Hathaway v. Hathaway

• Court: Tennessee Court of Appeals
• Writing for the Court: Herschel Pickens Franks, J.
• Citation: Hathaway v. Hathaway, 98 S.W.3d 675 (Tenn. App. 2002)
• Decision Date: 26 November 2002
• Parties: Linda Sue Long HATHAWAY (Branstetter) v. Glenn Jefferies HATHAWAY.

98 S.W.3d 675

Linda Sue Long HATHAWAY (Branstetter) v. Glenn Jefferies HATHAWAY.

Court of Appeals of Tennessee, Eastern Section, at Knoxville.

October 2, 2002 Session.

November 26, 2002.

Permission to Appeal Denied by Supreme Court March 10, 2003.

James H. Snyder, Jr., Alcoa, Tennessee, for Appellant, Glenn Jefferies Hathaway.

Ronald J. Zuker, Knoxville, Tennessee, for Appellee, Linda Sue Long Hathaway (Branstetter).

OPINION

HERSCHEL PICKENS FRANKS, J., delivered the opinion of the court, in which HOUSTON M. GODDARD, P.J., and D. MICHAEL SWINEY, J., joined.

The Trial Court ordered father to pay daughter's tuition to a college of her choice, based upon a provision in the Marriage Dissolution Agreement. On appeal, we modify.

The issue before the Trial Court and this Court is the extent of the father's obligation under the parties' Marital Dissolution Agreement which contains this provision:

The husband shall pay all customary and reasonable tuition expenses for the parties' minor children in obtaining a bachelor's degree or its equivalent.

The parties were divorced on irreconcilable differences in 1987. Their two children were 5 and 2 years old. The ex-wife and children now reside in Florida. The defendant has been employed by the UT Medical center for 19 years as of the date of trial. At the time of the divorce, his gross annual salary was $37,200.00. At the time of trial, his gross annual salary was $50,016.00. He pays $550.00 per month child support and he has another child from the second marriage.

Defendant does not dispute his obligation or his willingness to pay his daughter's tuition. He contends that the MDA should not be interpreted to mean there are no limitations whatsoever on the amount that he is obligated to pay, without regard to the reasonableness of the price, under any circumstances.

The parties' daughter, Adrienne, graduated in the top of her high school class in 1999. She has interest and aptitude in interior design and architecture. She applied and was accepted to the Maryland Institute of Art. The annual tuition for the Maryland Institute of Art is $19,800.00 for the 1999-2000 academic year. Adrienne received a scholarship for $1,000.00 per semester, and obtained loans which reduced the outstanding tuition to $8,972.78 for her freshman year. Defendant paid $2,400.00 toward the bill, and loaned her $10,000.00.

At the hearing the Court ruled based upon "the pleadings touching upon the question of college tuition, the trial briefs with attached authorities, and the legal argument of counsel today in court that this is a matter of law, and not a fact". The Court focused upon the agreement as "important language in what it says and what it does not say", stating:

It could have had limiting terms. It does not say, for example, at the level of a state institution. It does not say at the level of the University of Tennessee, the University of Maryland. It does not say that reasonable shall be interpreted bearing in mind the payor's circumstances as they obtain at the time of the enrollment of the child.

All of those things could have been here, and they are not here.

. . .

This contract does not mean that the father shall make payments on tuition which is reasonable for his economic circumstances. It could have said that, or it could have put a cap on it. None of those things was done.

So the question for the Court is whether the tuition incurred by this child, Adrienne — and the Court is very much aware in today's ruling that there is yet another child who may well consider college in the future and that this ruling will obtain in that case, as well. The question for the Court is whether the tuition incurred by this child, Adrienne, is reasonable given her abilities, given the school's course of study, given the school's standing. In other words, is this an appropriate school for this child? Is this a good school? Does this college make sense for her? (Emphasis supplied).

The Court then said:

This Court holds that in the matter of Branstetter and Hathaway that it is not for the Court to determine reasonableness in the sense of comfort, reasonableness in the sense of is that what I would choose to do, reasonableness in is this too large a percentage of my income. This is a contract that the father made which was open-ended and is absolute. (Emphasis supplied).

Ultimately, Judgment was entered for the plaintiff for $8,972.78 for the first year of tuition, and $14,000.00 for the second year. The Trial Court, responding to a postjudgment Motion by the defendant requesting to present evidence on the issue of the reasonableness of the amount and on the issue of the school's being an appropriate fit, was denied, but the Court did set an evidentiary hearing for the defendant to present evidence on the issue of absurdity and/or impossibility only. At the hearing, the Court strictly limited the proof to the issue of absurdity/impossibility, specifically refusing to permit proof on the issue of reasonableness and whether the school was an appropriate fit.

At the hearing, the defendant testified that he could not pay the tuition on his yearly gross income, but always intended to provide a college education for his children; that he pays $550.00 per month child support, and that he has personal savings of $2,000.00. He has no stocks and bonds or 401(k). When Adrienne told him she could not get further loans or financial assistance, he loaned her $7,500.00 from a trust fund, of which he is a trustee, established by his parents for their grandchildren. The trust now has a balance of $400.00.

He further testified that the full tuition at the Maryland Institute of Art is approximately one-half of his annual salary, and there is no fat in his budget that could be cut. Following the hearing, the Court explicitly reiterated and adopted its previous opinion, and additionally found there was no absurdity or impossibility in the father's present circumstances as to financing the tuition. The Court concluded:

The Court has construed the language of the contract that the father made. It's not one that he likes today. It is, however, the contract that he made. It is the holding of this Court that persons live up to a contract....

The interpretation of a written contract is a matter of law and the scope of appellate review is de novo upon the record with no presumptions of correctness of the lower court's conclusions of law. Rainey v. Stansell, 836 S.W.2d 117, 118 (Tenn.Ct. App.1992). The appellate court's role is to review the agreement anew and make an independent determination of its meaning. See, Hillsboro Plaza Enter. v. Moon, 860 S.W.2d 45, 47 (Tenn.Ct.App.1993).

Agreements in marital dissolution agreements for post-majority support are enforceable contracts, and the payment of college tuition is a valid contractual subject for a husband and wife in the throes of a divorce. Penland v. Penland, 521 S.W.2d 222, 224 (Tenn.1975). Such contractual obligations are binding upon the parties, and will be construed by courts by principles of interpretation as any other contract. Jones v. Jones, 503 S.W.2d 924, 929 (Tenn.Ct.App.1973); Boutin v. Boutin, 1996 WL 694122, 1996 Tenn. App. Lexis 770, No. 01-A01-9601-CH-00014.

The cardinal rule in interpreting contracts is to ascertain and effectuate the intent of the parties, consistent with legal principles. Rainey v. Stansell, 836 S.W.2d 117 (Tenn.Ct.App.1992). To arrive at that intent, it is appropriate to consider the circumstances of the parties at the time the contract was formed. Hamblen County v. City of Morristown, 656 S.W.2d 331 (Tenn.1983).

The Trial Court found that the defendant must pay all of the tuition, no matter how much or how difficult, because he had not put any limitation upon the obligation in the MDA. However, it is well settled that "[a] qualifying word which must be read into every contract is the word `reasonable' or its equivalent `reasonably'". Minor v. Minor, 863 S.W.2d 51, 54 (Tenn. Ct.App.1993). In this case, the parties put "reasonable" in the express language, which negates the Trial Court's interpretation that it is "open-ended and absolute". Moreover, a reasonable and equitable construction is given to all contracts by the courts. See 17 ACJS, Contracts § 333.

The use of the term "reasonable" does not create an ambiguity. Hennigan v. Hennigan, 1999 WL 330173, 1999 Tenn. App. Lexis 329, No. 01-A01-9807-CH-00380. The Trial Court restricted reasonableness to "reasonable in terms of the appropriate fit for the child". "Reasonable for the economic circumstances of the payor" was held immaterial. However, the contractual language includes no such limitation on the meaning of reasonableness. The term must be interpreted in accordance with traditional contract law which is reasonable under all the circumstances.

The Trial Court opined that this case is governed by Hennigan, focusing upon its language, wherein the Court observed that had the defendant intended to limit either the total amount or a percentage of his obligation for educational expenses, he could have done so in the agreement he signed.

Hennigan is distinguishable in several respects. In that case the Trial Court heard evidence relative to a consideration of reasonableness. The opinion went on to state: "While father testified that his current monthly expenses exceed his monthly income, the trial court was not persuaded that the college expenses of his daughter were unreasonable in light of his ability to pay". Id. In that case, the father had been aware for some time the daughter was considering expensive institutions, and received a letter two years earlier from the mother that if he planned on limiting the child's choices based on tuition, he needed to talk to the daughter so she wouldn't plan on those schools. Also, he knew she was visiting expensive colleges, and he had taken her to visit Vanderbilt University himself. Finally, this was a high income...