Thomas James Milam, Jr. v. Donna Lisa Vinson Milam ( 2012 )

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
December 6, 2011 Session
THOMAS JAMES MILAM, JR. v. DONNA LISA VINSON MILAM
Appeal from the Chancery Court for Williamson County
No. 38230 Robbie T. Beal, Chancellor
No. M2011-00715-COA-R3-CV - Filed May 17, 2012
This appeal involves a post-divorce petition to modify child support. The trial court reduced
Father’s child support obligation from $4,500 monthly to $2,500. Mother appeals. Finding
that the trial court erred in the calculation of Father’s income and the number of days of his
parenting time, we vacate the child support award and remand for a redetermination of the
appropriate award under the Child Support Guidelines.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed in
Part; Vacated in Part; Case Remanded
R ICHARD H. D INKINS, J., delivered the opinion of the court, in which F RANK G. C LEMENT,
J R. and A NDY D. B ENNETT, JJ., joined.
Russ Heldman, Franklin, Tennessee, for the Appellant, Donna Lisa Vinson Milam.
Helen Sfikas Rogers and Lawrence James Kamm, Nashville, Tennessee, for the Appellee,
Thomas James Milam, Jr.
OPINION
I. Facts and Procedural History
Donna Lisa Vinson Milam (“Mother”) and Thomas James Milam, Jr. (“Father”) were
divorced on August 13, 1997. In the Final Decree of Divorce, Mother was named primary
residential parent of the parties’ two children, and Father was ordered to pay $4,500 per
month in child support; Father was also ordered to pay $2,500 per month in rehabilitative
alimony for a period of forty-eight months. In 2000, Father filed a petition to modify the
child support, which the trial court denied. This Court, in Milam v. Milam, No. M2001-
00498-COA-R3-CV, 2002 WL 662026 (Tenn. Ct. App. Apr. 23, 2002), affirmed the denial
of the petition to modify.
The issues presently before the Court arose from Father’s June 22, 2010 Petition for
Modification of Child Support and for Criminal Contempt. In his petition, Father alleged
that his “gross monthly income has decreased in 2010 as a result of a pay off agreement
concerning his place of employment.” Father requested that his child support obligation be
reduced to $2,182 per month and alleged that Mother was “in clear and open contempt” of
the court’s order due to her failure to return the children in a timely fashion on May 9, 2010.
On July 9, Mother filed a motion to dismiss, which the trial court denied. From August 2010
until the final hearing, Mother and Father filed various motions related to discovery,
including a motion for Protective Order, which was granted by the trial court.
The court held a hearing on November 19, 2010. On December 23, 2010, while the
matter was under advisement, Father’s attorney sent a letter and an affidavit of Father to the
trial judge notifying the court that Father had obtained employment since the final hearing
and provided Father’s anticipated salary. Mother’s attorney was also sent a copy of the letter
and affidavit.
On January 20, 2011, the trial court ruled that Father’s child support should be
reduced, pursuant to the child support guidelines, to $1,980; however, the court found there
should be an upward deviation of $520 making Father’s obligation $2,500 per month. The
court made the reduction in child support retroactive to the date Father filed the petition
which resulted in a judgment of $16,000 against Mother. The court held Mother in contempt
for her failure to return the children appropriately on May 9, 2010 but did not sanction
Mother. Finally, the court declined to award attorneys’ fees to either party, and denied
Mother’s objection to post-trial filings and her request for sanctions. Mother appeals.
II. Standard of Review
We review a trial court’s findings of fact de novo with a presumption of correctness
unless the preponderance of the evidence is otherwise. Tenn. R. App. P. 13(d). Thus, when
the trial court has set forth its factual findings in the record, we will presume the correctness
of those findings unless the evidence preponderates against them. Bordes v. Bordes, 358
S.W.3d 623, 627 (Tenn. Ct. App. 2011) (citing Crabtree v. Crabtree, 16 S.W.3d 356, 360
(Tenn. 2000)). The trial court’s conclusions of law are reviewed de novo, with no
presumption of correctness. Lacey v. Lacey, No. W2002-02813-COA-R3-CV, 2003 WL
23206069, at *2 (Tenn. Ct. App. Oct. 31, 2009) (citing Huntley v. Huntley, 61 S.W.3d 329,
334 (Tenn. Ct. App. 2001)).
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III. Analysis
Mother’s paramount issue on appeal relates to the decrease in Father’s child support
obligation from $4,500 per month to $2,500. Mother asserts that the trial court erred in
making its calculation of the amount of child support by erroneously calculating the parties’
income and number of days of parenting time, and by failing to apply the “Hardship
Provision” to deny Father any reduction in his obligation. Mother raises additional issues
related to discovery matters and attorney’s fees.1
A. Modification of Child Support
The modification of child support is governed by Tenn. Code Ann. § 36-5-101(g).
In considering a petition to modify child support, the trial court must determine whether a
“significant variance” exists between the Child Support Guidelines (“the Guidelines”) and
the amount of support currently owed. Tenn. Code Ann. § 36-5-101(g). See Kaplan v.
Bugalla, 188 S.W.3d 632, 636 (Tenn. 2006). For child support orders that were established
before January 18, 2005,2 as in the instant case, the Guidelines define a “significant variance”
as: “[a]t least a fifteen percent (15%) change in the gross income of the [alternate residential
parent].” Tenn. Comp. R. & Regs. 1240-2-4-.05(2)(b)(1). The parent seeking modification
of child support has the burden to prove a significant variance exists. Wine v. Wine, 245
S.W.3d 389, 394 (Tenn. Ct. App. 2007).
The trial court found that Father’s income had decreased significantly from
approximately $700,000 per year when the Final Decree of Divorce was entered in 1997, to
an average of approximately $350,000 per year over the three years preceding the hearing.
The court held that this decrease in income constituted a “significant variance” warranting
a modification in Father’s child support obligation. We affirm the trial court’s finding that
this change in income constituted a “significant variance” under the Guidelines. We now
1
Mother also asserts that the trial court erred in accepting an ex parte communication from Father.
The alleged ex parte communication was a letter and affidavit Father’s counsel sent to the court and to
Mother’s attorney after the case was taken under advisement. Because this communication was disclosed
to Mother and she had the opportunity to respond, we decline to characterize this communication as ex parte
and find no merit in Mother’s argument. See Castle v. State Dept. of Corr., No. E2005-00874-COA-R3-CV,
2005 WL 2372762, at *3 (Tenn. Ct. App. Sept. 27, 2005) (citing Moore v. Moore, No. 01-A-01-9210-CH00-
389, WL 1993 54593, at *5 (Tenn. Ct. App. May 3, 1993)).
2
When the Final Decree of Divorce was entered in this case, the parties’ child support obligations
were determined under the Flat Percentage Guidelines. Since January, 18, 2005, all modifications and
awards of support are calculated under the Income Shares Model promulgated by the Tennessee Department
of Human Services Child Support Services Division. See Tenn. Comp. R. & Regs. 1240-2-4-.03(1).
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proceed to examine whether the trial court erred in establishing the amount of Father’s child
support obligation, as argued by Mother.
Mother first contends that the trial court erred by imputing income to her without
specifically finding that she was willfully and/or voluntarily underemployed. Father contends
that Mother’s argument “rests upon a technicality” because the clear meaning of the trial
court’s order was that Mother was voluntarily underemployed even though the trial court did
not expressly hold as such. Second, Mother asserts that the trial court erred in failing to
consider all sources of Father’s income and miscalculated the amount Father’s parenting time
and his contribution to the children’s medical insurance premiums.
1. Calculation of Mother’s Income
With respect to Mother’s employment status and earnings, the trial court found that
Mother is a registered nurse and worked approximately thirty hours per week at NHC Place
in Cool Springs. The court found that her income increased from “no annual earnings” at the
time of the divorce to earnings in the amount of “close to $35,000.00 per year.” The court
held that “Mother is earning less than she is capable,” and that she has the ability to earn
$50,000.00 per year.
Determining whether a parent is voluntarily underemployed is a fact driven inquiry
requiring careful consideration of all the attendant circumstances. See Richardson v. Spanos,
189 S.W.3d 720, 726 (Tenn. Ct. App. 2005). Accordingly, we review the trial court’s
determination in accordance with Tenn. R. App. P. 13(d), presuming the correctness of the
trial court’s factual findings unless the evidence preponderates otherwise. Id.
The integrity of a child support award is dependent upon the trial court’s accurate
determination of both parents’ gross income. Pursuant to the Guidelines, a court may impute
gross income in the following situations:
(I) If a parent has been determined by a tribunal to be willfully and/or
voluntarily underemployed or unemployed; or
(II) When there is no reliable evidence of income; or
(III) When the parent owns substantial non-income producing assets, the court
may impute income based upon a reasonable rate of return upon the assets.
Tenn. Comp. R. & Regs. 1240-2-4-.04(3)(a)(2)(i). The attribution of income to a party is
based on the premise that “parents may not avoid their financial responsibility to their
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children by unreasonably failing to exercise their earning capacity.” Massey v. Casals, No.
W2008-01807-COA-R3-JV, 2009 WL 4017256, at *6 (Tenn. Ct. App. Nov. 23, 2009).
The Guidelines do not presume that a parent is willfully underemployed; rather,
courts are directed to “ascertain the reasons for the parent’s occupational choices, and to
assess the reasonableness of these choices in light of the parent’s obligation to support his
or her child(ren) and to determine whether such choices benefit the children.” Tenn. Comp.
R. & Regs. 1240-2-4-.04(3)(a)(2)(ii). The party alleging that a parent is willfully or
voluntarily underemployed carries the burden of proving underemployment. Armbrister v.
Armbrister, No. E2010-01561-COA-R3CV, 2011 WL 5830466, at *5 (Tenn. Ct. App. Nov.
21, 2011). “A determination of willful and voluntary . . . underemployment is not limited to
occupational choices motivated only by an intent to avoid or reduce the payment of child
support. The determination may be based on any intentional choice or act that affects a
parent’s income.” Tenn. Comp. R. & Regs. 1240-2-4-.04(3)(a)(2)(ii)(I). Thus, courts should
allocate additional income to an underemployed parent to increase the parent’s gross income
to an amount that reflects the parent’s income potential or earning capacity based upon his
or her educational level and previous work experience. See Diley, 2011 WL 2015395, at
*7–8; see also Tenn. Comp. R. & Regs. 1240–2-4-.02(3)(a)(2)(ii)(II).
As an initial matter, we address Mother’s contention that the trial court lacked
authority to allocate additional income to her without making an express finding that she was
voluntarily underemployed. We acknowledge that the court did not expressly state Mother
was voluntarily underemployed; however, we discern from the court’s imputation of income
to Mother and its finding that Mother was “earning less than she is capable” that the trial
court found Mother to be underemployed. Moreover, the trial court’s use of the phrase
“earning less than she is capable” mirrors the language used in Tenn. Comp. R. & Regs.
1240-2-4-.04(3)(a)(2)(ii)(II), which instructs a court to impute additional income to a
voluntarily underemployed parent to reflect their “earning capacity.” This contention is
without merit.
We next examine whether the court erred in imputing income to Mother. Mother
testified that she makes $25 per hour and works “about 30 hours a week.” When asked
whether she had ever considered working additional hours doing “PRN” work which pays
more per hour than her present job, Mother stated that she tried to “avoid” that type of work
because the hours were not as flexible as her current position. Mother also testified that, in
2008 and 2009, she worked more than 30 hours per week at Vanderbilt Hospital and made
more money than in the position she held at time of trial. The court held that Mother is
“capable of working a forty (40) hour week and making ($50,000.00) per year.” Based on
our review of the record, we find that the evidence does not preponderate against the trial
court’s conclusion that Mother was capable of working more than 30 hours per week and that
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her income potential, based upon her educational level and previous work experience, is
$50,000.00 per year. We affirm the trial court’s allocation of income to Mother.
2. Calculation of Father’s Income, Parenting Time, and Medical
Insurance Payment
a. Father’s Income
With regard to Father’s income, the court found as follows:
Mr. Milam has suffered a job loss which significantly cut his income
to its present amount in 2010 to Two Hundred Eighty-One Thousand Dollars
($281,000.00). Mr. Milam is reaching retirement age and has had issues with
his health. The state of the United States’ economy is not such that would
allow Mr. Milam to easily find a job in the realm of his past earnings.
However, the Court also must consider Mr. Milam’s earning potential.
His experience level is significant and he possesses specific and particular
skills that are desirable in his industry. Further, his past earnings must be
taken into account as representational of his overall ability to earn.
For child support calculation purposes, the Court finds that during the
scope of the year 2010, Mr. Milam has actively searched for employment and
his income is properly calculated at the amount of his severance pay of . . .
($281,000.00). However, the Court finds that said amount of . . .
($281,000.00) is the absolute minimum that Mr. Milam should be expected to
earn throughout the duration of his employable years.
The trial court ultimately held that Father had the ability to earn $23,416.66 per month in
gross income and used that amount in its calculation of Father’s child support obligation.
Mother contends that, by failing to consider sources of income other than severance
pay from his previous employer, the trial court erroneously calculated Father’s gross monthly
income. In support, Mother cites Father’s testimony regarding income he received from
employment as a part-time lobbyist.
The trial court did not specify how it determined Father’s 2010 income to be
$281,000.00. Evidence of Father’s 2010 income in the record includes a series of pay stubs
from American Health Fulfillment Inc., a report of Thomas Price, an accountant, and Father’s
testimony regarding his lobbying activities. The pay stubs show that Father was paid
$11,535.46 bi-monthly in severance pay and that, in 2010, he received $7,453.60 as
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remuneration for unused vacation days;3 thus, at the time of the hearing, Father was set to
receive $284,304.64 in severance payments in 2010.4 Father testified that, in addition to
severance pay, he had been paid $14,000 in 2010 for part-time lobbying activities and was
expecting another payment of $14,000 for this work “depend[ing] on when they collect from
these various companies.” The evidence thus shows that Father’s 2010 income was at least
$298,304.64 or $24,858.67 per month.5
The definition of “gross income,” for the purpose of determining a party’s child
support obligation is found under Tenn. Comp. R. & Regs. 1240-2-4-.04(3)(a)(1) which
includes, in relevant part, “. . . all income from any source . . ., whether earned or unearned,
and includes, but is not limited to the following: (i) Wages; (ii) Salaries; . . . (iv) Income from
self-employment . . . (vii) Severance pay . . . .” The trial court failed to consider all sources
of Father’s income for purposes of setting his child support, thus the evidence preponderates
against the trial court’s finding that Father’s income “is properly calculated at the amount of
his severance pay of . . . ($281,000.00).” 6
b. Parenting Time
In the child support worksheet attached to the court’s order, the court assigned 162.5
days of parenting time to Father and 202.5 days of parenting time to Mother. Mother
contends that the number of days of parenting time assigned to Father is inaccurate, and
consequently, his child support obligation is incorrectly calculated.
Father attached a child support worksheet as an exhibit to his Petition for Modification
of Child Support and for Criminal Contempt in which he listed the number of days of his
3
Father testified that he received the pay for his unused vacation in March of 2010.
4
$11,535.46 x 24 = $276,851.04. $276,851.04 + $7,453.60 = $284,304.64.
5
As noted by Mother, this amount does not include interest income, rental income or IRA
distributions, which are sources of income Father previously identified on his 2008 tax return. See Tenn.
Comp. R. & Reg. 1240-2-4-.04(3)(a)(1) (listing interest income and Individual Retirement Accounts as
sources of income).
6
Mother asserts that the trial court erred in admitting inadmissible hearsay into evidence.
Specifically, Mother contends that Father’s testimony regarding what he thought his salary would be in the
current job market constituted inadmissible hearsay. We have reviewed the testimony Mother complains of
and find the testimony was admissible in accordance with Tenn. R. Evid. 701 as an opinion of a lay witness.
Pursuant to Tenn. R. Evid. 701, “[a] witness may testify to the value of the witness’s own property or
services.” Father was testifying regarding his opinion of the value of his own services, thus the trial court
did not err in allowing the testimony.
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parenting time at 120 days per year. At trial, Father proffered proposed child support
worksheets, which were made exhibits to his testimony, in which Father’s counsel listed the
number of days of his parenting time at 162.5 days per year. On cross-examination, Mother’s
counsel asked about the discrepancy between his original child support worksheet and the
worksheet proffered at trial, and Father testified as follows:
Q: All right. Now, I want to hand you this. When [you] filed your petition,
this is what was attached, was it not?
A: (Witness reviewing document.) Yes. That was a child support worksheet.
Yes.
Q: And that child support worksheet contains the calculation of 120 days that
you exercise; correct?
A: Correct.
Q: All right. And when you filed that petition, you were telling the Court that
you want the Court to set your child support based upon 120 days to you and
the rest to mother; correct?
A: Correct.
...
Q: So that was your position at that time about how many days that you have
with the children based upon the two orders of the Court; correct?
A: Correct.
Q: Then you’ve never submitted another child support worksheet with any
other number on it until today, where now you’re saying 162.5; correct?
A: I did see the document and saw it said that. I did not see that document
until today, and I don’t know where the 160-whatever came from.
...
Q: So from your standpoint, it’s always been your position it’s 120 days today?
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A: Approximately. It is one-third, but, yes, that sounds about right to me.
Based on Father’s testimony and our review of the entire record, we conclude that the
evidence preponderates against the trial court’s finding that Father exercised 162.5 days of
parenting time with the children.
c. Health Insurance Premiums
The trial court listed Father’s insurance premium payment at $250 on the child support
worksheet attached to the order modifying Father’s support obligation. Mother contends that
the appropriate amount of the premium payment is $164. In support of her contention,
Mother points to the child support worksheet Father originally attached to his Petition to
Modify, in which he stated that the insurance premium was $164 per month. At trial, Father
introduced a child support worksheet as an exhibit that listed his monthly insurance premium
at $250 per month. Mother fails to cite any testimony or other evidence to support her
contention that the insurance premium remained $164 at the time of trial; thus we find that
the evidence does not preponderate against the trial court’s finding that Father paid $250 for
the children’s portion of health insurance premium.
In sum, we find the evidence preponderates against the trial court’s calculation of
Father’s income and the number of days of his parenting time. Therefore we vacate the
determination of Father’s child support obligation and remand the case for a fresh
determination of the amount of child support owed by Father.
3. Hardship Provision
Mother asserts that the trial court erred in failing to invoke the Hardship Provision to
require Father to continue paying $4,500 per month in child support. Mother relies on Tenn.
Comp. R. & Regs. 1240-2-4-.07(2)(h), titled “Hardship Provisions Due to Modification of
Order,” to support her assertion, which states:
Any time following the effective date of these Rules when a tribunal is
considering modification of an order initially established under Tennessee's
Flat Percentage Guidelines, and the tribunal finds a significant variance
between the amount of the existing child support order and the amount of the
proposed child support order calculated under this chapter, which change
results from the application of the guidelines rather than from the change in
the income and/or circumstances of the parties, then the tribunal may modify
the current child support order up to the full amount of the variance or may
apply a hardship deviation as described below in parts 2-4.
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Tenn. Comp. R. & Regs. 1240-2-4-.07(2)(h) (emphasis added).
The Guidelines state that the Hardship Provision is applicable only in situations where
a child support order initially established under the Flat Percentage guidelines, is modified
under the Income Shares guidelines and the change in the amount of child support to be paid
is caused by “the application of the guidelines rather than from the change in income and/or
circumstances of the parties . . . .” Id. The trial court found that the modification of Father’s
child support obligation was caused by a change in his income, not as a result of the
application of the Income Shares Model of the Guidelines. Therefore, the trial court did not
err in failing to apply the Hardship Provision under these circumstances.
4. Upward Deviation and Judgment Against Mother
Father contends that the trial court erred in finding that the facts of this case warranted
an upward deviation pursuant to Tenn. Comp. R. & Regs. 1240-2-4-.07(b). The trial court
found that Father’s presumptive child support was $1,980.00 monthly. The court deviated
from the presumptive amount by increasing child support by $520.00 per month resulting in
an obligation of $2,500.00 per month. In light of our decision to remand the case for a
redetermination of the amount of Father’s child support obligation, we vacate the upward
deviation as ordered by the court. In so doing, we leave open the question of whether an
upward deviation may be appropriate when the court recalculates Father’s income and days
of parenting time. We likewise vacate the judgment of $16,000 granted against Mother for
Father’s overpayment of child support; we leave open the question of whether a judgment
for overpayment will be warranted.
B. Discovery Matters
This Court reviews a lower courts’ determination of discovery matters as follows:
Because decisions regarding pretrial discovery are inherently discretionary,
they are reviewed using the “abuse of discretion” standard of review. The
abuse of discretion standard of review envisions a less rigorous review of the
lower court's decision and a decreased likelihood that the decision will be
reversed on appeal.
Lee Med., Inc. v. Beecher, 312 S.W.3d 515, 524–25 (Tenn. 2010).
On September 17, 2010, the court entered an order on Father’s motion for a protective
order in which the court, inter alia, designated documentary information produced in
response to discovery as confidential; restricted use of the information to purposes of the
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current litigation; restricted the disclosure of the information; and ordered that the
information produced be destroyed within 90 days of the termination of the proceeding.
Mother contends that there was insufficient cause shown for the issuance of the order,
asserting that the order was entered on the basis of hearsay statements of Father’s counsel.
We do not deem it necessary to resolve this issue in light of our disposition of this
appeal. The case will be returned to the court for further consideration, presumably utilizing
the material which is the subject of the protective order. The trial court retains the
discretionary authority to modify or lift the protective order. Ballard v. Herzke, 924 S.W.2d
652, 659 (Tenn. 1996). If Mother would like to modify the terms of the protective order, she
is free to request relief from the court.
Mother also complains that the court erred in denying her motion to strike certain
hearsay statements made by Father’s counsel in support of the motion for protective order.
The record reflects that, at a hearing on Father’s motion for the protective order, Mother’s
counsel moved the court to strike certain alleged “ugly” comments made by Father’s counsel;
the court stated that the requested relief “was not necessary.” There is no Order in the record
reflecting what Mother characterizes as the court’s denial of her motion to strike the
statements of Father’s counsel. “We do not review the court's oral statements, unless
incorporated in a decree, but review the court's order and judgments for that is how a Court
speaks.” Cunningham v. Cunningham, No. W2006-02685-COA-R3-CV, 2008 WL 2521425,
at *5 (Tenn. Ct. App. June 25, 2008) (citing Shelby v. Shelby, 696 S.W.2d 360, 361 (Tenn.
Ct. App. 1985)). Without a written order from the court, we are unable to assign error to the
trial court for the denial of Mother’s motion to strike.
As a separate issue, Mother urges this Court to find that the trial court erred in
refusing to dismiss Father’s petition as a sanction for “Father’s willful refusal to answer
questions at his court ordered discovery deposition.” The record shows that Mother made
an oral motion to dismiss the proceeding on the morning of the hearing on the basis that
Father did not answer certain questions in his deposition; the court declined to dismiss the
petition as a sanction. We have reviewed the transcript of the hearing and find that the trial
court was within its inherent discretionary authority when it denied Mother’s motion to dismiss.
D. Attorney’s Fees
Mother asserts that the trial court abused its discretion in failing to award attorney’s
fees to her. “The allowance of attorney's fees is largely in the discretion of the trial court,
and the appellate court will not interfere except upon a clear showing of abuse of that
discretion.” Aaron v. Aaron, 909 S.W.2d 408, 411 (Tenn. 1995). In denying Mother’s
motion, the court discussed at some length its determination that each party should bear their
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own fees. The factors considered by the court are supported by the record; consequently, we
do not find that the trial court abused its discretion in declining to award attorney’s fees to
Mother.
IV. Conclusion
For the foregoing reasons, we vacate the court’s modification of child support and the
judgment against Mother for $16,000. We remand the case for a redetermination of the
amount of child support in accordance with the Guidelines based on Father’s gross annual
income of $298,304.64, Mother’s imputed income of $50,000, and Father having 120 days
of parenting time, subject to an upward deviation in the trial court’s discretion. Costs of this
appeal are assessed against the parties equally.
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RICHARD H. DINKINS, JUDGE
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