Broadbent v. Broadbent

• Decision Date: 19 October 2006
• Citation: 211 S.W.3d 216
• Parties: Robert Kendall BROADBENT v. Shari Katherine Langhi BROADBENT.
• Court: Tennessee Supreme Court

211 S.W.3d 216

Robert Kendall BROADBENT v. Shari Katherine Langhi BROADBENT.

Supreme Court of Tennessee, at Nashville.

June 7, 2006 Session.

October 19, 2006.

Denty Cheatham and Rose Palermo, Nashville, Tennessee, for the appellant, Shari Katherine Langhi Broadbent.

Thomas F. Bloom, Nashville, Tennessee, for the appellee, Robert Kendall Broadbent.

OPINION

JANICE M. HOLDER, J., delivered the opinion of the court, in which WILLIAM M. BARKER, C.J., and E. RILEY ANDERSON, ADOLPHO A. BIRCH, JR., and CORNELIA A. CLARK, JJ., joined.

This appeal involves the trial court's award of alimony in solido to the wife. The trial court compared the parties' relative responsibility for the loss of wife's separate assets, which the husband had invested in the stock market and aggressively traded. The trial court concluded that the wife was 30% responsible for the loss of her separate funds and that the husband was 70% responsible for her loss. Using these percentages, the trial court ordered the husband to pay $51,500 in alimony in solido. We conclude that it was proper for the trial court to consider the husband's participation in the loss of the wife's separate assets in awarding alimony. The trial court's allocation of responsibility for this loss, although expressed in percentages of "comparative fault" rather than relative fault, was not error. Accordingly, we hold that the trial court did not abuse its discretion in awarding $51,500 in alimony in solido to the wife.

I. FACTUAL AND PROCEDURAL BACKGROUND

This appeal arises out of a divorce action. The appellant, Shari Katherine Langhi Broadbent ("Ms.Langhi"), began dating the appellee, Robert Kendall Broadbent ("Mr.Broadbent"), in 1996. Ms. Langhi, a kindergarten teacher, lived in a condominium in which she and each of her parents owned a one-third interest. Mr. Broadbent, a telecommunications analyst, lived in a house a few miles away from Ms. Langhi's residence. Ms. Langhi's parents regularly gave her substantial gifts of money. Before she met Mr. Broadbent, Ms. Langhi deposited funds she received from her parents in savings accounts and certificates of deposit for her retirement.

Mr. Broadbent traded heavily in the stock market. In 1998, prior to their marriage, Mr. Broadbent helped Ms. Langhi open accounts in which she began to deposit the gifts from her parents. Ms. Langhi initially placed $30,000 in an investment account and $2,000 in an individual retirement account ("IRA"). Ms. Langhi testified that she asked Mr. Broadbent to invest her money only in blue chip stocks to decrease the risk associated with the investments. In October 1999, Ms. Langhi signed a Limited Power of Attorney to provide Mr. Broadbent with direct access to her accounts. A Margin Agreement/Loan Consent Agreement, which Ms. Langhi denies signing, permitted Mr. Broadbent to trade on margin¹ with her accounts. On November 30, 1999, the margin debt on Ms. Langhi's investment account was $51,569.17.

Mr. Broadbent and Ms. Langhi married on December 4, 1999, and Ms. Langhi's account statements began to be mailed to Mr. Broadbent's residence in February 2000. The parties' living arrangements remained the same, with Ms. Langhi living in the condominium and Mr. Broadbent living in his house. The parties did not live together, in part, because they were looking for their "dream home." The margin debt on Ms. Langhi's investment account decreased to $31,108.06 in December 1999. In January 2000, Ms. Langhi deposited an additional $51,338.58 in her investment account. At the end of January 2000, the net value of the investment account was $102,000, but the margin debt on the account was approximately $125,000. The stock market declined in 2000. Ms. Langhi's accounts, which Mr. Broadbent had invested mainly in technology stocks, declined as well.

After the parties separated in January 2001, Ms. Langhi contacted the investment firm in which her accounts were held and was told that her investment account balance was approximately $17,000. According to Ms. Langhi, when she questioned Mr. Broadbent about the account balance, he denied that the balance that had been reported to her was correct. Ms. Langhi testified that she was unaware Mr. Broadbent was trading on margin with her accounts until she received a margin call² in April 2001. Mr. Broadbent, however, testified that he had many conversations with Ms. Langhi about the losses, and Mr. Broadbent's mother testified that in 2000 Ms. Langhi told her that she and Mr. Broadbent "lost quite a bit of money in the stock market."

Mr. Broadbent filed for divorce in May 2001 in the Circuit Court for Davidson County. Ms. Langhi filed a counterclaim for divorce in August 2001. She argued that Mr. Broadbent "entered into a calculated campaign to deprive [her] of a substantial amount of her separate funds . . . to indulge his hi-tech gambling addiction by day-trading stocks on the Internet." She alleged that Mr. Broadbent "dissipated" approximately $80,000 of her separate funds through his aggressive stock market trading and that she was entitled to be reimbursed for the loss of these funds. Ms. Langhi also stated that she and Mr. Broadbent had not acquired any marital property during their brief marriage.

The trial court granted Ms. Langhi a divorce on the ground of inappropriate marital conduct. The trial court determined Ms. Langhi lost $83,000 in her investment account and would have lost only $11,000 if her investments had remained in blue chip stocks. The trial court further determined that Ms. Langhi would have lost only $1,500 in her IRA, rather than $4,000-$6,000, if her investments had remained in blue chip stocks. The trial court therefore determined that Ms. Langhi lost a total of approximately $75,000 of her separate funds due to Mr. Broadbent's "obsession with the stock market." The trial court then compared the relative responsibility for the loss. The trial court found that Ms. Langhi "had probable knowledge of the stock market problems" and concluded Ms. Langhi was 30% responsible and Mr. Broadbent was 70% responsible for the loss of Ms. Langhi's funds. Using these percentages, the trial court ordered Mr. Broadbent to pay $51,500 as alimony in solido and 70% of Ms. Langhi's attorney's fees. The trial court stated that its analysis was "similar to comparative negligence in torts." The Court of Appeals affirmed the trial court's award of attorney's fees but reversed the award of alimony in solido, holding that the trial court's use of a comparative fault analysis was "not the proper test for determining whether Mr. Broadbent dissipated Ms. Langhi's savings." We granted review.

II. ANALYSIS

At issue in this case is the use of alimony in solido to replace the loss of a portion of Ms. Langhi's separate property for which the trial court held Mr. Broadbent responsible. We review the trial court's findings of fact de novo upon the record of the trial court, accompanied by a presumption of the correctness of these findings, unless the evidence preponderates otherwise. Tenn. R.App. P. 13(d); Langschmidt v. Langschmidt, 81 S.W.3d 741, 744 (Tenn.2002). We give great weight to the trial court's findings involving the credibility of witnesses because the trial court is in a better position to weigh and evaluate the credibility of witnesses. Randolph v. Randolph, 937 S.W.2d 815, 819 (Tenn.1996). With respect to the trial court's conclusions of law, however, our review is de novo with no presumption of correctness. Ganzevoort v. Russell, 949 S.W.2d 293, 296 (Tenn.1997).

Trial courts have broad discretion in awarding spousal support. Bratton v. Bratton, 136 S.W.3d 595, 605 (Tenn. 2004). "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.'" Bogan v. Bogan, 60 S.W.3d 721, 727 (Tenn.2001) (quoting Kinard v. Kinard, 986 S.W.2d 220, 234 (Tenn.Ct.App.1998)). The role of an appellate court in reviewing an award of spousal support is to determine whether the trial court applied the correct legal standard and reached a decision that is not clearly unreasonable. Id. at 733. Thus, this Court gives awards of alimony an abuse of discretion review. See Bratton, 136 S.W.3d at 605.

Dissipation

We begin by analyzing the Court of Appeals' conclusions with regard to dissipation. The Court of Appeals held that the trial court incorrectly used a comparative fault analysis to determine whether Mr. Broadbent dissipated Ms. Langhi's separate assets. We are unpersuaded that the trial court's inappropriate use of the term "comparative fault" is fatal to the trial court's analysis. Moreover, we are unable to conclude that the trial court's ruling was based upon a dissipation analysis.

In equitably dividing marital property, the trial court must consider the contribution of each party to the acquisition, preservation, appreciation, depreciation, or dissipation of the parties' marital or separate property. Tenn.Code Ann. § 36-4-121(c)(5) (2001). Although this statute does not define "dissipation," the term typically refers to the use of funds after a marriage is irretrievably broken. See, e.g., Altman v. Altman, 181 S.W.3d 676, 681-82 (Tenn.Ct.App.2005) (observing that dissipation of marital property occurs "when the marriage is breaking down"). Thus, dissipation generally occurs in contemplation of the dissolution of a marriage.

Dissipation of separate property may be relevant to the equitable division of marital property in at least two circumstances. First, the appreciation of separate property during the course of the marriage may be classified as marital property if each party substantially contributed to its preservation and appreciation. Tenn.Code Ann. § 36-4-121(b)(1)(B) (2001). The dissipation of separate property may therefore affect the total value of the marital property to be equitably...