Broadbent v. Broadbent, No. M2003-00583-COA-R3-CV (TN 8/24/2005)
| Decision Date | 24 August 2005 |
| Docket Number | No. M2003-00583-COA-R3-CV.,M2003-00583-COA-R3-CV. |
| Parties | ROBERT KENDALL BROADBENT v. SHARI KATHERINE LANGHI BROADBENT. |
| Court | Tennessee Supreme Court |
Appeal from the Circuit Court for Davidson County; No. 01D-1410; Marietta Shipley, Judge.
Judgment of the Circuit Court Reversed in Part and Affirmed in Part.
Thomas F. Bloom, Nashville, Tennessee, for the appellant, Robert Kendall Broadbent.
Rose Palermo, Nashville, Tennessee, for the appellee, Shari Katherine Langhi Broadbent.
OPINION
This appeal involves a dispute over the responsibility for investment losses incurred by a spouse before and during the parties' marriage. After only one year of marriage, the husband filed suit for divorce in the Circuit Court for Davidson County. The wife counterclaimed for divorce and, among other relief, sought alimony in solido to offset the loss of her separate property resulting from the husband's aggressive stock market trading. Following a bench trial, the trial court granted the wife a divorce on the ground of inappropriate marital conduct and then, employing a comparative fault analysis, determined that the husband should pay the wife $51,500 in alimony in solido to reimburse her for her separate property lost in the stock market. The husband has appealed. We have determined that the wife is not entitled to be reimbursed for the losses caused by the husband's investments.
Robert Kendall Broadbent and Shari Langhi began dating in July 1996. Mr. Broadbent, then thirty-two years old, worked for BellSouth Telecommunications. Ms. Langhi was twenty-nine years old and was employed as a kindergarten teacher. She was also a single mother, and she and her son lived in a condominium provided by her parents. In addition to paying virtually all of her housing expenses, Ms. Langhi's parents regularly gave her substantial gifts of money. Ms. Langhi placed these funds in savings accounts and certificates of deposit because she planned to use them for her retirement.
When Mr. Broadbent first met Ms. Langhi, he was already aggressively managing the investments in his BellSouth stock plan. In April 1998, he persuaded Ms. Langhi that she could earn a greater return on her money if she invested it in the stock market as opposed to leaving it in savings accounts and certificates of deposit. Ms. Langhi was concerned about the risk, but eventually agreed to let Mr. Broadbent help her place some of her money in the stock market after her father advised her to make sure that Mr. Broadbent invested in blue chip stocks.
In April 1998, Mr. Broadbent helped Ms. Langhi open an investment account and an Individual Retirement Account. She deposited $30,000 in the investment account and $2,000 in the retirement account. She later deposited an additional $ 5,000 in the investment account, and by September 30, 1999, the value of her investments has grown to approximately $89,000. On October 1, 1999, apparently well satisfied with the growth of her investments, Ms. Langhi executed a limited power of attorney authorizing Mr. Broadbent to trade directly on her accounts. Three days later, she signed a Margin Agreement/Loan Consent Agreement allowing Mr. Broadbent to trade her accounts on margin.1 Mr. Broadbent began trading on margin with Ms. Langhi's accounts, just as he had been trading with his accounts.
The parties married on December 4, 1999. By then, the margin debt on Ms. Langhi's investment account was approximately $51,500. It decreased to approximately $31,000 by December 31, 1999, and in early January 2000, Ms. Langhi deposited the remainder of her savings — approximately $51,000 — in her investment account. By January 31, 2000, the margin debt on her investment account had ballooned to approximately $125,000, but the net value of the account was $102,000.
The parties did not consolidate their living arrangements following their marriage. Ms. Langhi declined to move into Mr. Broadbent's residence because she found it uninhabitable. Mr. Broadbent did not desire to move into Ms. Langhi's condominium because it was too small. He tired of spending the night at Ms. Langhi's condominium and then returning to his house to dress in the morning. Both parties eventually agreed to purchase a new house, but they disagreed about how much house they could afford. Mr. Broadbent believed they could afford a house in the range of $480,000, but only if the stock market remained strong and if they had full use of the proceeds of the sale of the condominium where Ms. Langhi had been living. Accordingly, he began to trade even more aggressively in order to generate the money needed to purchase their dream home. Shortly after the parties married, Ms. Langhi made a $5,000 down payment on a $162,000 lot in Williamson County. However, they lost the down payment when they were unable to make the second payment on the lot.2
The market value of Ms. Langhi's investment account peaked at $328,871 in March 2000. Even though the margin debt was $162,277, the net value of the account was $159,644. By this time, Mr. Broadbent had heavily invested Ms. Langhi in technology stocks. The value of these investments began to erode precipitously when the NASDAQ began to decline. By November 2000, the net value of Ms. Langhi's investment account was only $19,338.
The erosion of the parties' relationship paralleled the decline in Ms. Langhi's investments. Mr. Broadbent began mentioning divorce as early as February 2000. The parties tried counseling, but they separated briefly following a particularly difficult incident in October 2000. They separated for good in late January 2001, and Mr. Broadbent stopped trading Ms. Langhi's accounts at that time. At the time of the parties' final separation, the net value of Ms. Langhi's investment account was $34,239.
In May 2001, Mr. Broadbent filed a divorce complaint in the Circuit Court for Davidson County. Ms. Langhi filed an answer and counterclaim for divorce in August 2001. She asserted that Mr. Broadbent dissipated approximately $80,000 of her separate funds "to indulge his hi-tech gambling addiction by day-trading stocks on the Internet." Following a hearing in September 2002, the trial court entered an order on December 17, 2002 granting Ms. Langhi a divorce on the ground of inappropriate marital conduct3 and reserving all other issues. On January 29, 2003, the trial court filed a memorandum opinion determining that Ms. Langhi was thirty percent responsible for the loss of her savings in the stock market but ordering Mr. Broadbent to pay $51,500 in alimony in solido to replace a portion of those losses. The court also directed Mr. Broadbent to pay $7,918.57 of Ms. Langhi's attorney's fees. Following the entry of a final decree in February 2003, Mr. Broadbent appealed.
The principle issue in this case is whether the trial court erred by awarding Ms. Langhi $51,500 in alimony in solido to replace a portion of her savings that Mr. Broadbent lost in the stock market during their marriage. Mr. Broadbent asserts that the court should not have awarded Ms. Langhi alimony in solido because there is no factual basis for concluding that he is more at fault for the investment losses than Ms. Langhi. We have determined that both Mr. Broadbent and Ms. Langhi must bear the responsibility for the investment losses and, therefore, that the $51,500 alimony in solido award cannot stand.
There are no hard and fast rules for spousal support decisions. Manis v. Manis, 49 S.W.3d 295, 304 (Tenn. Ct. App. 2001); Anderton v. Anderton, 988 S.W.2d 675, 682 (Tenn. Ct. App. 1998); Crain v. Crain, 925 S.W.2d 232, 233 (Tenn. Ct. App. 1996). Trial courts have broad discretion to determine whether spousal support is needed and, if so, its nature, amount, and duration. Bratton v. Bratton, 136 S.W.3d 595, 605 (Tenn. 2004); Burlew v. Burlew, 40 S.W.3d 465, 470 (Tenn. 2001); Goodman v. Goodman, 8 S.W.3d 289, 293 (Tenn. Ct. App. 1999). Accordingly, appellate courts are generally disinclined to second-guess a trial court's spousal support decision unless it is not supported by the evidence or is contrary to the public policies reflected in the applicable statutes. Nelson v. Nelson, 106 S.W.3d 20, 23 (Tenn. Ct. App. 2002); Brown v. Brown, 913 S.W.2d 163, 169 (Tenn. Ct. App. 1994). Our role is not to fine-tune a trial court's spousal support award, Davidson v. Davidson, No. M2001-01830-COA-R3-CV, 2002 WL 31769205, at *3 (Tenn. Ct. App. Dec. 11, 2002) (No Tenn. R. App. P. 11 application filed), but rather to determine whether the trial court applied the correct legal standard and reached a decision that is not clearly unreasonable. Bogan v. Bogan, 60 S.W.3d 721, 733 (Tenn. 2001).
Initial decisions regarding the entitlement to spousal support, as well as the amount and duration of spousal support, hinge on the unique facts of each case and require a careful balancing of all relevant factors, including those identified in Tenn. Code Ann. § 36-5-101(d)(1)(E). Robertson v. Robertson, 76 S.W.3d 337, 338 (Tenn. 2002); Dube v. Dube, 104 S.W.3d 863, 868 (Tenn. Ct. App. 2002); Wilder v. Wilder, 66 S.W.3d 892, 894 (Tenn. Ct. App. 2001). Among these factors, the two that are considered the most important are the disadvantaged spouse's need and the obligor spouse's ability to pay. Robertson v. Robertson, 76 S.W.3d at 342; Bogan v. Bogan, 60 S.W.3d at 730; Sullivan v. Sullivan, 107 S.W.3d 507, 510 (Tenn. Ct. App. 2002). Of these two factors, the disadvantaged spouse's need is the threshold consideration. Aaron v. Aaron, 909 S.W.2d 408, 410 (Tenn. 1995); Watters v. Watters, 22 S.W.3d 817, 821 (Tenn. Ct. App. 1999).
We have determined that the trial court's decision to award Ms. Langhi $51,500 in alimony in solido...
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