Tennessee

Warning: The following opinion is provided for purposes of discussion only. We have not Shepardized™ this opinion, and do not know the subsequent disposition of this case nor whether the effect of the opinion has been overruled or superceded by other law.

Richard George Schwartz v.
Jacqueline Raelene Vaneman Schwartz,
1990.TN.861 (Tenn.App. 05/11/1990)

COURT OF APPEALS OF TENNESSEE, MIDDLE SECTION, AT NASHVILLE

No. 89-276-II

1990.TN.861

May 11, 1990

RICHARD GEORGE SCHWARTZ, PLAINTIFF/APPELLANT,

v.

JACQUELINE RAELENE VANEMAN SCHWARTZ, DEFENDANT/APPELLEE

APPEAL FROM THE CIRCUIT COURT FOR WILLIAMSON COUNTY AT FRANKLIN, TENNESSEE; THE HONORABLE HENRY DENMARK BELL, JUDGE.

Petitions for rehearing Denied June 6, 1990,

Attorney for Plaintiff/Appellant : R.e. Lee Davis, Hartzog, Silva & Davies, Franklin, Tennessee.

Attorney for Defendant/Appellee : Anne Russell, Nashville, Tennessee, Wm. Don Young, Young & McDADE, Franklin, Tennessee.

Joe C. Loser, Jr., Special Judge. Henry F. Todd, Presiding Judge, Ben H. Cantrell, Judge, concur.

The opinion of the court was delivered by: Loser

This is an appeal by the plaintiff, Richard George Schwartz (husband), from portions of a judgment of the Circuit Court for Williamson County granting the defendant, Jacqueline Raelene Vaneman Schwartz (wife), an absolute divorce and other relief.

The parties were married in their home state of Kansas on April 6, 1968. The marriage produced six children, which were at the time of the divorce aged 14, 14, 11, 8, 7 and 5.

At the time of the marriage, wife was employed as a teacher in Kansas and husband was in the United States Marine Corps stationed in North Carolina. In the fall of 1969, husband, having been discharged from the Marine Corps, entered law school. He soon quit law school and began working as a salesman for Simmons Company in Topeka, Kansas. He changed jobs several times. In 1974, he went to work for his father's bank in Paola, Kansas. In 1978, he returned to the Simmons Company as a salesman. In 1981, husband became a self employed manufacturers' representative for a number of furniture manufacturing companies in North Carolina and the family moved to Tennessee.

During the first seven years of the marriage, wife worked as an elementary school teacher. She did not work thereafter because husband preferred that she not work, but be a full time wife and mother.

After moving to Tennessee, the parties purchased a home on Crockett Hills Boulevard in Brentwood. The family subsequently moved into a new home on Frontier Lane in Brentwood, retaining the Crockett Hills home for use as rental property.

Various problems arose in the marriage and attempts to salvage the marriage through counseling failed. Husband had two separate affairs with the same person, identified in the record only as Ms. Bennett. The first one began in 1985 and was discovered by wife, but thereafter the parties reconciled. The parties separated when, in 1986, husband and Ms. Bennett renewed their relationship.

On August 14, 1987, husband established an irrevocable trust, naming his brother, David J. Schwartz, and Marvin Wm. Barkis as trustees and the parties' six children as beneficiaries. The corpus of the trust is 1000 shares of Paola-Citizens Bancshares, Inc., in which it is said that husband's father owns controlling interest. Most of the 1,000 shares transferred to the trustees were purchased by the parties during their marriage. Neither of the trustees is a party to this civil action, which was commenced by husband on October 26, 1987.

The complaint charged wife with cruel and inhuman treatment and claimed irreconcilable differences. In his complaint, husband sought a judgment of absolute divorce, that the two houses be sold and the equity distributed between the parties, that wife be awarded custody of all six children, that an "equitable amount of child support" be ordered, and a division of the marital estate.

Wife served an answer denying that she was guilty of cruel and inhuman treatment but admitting that irreconcilable differences existed between the parties. By counterclaim, wife accused husband of cruel and inhuman treatment, adultery, indignities to the person, and abandonment and failure to provide; she demanded a judgment of absolute divorce, custody of the six children, reasonable child support, an equitable division of the marital property, certain injunctive relief, and alimony.

Following trial on December 9 and 10, 1988, the Trial Judge took the matter under advisement and rendered his memorandum opinion on February 20, 1989. The final judgment, entered on May 9, 1989, granted, inter alia, an absolute divorce to wife on the grounds of adultery and such cruel and inhuman treatment and conduct by husband toward wife as renders cohabitation unsafe and improper; awarded custody of the six children to wife; dismissed husband's complaint; awarded each party ownership of such money, motor vehicles and tangible personal property in his or her present possession; awarded wife a judgment against husband in the sum of $156,000 for her equitable share of marital assets which the Trial Judge found to have been fraudulently transferred and dissipated by him; awarded husband ownership of all other marital property including choses in action; ordered husband to hold wife harmless with respect to other pending litigation; ordered husband to pay to wife, as alimony, the sum of $700 per month for 36 months; ordered husband to pay to wife, as child support, the sum of $2,700.00 per month, without abatement during visitation periods, plus the cost of all necessary medical, dental and psychological care; and, established a schedule of child visitation by husband.

Husband moved to alter or amend that judgment by reducing monthly child support payments from $2,700 to $2,100 and by deleting alimony therefrom. That motion was disallowed on June 12, 1989. Notice of appeal was served on June 14, 1989 and filed the next day.

On appeal, husband argues (1) that the Trial Judge abused his discretion in fixing monthly child support at $2,700 per month, (2) that the Trial Judge abused his discretion by awarding rehabilitative alimony of $700 per month for three years, (3) that the Trial Judge erred in awarding wife a judgment of $156,000 as part of her distributive share of the marital estate, and (4) that the Trial Judge erred in not allowing an abatement of payments of child support during visitation periods.

Wife insists, on appeal, that the Trial Judge erred in (1) not setting aside the fraudulent conveyance of bank stock to the trustees, and (2) not awarding alimony in solido to her.

At the time of the trial. wife had a present earning capacity of $600 per month and was attending school with the expectation of being recertified as a teacher in Kansas. Husband's present earning capacity at the time of the trial was found by the Trial Judge to be $70,000 per year. The needs of the children are great.

"The trial court is vested with wide discretion in awarding support for minor children, and this court will not interfere except upon a clear showing that the trial court erred in exercising its discretion." Harwell v. Harwell, 612 S.W.2d 182, 185 (Tenn. App. 1980) citing Marmino v. Marmino, 34 Tenn. App. 352, 355, 238 S.W.2d 105, 107 (1950). In setting child support, Tennessee courts must look to the factors set out in Tenn. Code Ann. § 35-5-101(e) for guidance. Among these factors, the needs of the children and each parent's ability to pay are the paramount factors to be considered. Allison v. Allison, 638 S.W.2d 394, 396 (Tenn. App. 1982).

After a review of the record in this case in the light of those standards, it is our opinion that the monthly child support required of the husband should be $2,400 instead of $2,700, subject to such modification as may be appropriate from time to time because of changed circumstances. The judgment is modified accordingly.

The next issue regards the matter of rehabilitative alimony.

As with child custody matters, the trial court is vested with great latitude when making decisions with regard to alimony. Campanali v. Campanali, 695 S.W.2d 193, 197 (Tenn. App. 1985). However, our review is de novo with a presumption of correctness of the ruling below. Lancaster v. Lancaster, 671 S.W.2d 501, 502 (Tenn. App. 1984); Tenn. R. App. P. 13(d).

There is sufficient evidence to support an award of $700 per month to wife for rehabilitative alimony for three years. Wife is currently working a graduate assistant while she earns credit towards a masters degree. Although wife could forego further education and instead obtain her teaching certificate and begin teaching at an annual salary of around $19,000, her continued education could assure her of a larger income which will enable her to more easily support herself and her children in the years to come. Tennessee Code Annotated § 36-5-101(d)(2) provides that one of the factors which should be considered in setting alimony is "he relative education and training of each party, the ability and opportunity of each party to secure such education and training, and the necessity of a party to secure further education and training to improve his or her earning capacity to a reasonable level." Id.

Husband's second issue is without merit.

In his third issue, husband alleges that "the trial court erred in awarding a judgment to the wife in the amount of $156,000 as a distribution of the marital estate."

In his brief, husband argues that the trial court erred in its valuation and distribution of the marital property because it overvalued two parcels of real estate which composed part of the marital estate. Specifically, husband argues that although the trial court valued the parties' equity in the Crockett Hills Boulevard and Frontier Lane properties at $144,000, the actual equity in the properties was only $2,247.30. This contention is based on the alleged undisputed fact that the parties made a net profit of $2,247.30 in the sale of the Frontier Lane home and they lost money in the foreclosure sale of the Crockett Hill Boulevard home since all proceeds of that home went to pay off the first and second mortgages thereon. In essence, husband contends that the trial court erred in making its valuation of the marital property before the sales of the two properties rather than after the sales.

The Trial Judge correctly valued the marital estate as of the date of separation. As stated in his memorandum opinion of February 20, 1989:

The final separation of the parties occurred on May 25, 1987. During June of 1987, husband made the final decision to terminate the marriage. On August 14, 1987, husband transferred the 967 shares of Paola Bank stock to trustees for the use and benefit of the six children of the parties (Exhibit No. 12). On October 26, 1987, husband filed his complaint herein seeking an absolute divorce. Subsequently, husband quit making mortgage payments on one of the parcels of real estate and unnecessarily allowed that parcel to be sold at foreclosure for the amount of the debt. The other parcel of real estate (Frontier Lane) was sold and the net sale proceeds ($2,247.30) are now held by the clerk of this court. Husband is involved in two lawsuits arising out of the construction of the Frontier Lane residence, and may eventually recoup some of the loss of equity. The court finds from the evidence that the marital estate continued to have a value of approximately $312,000.00 through the date of the separation of the parties. The court further finds that husband was, in effect, in total control of the parties marital property from the date of the separation of the parties until the date of trial. Under the circumstances, the court concludes that husband was a constructive trustee as to the marital property. The court Judges the husband to have been a totally discredited witness. His explanation as to the marital estate diminishing from $312,000.00 to minus $77,000.00 is entirely unsatisfactory. The transfer of the Paola stock to trustees was done for the fraudulent purpose of defeating the wife's interest in the marital estate. The court finds the contention of the wife that husband deliberately dissipated the marital estate out of spite and malice is supported by the preponderance of the evidence.

In setting the value of the marital estate and in making an equitable division of that estate, the trial court appears to have relied heavily on its Conclusion that husband was not a credible witness. Where a case is tried upon oral testimony without intervention of a jury, the presumption of correctness of the chancellor's findings is entitled to great weight since "the Chancellor the opportunity, which we do not have, to observe the manner and demeanor of the witnesses while testifying before him and to determine which way the evidence preponderated." Fiddler's Inn v. Andrews Distributing Co., 612 S.W.2d 166, 169 (Tenn. App. 1981) (quoting Capital City Bank v. Baker, 59 Tenn. App. 477, 493, 442 S.W.2d 259, 266 (1969)). In light of the foregoing, we are of the opinion that the evidence in this case preponderates in favor of the decision of the trial court.

Husband's third issue is without merit.

Husband's fourth and final issue alleges that "the trial court erred in refusing to give any compensation when exercising his visitation after moved the children to Kansas."

In order to show that the trial court improperly exercised its discretion by failing to abate husband's child support obligation during visitation with the children, husband must show that the trial court's decision was more than an error of judgment; husband must show that it was a misapplication of the law or an unreasonable exercise of judgment. DeWalt v. DeWalt, 529 A.2d 508, 510 (Pa. Super. 1987).

Under the facts of this case, the trial court's decision cannot be said to be unreasonable. Even though some of wife's expenses might be reduced during the periods of the children's visitation with husband, other expenses will not be affected by the absence of the children for short periods. House rent or a mortgage payment, electricity, and clothing would be examples of expenses that would not be affected by the childrens' visitations with husband. In light of the wife's relative lack of financial resources, it is not too much to ask that husband contribute a fixed amount for the support of his children even when some of these children visit with him for short periods of time.

Husband's fourth issue is without merit.

Wife insists in her first issue that the Trial Judge should have enjoined husband to return the Paola Bank stock to Tennessee. Under the facts of this case, the wife's interest in that asset was protected by the finding that the stock was marital property and the award of a judgment representing her share of its value. One seeking to set aside a fraudulent transfer should sue the transferees. As already noted, the trustees were not sued.

Wife's first issue is without merit.

In her second issue, wife insists that "(t)he trial court erred in failing to award wife alimony in solido charged against husband's share of marital property for assets dissipated by husband."

Although wife has a need for alimony, there is no showing that husband has a present ability to pay alimony in solido. Moreover, as husband correctly argues, citing Aleshire v. Aleshire, 642 S.W.2d 729 (Tenn. App. 1981), alimony in solido should not be awarded out of an expectation of future earnings, but only where the husband has a present estate out of which such an award could be made.

Wife's second issue is without merit.

The trial court is affirmed in all respects except that husband's monthly child support obligation is reduced to $2,400. Costs are taxed to the appellant. The cause is remanded to the trial court for such further proceedings as may be appropriate and consistent herewith.

MODIFIED, AFFIRMED and REMANDED.

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