Church v. Elrod

• Decision Date: 25 March 2019
• Docket Number: No. M2018-01064-COA-R3-CV,M2018-01064-COA-R3-CV
• Parties: CHRISTY KELLER ELROD CHURCH v. DARRELL GENE ELROD
• Court: Tennessee Court of Appeals

CHRISTY KELLER ELROD CHURCH v. DARRELL GENE ELROD

No. M2018-01064-COA-R3-CV

COURT OF APPEALS OF TENNESSEE AT NASHVILLE

January 10, 2019 Session

March 25, 2019

Appeal from the Chancery Court for Williamson County

No. 28861

Deanna B. Johnson, Judge

In this post-divorce petition to modify, the Appellant (former Husband) contends that the trial court erred in concluding that his obligation to provide life insurance for the benefit of Appellee (former Wife) was part of a property settlement and therefore not subject to modification. The trial court's order included an upward deviation for support of the parties' youngest child for the twelve month period prior to her emancipation. The trial court also ordered Appellant to pay college tuition equal to that of the University of Tennessee at Knoxville without providing any allowance for scholarships and sponsor fees received by the parties' daughter. The trial court further found that Appellant was not guilty of civil contempt for failure to make payments into Appellee's retirement account under the terms of the parties' Agreed Order of Legal Separation (AOLS). However, the trial court refused to relieve Appellant of his obligation to continue funding Appellee's retirement account at the same level as he funds his own retirement account. We conclude from our review that the life insurance policy obligation constitutes spousal support, which is subject to modification. We vacate the trial court's judgment concerning college tuition and hold that Appellant is obligated to pay the cost of tuition and books, less scholarships and sponsor fees received by the parties' daughter. All other aspects of the trial court's order are affirmed. Accordingly, we affirm in part, reverse in part, and remand for further proceedings in accordance with this opinion.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court is Affirmed in Part, Reversed in part, and Remanded.

KENNY ARMSTRONG, J., delivered the opinion of the court, in which RICHARD H. DINKINS and W. NEAL MCBRAYER, JJ., joined.

Craig H. Brent, Franklin, Tennessee, for the appellant, Darrell Gene Elrod.

Thomas F. Bloom, Nashville, Tennessee, for the appellee, Christy Keller Elrod Church.

OPINION

I. Background

On August 20, 2002, Darrell Gene Elrod ("Appellant") and Christy Keller Elrod Church ("Appellee"), entered into an Agreed Order of Legal Separation ("AOLS") that was prepared by Ms. Church's then-attorney. The relevant portions of the AOLS are as follows:

A. The ( ) Wife (X) Husband will pay child support, in accordance with the Tennessee Child Support Guidelines, in the amount of $3,003.00 per month payable every two (2) weeks in the amount of $1,386.00, directly to the (X) Ms. Church.

TOTAL AMOUNT OF CHILD SUPPORT: $3,003.00 per month based upon Husband's annual income of $111,000.00 per year.

The AOLS further provided:

ORDERED, ADJUDGED and DECREED that Husband shall continue to maintain and keep current the life insurance policy on his life at Northwestern Mutual Life in the face amount of Seven Hundred Thousand ($700,000) Dollars, with such policy payable to the Wife for her use and benefit; and it is further

ORDERED, ADJUDGED and DECREED that Husband shall continue to make the maximum contribution possible to his employer's, D.F. Chase, Inc., profit sharing plan during the legal separation; provided, however, that Wife shall be entitled to one-half (1/2) of the then balance of the profit sharing plan in the event that a Final Decree of Divorce is entered between the parties, and in the event that a Final Decree of Divorce is entered between the parties, a Qualified Domestic Relations Order shall be entered segregating Wife's fifty (50%) percent of the retirement account into a separate account in her name, with Husband being required thereafter to make equal contributions to Wife's separate retirement account as he makes his own retirement account or accounts through his employer or any subsequent employer until he reaches the age of sixty-five (65) years, and it is further

ORDERED, ADJUDGED and DECREED that Husband shall and does agree to be contractually bound to pay college tuition and books for the parties' minor children for up to five (5) years of college for each or untileach child has reached the age of twenty-five (25) years, whichever occurs first, at a rate not to exceed that charged for in-state tuition at the University of Tennessee, Knoxville;

The parties did not reconcile after the entry of the AOLS, but were divorced by order of February 14, 2005. With regard to the AOLS, the Final Decree states in relevant part:

4. The court found that the parties to the Agreed Order of Legal Separation intended that Order to be a final adjudication of their property rights and support obligations arising out of their marriage.

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8. The court found that there were no issues of division of assets, residential time, spousal or child support that had not been addressed in the Agreed Order of Legal Separation and Permanent Parenting Plan nor were there any issues that were not intended by the parties to be a final adjudication. The Agreed Order of Legal Separation specifically addressed what would occur if the parties divorced.

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ORDERED, ADJUDGED and DECREED that the Wife's Motion to Dismiss Husband's divorce prayer for the Court to make an equitable division of the assets and liabilities of the marriage is granted, the Court having found that the parties Agreed Order of Legal Separation made a full and complete division of the parties' assets and liabilities at the time of the legal separation and made provisions in contemplation of a divorce and, thus, was a Final Order;

On May 29, 2015, Mr. Elrod filed a petition to modify his child support and other support obligations. By his petition, Mr. Elrod sought: (1) to terminate his child support obligation for the parties' three older children because they had emancipated;¹ (2) to have his child support obligation recalculated for Shelby, the youngest child, effective June of 2015; (3) to terminate his obligation to maintain certain life insurance policies including a $700,000 policy naming Ms. Church as the beneficiary; and (4) to terminate his obligation to fund a retirement account for Ms. Church.

On August 4, 2015, Ms. Church filed an answer and counter-petition for civil contempt. In relevant part, Ms. Church's answer denied that Mr. Elrod was entitled to termination of the $700,000 life insurance policy because the policy was in the nature ofa property settlement. Ms. Church also argued that Mr. Elrod should be required to pay an upward deviation in child support to maintain Shelby's lifestyle. Ms. Church's counter-petition alleged that Mr. Elrod breached the divorce decree and the AOLS by failing to make contributions to Ms. Church's separate retirement account and by failing to pay the children's college tuition.

The trial in this matter was held on November 15, 2017. At the time of trial, Mr. Elrod was 61 years old and he had been employed as an Executive Vice President in charge of construction projects for D.F. Chase for approximately 31 years. His annual gross income in 2016 was $289,583, which was more than double his income of $111,000 at the time of the parties' divorce. Both Mr. Elrod and Ms. Church have remarried. Ms. Church and her new husband had an annual income of approximately $161,535 in 2016. Ms. Church contributed approximately $44,316 to this total.

By order of April 16, 2018, the trial court held that Mr. Elrod's child support obligation for Shelby would remain $3,003 per month from May 29, 2015 until her emancipation on July 5, 2016. The trial court's decision was based on Mr. Elrod's increased annual income, his limited parenting time, and his high standard of living, which under the Guidelines, Shelby was entitled to share in because of her Father's wealth. The trial court further held that the $700,000 life insurance policy was in the nature of a property settlement, or in the alternative was alimony in solido and, therefore, not modifiable. Consequently, the trial court held that Mr. Elrod was still obligated to maintain the $700,000 life insurance policy naming Ms. Church as the beneficiary. Although the divorce decree required Mr. Elrod to make equal contributions to Ms. Church's separate retirement account, the trial court found that he had "not contributed to his retirement account since the parties' divorce;" therefore, Mr. Elrod was not in contempt and was not obligated to fund Ms. Church's retirement account. The trial court, however, did not eliminate Mr. Elrod's obligation under the AOLS to fund Ms. Church's retirement account at a level commensurate with the funding of his own retirement account.

The trial court further held that Mr. Elrod was liable for payment of Shelby's tuition up to the amount of in-state tuition at University of Tennessee, Knoxville (UTK) without a credit for scholarships and sponsor fees received by Shelby. On its finding that "[t]here is nothing in the MDA (sic) that entitles [Mr. Elrod] to take credit for the scholarship or sponsor fee money," the trial court determined that "[t]here is no basis for the court to take these benefits into account in computing [Mr. Elrod's] obligation." Accordingly, the trial court awarded Ms. Church $12,724 for 2018-2019 and 2019-2020 and ordered Mr. Elrod to reimburse Ms. Church $24,346 for 2016-2018. The trial court also ordered Mr. Elrod to pay for Ms. Church's attorney fees. Mr. Elrod appeals.

II. Issues

The following issues are presented for appeal by Mr. Elrod:

1. Whether the trial court erred in characterizing Mr. Elrod's seven hundred thousand dollar ($700,000) term life insurance policy on himself with Ms. Church as beneficiary, as part of the division of the marital estate or, in the alternative, alimony in solido, and ordering that he shall continue to maintain said policy on himself with Ms. Church as beneficiary.

2. Whether the trial court erred in awarding an

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