Lubell v. Lubell

Decision Date12 November 2015
Docket NumberNo. E2014-01269-COA-R3-CV,E2014-01269-COA-R3-CV
CourtCourt of Appeals of Tennessee


No. E2014-01269-COA-R3-CV


July 23, 2015 Session
NOVEMBER 12, 2015

Appeal from the Circuit Court for Bradley County
J. Michael Sharp, Judge

This is a divorce action involving a long-term marriage between parties whose primary source of income throughout the marriage was their respective employment by a nonprofit corporation they had co-founded. The wife alleged that the nonprofit corporation was the husband's alter ego and should therefore be classified as the parties' marital asset. The trial court found, inter alia, that the nonprofit corporation could not be classified or distributed as a marital asset. The wife appeals this finding, as well as the trial court's (1) capping of the husband's child support obligation in combination with an award to the wife of transitional alimony, (2) denial of her requests for alimony in futuro and in solido, (3) allocation of certain marital debts to the wife, and (4) inclusion of extraordinary educational expenses in the calculation of the husband's income for child support purposes. Having determined that the trial court placed an improper cap on child support by linking it to the transitional alimony award and improperly considered extraordinary educational expenses as an adjustment to the husband's gross income rather than as a deviation, we vacate the trial court's determination of the husband's child support obligation. We remand for recalculation of the husband's child support obligation. We modify the award of transitional alimony to an award of alimony in futuro and separate the amount from the calculation of child support. Having also determined that the wife is entitled to an award of alimony in solido to more equitably adjust the distribution of the marital estate, we reverse the trial court's denial of alimony in solido and remand for the trial court to determine the amount to be awarded. We affirm the trial court's judgment in all other respects.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Vacated in Part, Reversed in Part, Affirmed in Part as Modified; Case Remanded

THOMAS R. FRIERSON, II, J., delivered the opinion of the court, in which CHARLES D. SUSANO, JR., C.J., and D. MICHAEL SWINEY, J., joined.

William J. Brown, Cleveland, Tennessee, for the appellant, Deborah Jo Lubell.

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Philip M. Jacobs, Cleveland, Tennessee, for the appellee, Robert Howard Lubell.

Stephen S. Duggins, Chattanooga, Tennessee, for the third-party appellee, Partners for Christian Media, Inc.


I. Factual and Procedural History

The parties were originally married in July 1976. They subsequently divorced in 1988 but began cohabitating approximately a year later and were married a second time in February 1991. At the time of trial in the instant action, Husband was fifty-eight years old while Wife was fifty-seven years of age. Their second marriage had lasted twenty-two years, and it had been thirty-seven years since they were first married. During the marriage at issue in this divorce action, the parties adopted two children: a son who was fourteen years old and a daughter who was twelve years old at the time of trial. The son was diagnosed at the age of two with a high-functioning form of autism and Asperger's syndrome. By the time of trial, he had for several years attended Bachman Academy, a private school designed to meet special needs. The parties' daughter attended a private Christian school.

The parties founded Partners for Christian Media ("Partners") in 1992. Husband had been President of Partners since its establishment. He began his career by completing two and one-half years of coursework toward a bachelor's degree with a major in broadcast journalism at Lee College (now Lee University). Prior to founding Partners, Husband worked as a sales manager for two radio stations and a marketing manager for a cellular communications company. He also founded and served as president of two safety product companies and a cellular telephone company. Since 1992, Partners had been Husband's only source of employment.

In previous years, Wife had held the position in Partners of National Sales Manager. Partners terminated Wife's employment in December 2012. Through Partners, Wife had also served as General Manager and Vice President of an affiliate radio station, Friendship Broadcasting ("Friendship"), although it was undisputed that Wife's role in this regard was primarily as a figurehead. Friendship terminated Wife's employment in January 2013. Wife holds a bachelor's degree in psychology from Lee College. At the time of trial, Wife had also completed several courses toward a master's degree in theology by attending the Church of God's Seminary part-time. Prior to Partners' formation, Wife had held other positions in broadcast advertising sales. During Partners'

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early years, Wife had also worked part-time as a river guide to assist with the parties' expenses.

Partners is a nonprofit corporation, registered with the Tennessee Secretary of State and certified by the Internal Revenue Service as a 501(c)(3) organization. It operates a radio station broadcasting Christian content throughout Tennessee and three other states, as well as operating a second radio station through an affiliate. As a nonprofit religious organization, Partners accepts a high number of donations from third parties. In addition, Partners sells some broadcast time and advertising, and it is undisputed that in the organization's early years, Wife was instrumental in securing funding through her efforts as the primary sales representative and business manager. In addition, Wife designed the bookkeeping process used to track donors and their donations.

In 2012, Partners reported a net worth on its federal income tax return of $1,294,816.00. This reflected total revenues of $2,157,980.00 and salary expenses of $1,182,737.00. The trial court found that Husband's income at the time of trial was $190,000.00 per year. Testimony and compensation records also demonstrated that Husband received multiple benefits, including health insurance, disability insurance, a 401(k), a company automobile, and compensation through trade barter.

When Wife was employed by Partners, her income was based on a twenty-percent commission for her sales. Her W-2 forms demonstrate that she earned approximately $60,000 per year from 2002 through 2006. Her salary began to decrease, however, in 2007. By 2009, she earned $39,845.51. At that time, Wife began to work less, and by 2010, she was earning income only from residual accounts she had managed. She earned $22,725.74 in 2010 and $20,682.00 in 2011. Wife's 2012 W-2 reflected income received from Partners in the amount of $42,679.16. According to Partners' Finance Director Linda Yeargan, the $42,679.12 received by Wife in 2012 included $20,000.00 in trade barter. Ms. Yeargan testified that Wife's 2012 income represented commissions owed to Wife from residual accounts, although Wife disputed this explanation and implied that her income was falsely bolstered. Husband testified that Wife suffered from depression and insomnia and simply stopped going to work. Wife insisted, however, that she felt "pushed out" of her position by Husband's hiring of a new sales manager. She acknowledged that she had not worked on any accounts for Partners since 2009.

Wife, acting through her former counsel, first filed a complaint for divorce in the Hamilton County Circuit Court.1 On December 12, 2012, Husband subsequently commenced the instant action by filing a complaint for divorce in the Bradley County

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Circuit Court ("trial court"). He alleged irreconcilable differences as a ground for divorce, or in the alternative, inapprorpriate marital conduct on the part of Wife. See Tenn. Code Ann. § 36-4-101(11), (14) (2014). Upon agreement of the parties, the Hamilton County Circuit Court entered an order on March 22, 2013, transferring the Hamilton County action to the trial court and consolidating it with the action commenced by Husband. In the meantime, Wife had filed a motion seeking alimony pendente lite and child support on January 23, 2013. The parties had stipulated to attend mediation in an agreed order entered by the trial court on Januay 28, 2013.

On March 7, 2013, Wife, acting through her current counsel, filed an answer to Husband's complaint, a counter-complaint against Husband, and a "Cross Complaint" against Partners. Wife alleged irreconcilable differences as a ground for divorce, or in the alternative, inappropriate marital conduct on the part of Husband. See id. In her "Cross Complaint," Wife requested that the trial court classify Partners as a marital asset. Wife also filed amended motions seeking an award of alimony pendente lite and entry of a proposed temporary parenting plan.

Partners responded on April 8, 2013, by filing a motion to dismiss what it treated as Wife's "third-party complaint" against it. Wife filed a response to the motion to dismiss on April 25, 2013. Following a hearing conducted on May 8, 2013, the trial court determined that Partners was a legal nonprofit corporation and that as such, its assets could not be included as a marital asset when distributing the parties' marital estate. On August 13, 2013, the trial court entered an order, inter alia, granting Partners' motion to dismiss what it found to be Wife's third-party complaint against Partners, pursuant to Tennessee Rule of Civil Procedure 12.02(6). The court also made several findings of fact regarding other issues concerning the divorce.

On August 30, 2013, the court sua sponte rescinded the August 13, 2013 order, pursuant to Tennessee Rule of Civil Procedure 60.02, noting that the matter had been before it solely on Partners' motion to dismiss the third-party complaint. The court substituted a new order confirming the dismissal of Wife's complaint against Partners. The trial court...

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