Houghland v. Houghland

• Decision Date: 29 May 1992
• Citation: 844 S.W.2d 619
• Parties: Gloria Jean Farrell HOUGHLAND, Plaintiff/Appellee, v. Calvin HOUGHLAND, Jr., Defendant/Appellant.
• Court: Tennessee Court of Appeals

Page 619

844 S.W.2d 619

Gloria Jean Farrell HOUGHLAND, Plaintiff/Appellee, v. Calvin HOUGHLAND, Jr., Defendant/Appellant.

Court of Appeals of Tennessee Western Section, at Nashville.

May 29, 1992.

Application for Permission to Appeal

Denied by Supreme Court Oct. 26, 1992.

Harlan Dodson, III, Lucinda E. Smith, Nashville, for defendant/appellant.

Robert L. Jackson, David W. Garrett, Nashville, for plaintiff/appellee.

FARMER, Judge.

Calvin Houghland, Jr., appeals from the final decree of the trial court ordering him, inter alia, to pay to his wife, Gloria Jean Farrell Houghland, $83,479.71 as alimony in solido, to pay part of Wife's attorney's fees in the amount of $8,000.00, and to hold Wife harmless from certain joint obligations of the parties.

The parties were married in June 1976 and divorced in June 1991. The trial court awarded Wife a divorce upon the grounds of cruel and inhuman treatment.

The issues on appeal as presented by the appellant are:

I. The trial court erred in awarding $83,479.71 as alimony in solido when Mr. Houghland had no estate and the record establishes neither Mrs. Houghland's need nor Mr. Houghland's ability to pay.

A. The trial court erred in awarding alimony in solido when Mr. Houghland had no estate.

B. There is not a legal, or factual, basis for the award of alimony in solido.

C. The trial court failed to consider the statutory factors in awarding alimony.

II. The trial court erred in ordering Mr. Houghland to pay attorney's fees for Mrs. Houghland

III. The trial court erred in ordering Mr. Houghland to hold Mrs. Houghland harmless from joint obligations.

A. The trial court erred in ordering Mr. Houghland to hold Mrs. Houghland harmless from a judgment against her of $425,000.00.

B. Mr. Houghland should not be required to hold Mrs. Houghland harmless from a judgment for maintenance fees for a condominium which the court awarded to Mrs. Houghland.

C. Mr. Houghland should not be required to hold Mrs. Houghland harmless from a judgment for a deficiency for a condominium which was foreclosed.

IV. The trial court's order that Mr. Houghland hold Mrs. Houghland harmless for indebtedness discharged in bankruptcy is void.

Also, Wife requests an additional award of attorney's fees on appeal.

The Award of Alimony In Solido

The trial judge awarded the sum of $83,479.71 as alimony in solido to Wife "as a judgment against the Husband and necessary for her support and maintenance and that of the minor children."

The award of alimony is within the sound discretion of the trial court. Rains v. Rains, 58 Tenn.App. 214, 428 S.W.2d 650 (1968). T.C.A. § 36-5-101(d) delineates the factors to be considered by the trial court in awarding alimony. Of these factors, the courts have recognized that "the need of the spouse is the single most important factor followed by the ability of the obligor spouse to pay." Campanali v. Campanali, 695 S.W.2d 193, 197 (Tenn.App.1985). Accord Cranford v. Cranford, 772 S.W.2d 48, 50 (Tenn.App.1989). These factors apply whether the court is making an award of alimony in futuro or alimony in solido. Fisher v. Fisher, 648 S.W.2d 244, 246-47 (Tenn.1983). Where possible, awards of alimony in solido are preferred to awards in futuro. Spalding v. Spalding, 597 S.W.2d 739, 741 (Tenn.App.1980).

After review of this matter, we conclude that the trial judge did not abuse her discretion in finding that the award of alimony in solido was necessary for the support and maintenance of Wife. Regarding the statutory factors, the evidence at trial indicated that Wife earned a B.S. degree from the University of Tennessee at Knoxville in 1972. Throughout the marriage, Wife worked as a school teacher. At the time of trial, she was teaching marketing at Franklin High School and earning a net income of approximately $29,000.00 per year. She is the custodian of the parties' two minor children and testified to expenses of $6,400.00 per month.

Husband earned an M.B.A. from Vanderbilt University. During the early years of the marriage, he worked as a vice president at Fleet Transport, and from 1982 to 1985 he was president of that company. After a brief stint as general manager of the petroleum transportation division of Leaseway, Husband became president and owner of a corporation known as Direct Transport. Although Husband had a total of 23 years experience in the tank truck industry, at the time of trial he had been unable to secure employment in that field and was working as a cleaning contractor. He predicted that he could earn approximately $2,000.00 per month from this employment. Husband also received net income of $1500.00 per month from a trust established by his father. Federal income tax returns for the years 1987, 1988, and 1989 indicated that Husband grossed $158,662.00 in wages, tips, and other compensation for the three years while Wife grossed $85,933.00. Despite Husband's business setbacks, he had demonstrated a higher earning capacity than Wife.

Although Husband had filed for bankruptcy and had virtually no assets at the time of trial, in the past Husband had access to large sums of money. During the marriage, which lasted 16 years, the parties enjoyed a relatively high standard of living. At the time of trial Wife was 39 years of age and Husband was 43. Both parties were in good health. The trial judge found that Wife had the lesser degree of fault in the breakup of the marriage.

Husband also appeals the award on the basis of this Court's holding in Aleshire v. Aleshire, 642 S.W.2d 729 (Tenn.App.1981), that alimony in solido should not be awarded out of an expectation of future earnings. In reversing the trial court's award of alimony in solido, which was based on the husband's expected earning capacity as a medical doctor, this Court stated that T.C.A. § 36-821 (now § 36-5-102) "provides for alimony in solido to be paid out of the present estate of the spouse and does not ... contemplate the consideration of an expectation of earnings as a part of that present estate." 642 S.W.2d at 733. In Hall v. Hall, 772 S.W.2d 432 (Tenn.App.1989), on the other hand, this Court held that alimony in solido could be awarded from future earnings where the husband had a profit sharing interest in his employer's business which he valued at $20,000.00 to $30,000.00 per year. In affirming the award, the Court found that this interest constituted an "estate" from which alimony in solido might be awarded. 772 S.W.2d at 438.

In the present case, Husband argues that, because of his bankruptcy, he has no "estate" from which to award alimony in solido. In accordance with Aleshire, we agree that alimony in solido should not be awarded out of an expectation of future earnings. As previously noted, however, Husband receives $18,000 net income per year from a trust established by his father. Although Husband attempts to characterize the trust as revocable at the discretion of his father, Husband's citations to the record fail to support such an assertion. We conclude that Husband's interest in the trust is similar to the Hall husband's profit sharing interest in a business and, thus, constitutes an "estate" from which to award alimony in solido.

In addition, we note that the Aleshire court did not hold "that in no event may alimony in solido be awarded from future earnings." 642 S.W.2d at 733. Instead, the Court recognized that:

Extreme circumstances could arise where it might be necessary to do so. Illustrative of those circumstances, but not all inclusive, is a situation where a spouse intentionally disposed of his or her tangible assets in order to deprive the other spouse of alimony in solido or where it could be shown that a spouse entered into the marriage solely to have his or her spouse work and provide him or her with an education.

Id. The Hall court, in concurring in the trial court's finding that the husband had been instrumental in the dissipation of the wife's assets, also concluded that dissipation was a relevant consideration in the fixing of alimony in futuro or in solido. 772 S.W.2d at 438.

In making the award of alimony in solido in the present case, the trial judge found that the sum awarded of $83,479.71 represented the parties' "equity balance after the sale of the homeplace which was disposed of by the husband to the detriment of the wife and children." In 1984 the parties sold their marital home and received as partial payment a promissory note payable to both parties in the amount of $83,479.71. Although the note specified that it was due in November 1990, in May 1986 Husband received a check in satisfaction of the note, which check was made out to Husband only. This amount, $83,479.71, represented the equity in the parties' home, and Husband acknowledged that these monies were marital property. He retained the funds and invested $80,000.00 into his company, Direct Transport, in which Wife had no ownership interest. When asked if he ever informed Wife of the receipt of these funds, Husband first stated that he did not recall. Upon further questioning, he stated that he believed he did tell his Wife. At trial Wife testified that he never told her he received the $83,479.71 from the note receivable, that she does not know what he did with the money, and that she did not know that he received the funds in May 1986. The parties separated in April 1988.

In view of the above circumstances, we conclude that the trial judge did not abuse her discretion in ordering Husband to pay the amount of the note received as alimony in solido. Our review of the record indicates that Husband disposed of marital assets without informing Wife and later concealed these actions from her. We believe that these actions constitute extreme circumstances which justify a departure from the general rule announced in Aleshire. Further, we consider it to be immaterial that Husband disposed of the funds prior to the parties' final separation, and Husband has cited no authority which makes...