Bogan v Bogan

• Decision Date: 08 November 2001
• Docket Number: 98-00060
• Citation: 60 S.W.3d 721
• Court: Tennessee Supreme Court
• Parties: RICHARD THOMAS BOGAN v. DORIS MAE BOGAN

RICHARD THOMAS BOGAN v DORIS MAE BOGAN

No. E1998-00060-SC-R11-CV

September 5, 2001 Session

IN THE SUPREME COURT OF TENNESSEE AT KNOXVILLE

Filed November 8, 2001

Appeal by Permission from the Court of Appeals, Eastern Section Chancery Court for Sullivan County, No. 21988(T)

Hon. John S. McLellan, III, Chancellor

The sole question in this appeal is whether an obligor's retirement constitutes a substantial and material change in circumstances so as to permit modification of a spousal support obligation. The trial court held that the obligor's retirement did constitute a substantial and material change in circumstances, but the Court of Appeals reversed, finding that because the retirement was voluntary and foreseeable, the obligor could not seek modification of the original alimony award. We granted permission to appeal and hold that a bona fide retirement need only be objectively reasonable under the totality of the circumstances to constitute a substantial and material change in circumstances. In so holding, we reject, in the retirement context, the traditional test requiring an involuntary and unforeseeable change in circumstances to modify a support award. We further hold that the retirement in this case was objectively reasonable and that the trial court did not abuse its discretion in modifying the support award. We reverse the judgment of the Court of Appeals and reinstate the trial court's modification of the support award.

Tenn. R. App. P. 11 Application for Permission to Appeal; Judgment of the Court of Appeals Reversed

William M. Barker, J., delivered the opinion of the court, in which Frank F. Drowota, III, C.J., and E. Riley Anderson, J., joined. Adolpho A. Birch, Jr., J., filed a concurring and dissenting opinion. Janice M. Holder, J., filed a dissenting opinion.

Thomas F. Bloom, Nashville, Tennessee, for the appellant, Richard Thomas Bogan.

William Stephenson Todd, Jr., Kingsport, Tennessee, for the appellee, Doris Mae Bogan.

OPINION

FACTUAL BACKGROUND

On July 11, 1991, the Sullivan County Chancery Court granted the parties in this case a divorce after nearly thirty years of marriage. The final decree dissolving the marriage was entered on July 24, 1991, and the decree incorporated a Marital Dissolution Agreement (MDA) signed by the parties. According to the MDA, the parties agreed to an equitable division of all of the marital property,¹ and Mr. Bogan further agreed to pay Ms. Bogan monthly support payments in the amount of $2,300.00, which were to cease upon her remarriage or upon the death of either party. The MDA made no specific reference to modification of Mr. Bogan's support payments in the event of his retirement.

On August 25, 1997, Mr. Bogan filed a petition to terminate his support obligation alleging two substantial and material changes in circumstances: (1) that he would obtain retirement status on September 1, 1997, with his employer, Eastman Chemical, and that as a result, he would no longer receive a wage from his employer; and (2) that because of his retirement, Ms. Bogan would no longer need support payments, as she would receive half of his retirement income pursuant to the MDA and the Qualified Domestic Relations Order. Ms. Bogan answered that because the retirement was voluntary and foreseeable at the time of the MDA, no legally cognizable change in circumstances had occurred warranting modification or termination of the support payments.

After holding hearings on the petition on February 19 and April 12, 1998, the chancery court found that Mr. Bogan's retirement was a substantial and material change in circumstances that warranted a reduction in his support payments. More specifically, the court found the following facts: (1) that Mr. Bogan's retirement was motivated by his own dissatisfaction with his job and by Eastman Chemical's attempt to downsize its workforce by encouraging employees to retire²; (2) that Mr. Bogan was qualified for full retirement under Eastman Chemical's then current point system, having nearly five more points than was needed for retirement with full benefits³; (3) that if Mr. Bogan retired after January 1, 1998, his lump-sum retirement benefits would decrease in value, to be replaced by monthly annuity payments, and that he would lose value in his joint survivor and life insurance benefits; (4) that Mr. Bogan's income after his retirement was fifty percent of his income at the time of the divorce; (5) that Ms. Bogan's need for support had decreased because she could earn substantial annual investment income between $14,736.00 and $16,306.00 from the lump sum payment of Mr. Bogan's retirement benefits; and (6) that since the parties' divorce in 1991, Ms. Bogan's opportunity to gain addition income had increased because her business had improved its earning potential.

The chancery court also found that the parties did not address the effect of Mr. Bogan's retirement in the MDA and that they did not foresee the change in retirement benefits that would occur on January 1, 1998, which eliminated the lump sum payments and reduced the value of the benefits from the retirees' life insurance and survivor income plans. Nevertheless, the court concluded that because Ms. Bogan still had financial need and because Mr. Bogan retained some ability to provide support, his request to terminate his obligation should be denied. Instead, based upon its factual findings, the chancery court concluded that a reduction in support payments was more appropriate, and it reduced Mr. Bogan's monthly support obligation from $2,300.00 to $945.00.

Ms. Bogan appealed to the Court of Appeals, arguing that because her former husband's retirement was voluntary and foreseeable, and because his retirement was contemplated in the MDA, no material change in circumstances had occurred warranting a modification of the support benefits. A majority of the Court of Appeals agreed, and it reinstated the original award of $2,300.00. Although the majority concluded that retirement may not always be a foreseeable event, it found that Mr. Bogan's voluntary retirement was in fact foreseeable at the time of the MDA, and consequently, no material change in circumstances had occurred. However, writing in dissent, Judge Susano expressed his belief that retirement is usually always voluntary and foreseeable and that these two factors should not preclude a finding of a substantial and material change in circumstances. Instead, Judge Susano believed that retirement should be considered a substantial and material change in circumstances so long as it is taken in good faith and without intent to defeat the support obligations.

Mr. Bogan then requested permission to appeal to this Court, primarily on the issue of whether a good-faith retirement, though voluntary and foreseeable, may constitute a substantial and material change in circumstances warranting a reduction in spousal support obligations. This Court initially heard oral argument in this case during our September 2000 session in Knoxville, and the panel hearing this case consisted of then Chief Justice Anderson, Justice Birch, Justice Holder, and Justice Barker. Following oral argument, and upon further consideration of the record in this case, we requested reargument before the full panel of this Court at our September 2001 session in Knoxville. We now hold that an objectively reasonable retirement, taken in good faith and without intent to defeat the support obligation, does constitute a substantial and material change in circumstances so that a modification of support obligations may be considered. We also hold, however, that actual modification of the award, if any, is addressed to the trial court's discretion after considering the relevant factors listed in Tennessee Code Annotated section 36-5-101(d). The judgment of the Court of Appeals is reversed.

STANDARD OF APPELLATE REVIEW

Because modification of a spousal support award is "factually driven and calls for a careful balancing of numerous factors," Cranford v. Cranford, 772 S.W.2d 48, 50 (Tenn. Ct. App. 1989), a trial court's decision to modify support payments is given "wide latitude" within its range of discretion, see Sannella v. Sannella, 993 S.W.2d 73, 76 (Tenn. Ct. App. 1999). In particular, the question of "[w]hether there has been a sufficient showing of a substantial and material change of circumstances is in the sound discretion of the trial court." Watters v. Watters, 22 S.W.3d 817, 821 (Tenn. Ct. App. 1999) (citations omitted). Accordingly, "[a]ppellate courts are generally disinclined to second-guess a trial judge's spousal support decision unless it is not supported by the evidence or is contrary to the public policies reflected in the applicable statutes." Kinard v. Kinard, 986 S.W.2d 220, 234 (Tenn. Ct. App. 1998); see also Goodman v. Goodman, 8 S.W.3d 289, 293 (Tenn. Ct. App. 1999) ("As a general matter, we are disinclined to alter a trial court's spousal support decision unless the court manifestly abused its discretion."). When the trial court has set forth its factual findings in the record, we will presume the correctness of these findings so long as the evidence does not preponderate against them. See, e.g., Crabtree v. Crabtree, 16 S.W.3d 356, 360 (Tenn. 2000); see also Tenn. R. App. P. 13(d).

MODIFICATION OF SUPPORT AWARD BASED UPON AN OBLIGOR'S RETIREMENT

It is well settled that a court may not modify or terminate a spousal support award unless it first finds that a substantial and material change in circumstances has occurred since the entry of the original support decree. See Tenn. Code Ann. § 36-5-101(a)(1) (Supp. 2000). In the typical case involving modification of spousal support awards, a change in circumstances is considered to be "material" when the change (1) "occurred since the entry of the divorce decree ordering the payment of alimony," Watters, 22 S.W.3d at 821, and (2) was not "anticipated or [within] the contemplation of the...