Turner v. Turner

• Decision Date: 15 December 1995
• Citation: 919 S.W.2d 340
• Parties: Rebecca Diane TURNER (Turpin), Plaintiff/Appellee, v. Charles Daniel TURNER, Defendant/Appellant.
• Court: Tennessee Court of Appeals

Page 340

919 S.W.2d 340

Rebecca Diane TURNER (Turpin), Plaintiff/Appellee, v. Charles Daniel TURNER, Defendant/Appellant.

Court of Appeals of Tennessee Middle Section, at Nashville.

Dec. 15, 1995.

Application for Permission to Appeal

Denied Feb. 26, 1996.

Appeal from Circuit Court, Warren County; Charles D. Haston, Judge.

Marguerite H. Stewart, Camp & Stewart, McMinnville, for appellant.

J. Stanley Rogers, Christina Henley Duncan, Rogers, Richardson & Duncan, Manchester, for appellee.

OPINION

KOCH, Judge.

This appeal involves an acrimonious post-divorce dispute over child support and visitation. After their divorce in 1990, the mother filed several petitions in the Circuit Court for Warren County seeking to hold the father in contempt. The father also filed several petitions to modify his child support because of his inability to pay. This appeal involves the denial of the father's latest petition for modification and the summary suspension of his visitation for not paying child support. We have determined that the evidence preponderates against the trial court's conclusion that the circumstances with regard to the father's income have not changed and that the father's visitation should be suspended. Accordingly, we vacate the order dismissing the father's petition and remand the case for further proceedings.

I.

Rebecca Diane Turner (now Turpin) and Charles Daniel Turner were married in September 1984. They had two children before separating in May 1987. After an unsuccessful attempt at reconciliation, Ms. Turner filed for divorce in June 1989. On August 15, 1990, the trial court entered a final order granting Ms. Turner the divorce and awarding her custody of the parties' children. The trial court also granted Mr. Turner visitation rights and ordered him to pay $704.13 per month in child support and to pay for the children's medical insurance. The trial court later denied Mr. Turner's post-trial motion to alter or amend the child support award but granted him additional visitation.

In early November 1990, Ms. Turner sought to have Mr. Turner held in contempt for being $2,166.52 in arrears in his child support. Mr. Turner responded with a petition admitting that he was delinquent in his child support payments and requesting a reduction in his child support because he was financially unable to comply with the August 1990 order. Thereafter, Mr. Turner paid all the child support due through November 30, 1990, and agreed to pay an additional $475 for the children's medical expenses. Following a hearing in January 1991, the trial court entered an order on February 1, 1991, finding Mr. Turner in contempt for failing to pay child support and failing to obtain medical insurance for his children. The trial court decided not to act on Mr. Turner's petition to modify his child support because "he comes to the Court with unclean hands." In addition, the trial court directed Mr. Turner to begin paying an additional $177 per month to reimburse Ms. Turner for obtaining medical insurance for the children through her group insurance plan at work.

Ms. Turner filed a second petition in May 1991 seeking to hold Mr. Turner in contempt for inappropriate conduct while he was returning her son from visitation. In December 1993, she filed her third contempt petition complaining that Mr. Turner had harassed and abused her and the children and that he was seriously delinquent in his child support obligations. ¹ Following an ex parte hearing, the trial court ordered Mr. Turner's arrest and suspended his visitation rights. Mr. Turner responded, as he had in the past, that he was financially unable to meet his child support obligations and again requested the trial court to reduce his child support.

Following a January 1994 hearing, the trial court filed an order on February 14, 1994, finding Mr. Turner in criminal contempt for violating the orders prohibiting him from harassing and abusing Ms. Turner and the children and also finding him in civil contempt for failing to make his child support payments. The trial court sentenced Mr. Turner to ten days for the criminal contempt to be served consecutively with a six-month sentence for civil contempt but determined that Mr. Turner could purge himself of the civil contempt by paying $40,908.86. ² The trial court also ordered that Mr. Turner's visitation would be summarily suspended if he did not make prompt and timely support payments.

The trial court summarily suspended Mr. Turner's visitation before he was released from jail because he failed to pay his child support. Mr. Turner filed another petition in July 1994 requesting modification of his child support and reinstatement of his visitation. On December 20, 1994, the trial court filed an order denying Mr. Turner's petition because he had not demonstrated a material change in circumstances between 1990 and 1994.

II.

The determinative issue on this appeal involves the trial court's denial of Mr. Turner's petition to modify his child support. The trial court's rationale is not readily apparent. The record, however, indicates that the trial court used the wrong test for determining whether Mr. Turner was entitled to relief and that Mr. Turner might be entitled to relief if the correct test were used.

A.

We turn first to the proper standard for determining whether an existing child support order should be modified. Prior to July 1, 1994, trial courts could modify existing child support awards "only upon a showing of a substantial and material change of circumstances." See Tenn.Code Ann. § 36-5-101(a)(1) (1991) (amended 1994). The General Assembly replaced this standard in 1994 by enacting legislation providing that:

In cases involving child support, upon application of either party, the court shall decree an increase or decrease of such allowance when there is found to be a significant variance, as defined in the child support guidelines ... between the guidelines and the amount of support currently ordered unless the variance has resulted from a previously court-ordered deviation from the guidelines and the circumstances which caused the deviation have not changed.

Tenn.Code Ann. § 36-5-101(a)(1) (Supp.1995). ³ In accordance with the amended statute, the Department of Human Services promulgated a public necessity rule defining a "significant variance" as "15% or $15 per month." See 20 Tenn.Admin.Reg. 28 (Aug. 1994). ⁴

The amended statute and the public necessity rule took effect on July 1, 1994 and, therefore, applied to Mr. Turner's petition. The trial court should have used them to determine whether Mr. Turner's child support obligation should be modified. While the trial court did not explain the basis for its decision, its denial of the petition on the ground that there had been "no change in circumstances" indicates that the trial court applied the wrong test. By the time of the hearing, the "material change of circumstances" test had been replaced by the "significant variance" test.

B.

Mr. Turner operates an auto salvage business in McMinnville called Highway 55 Auto Sales and Salvage. The business is a sole proprietorship, and over the years, Mr. Turner has comingled his personal and business finances. He pays for his utilities, rent, food, and other items from his business account, and he conceded at the 1994 hearing that he was "living out of the business." He testified that he is occasionally involved with cash transactions but that he does not possess large amounts of cash that he has not reported to his accountant.

In 1989, the year in which Ms. Turner filed for divorce, his business reported a net profit of $9,857 on gross sales of $229,753. His business tax returns for that year showed that his inventory cost was $118,431 and that his business expenses were $101,465. His 1989 adjusted gross income for tax purposes was a negative $51,956 because of $63,843 in net operating losses being carried forward from 1986 and 1988.

In 1990, the year in which the trial court granted the divorce and ordered Mr. Turner to pay $704.13 in child support, his business's gross sales had fallen to $127,967, and his net profit was a negative $11,721. His inventory cost and business expenses that year were $63,520 and $76,641 respectively.

Mr. Turner's business was on the financial edge. In addition to problems with creditors, he faced assessments from the Internal Revenue Service and other assessments for delinquent payroll taxes. In June 1990, he filed a petition under Chapter 13 of the Bankruptcy Code in order to put his creditors on hold and to reorganize his finances. ⁵ His business has never recovered beyond its 1989 or 1990 levels. In 1993, his gross receipts amounted to $112,969, and his net profit was $12,114; however, his personal adjusted gross income was only $6,606 because of net operating loss carry-overs from 1991 and 1992.

Mr. Turner testified at the November 1994 hearing that his monthly income was less than $1,000 and that he was currently able to pay the amount of child support required by the guidelines as well as $25 to $50 per week toward the arrearage. Ms. Turner produced no evidence to the contrary; however, her lawyer argued with some effect that Mr. Turner was a "very street-smart person" and suggested that Mr. Turner had under-reported his income in 1990 and that he was still under-reporting it in 1994.

C.

The current guidelines require that decisions to modify existing child support orders must be based on a comparison of the amount of the existing support obligation and the amount that the obligation would be if it were based on the obligor parent's current income. A modification must be made if the existing support obligation varies by fifteen percent or more from the amount that the obligation would be based on the obligor parent's current income. Tenn.Comp.R. & Regs. r. 1240-2-4-.02(3). In cases where the variance equals or exceeds fifteen percent, the guidelines permit refusing to...