Howard v. Howard

Procedural entryThis page is a short order in Howard v. Howard. Read the opinion of the Court — 1999 Tenn. App. LEXIS 1 →

Court of Appeals of Tennessee·Decided June 25, 1999·No. 03A01-9811-CV-00374·Published

Opinion

IN THE COURT OF APPEALS OF TENNESSEE FILED AT KNOXVILLE June 25, 1999

Cecil Crowson, Jr. Appellate C ourt Clerk

JOH N CL ARE NCE HOW ARD , JR., ) C/A NO. 03A01-9811-CV-00374 ) Plaintiff-A ppellant, ) HAM ILTON CIRCU IT ) v. ) HON. L. MARIE WILLIAMS, ) JUDGE LINDA JOYCE KEATON HOWARD, ) ) AFFIRMED AND Defendant-Appellee. ) REMANDED

ROB ERT P . RAY BUR N, Chatta nooga, fo r Plaintiff-A ppellant.

JOHN M. HIGG ASON, JR., Chattanooga, for Defendant-Appellee.

O P I N IO N

Franks, J.

In this ongoing dispute over child support, the father appeals from the

Trial Court’s Order establishing child support at $1,413.02 per month for the

remaining minor child , and questio ns the Co urt’s finding that the fathe r was in

contemp t of court fo r failing to pa y medical bills an d make tim ely support pa yment,

and the award o f attorney’s fees to the mother.

The parties were divorced on March 22, 1990, and child support was

awarded for the parties’ two minor children. The Trial Court heard matters brought

before the Court by petitio ns on Jun e 8, 1998. A t trial, the father testif ied extensiv ely

about his income. He testified that his adjusted gross income for 1997, as reflected by

his federal income tax return, was $57,304.00. This amount reflected income as an

employee of Allstate Insurance Company in the amount of $89,365.00, taxable interest of $417.00, rental income of $62.00, and assigned risk income of $222.00, less a

business loss of $32,762.00. The business loss was from his sole proprietorship called

J.C.H. Enterprises, which the father testified was his sports card business. The gross

receipts for that business were $1,140,866, and the cost of goods sold was $1,092.556,

which left a gross profit of $48,310.00. The father then subtracted expenses of

$81,07 2.00 fr om tha t gross in come , leaving a loss of $32,76 2.00.

The father testified that his wife, Bethany Howard, is an employee of

J.C.H. Enterprises, and that the business expense item of $29,713.00 was a portion of

her salary. He further testified that he runs his sports card business out of the same

office with his insurance business, and that his wife works for both businesses. The

wife did n ot testify, and there was no te stimony abou t the wife’s la bor for the sports

card business. The father testified in detail about what his wife did on his behalf for

Allstate. He testified that he needs a support staff because his office is open from 9

a.m. to 5 p.m., Monday through Friday, and Saturday by appointment. He testified

that he needs someone in the office while he is not, and that his wife has been

fulfilling this ro le for the pa st seven years, alth ough she was not g etting paid u ntil

1997.

The Trial Judge refused to deduct the business loss from the father’s net

income. The Court ordered child support obligations for the adult child terminated,

and then determined that the guideline amount for the remaining child from the

income as found by the Court would be $1,159.00 per month, but having found

criteria for upward deviation, i.e., the father not exercising standard visitation with the

child, the Court ordered an upward deviation from the child support guidelines in the

amou nt of $2 55.00 p er mon th, for a t otal sup port ob ligation of $1,4 13.02.

The Co urt then fou nd the fath er in contem pt for failure to pay certain

medical bills and for failure to make timely child support payments, and also ordered

2 the father to pay the $3,000.00 a ttorney’s fee incurred by the mother.

Our standard of review in cases tried by the Court without a jury is de

novo upon the record of the Trial Court, accompanied by a presumption of correctness

of the Trial Court’s findings, unless the evidence preponderates otherwise. T.R.A.P.

Rule 1 3(d). Hass v. Knighton, 676 S.W.2d 55 4, 555 (Tenn. A pp. 1983).

“Determining the amount of the non-custodial parent’s income is the

most important element of proof in a proceeding to set child support. This is the case

both when setting initial support and when considering requests for modification of an

existing support obligation.” Turner v. Turner, 919 S.W.2d 340, 344 (Tenn. App.

1995). The child support guidelines define gross income as:

all income from an y source (before taxes and other deductions), whether earned or unearned, and includes but is not limited to the following: wages, salaries, commissions, bonuses, overtime payments, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, benefits received from the Social Security Administration, i.e., Title II Social Security benefits, workers compen sation bene fits whethe r temporary or permane nt, judgments recovered for personal injuries, unemployment insurance benefits, gifts, prizes, lottery winnings, alimony or maintena nce, and in come fro m self-em ployment.

Tenn . Com p. R. & Regs. C h. 1240 -2-4-.03 (3)(a).

The guid elines then p rovide:

Income from self-employment includes income from business operations and rental properties, etc., less reasonable expenses necessary to produce such income. Depreciation, home offices, excessive promotional, excessive travel, excessive car expenses, or excessive personal expenses, etc., should not be considered reasonable expenses.

Id.

Once gross income is determined, the trial court must then determine net income and

any grou nds fo r deviati on, and set the ch ild supp ort acco rdingly. See Tenn. Comp. R.

& Re gs. Ch . 1240- 2-4-.03 (4), (5) a nd Ch . 1240- 2-4-.04 .

The Tria l Court dete rmined the father’s gro ss income from A llstate

3 Insurance Company as reflected on his W-2 form to be $94,011.52. This amount

added to the father’s other taxable income, brought the total to $94,717.52. The Trial

Court then found th at the father re alized no in come as a self-emplo yed individua l,

because h is claimed ex penses ex ceeded h is income f rom the bu siness. In reac hing this

result, the Court said “The Court has insufficient proof to determine whether the

various expenses claimed were reasonable or not.” Under the guidelines, where the

obligor has income from self-employment, the burden is upon the obligor to show that

any expens es he ded ucts from that incom e is a reason able expe nse neces sary to

produce the income. We agree with the Trial Judge that the father has not carried that

burden as to the reason ableness of the expe nses claimed. T.R.A .P. Rule 13(d).

Next, the father insists the Trial Co urt erred in ordering an up ward

deviation in his child sup port obligatio n, because this issue wa s not explicitly raised in

the pleadings.

“In determining whether or not a judgment is beyond the scope of the

pleadings, th ese pleadin gs must be given a libe ral constructio n with all rea sonable

intendme nts taken in f avor of the judgmen t. The policy un derlying the rule seems to

be that since the purpose of pleadings is to give notice to all concerned regarding what

may be adjudicated, a judgment beyond the scope of the pleadings is beyond the

notice given the parties and thus should not be enforced.” Brown v. Brown, 281

S.W.2d, 492, 497. In this case the father’s Petition to Modify contained the following

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