Priscilla Lee Slagle v. Lawrence Fred Slagle ( 2012 )

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
January 31, 2012 Session
PRISCILLA LEE SLAGLE v. LAWRENCE FRED SLAGLE
Appeal from the Probate and Family Court for Cumberland County
No. 17140 John R. Officer, Judge
No. E2011-00785-COA-R3-CV-FILED-APRIL 30, 2012
This is a divorce case. The parties are Priscilla Lee Slagle (“Wife”) and Lawrence Fred
Slagle (“Husband”). They were married for more than thirty years and, prior to the entry of
the divorce judgment, they shared the custody of their adopted grandson (“the Child”). Wife
sued for divorce on the grounds of inappropriate marital conduct and irreconcilable
differences. Husband filed a counterclaim on the same grounds. At a pre-trial hearing, the
court held Husband in contempt for violating the statutorily-mandated 1 injunction
prohibiting, among other things, the transferring of or the borrowing against “any marital
property.” Following the trial, the court additionally found Husband in contempt (1) for
failing to comply with discovery requests and (2) for dissipating marital assets. Husband left
the country and did not appear at trial. The court granted Wife a divorce predicated on
Husband’s inappropriate marital conduct; designated Wife as the Child’s primary residential
parent; and prohibited any contact between Husband and the Child until he had purged
himself of contempt. The court classified and divided the parties’ assets, awarded Wife
$5,000 a month in alimony in futuro, and set Husband’s child support obligation. Husband
appeals. He challenges the contempt findings and some financial aspects of the court’s
decree. We reverse that part of the judgment barring contact between Husband and the child
and downwardly adjust the award of alimony to $3,200 per month. In all other respects, the
judgment is affirmed.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Probate and Family Court
Reversed in Part and Modified in Part; Affirmed as Modified; Case Remanded
with Instructions
C HARLES D. S USANO, J R., J., delivered the opinion of the Court, in which H ERSCHEL P.
F RANKS, P.J., and J OHN W. M CC LARTY, J., joined.
1
See Tenn. Code Ann. § 36-4-106(d)(1)-(7) (2010).
Thomas F. Bloom, Nashville, Tennessee, for the appellant, Lawrence Fred Slagle.
Randal R. Boston and Kevin D. Poore, Crossville, Tennessee, for the appellee, Priscilla Lee
Slagle.
OPINION
I.
Husband and Wife met in 1967, when Wife was 14 years old. They began dating and
the following year their daughter Lisa was born. The parties established a home and married
in 1980. In 2000, Lisa gave birth to the Child – a son named Jesse. Wife testified that a few
months after the Child was born, Lisa began suffering from depression and became disabled
and was unable to care for the Child. As a result, Husband and Wife adopted the Child and
have raised him since infancy. At the time of trial, Husband was 67, Wife was 57, and the
Child was 10. In addition to Wife and the Child, both Wife’s elderly mother and the parties’
daughter, Lisa, were living with the parties. We will now summarize the operative facts and
the testimony presented in the proceedings below. It should be remembered that, because
Husband did not appear at the December 2010 trial, his testimony is limited to that given by
him at the August 2009 contempt hearing.
Husband worked in the travel and resort development businesses. For 21 years,
throughout the 1970s and at the beginning of the marriage, he worked for a development
company called Fairfield Communities located in Virginia. In the late 1980s, Husband and
Wife relocated to Crossville. They later left and returned there more than once, while
Husband pursued business ventures outside the country. In all, Husband worked in South
Africa for eight years and on St. Maarten Island for three years. In 2004, Husband
established his company, “World Vacations,” a member-managed corporation with Husband
as the sole member. At the time of trial, it continued to be active under the name of
“Universal Dreams, NV.” In addition, Husband established another business, “Marine
Vacations.” Wife testified that he subsequently sold it in 2006 for $500,000.2 Wife had kept
the company’s books and said all of the earnings from Husband’s business ventures were
deposited into bank accounts in the United States. Husband agreed that in 2005 and 2006,
he began taking Wife’s name off of the parties’ joint accounts and placing them in his name
alone. He also closed other accounts. At the time of trial, Husband held an account at an
offshore bank on St. Maarten.
2
Few details regarding the company were provided and its relationship, if any, with World Vacations
is unclear from the record before us; some testimony indicates that it was “World Vacations” that Husband
sold and later regained.
-2-
At the time of the marriage, Wife had her GED and also worked for Fairfield
Communities. After the marriage, she began college; she graduated with a business degree
in 1985 and became a certified public accountant. While in Virginia, Wife worked, but left
her job when the parties moved to Crossville. From that time on, Wife worked intermittently,
repeatedly leaving her employment every few years, at Husband’s request, to help him with
his foreign business ventures. For a time, she worked in Crossville for MasterCorp, earning
over $30,000 a year. This was her best-paying position. She was there until 1996, when the
parties returned to South Africa. Later, Wife worked for Crossville Realty, in which
Husband had an interest, and for a local CPA’s office. In 2003, the parties moved to St.
Maarten and Wife worked, without pay, for Husband’s company, until she decided to end the
marriage. According to Wife, she maintained her CPA license until 2004, when Husband
told her she would not need to work anymore and didn’t need to keep her license. Wife
testified that her license is in an inactive status, and that reactivation required her to complete
80 hours of continuing education classes at a cost of $2,500. Wife said she did not have the
necessary funds and had been unable to find a job with an employer who would pay the
reactivation fees for her.
Wife testified that in 2006 the marriage was especially strained. By April 2007, the
situation became worse and Wife felt that she and the Child needed to leave Husband. That
month, Wife said things were “strange.” Husband had been shredding many documents and
became “real agitated” when Wife refused to sign their tax return. She suggested that they
have everything appraised, split it 50/50, and go their separate ways. Wife said Husband
responded by telling her that she would die “an old lonely penniless bitch” and threatened
her that “you’re not going to get one damn red cent. I will blow your damn ass away.” Wife
said this “was it,” and two weeks later she left with the Child while Husband was out of the
country.
On April 28, 2007, Wife called Husband in St. Maarten and told him she was
divorcing him. Husband scheduled a return to Crossville the following day only to find that
Wife and the Child had left the marital home. When Wife left, she removed $16,000 in cash
and a $12,000 check made out to her from a safe of property. Husband met with an attorney
that same day. Wife filed her complaint, accompanied by the standard injunction, on April
30, 2007. The return of service is not included in the record, but other evidence indicates that
Husband was served on May 3, 2007. Beginning the following day, Husband started to
engage in transactions involving marital funds held in various business and personal accounts
and other marital property that later led the trial court to hold him in contempt for dissipation
of marital assets in willful violation of the temporary injunction.
The proof shows that on May 1, after meeting with his attorney, Husband cashed a CD
in the Child’s name for $72,973.24. On May 4, 2007, Husband withdrew $110,000 from his
-3-
company’s account, leaving a balance of $484, and another $15,000 from a personal
checking account at U.S. Bank, leaving a balance of $5,215. That same day, he also obtained
a loan from U.S. Bank for $200,150 secured by a money market account at the bank. On
May 7, Husband obtained a $200,000 loan from Progressive Bank, this loan secured with two
certificates of deposit. The first loan stated a purpose of “other,” while the second stated
“consumer business start up costs;” both loans were repaid within two months with the CDs
and money market funds that had been securing them. On or about July 18, Husband
transferred $248,506.44 held in a U.S. Bank IRA to “Lincoln Financial FBO Fred Slagle”
to open a new retirement annuity.
According to Husband’s testimony at the hearing in August 2010, the proceeds from
the May 2007 loans, the Child’s CD, and additional funds – totaling over $500,000 in all
– were expended in a “ bad investment” and lost. He said he was the managing partner of
a joint venture in which he invested the money with the partners who had earlier purchased
his World Vacations company. Husband said he was unable to run the business because of
the divorce proceedings, and his partners backed out of the venture but kept his money.
Husband said that because he had been a faithful investor, the partners had since decided to
return the World Vacations business to him in compensation for his losses. Husband had no
documentation for the bad investment he supposedly made, explaining that “these people
deal in cash.” Questioned regarding the timing of the deal, Husband said that the
negotiations lasted over a year before the partners met in February 2007 and again in April
2007 and “from there it all blew up.” Husband agreed that only $30,000 of the money he lost
was paid before the divorce was filed; the remaining funds that he obtained in May 2007
were later picked up by his partners’ representatives. Asked to name the persons to whom
he gave the money, Husband repeatedly exercised his 5th Amendment right against self-
incrimination.
Husband stated his current monthly income was $3,700 a month; this included his
social security and annuity income of $2,800 a month and $900 a month in social security
benefits for the Child. In addition to child support, Husband paid the Child’s private school
tuition and related expenses. He testified he had paid for clothing, dental and other expenses
to “totally support [the Child] 100%.” Husband last had physical contact with the Child in
September 2009. Mother acknowledged that Husband and the Child had expressed love for
each other and said that she continued to allow the Child to communicate with Husband by
telephone. She agreed that while she was the primary caregiver, Husband had been actively
involved in the Child’s life until he left the country in late 2009. Wife had no objection to
Husband spending time with the Child but did express some concern about threats he had
made about kidnaping the Child.
-4-
At the time of trial, Husband had not paid any pendente lite-ordered alimony for the
past 14 months. Wife and Child lived in the paid-for marital home, a five-bedroom house
in Crossville. The 2007 tax appraisal valued the home at $323,800, while a May 2010 court-
ordered appraisal set the value at $260,000. Wife kept possession of the 2005 Toyota she
drove, valued at $5,000, while Husband kept three other vehicles with an estimated combined
value of $50,000.
Wife presented a list of her job-seeking activities since she filed for divorce. She had
applied for 76 positions or employment agencies without success. She attributed her
difficulty finding a job as an accountant to several factors including her age, lack of
experience, and frequent, lengthy breaks in her employment. She could not foresee ever
achieving the kind of income Husband had generated during the marriage or enjoying a
similar lifestyle. Wife testified that she was “barely getting by” on the income of $2,116 that
she received from social security and child support each month and had relied on credit cards,
some of which had gone into collection. Her “minimum” monthly expenses totaled $2701,
excluding health insurance for herself. Wife testified that she had some health issues, but
nothing that prevented her from caring for the Child, her elderly mother, or the parties’
grown daughter. Wife said that Husband had a heart attack in 2005, but underwent surgery
and “got over that.”
The trial court granted a divorce to Wife on the ground of Husband’s inappropriate
marital conduct and dismissed Husband’s counterclaim. The trial court expressly found that
Husband’s conduct “caused anguish or distress to [Wife] . . . that rendered continued
cohabitation improper, intolerable, or unacceptable.” Further, the court made Wife the
primary residential parent of the Child, set Husband’s child support obligation at $1,434.50
per month, awarded Wife alimony in futuro of $5,000 per month, and equally divided the
parties’ assets, which the court valued at approximately $2.2 million. Wife was awarded the
marital home, its contents, and certain other specific assets. Included in its valuation of
assets was roughly $600,000 the court found Husband dissipated after the complaint was
filed and over $776,000 in deposits to his business and personal bank accounts over a four-
year period leading up to the trial. In addition, the court ordered Husband to pay Wife’s legal
fees in the amount of $73,000 out of his half of the marital assets, and awarded Wife a
judgment for past due alimony in the amount of $14,000. After awarding Wife $327,508.50
in specific marital property, the court awarded Wife an additional $722,491.50, representing
the balance of her one-half share of the marital estate.
Pertinent provisions of the final decree are as follows:
As to parenting of the parties[’] minor [C]hild . . . until such
time as [Husband] has reappeared and shown evidence of his
-5-
parenting skills, accepted his obligations in this litigation, and
especially dispelled the risk that he would remove the [C]hild
from the jurisdiction of this court in the manner that he has
removed himself, he shall have no parenting time with the
[C]hild and this decree shall enjoin him from having any contact
with the [C]hild.
* * *
The child support amount pursuant to the child support
guidelines would be $1,737 per month. [Husband], after the
deviation of $312.50 per month would owe unto [Wife]
$1,434.50 in child support per month.
* * *
[Wife] shall be granted permanent alimony in the amount of
$5,000 per month. The payments shall be retroactive to January
1, 2011 and shall begin immediately.
* * *
The total assets of the parties set forth in the finding of facts
(APPROXIMATELY $2.2 million) shall be divided equally,
subject to a reduction of [Husband’s] portion by the alimony,
support obligation, attorney fee obligations, etc, which have
accrued and been previously mentioned . . . .
All legal fees incurred by [Wife] in the amount of $73,000 shall
be paid by [Husband] out of his one half of the marital assets
awarded to him.
[Wife] is additionally awarded a judgment for past due
temporary alimony in the amount of $14,000 . . . against
[Husband] out of his portion of the marital assets awarded to
him . . . .
[Wife] is specifically awarded the parties[’] marital home at . . .
Crossville, Tennessee. . . .
-6-
All the right, title and interest in the marital home is divested out
of [Husband] and vested into [Wife] as separate property of
[Wife] as distribution of marital property. The property was
appraised at $260,000 . . . in 2010 and that is the amount
credited to [Wife’s] one half of the marital assets.
All other identifiable assets, specifically including the World
Vacations bank account ending in 7121 ($36,650.95 as of
October 31, 2010) and the US bank account ending in 7522
($4,638.05 as of November 5, 2010) are awarded to [Wife]. If
the funds in those accounts no longer exist, then [Wife] shall be
awarded a judgment in the amount of $41,289. . . .
[Wife] is further awarded all property at the marital home and
residence including the Toyota Prius that she is currently
driving.
[Wife] has been specifically awarded $327,508.50 in marital
property and the total marital assets proven were approximately
$2.2 million[].
Therefore, [Wife] is additionally awarded a judgment of
$772,491.50 against [Husband] for which execution may issue.
[Husband] shall pay and save harmless [Wife] from all marital
debts.
[Husband’s] conduct in this manner has been reprehensible and
the prior ruling of this court holding [Husband] in contempt
remains in effect.
(Capitalization and emphasis in original).
Husband timely filed a notice of appeal. He does not contest the granting of the
divorce to Wife, but does challenge the classification of certain property, the calculation of
his child support obligation, and the award of alimony in futuro as well as the finding of
contempt and resulting punishment.
-7-
II.
Husband presents issues for our review that we restate as follows:
1. The trial court abused its discretion in holding Husband in
contempt and banning contact with the Child as punishment.
2. The trial court erred in its classification of marital property.
3. The trial court abused its discretion in awarding Wife alimony
in futuro.
4. The trial court erred in its calculation of Husband’s monthly
income for child support purposes.
III.
Our review is de novo; however, the record developed below comes to us
accompanied by a presumption of the correctness of the trial court’s findings, which
presumption we must honor “unless the preponderance of the evidence is otherwise.” Rule
13(d), T.R.A.P. The trial court’s conclusions of law are not accorded the same deference.
Adams v. Dean Roofing Co., Inc., 715 S.W.2d 341, 343 (Tenn. App. 1986). “Where the
issue for decision depends on the determination of the credibility of witnesses, the trial court
is the best judge of the credibility and its findings of credibility are entitled to great weight.
This is true because the trial court alone has the opportunity to observe the appearance and
the demeanor of the witnesses.” Tenn-Tex Properties v. Brownell Electro., 778 S.W.2d 423,
426 (Tenn. 1989).
IV.
A.
Husband’s first two issues revolve around the trial court’s order holding him in civil
contempt for violating the temporary injunction mandated by statute. His contempt was
based upon his obtaining of new “business” loans and paying them off with marital funds
after the divorce was filed. In this regard, he contends that (1) Wife failed to prove that he
was served with the injunction before the transactions at issue; and (2) the transactions were
made in the ordinary course of Husband’s business and fulfilled a commitment that pre-dated
the filing of the complaint. In any event, Husband concludes that his actions cannot be
deemed willful. Husband further submits that denying him all contact with the Child until
-8-
the contempt is purged violates Husband’s constitutional rights, is unrelated to his offense,
and is not a permitted form of punishment given the policy considerations favoring visitation
between non-custodial parents and their children. In this section, we address these related
issues in turn.
The Supreme Court has described civil contempt as follows:
Civil contempt occurs when a person refuses or fails to comply
with a court order and a contempt action is brought to enforce
private rights. If imprisonment is ordered in a civil contempt
case, it is remedial and coercive in character, designed to
compel the contemnor to comply with the court's order.
Compliance will result in immediate release from prison.
Therefore, it has often been said that in a civil contempt case,
the contemnor “carries the keys to his prison in his own
pocket….”
Black v. Blount, 938 S.W.2d 394, 398 (Tenn. 1996) (internal citations omitted).
In the final decree, the trial court summarized the basis for its finding of contempt as
follows:
CONTEMPT
Husband was ordered by the Court at the August 14, 2009
hearing to pay [Wife] $1,000 per month in temporary alimony
beginning . . . September 1, 2009.
Testimony of [Wife] indicated that [Husband] paid the
temporary alimony in September and October 2009, but has
failed to pay any alimony from November 2009 to the date of
the final hearing on December 3, 2010.
[Wife] is awarded a judgment for past due alimony in the
amount of $14,000 . . . .
[Husband] has violated the Court’s Order regarding temporary
alimony for fourteen consecutive months.
-9-
The Court[] previously found [Husband] to be in willful
contempt of injunctions contained with [the] Divorce Complaint
in May 2007, specifically the transfer of $498,154.81 in marital
assets[,] after receiving the Summons of Complaint[,] in the
previous Order . . . entered on September 22, 20[09]3 . An
additional $110,000 was proven to have been taken by
[Husband] at the December 3, 2010 hearing.
[Husband] was given the opportunity to purge himself of the
willful contempt by depositing no less than $498,154.81 with
the . . . Court . . . on or before October 15, 2009 or alternatively
to turn himself into the . . . Justice Center . . . until such time
that he tendered the amount withdrawn.
As of the . . . final hearing . . ., [Husband] has continued to be in
contempt of the Court’s September 2009 Order by failing to
abide by the Court’s Order to tender the funds or turn himself in
. . . for incarceration. [Wife] asked for a finding of contempt for
each and every day [Husband] has failed to comply with the
Orders of the Court and for [Husband] to be punished
accordingly.
[Husband] is also in contempt for failure to comply with the
Requests to comply with discovery.
Several bank accounts belonging to [Husband] were
subpoenaed, but only the two US Bank accounts that were
entered in the record were provided by [Husband].
(Capitalization and bold type in original.) In addition, the court stated that its 2009 ruling
“holding [Husband] in contempt remains in effect.” That order provided that Husband
“shall have no further visitation with the minor [C]hild prior to purging himself of willful
contempt. . . . ”
Based on the foregoing, the court further ordered:
3
The trial court from time-to-time inadvertently referred to the year as 2010. We have corrected it
throughout to reflect that the hearing was held in August 2009 and the order was entered in September 2009.
-10-
As to parenting of the parties[’] minor [C]hild . . . until such
time as [Husband] has reappeared and shown evidence of his
parenting skills, accepted his obligations in this litigation, and
especially dispelled the risk that he would remove the [C]hild
from the jurisdiction of this court in the manner that he has
removed himself, he shall have no parenting time with the
[C]hild and this decree shall enjoin him from having any contact
with the [C]hild.
Konvalinka v. Chattanooga-Hamilton County Hosp. Auth, 249 S.W.3d 346, 354-57
(Tenn. 2008), provides an extensive discussion of the courts’ contempt power in the context
of disobedience of a court order. Therein, the Supreme Court observed:
The power to punish for contempt has long been regarded as
essential to the protection and existence of the courts and the
proper administration of justice.
* * *
Tenn. Code Ann. § 16-1-103 (1994) currently provides that
“[f]or the effectual exercise of its powers, every court is vested
with the power to punish for contempt, as provided for in this
code.” To give effect to this power, Tenn.Code Ann. §§
29-9-101 to -108 (2000) further define the scope of the contempt
power and the punishment and remedies for contemptuous acts.
Of particular relevance to this case, Tenn.Code Ann. §
29-9-102(3)specifically empowers the courts to use their
contempt powers in circumstances involving “[t]he willful
disobedience or resistance of any officer of the such courts,
party, juror, witness, or any other person, to any lawful writ,
process, order, rule, decree, or command of such courts.” This
provision enables the courts to maintain the integrity of their
orders.
* * *
Civil contempt claims based upon an alleged disobedience of a
court order have four essential elements. First, the order alleged
-11-
to have been violated must be “lawful.” Second, the order
alleged to have been violated must be clear, specific, and
unambiguous. Third, the person alleged to have violated the
order must have actually disobeyed or otherwise resisted the
order. Fourth, the person’s violation of the order must be
“willful.”
(Internal citations, headings and footnotes in original omitted).
Husband contends that his conduct was not willful. “The word ‘willfully’ has been
characterized as a word of many meanings whose construction depends upon the context in
which it appears. Most obviously, it differentiates between deliberate and unintended
conduct.” Id. at 357. Further, “[i]n the context of a civil contempt proceeding under
Tenn.Code Ann. § 29-9-102(3), acting willfully does not require the same standard of
culpability that is required in the criminal context. . . . Determining whether the violation of
a court order was willful is a factual issue that is uniquely within the province of the
finder-of-fact who will be able to view the witnesses and assess their credibility.” Id.
Husband first suggests that there is “some controversy” as to whether he carried out the
disputed transactions before or after he was served with the complaint and injunction. In the
trial court, Husband answered Wife’s contempt petition with an allegation that he was not
served until May 8, 2007. The return of service is not before us. Nevertheless, we are
unpersuaded by Husband’s effort to convince us that the several withdrawals and transfers
of marital funds he carried out beginning on May 4 were without knowledge of the injunction
put in place the day before. Husband’s own testimony at the 2009 hearing, reasonably
construed, is contrary to the argument he makes here:
[Counsel]: You were actually served with the divorce papers on
May 3, 2007?
[Husband]: I would assume the record would show that, yes.
I’m not entirely sure.
[Counsel]: Whatever the record shows would be correct?
[Husband]: [T]he last attorney, there was some controversy
about when it was served. He never got to the bottom of it.
[Counsel]: As far as you know the person who signed the paper
and turned it in on May 3rd, that’s when you were served;
correct?
-12-
[Husband]: As far as I can say, yes.
* * *
[Counsel]: And you are aware that there are certain injunction
that attach immediately upon service of process of you with that
Complaint, weren’t you?
[Husband]: If I read it, yes.
Husband’s testimony leaves little doubt that he was served, as Wife contends, on May
3, 2007. Absent the return of service, the best evidence supporting this conclusion, however,
is before us. It is an itemized bill from Husband’s attorney reflecting that Husband was
billed for work on May 3, 2007 described as “[t]elephone call from client re: receipt of
divorce complaint.”
Husband’s contention that the terms of the injunction were vague and ambiguous as
to whether his actions were permissible is equally unpersuasive. The injunction provides in
relevant part as follows:
The parties are hereby restrained and enjoined from transferring,
assigning, borrowing against, concealing or in any way
dissipating or disposing, without the consent of the other party
or an order of the court, of any marital property.
Expenditures from current income to maintain the marital
standard of living and the usual and ordinary costs of operating
a business are not restricted by this injunction. Each party shall
maintain records of all expenditures, copies of which shall be
available to the other party upon request.
“A person may not be held in civil contempt for violating an order unless the order
expressly and precisely spells out the details of compliance in a way that will enable
reasonable persons to know exactly what actions are required or forbidden. The order must,
therefore, be clear, specific, and unambiguous.” Konvalinka, 249 S.W.3d at 354. At the
same time, contempt orders “need not be ‘full of superfluous terms and specifications
adequate to counter any flight of fancy a contemnor may imagine in order to declare it
vague.’ ” Id. at 356. In the present case, we see nothing vague or ambiguous in the language
-13-
of the injunction. It simply states that divorcing parties may use current income to pay the
“usual and ordinary” costs of operating a business. See Armstrong v. Armstrong, No.
M2006-02713-COA-R3-CV, 2008 WL 624862 at *8 (Tenn. Ct. App. M.S., filed Mar. 5,
2008)(holding that Wife violated the temporary injunction by expending funds received from
the sale of the marital home during the pendency of the divorce as “[t]hese monies were not
‘current income,’ but represented an asset of the parties.”). Suffice it to say that Husband’s
conduct in unilaterally applying hundreds of thousands of dollars in marital assets to finance
the “start-up costs” of a new business venture is an unreasonable, over broad interpretation.
Moreover, Husband failed to maintain any records of his expenditures in connection with the
purported “bad business investment” that he asserts was conducted entirely in cash and with
persons whose identities he refused to divulge.
The evidence shows that Husband acted with deliberate speed to withdraw, transfer,
and use, marital assets in direct violation of the temporary injunction. The trial court did not
err in holding him in willful contempt and his argument to the contrary is disingenuous, at
best.
B.
Next, Husband asserts that even if the finding of contempt is upheld, the punishment
imposed is not appropriate. The power of the courts to enforce their judgments and decrees
is well-established. The Supreme Court has observed that “there can be no doubt about the
power and authority of this Court to take such action as it deems proper and appropriate to
enforce its decrees and orders and to issue all necessary process to prevent interference
therewith.” State ex rel. Stall v. Knoxville, 211 Tenn. 428, 436 (1963). Stated otherwise,
“[a] court’s contempt powers can be used to compel obedience to its orders and to punish
those who willfully disobey those orders.” City of Franklin v. Hunter, No.
M2007-02399-COA-R3-CV, 2009 WL 1260214 at *4 (Tenn. Ct. App., M.S., filed May 6,
2009).
In his brief, Husband admits that he fled the court’s jurisdiction to avoid being jailed
for contempt but insists he has not willfully abandoned the Child. He urges that the “only
possible legitimate reason” to restrict his visitation in the present case is a fear that he may
abscond with the Child. Citing public policy grounds that favor visitation between non-
custodial parents and children, however, Husband basically argues that his conduct does not
justify prohibiting contact with the Child altogether. On this point, we agree with Husband.
Custody and visitation determinations fall within the broad discretion of the trial court
and will not generally be overturned absent a showing of abuse of such discretion. Eldridge
v. Eldridge, 42 S.W.3d 82, 85 (Tenn. 2001). “In reviewing the trial court’s visitation order
-14-
for an abuse of discretion, the child’s welfare is given ‘paramount consideration,’ ” Suttles
v. Suttles, 748 S.W.2d 427, 429 (Tenn. 1988)(quoting Luke v. Luke, 651 S.W.2d 219, 221
(Tenn. 1983)), and “the right of the noncustodial parent to reasonable visitation is clearly
favored.” Id. Under similar circumstances to those in the present case, this Court has
reversed an order banning contact between a parent held in criminal contempt for disobeying
a court order and her minor child. See In re C.C.S., No. M2007-00842-COA-R3-JV, 2008
WL 5204428 (Tenn. Ct. App. M.S., filed Dec. 11, 2008). Therein, we concluded that,
notwithstanding the court’s power to punish a party for willful contempt, the “total
suspension of mother’s visitation was not the least drastic measure available” and was
therefore unjustified. In reversing the trial court’s judgment, we observed:
While we do not condone Mother’s behavior in violating the
court’s order, that violation, standing alone, is not sufficient to
order all contact with the child be suspended. There is no proof
in this record that Mother’s conduct endangered the child’s
welfare, physically or emotionally, to the point where the
presumption against denying her visitation rights was overcome.
[T]he court must balance the right of Mother to visitation with
the best interest of the child, as well as consider less restrictive
alternatives.
Id. at * 23.
Returning to the present case, the trial court certainly has discretion to compel
obedience to its orders by directing Husband to return the marital funds he took and put to
his own use. At the same time, we remain mindful that “[c]ustody and visitation decisions
are not intended to reward or punish parents, and visitation should not be granted or withheld
for punitive purposes.” In re A.N.F., No. W2007-02122-COA-R3-PT, 2008 WL 4334712at *18 (Tenn. Ct. App. W.S., filed Sept. 24, 2008). Based on the foregoing, we cannot
sanction banning all contact between Husband and the Child as punishment for Husband’s
contemptuous behavior. Accordingly, we remand this matter to the trial court for the
establishment of telephonic and such supervised visitation and/or other permissible face-to-
face contact by Husband with the Child as determined to be appropriate in the court’s
discretion.
-15-
V.
A.
Husband contends that the trial court erred in its classification of the property in the
marriage. He focuses specifically on two assets – the retirement annuity now with Lincoln
Financial and the marital home.
Tenn. Code Ann. § 36-4-121(b) provides the following definitions relevant to the
classification of property in a divorce:
(1)(A) “Marital property” means all real and personal property,
both tangible and intangible, acquired by either or both spouses
during the course of the marriage up to the date of the final
divorce hearing and owned by either or both spouses as of the
date of filing of a complaint for divorce, except in the case of
fraudulent conveyance in anticipation of filing, and including
any property to which a right was acquired up to the date of the
final divorce hearing, and valued as of a date as near as
reasonably possible to the final divorce hearing date.
(B) “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, and the value of vested and unvested pension,
vested and unvested stock option rights, retirement or other
fringe benefit rights relating to employment that accrued during
the period of the marriage.
(2) “Separate property” means:
(A) All real and personal property owned by a spouse before
marriage, including, but not limited to, assets held in individual
retirement accounts . . . .;
* * *
-16-
(C) Income from and appreciation of property owned by a
spouse before marriage except when characterized as marital
property under subdivision (b)(1).
B.
Regarding the retirement annuity, Husband asserts in his brief that he opened the
account with pre-marital earnings and it increased in value during the marriage as a result
of passive growth. As he sees it, “[b]y definition, this is the Husband’s separate property.”
Husband’s testimony and bank account statements show that the account had a “guaranteed
value” of some $248,000, and generated monthly income of about $1,450 as reflected by
monthly deposits into Husband’s personal U.S. Bank account. By all indications, the annuity
still existed at the time of trial.
The proof showed that the annuity was opened at Lincoln Financial in July 2007 with
funds that Husband transferred from a traditional IRA formerly held at U.S. Bank. Husband
asserts that “there is no material dispute that the . . . account . . . derived from his profit-
sharing arrangement with Fairfield Communities between 1970 and 1980, prior to his
marriage.” Further, Husband continues, “Wife does not contradict this testimony. Instead,
she testified to a profit-sharing plan which she could have participated in . . . started in 1979,
a year prior to the parties’ marriage.” Our review of the evidence indicates otherwise.
Husband testified that the former IRA funds were received from his profit-sharing
plan while employed with Fairfield Communities. When first questioned, he could not recall
the amount he initially invested in the IRA; later in his testimony, he estimated it was
$100,000. Husband agreed that the funds he transferred to open the annuity more than
doubled during the marriage. Wife directly contradicted Husband’s testimony that he earned
the IRA funds before the marriage through a profit-sharing plan. She stated she worked in
the accounting office at Fairfield Communities from 1976-80 and was familiar with the
company’s profit-sharing plan. She stated the plan did not start until 1979 and required five
years of service from that year forward before an employee became fully vested, so that the
funds with which he opened the IRA could not have been earned by Husband before the
marriage. Wife’s testimony on this point concerned only Husband; she made no reference to
a different plan that became available to her with the same employer. Husband failed to
produce any conclusive evidence regarding the retirement funds, thus leaving the trial court
with nothing more than “he said, she said” testimony to consider.
Contrary to Husband’s assertion, the parties’ testimony certainly conflicted as to the
source of the funds Husband initially used to establish his retirement account and when those
funds were earned. In its decree, the trial court specifically included the annuity in the list
-17-
of “marital assets . . . proven to exist” at the time of the divorce, thus implicitly rejecting
Husband’s testimony and his “separate property” argument. “Where the issue for decision
depends on the determination of the credibility of witnesses, the trial court is the best judge
of the credibility and its findings are entitled to great weight. This is true because the trial
court alone has the opportunity to observe the appearance and demeanor of the witnesses.”
Tenn-Tex Properties v. Brownell-Electro, 778 S.W.2d 423, 426 (Tenn.1989). The evidence
does not preponderate against the trial court’s finding that implicitly credited Wife’s
testimony to the effect that the annuity funds could not have been accumulated before the
marriage. The trial court did not err in classifying the annuity as marital property.
C.
Turning to the marital home, Husband submits that this asset presents a “closer
question” regarding its proper classification. The proof shows that, in 1978, Husband bought
the land upon which the marital home was built and titled the deed in both parties’ names.
Husband asserts he hired workers from his small construction company to build the marital
home. According to Husband, “the land was $21,000 at the time, and [he] spent about
$200,000 in the initial building of the home.” In the property division, the trial court
classified the home as marital property, valued it at $260,000, pursuant to the most recent
appraisal, and awarded it to Wife as part of the specific, identifiable assets she received.
Husband essentially concedes that the property was transmuted from separate to
marital property when he titled it in both parties’ names. As this Court explained in Batson
v. Batson, 769 S.W.2d 849, 858 (Tenn. Ct. App. 1988),
[Transmutation] occurs when separate property is treated in such
a way as to give evidence of an intention that it become marital
property. One method of causing transmutation is to purchase
property with separate funds but to take title in joint tenancy.
This may also be done by placing separate property in the names
of both spouses.
As we further noted, “dealing with property in these ways creates a rebuttable presumption
of a gift to the marital estate.” Id.
Generally speaking, property that has been properly classified as marital must then be
equitably divided and distributed between the parties. See Tenn. Code Ann. §
36-4-121(a)(1). “Trial courts have wide latitude in fashioning an equitable division of
marital property.” Brown v. Brown, 913 S.W.2d 163, 168 (Tenn. Ct. App. 1994). Such a
division must be accomplished with reference to the statutory factors found in Tenn. Code
-18-
Ann. § 36-4-121(c). Among those factors is the “estate of each party at the time of the
marriage.” Tenn. Code Ann. § 36-4-121(c) (7). “An equitable property division is not
necessarily an equal one. It is not achieved by a mechanical application of the statutory
factors, but rather by considering and weighing the most relevant factors in light of the
unique facts of the case.” Batson v. Batson, 769 S.W.2d 849, 859 (Tenn. Ct. App. 1988).
It is not necessary that both parties receive a share of each piece of property. Thompson v.
Thompson, 797 S.W.2d 599, 604 (Tenn. Ct. App. 1990).
Despite acknowledging that the marital home in this case is presumed to be a gift to
the marital estate, Husband urges us to find that he is entitled, “as a matter of law and
equity,” to a $221,000 credit for the monies he spent on the land and home prior to the
parties’ marriage. Thus, Husband’s list of marital property includes the marital home at a
value of $39,000, a figure he reached by deducting from the appraised value his initial costs.
Under similar facts, this Court has rejected precisely the same line of reasoning as being
based on a “false premise” that “incorrectly assumes that some part of the property to be
divided in this case is separate property because Husband owned property at the time of the
marriage.” Brock v. Brock, 941 S.W.2d 896, 901 (Tenn. Ct. App. 1996). We further stated:
Husband claims that these assets were his separate property
because they fit within the definition of “separate property”
found at T.C.A. § 36-4-121(b) (2) (A):
All real and personal property owned by a spouse
before marriage.
He argues from this that “the property division is inequitable
because it did not provide him with a credit for [these assets].”
We agree that the property in question falls within the definition
of “separate property.” We disagree with Husband's
interpretation of the significance of this fact in this case.
The definitions of “separate property” and “marital property”
found at T.C.A. § 36-4-121 are for the purpose of aiding a court
in properly classifying property owned by one or both of the
parties at the time of their divorce. In the instant case, neither of
the assets in question was owned by either of the parties at the
time of the divorce. Those interests had been disposed of or
otherwise liquidated at an earlier time. The property interests
-19-
represented by these assets were merged into the “wealth” of the
marriage.
We are not aware of any authority, and counsel has not directed
us to any, for the proposition that assets of a spouse at the time
of marriage, but not owned by him or her at the time of the
divorce, are to be carved out of the marital estate as separate
property for the benefit of that spouse at the time of the divorce.
The appellant is not entitled to an automatic dollar-for-dollar
credit against the marital estate for the value of property owned
by him at the time of the marriage, but no longer owned by him
at the time of the divorce. However, to the extent these interests
were contributed by Husband to the wealth of the marriage, they
are a proper matter to be considered in determining how the
marital estate should be equitably divided.
Id. at 901. (Internal citations omitted). As in Brock, we conclude that Husband is not
entitled to a $221,000 credit for pre-marital funds he spent to purchase the land and build the
marital home. Certainly, however, such contributions, are properly considered by the trial
court in its equitable division of the marital property existing at the time of the divorce.
In summary, the evidence does not preponderate against the trial court’s implicit
finding that Husband’s expenditures toward the marital home were transmuted into a marital
asset subject to equitable distribution in the divorce. We note that although the trial court
awarded this particular asset to Wife, it awarded one-half of the value of the total marital
assets to each party. The evidence does not preponderate against the trial court’s
classification of the marital home and the court’s determination that an equitable division in
this case is an equal division of the marital estate. Husband is not entitled to a dollar-for-
dollar credit for the funds he spent to acquire and improve the marital real property for the
parties.
VI.
Husband next challenges the award of $5,000 a month in alimony in futuro to Wife.
He reasons that this “case is a perfect example of where only transitional or rehabilitative
alimony is warranted.” He points to the fact that Wife is a certified public accountant who
has worked in her field in the past. Husband emphasizes that after filing for divorce, Wife
has chosen not to reactive her professional license and has yet to secure new employment
that, as he sees it, would allow her to rehabilitate herself to a comfortable, self-sufficient
level.
-20-
In deciding that Wife was entitled to spousal support, the trial court made extensive
findings of fact. Among the more pertinent to our review are the following:
[Husband] has been and apparently continues to be a successful
entrepreneur and international businessman.
[Wife] obtained a GED certificate and holds a Bachelor of
Science Degree in business. . . .
[Wife] has contributed her earnings to the marriage, and as a
homemaker and stay at home mother, she has contributed to
[Husband’s increased earning power during the course of the
marriage by working for certain business entities of [Husband]
without pay.
* * *
[Wife] worked with [Husband’s] company in St. Maarten
without pay.
[Husband] told [Wife] that she would not need to maintain her
CPA license or work anymore when the parties had moved to St.
Maarten.
The parties had a long term marriage of 30 years and lived
together since 1968.
* * *
The relative earning capacity of [Husband] far exceeds the
relative earning capacity of [Wife] under even the best of
circumstances.
* * *
[Wife’s] testimony would indicate that the only separate
property that she would have other tha[n] what she was awarded
during this divorce would be the jewelry that . . . were gifts to
her during the marriage of approximately $7,000.
-21-
[Wife] has never earned more than $35,000 per year.
[Husband] has the ability for future acquisition of capital assets
and income through entrepreneurial opportunities, retirement
account, and an ongoing basis through his employment while
[Wife’s] opportunity for future acquisitions is very limited.
* * *
It would be unclear as to what separate assets [Husband] would
have as [Husband] continuously failed to abide by the Court’s
Order in providing discovery to [Wife], (specifically bank
records).
The parties established a lavish standard of living during the
marriage.
[Wife] also suffered economic detriment for the benefit of the
marriage by foregoing her career at the request of [Husband]
and in assisting [Husband] in various business ventures. . . .
* * *
[Wife] does not have any type of health or life insurance.
* * *
While the legislative preference is that a spouse who is
economically disadvantaged relative to the other spouse, be
rehabilitated whenever possible, in this case, rehabilitative
alimony would not assist in bringing equity among the parties.
[Wife] needs and [Husband] has the ability [to] earn income to
the extent that [Husband] is capable and able to pay alimony . . .
in the amount of $5,000 per month in futuro.
Alimony in futuro is permissible in this matter as [Wife] is
economically disadvantaged relative to [Husband] and full
rehabilitation is not feasible.
-22-
An award of rehabilitative alimony would not place [Wife]
anywhere near an equal footing with [Husband] nor would
[Wife] be able to continue living in the manner in which she had
become accustomed . . . during this thirty year marriage. An
award of alimony in futuro will further assist her in this regard
and provide[] her with “closing in” money.
[Wife’s] . . . post-divorce standard of living should be
“reasonably comparable to the parties’ standard of living during
the marriage.[”]
[Wife] asked the court to award alimony in futuro in the amount
of $5,000 per month until [her] death or remarriage. . . .”
As the court acknowledged, Tenn. Code Ann. § 36-5-121(d)(2005), the statute
governing alimony, states a preference, “whenever possible,” for an award of rehabilitative
alimony to an economically disadvantaged spouse. However, “[where there is such relative
economic disadvantage and rehabilitation is not feasible in consideration of all relevant
factors, . . . then the court may grant an order for payment of support and maintenance on a
long-term basis. . . .” Id. Thus, long-term spousal support is intended to provide long-term
support to an economically disadvantaged spouse who is unable to be rehabilitated. Burle
v. Burle, 40 S.W.3d 465, 471 (Tenn. 2004); Lora v. Lora, 952 S.W.2d 836, 838 (Tenn. Ct.
App.1997). The amount, if any, and type of alimony to be awarded is within the sound
discretion of the trial court in view of the particular circumstances of the case and a
consideration of the relevant factors set forth in Tenn. Code Ann. § 36-5-121(I)(1-12).4
4
The statutory factors are:
(1) The relative earning capacity, obligations, needs, and financial resources of each
party, including income from pension, profit sharing or retirement plans and all other
sources;
(2) The 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 such party's earnings capacity to a
reasonable level;
(3) The duration of the marriage;
(4) The age and mental condition of each party;
(5) The physical condition of each party, including, but not limited to, physical
disability or incapacity due to a chronic debilitating disease;
(6) The extent to which it would be undesirable for a party to seek employment
(continued...)
-23-
Among the cited factors, the “real need of the [disadvantaged] spouse seeking the support
is the single most important factor . . . [and next] the courts most often consider the ability
of the obligor spouse to provide support.” Aaron v. Aaron, 909 S.W.2d at 410.
Applying the relevant factors to the evidence before us, we reject Husband’s
contention that the trial court abused its discretion in awarding Wife alimony in futuro. In
particular, we agree that economic rehabilitation of Wife to any significant extent is not
feasible. Wife presented evidence of her persistent, ongoing search for employment with
some 76 potential employers since the parties separated, without success. Even when her
CPA license was active, Wife was able to earn, at best, some $30,000 a year in a job she held
over 20 years ago. Presumably, Wife’s limited experience, unstable employment history, and
advancing age would make it most difficult, if not impossible, to achieve any semblance of
financial independence or a standard of living comparable to that the parties’ enjoyed during
the marriage.
Notwithstanding our conclusion that alimony in futuro is warranted in this case, we
conclude that the evidence preponderates against the amount of the award. Simply put, we
discern no basis for awarding Wife $5,000 a month. Wife testified that the statement of
expenses she provided was a true and accurate reflection of her current, average monthly
expenses, excluding health insurance. The statement showed Wife’s monthly expenses were
$2,701. In our view, the award of $5,000 a month was based on little more than Wife’s
request for this amount. Accordingly, we modify the amount of the award of alimony in
futuro to $3,200 a month to match Wife’s stated expenses, plus $500 per month toward
health insurance. Any award in excess of proven need is punitive and cannot stand. See
Duncan v. Duncan, 686 S.W.2d 568, 571-72 (Tenn. Ct. App. 1984).
4
(...continued)
outside the home, because such party will be custodian of a minor child of the
marriage;
(7) The separate assets of each party, both real and personal, tangible and intangible;
(8) The provisions made with regard to the marital property, as defined in § 36-4-121;
(9) The standard of living of the parties established during the marriage;
(10) The extent to which each party has made such tangible and intangible contributions to
the marriage as monetary and homemaker contributions, and tangible and intangible
contributions by a party to the education, training or increased earning power of the other
party;
(11) The relative fault of the parties, in cases where the court, in its discretion, deems it
appropriate to do so; and
(12) Such other factors, including the tax consequences to each party, as are necessary to
consider the equities between the parties.
-24-
VII.
Lastly, Husband asserts that the trial court erroneously calculated his income for
purposes of calculating his child support obligation by averaging the gross deposits to his
business account without deducting salaries, commissions and other business expenses. In
unsupported, conclusory fashion, Husband argues in his brief that the method of calculation
amounts to clear error and requests the case be remanded for reevaluation of his child support
obligation.
The trial court calculated Husband’s child support obligation as follows:
[C]urrent child support shall be based on the following:
[Wife] is the primary residential parent . . . and shall be credited
with 365 days and [Husband] 0 days.
[Husband’s] income for child support purposes shall be set at
$16,876.96 per month pursuant to the findings of fact and
[Wife’s] income shall be calculated at minimum wage for 40
hours per week.
[Husband] shall be given credit on the child support worksheet
for $312.50 per month for books, tuition, and activity fees paid
for the . . . [C]hild as long as the [C]hild is attending private
school.
The child support amount pursuant to the child support
guidelines would be $1,737 per month. [Husband], after the
deviation of $312.50 per month would owe unto [Wife]
$1,434.50 in child support per month.
The trial court calculated Husband’s monthly income “by dividing the $766,340.04 in
deposits over the past 46 months (January 2007 - October 2010) or $16,876.96 per month.”
Husband testified at the earlier contempt hearing that he subsisted entirely on social
security benefits and his retirement income of $1,450 a month. The only other evidence
relevant to a determination of Husband’s income came in the form of his bank statements,
subpoenaed by Wife, showing monthly deposits to Husband’s personal and business accounts
at U.S. Bank. The statements reflect – in addition to the income as set forth herein which
Husband acknowledged – frequent deposits in varying amounts from various sources in the
-25-
months before and since Wife filed for divorce. Husband argues that such deposits, alone,
do not represent his actual, net income but he provided nothing to assist the court in this
determination. In our view, the trial court properly relied on the limited evidence presented
to establish Husband’s child support obligation. The trial court cannot be faulted for not
“deducting salaries, commissions and other business expenses” when the bank account
statements were the only evidence provided by Husband. Since he was not at the trial, there
was no evidence with respect to any alleged expenses.
The trial court did not err in calculating Husband’s child support obligation. This
issue is without merit.
VIII.
The judgment of the trial court is reversed with respect to the provision prohibiting
any contact by Husband with the Child until he had purged himself of his contempt of court.
We remand this cause to the trial court for an order establishing telephonic and supervised
visitation and/or some other form of face-to-face contact or communication with the Child
by Husband under such terms and with such frequency as determined to be appropriate by
the trial court in the exercise of its discretion. The award of alimony in futuro is modified
to $3,200 per month. In all other respects, the judgment is affirmed. Costs on appeal are
assessed against the appellant, Lawrence Fred Slagle.
_______________________________
CHARLES D. SUSANO, JR., JUDGE
-26-