child support as punishment for Husband’s
marital misdeeds.

        Tennessee Code Annotated § 36-5-101 sets forth the factors to be utilized in determining the
amount of an award of alimony. These factors include the relative earning capacity of the parties and
their financial resources, the duration of the marriage, the physical condition of each party, the
standard of living established during the marriage, and the relative fault of the parties. Tenn. Code
Ann. § 36-5-101(d)(1)(A), (C), (E), (I) and (K).

        At the outset of the trial, counsel for Wife outlined to the trial court Wife’s version of the
facts and the issues in dispute. In an effort to streamline the proceedings, the trial judge identified
for counsel the issues and facts he saw in dispute, and asked them repeatedly to tell him if there were
additional facts or issues in dispute. Facts asserted by counsel for Wife in the opening statement
included: (1) that Husband’s total earnings from all sources in 1997 were $60,214 and that he
voluntarily elected to take early retirement shortly before the parties separated, and (2) that Husband
was not exercising overnight visitation with the parties’ minor daughter, and that the daughter would
incur unusual expenses associated with her high school graduation. In response to the trial court’s
inquiries, counsel for Husband1 did not dispute these factual assertions by counsel for Wife. Under
these circumstances, the trial court did not err in taking these factual assertions as undisputed, in the

          1
              Husband was represented by a different attorney at the trial level than his counsel for this
appeal.

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interest of judicial economy.

         As noted above, the statute governing alimony refers to the parties’ relative “earning
capacity,” not their actual earnings. Tenn. Code Ann. § 36-5-101(d)(1)(A). The trial court found that
Husband’s earning capacity was evidenced by the amount he earned prior to voluntarily electing to
retire, rather than the amount of pension he actually received. Under these circumstances, the
evidence does not preponderate against the trial court’s implicit finding that Husband was voluntarily
underemployed and that Husband’s earning capacity, for purposes of determining alimony and child
support, was $60,000 per year. See Tenn. Comp. R. & Regs., ch. 1240-2-4-.03(3)(d) (imputing
income for purposes of calculating child support); Brooks v. Brooks, 992 S.W.2d 403, 407 (Tenn.
1999) (voluntary underemployment and child support); Garfinkel v. Garfinkel, 945 S.W.2d 744,
747-48 (Tenn. Ct. App. 1996) (voluntary underemployment and child support); Storey v. Storey, 835
S.W.2d 593, 597 (Tenn. Ct. App. 1992) (alimony based on earning capacity).

         The trial court found Husband at fault for the demise of the marriage and found that
Husband’s extramarital relationship was the source of Wife’s genital disease. In awarding alimony,
the trial court may take into account the physical condition of the parties and the relative fault of the
parties. Tenn. Code Ann. §36-5-101(d)(1)(E) and (K). The record does not support Husband’s
contention that the amount of alimony awarded reflected the trial court’s desire to “punish” Husband.

         Husband argues that the trial court erred in awarding Wife 40% of the pension benefits he
receives monthly. Husband contends that, since he is currently drawing his pension, the trial court
should have considered his pension solely as income, rather than as marital property subject to
division. If the pension is considered income, and the award of alimony and child support was based
on Husband’s earning capacity, due in part to income he receives from his pension, Husband argues
that it was inequitable for the trial court to award Wife a portion of the pension in addition to the
alimony and child support.

        Tennessee Code Annotated § 36-4-121 (b)(1)(A) defines “marital property” as “all real and
personal property, both tangible and intangible, acquired by either or both spouses during the course
of the marriage . . . .” Tenn. Code Ann. § 36-4-121 (b)(1)(A) (1996). A spouse’s retirement benefits
which were accumulated during the parties’ marriage, as in this case, represent marital property.
Tenn. Code Ann. § 36-4-121 (b)(1)(B); Cohen v. Cohen, 937 S.W.2d 823, 827 (Tenn. 1996);
Umstot v. Umstot, 968 S.W.2d 819, 822 (Tenn. Ct. App. 1997); Kendrick v. Kendrick, 902 S.W.2d
918, 926 (Tenn. Ct. App. 1994). This is true whether the retirement or pension interest is vested or
nonvested. Kendrick, 902 S.W.2d at 922, 924. The fact that Husband was drawing his retirement
benefits at the time of the divorce hearing does not change his pension benefits from marital property
to his separate property. See Leggett v. Leggett, No. 02A01-9408-CV-00190, 1996 WL 83898, at
*1 (Tenn. Ct. App. Feb. 26, 1996)( husband’s pension, which he had already begun drawing at time
of divorce, was marital property subject to division by trial court) and DuBan v. DuBan, No.
02A01-9404-CV-00086, 1995 WL 241431, at * 2 (Tenn. Ct. App. Apr. 25, 1995)(husband’s military
pension, which he was drawing at time of divorce, found to be marital property subject to division).

        Husband also argues that the trial court’s award of 40% of his pension benefits to Wife is

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excessive, in light of the large alimony award made to Wife. He contends that the award of “spousal
support” is more than Wife’s demonstrated needs, and that it was inequitable for the trial court to
award alimony and child support based on Husband’s income level, including his pension, and then
award Wife 40% of that pension.

        In at least one instance in the divorce decree, the trial court referred to the award of 40% of
Husband’s pension benefits as alimony in solido. However, viewing the record as a whole, it is clear
that the pension award was not an award of “spousal support,” but rather an award of Wife’s share
of the marital property. See Towner v. Towner, 858 S.W.2d 888, 891 (Tenn. 1993)(provision in
marital dissolution agreement requiring husband to make monthly “spousal support/alimony”
payments to wife in consideration for her giving up any interest in his military pension held to be
division of marital property, rather than alimony); Marquess v. Marquess, No. 03A01-9707-GS-
00260, 1997 WL 772876, at * 3-4 (Tenn. Ct. App. Dec. 10, 1997) (award to wife of portion of
husband’s retirement income represented division of marital property rather than award of alimony).
Had Husband not elected to retire early, Wife could have been awarded alimony plus a portion of
his pension benefits, since the benefits are a marital asset. Clearly the trial court intended the same
result by awarding alimony based on earning capacity plus a portion of the pension benefits.

        When dividing a retirement or pension plan, trial courts may utilize one of two different
methods. Cohen v. Cohen, 937 S.W.2d 823, 831 (Tenn. 1996)(citing Kendrick v. Kendrick, 902
S.W.2d 918, 927 (Tenn. Ct. App. 1994)). Under the “present value method” the trial court first
determines the present cash value of the amount of pension benefits accrued during the marriage.
Id. After determining the present cash value of the pension, the trial court then divides the pension,
often by awarding the employee spouse the retirement benefits from the pension, and awarding the
non-employee spouse some other portion of the marital estate equal to his or her share of the
employee spouse’s retirement benefits. Id. Under the “deferred distribution” or “retained
jurisdiction” method, on the other hand, the trial court awards the non-employee spouse a percentage
of the employee spouse’s monthly retirement benefits, eliminating the need to determine the pension
plan’s present cash value. The choice of which method to use to divide the benefits is within the
sound discretion of the trial court. Id. In this case, the trial court utilized the retained jurisdiction
method of distribution. This was within the trial court’s discretion.

         Husband asserts that the trial court’s award of 40% of his pension benefits to Wife was
excessive. Trial courts are accorded wide discretion when dividing marital property in a divorce,
and their distributions will be given “great weight” on appeal. See Ford v. Ford, 952 S.W.2d 824,
825 (Tenn. Ct. App. 1997). The trial court’s division of marital property is presumed to be correct,
and we will not reverse it unless the evidence preponderates to the contrary. See Wade v. Wade, 897
S.W.2d 702, 715 (Tenn. Ct. App. 1994); Loyd v. Loyd, 860 S.W.2d 409, 411 (Tenn. Ct. App. 1993).
Under the circumstances in this case, given the long duration of the parties’ marriage, we cannot find
that the evidence preponderates against the trial court’s division of the pension. The award of 40%
of the pension to Wife is affirmed.

        Husband argues next that the trial court awarded Wife more than an equitable share of the
marital estate. He contends that the trial court was unclear in its treatment of farm property he

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owned jointly with his brothers and a bank account kept in connection with the farm. Husband
asserts that these items were his separate property, but that the trial court seemed to treat them as
marital property by including them in the division of the marital estate.

        The trial court is vested with wide discretion in its classification of property in a divorce, and
its decision to classify the parties’ property as either marital or separate is given great weight on
appeal. Dunlap v. Dunlap, 996 S.W.2d 803, 814 (Tenn. Ct. App. 1998)(citations omitted); Wilson
v. Moore, 929 S.W.2d 367, 372 (Tenn. Ct. App. 1996). The trial court’s classification and division
of property is presumed to be correct, unless the evidence preponderates otherwise. Tenn. R. App.
P. 13 (d); Dunlap, 996 S.W.2d at 814; Dellinger v. Dellinger, 958 S.W.2d 778, 780 (Tenn. Ct.
App. 1997).

         Husband contends that his interest in the farm, which he acquired by inheritance, is his
separate property, but that the trial court improperly included it in the marital estate. During opening
statements at the trial, Wife’s counsel acknowledged that Husband had inherited the farm property,
but contended that Wife had an equitable interest in it due to her substantial contributions to the
property during the marriage. Wife asserted that the farm’s income had gone on the parties’ joint
tax return for the past 25 years, and that she had paid taxes on that income. Wife also asserted that
she had made loans to benefit the farm, and had given money for its upkeep.

        Tennessee Code Annotated Section 36-4-121(b)(2)(D) defines “separate property” as
“property acquired by a spouse at any time by gift, bequest, devise or descent.” Tenn. Code Ann. §
36-4-121(b)(2)(D) (1996). Therefore, at the time Husband inherited the farm property it was his
separate property. However, Tennessee Code Annotated § 36-4-121 (b)(1)(B) states that “ ‘marital
property’ includes income from, and any increase in value during the marriage of, property
determined to be separate property in accordance with subdivision (b)(2) if each party substantially
contributed to its preservation and appreciation . . . .’ ” Tenn. Code Ann. § 36-4-121(b)(1)(B) (1996).
From the record on appeal, we are unable to determine whether the trial court considered the farm
and farm accounts to be marital property because of Wife’s substantial contributions over the years
to the farm property. However, from our review of the record as a whole, even if the farm property
and related bank account are separate property, we cannot say that the evidence preponderates
against the trial court’s division of property. Therefore, the trial court’s division of marital property
is affirmed.

         Finally, Husband argues that the trial court erred in awarding Wife $7,000 of her total
$12,000 attorney’s fees. A trial court’s award of attorney’s fees in a divorce in considered part of its
award of alimony. Long v. Long, 957 S.W.2d 825, 829 (Tenn. Ct. App. 1997). As with alimony,
a trial court has broad discretion regarding the award or denial of attorney’s fees, and we will not
interfere with the trial court’s decision absent a clear showing that it has abused that discretion.
Aaron v. Aaron, 909 S.W.2d 408, 411 (Tenn. 1995) (citing Storey v. Storey, 835 S.W.2d 593, 597
(Tenn. Ct. App. 1992) and Crouch v. Crouch, 385 S.W.2d 288, 293 (Tenn. Ct. App. 1964)).
Considering the record in this cause, we cannot say that the trial court abused its discretion in
awarding Wife a portion of her attorney’s fees. Accordingly, the award of attorney’s fees is
affirmed.

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        In sum, we find no error in the trial court’s order that alimony automatically increase when
Husband’s child support obligation ends. We affirm the trial court’s award of alimony and child
support based on his earning capacity rather than the amount of the pension benefits he currently
receives. We affirm the upward deviation in the amount of child support based on the undisputed
fact that Husband was not exercising overnight visitation with the parties’ minor daughter. The
amount of alimony awarded, both before and after the automatic increase, is affirmed. We affirm
the trial court’s award to Wife of 40% of the pension benefits, as part of the division of marital
property. The division of marital property and the award to Wife of a portion of her attorney’s fees
is affirmed.

       The decision of the trial court is affirmed. Costs on appeal are assessed against Appellant,
Richard V. Erwin, for which execution may issue if necessary.

                                      HOLLY KIRBY LILLARD, J.

                                      W. FRANK CRAWFORD, P. J., W.S.

                                      DAVID R. FARMER, J.

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