IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE FILED HENRY LEE HULSHOF, ) September 29, 1999 ) Cecil Crowson, Jr. Plaintiff/Appellee ) Appeal No. Appellate Court Clerk ) 01A01-9806-CH-00339 v. ) ) Marshall County Chancery DOROTHY ANN HULSHOF, ) No. 10075 ) Defendant/Appellant. ) )
COURT OF APPEALS OF TENNESSEE
APPEAL FROM THE CHANCERY COURT FOR MARSHALL COUNTY AT LEWISBURG, TENNESSEE
THE HONORABLE TYRUS H. COBB PRESIDING
RONDAL T. WILSON 200 E. DEPOT ST. P.O. BOX 336 SHELBYVILLE, TN 37160
ATTORNEY FOR PLAINTIFF/APPELLEE
LAWRENCE D. SANDS P.O. BOX 1660 102 WEST 7TH STREET COLUMBIA, TN 38402-1660
ATTORNEY FOR DEFENDANT/APPELLANT
AFFIRMED AS MODIFIED IN PART, VACATED IN PART, AND REMANDED
PATRICIA J. COTTRELL, JUDGE CONCUR: KOCH, J. CAIN, J. OPINION
Henry Lee Hulshof ("the husband") commenced this divorce action,
alleging inappropriate marital conduct or, alternatively, irreconcilable
differences. Two weeks later, his wife of twenty-seven years, Dorothy Ann
Hulshof ("the wife") responded by filing an answer and counter-petition alleging
inappropriate marital conduct, irreconcilable differences, and adultery. After a
bench trial, the court below awarded the wife a divorce on the ground that the
husband had committed inappropriate marital conduct. The court divided the
parties' personal property between them and awarded the wife rehabilitative
alimony in the amount of $300 per month for two years and one half the value
of the husband's retirement benefits calculated as of March 2, 1998. The court
also equally divided the funds in the couple's various accounts and ordered their
real property sold and the proceeds divided equally. The wife appealed,
challenging the property distribution, the amount of alimony awarded, and the
court's failure to award her sufficient attorney fees. We affirm in part as
modified, vacate in part, and remand for proceedings consistent with this
opinion.
The parties married in 1970, when the wife was seventeen years old and
just days after she graduated from high school. The wife did not continue her
education. The couple had two children, both of whom were adults when the
parties separated. At the time of trial, the wife was forty-six (46) years old. The
couple had been married for twenty-seven (27) years when the divorce complaint
was filed.
Throughout the marriage, the husband worked at Inner City Products.
His approximate yearly income was between $31,500 and $35,500, depending
-2- on the amount of overtime he worked. The job provided retirement benefits, but
at trial the husband was unsure of their value.
The wife worked at numerous jobs during the marriage. However, in
1985, she injured her back at work and underwent surgery. After that injury, she
received a $7,000 lump sum worker's compensation award. In 1994, she had
surgery to treat carpal tunnel syndrome. Apparently, the wife ceased working
outside the home after this surgery. She subsequently received a $19,000
workers compensation settlement. In May of 1997, she was determined to be
disabled and entitled to disability payments by the Social Security
Administration. She received a $6,000 disability payment covering back pay at
that time and began drawing $472 in monthly social security disability benefits
which is her sole income. The wife testified she also underwent a second carpal
tunnel surgery, a second lower back surgery, and suffered from degenerative
arthritis in her ankles, a degenerative muscle disorder, and a degenerative nerve
disorder. The wife admitted that notwithstanding her disability, she was able to
clean the house, babysit, drive her car, crochet, and do some yard work.
At the time of trial, the parties jointly owned their residence, which the
parties valued at $50,000 to $60,000. The outstanding balance on the mortgage
was approximately $5,100, and the monthly mortgage payments were $98. The
parties also owned a nearby lot, valued at approximately $5,000. The parties had
no joint accounts at the time of trial. The husband testified that his checking
account had a $535.58 balance, the assets in his savings totaled $102.00, and his
credit union accounts held approximately $3,018. In the approximately six
months before the husband filed his petition for divorce, the balances in his
credit union accounts plummeted from over $23,000 to just over $3,000. The
husband’s explanation for the dissipation of the account was that he made some
-3- improvements around the house, and may have gambled some of the money
away.
During the course of these proceedings, the parties requested an Order
of Reconciliation, and attempted to put aside their differences. Those efforts
failed. At the close of the evidence, the trial court granted the wife a divorce
based upon the husband's inappropriate marital conduct. Although the trial court
awarded the wife the above-mentioned rehabilitative alimony, it denied her
request for in futuro or in solido alimony. Attorney’s fees were awarded to the
wife in the amount of $1,200. The trial court subsequently entered an order
staying all proceedings, except the alimony obligation, in connection with the
enforcement of the judgment, pending final determination on appeal.
I.
The wife raises four issues, all of which are related to the financial
impact of the court’s decision. Essentially, she asserts that the distribution of
assets and the limited award of alimony will preclude her from meeting her
minimal living expenses. She further asserts that the economic disparity between
the parties, the length of the marriage, and her disability justify an award to her
of a greater share of the marital property and/or alimony in futuro or alimony in
solido. She also asserts that the money dissipated by the husband from his credit
union accounts should be taken into consideration in dividing the marital assets
and that she should have been awarded all her attorney’s fees. Although the
issues are separately raised, the effect of the trial court’s ruling must first be
examined in totality.
The wife’s sole income is her disability payment of $472 per month.
For two years, the income will be supplemented by the rehabilitative alimony of
$300 per month. The wife’s monthly expenses total $616.33. This figure
-4- includes the $98 house payment, and the record indicates the least expensive
alternative rental property would cost $300 per month. Thus, either the cessation
of the rehabilitative alimony or the requirement that the wife move out of the
marital residence, both of which are contemplated by the order, would reduce the
wife’s income below her expenses. Her attorney’s fees, before the appeal,
exceeded the amount awarded by the court by $2,145.
Her share of the distribution of the major marital assets includes half
the proceeds of the sale of the house and the lot (approximately $27,500), half
the accounts (approximately $1,659.15), half of the proceeds of the sale of a
trailer ($1,000) and half of the husband’s retirement as of March 2, 1997 (the
value of the retirement asset, the monthly amount she would receive, and the date
of eligibility are unknown).
In addition, the wife’s health problems, especially as they affect her
ability to work, are relevant to both the distribution of marital property and the
award of alimony. She is totally disabled and, according to her testimony, cannot
perform repetitive functions, cannot sit for long periods of time, and cannot
bend, stoop, or lift. Although she does her own housework and some yard work
(using a riding mower), she must stop frequently and can only do a little work
at a time. It is undisputed that she has had two back surgeries and two operations
for carpal tunnel syndrome.
II.
In her first issue, the wife maintains that the trial court erred in limiting
the award to the assets the parties possessed at the time of separation. She
argues that she was entitled to a portion of the recently dissipated funds
($20,000) from the husband's accounts at one credit union.
The division of the marital estate necessarily commences with the
-5- classification of the parties' property. See Brown v. Brown, 913 S.W.2d 163, 166
(Tenn. App. 1994). The now-familiar statutory definitions of marital property
and separate property provide the ground rules for this task. Tenn. Code Ann.
§§ 36-4-121(b)(1) and (2)(1996). Implicit in this statutory scheme is the
concept that the property to be divided, generally speaking, must be "owned by
the parties, individually or jointly, at the time of the divorce." Brock v. Brock,
941 S.W.2d 896, 900 (Tenn. App. 1996). This is so because courts ordinarily
"cannot divide and/or distribute what is 'not there' --- property no longer owned
by the parties . . . at the time of the divorce." Id.
Applying these principles to the instant case, we find the trial court
properly limited its decision on the division of marital property to that in which
the parties possessed an ownership interest at the time of the divorce.
With regard to the wife's contention that trial court erred by rejecting
her claim that the dissipation of the funds constituted a fraudulent conveyance
within the purview of Tenn. Code Ann. § 36-4-121(b)(1)(A), the wife bears the
burden of showing that the evidence preponderated against that finding. See
Galbreath v. Harris, 811 S.W.2d 88, 91 (Tenn. App. 1990);Tenn. R. App. P.
13(d). In rejecting that claim, the trial court considered the husband's testimony
that he spent a portion of the money on home improvements, gambling, bills, and
groceries. See Massingale v. Massingale, 915 S.W.2d 818, 819 (Tenn. App.
1995) (trial court's assessment of witness credibility is entitled to great weight
on appeal). While the evidence shows that the husband’s accounts decreased
monthly by significant but differing amounts in October, November, and
December of 1996 and January of 1997, the wife offered no evidence of a
-6- fraudulent conveyance. The husband testified that he spent the money. 1
Inasmuch as the wife presented no facts or law requiring a different result, we
must conclude that she has failed to satisfy her burden.
Our decision that the trial court correctly defined the marital estate as
property actually owned at the time of the divorce does not, however, preclude
consideration of the husband’s pre-filing dissipation of approximately $20,000.
Tennessee Code Annotated § 36-4-121(c)(5) specifically authorizes the court to
consider a party’s “dissipation of the marital or separate property” when
fashioning an equitable distribution of marital property. See also Meadows v.
Meadows, Appeal No. 01-A-01-9801-CH-00054, 1998 WL 770190 (Tenn. App.
1998). We discuss the effect of that dissipation on the division of property in
section IV below.
III.
The wife argues that the trial court erred in declining to award alimony
in solido or in futuro. The husband responds that the wife's admitted level of
activity demonstrates that she is capable of rehabilitating herself, but she lacks
the desire to do so.
Tennessee law provides for three types of alimony: (1) rehabilitative
alimony, which provides modifiable, temporary support for a period of
adjustment sufficient to enable a dependent spouse to become partially or totally
self-sufficient; (2) periodic alimony or alimony in futuro, a continuing, but
modifiable, support obligation to an economically disadvantaged spouse; and
(3) alimony in solido, an unmodifiable lump sum award which may be payable
1 The trial court found that both parties had dissipated substantial sums from their assets during their marriage. The court was commenting upon the settlement the wife received in 1994 and the disability back pay she received in 1997. With regard to the husband’s accounts, the court noted, “He had gotten rid of some money without a lot of explanation shortly before the divorce was filed.”
-7- over time. Tenn. Code Ann. § 36-5-101(d)(1)(1996); see Loria v. Loria, 952
S.W.2d 836, 838 (Tenn. App. 1997). Our law favors rehabilitative alimony
whenever possible and requires a finding that rehabilitation is "not feasible"
before an award of alimony in futuro is appropriate. Tenn. Code Ann. § 36-5-
101 (d) (2); see Self v. Self, 861 S.W.2d 360, 361 (Tenn. 1993). In reviewing the
propriety of an alimony award, we must consider a number of factors, including
the relative earning capacity, obligations, needs and financial resources of the
parties, including income from pension, profit sharing, or retirement plans.
Tenn. Code Ann. § 36-5-121(d)(1). The predominant factors to consider,
however, are the innocent2 spouse's need, and the obligor spouse's ability to pay.
See Hazard v. Hazard, 833 S.W.2d 911, 917 (Tenn. App. 1991).
Here, the record shows that the husband earned a yearly income of
approximately $32,000. The wife received a monthly income of $472 in
disability benefits -- a yearly income of approximately $5,664. Her monthly
expenses, including the extremely low house payment, exceed her monthly
income by $144. In the division of property below, she received $2,659.15 in
cash. These figures leave no doubt that the wife met the economic inequality
requirement on which any alimony award must be predicated. Tenn. Code Ann.
§ 36-5-101(d)(1). Nor can we dispute the wife's obvious need for additional
income. See Loyd v. Loyd, 860 S.W.2d 409, 412 (Tenn. App. 1993).
The trial court made no finding of fact regarding the wife’s
employability or possibility of rehabilitation. In making the rehabilitative
alimony award, the court stated that the $300 per month for two years was to
2 Fault is a factor to be considered in the award of alimony, and the trial court herein found that the husband had committed inappropriate marital conduct by virtue of an improper relationship with another woman.
-8- “give her a chance to go to maybe Motlow or something to get some further
training. She has a high school education according to the statistical data. She’s
going to have to be able to qualify for something.” While we can find implicit
in that statement the trial court’s conclusion that rehabilitation is possible, the
trial court made no findings of fact in support of that conclusion. Additionally,
the record includes no information regarding training or education which could
enable the wife to work full-time, no information about her employability in view
of her limitations, and no information concerning the income she could produce
if employed part-time or full-time.
The appellate record is sufficiently developed to permit us to find that
wife's ability to materially improve her health or increase her income is limited,
leading us to conclude that rehabilitation is not feasible. Tenn. Code Ann. § 36-
5-101(d)(2). Accordingly, we find the evidence preponderates against the
decision to award the wife rehabilitative alimony for two years. Having
determined that the wife is at an economic disadvantage in relation to the
husband and that rehabilitation is not feasible, and having considered the above-
mentioned statutory factors, especially the wife’s need, the husband’s ability to
pay, the duration of the marriage, and the relative earning capacity, in
conjunction with the others enumerated in Tenn. Code Ann. § 36-5-101(d), we
award the wife periodic alimony in the amount of $300 per month for two years
following the date of divorce, and in the amount of $200 per month thereafter,
until her death or remarriage.
IV.
The wife contends that the trial court erred in its division of the marital
property. She maintains that it failed to consider the marriage's length, her
-9- disabilities, age, education, and contribution to the marriage, the disparities in
earning capacity between the parties, and her inability to maintain herself on her
current income. The husband responds that the equal division of the parties'
assets was equitable, reflecting his equal, if not primary, contribution to the
marriage.
Tennessee law requires that marital property be divided equitably
without regard to fault. Tenn. Code Ann. § 36-4-121(a). But an equitable
division is not necessarily an equal one. See Barnhill v. Barnhill, 826 S.W.2d
443, 449 (Tenn. App. 1991). Tennessee Code Annotated § 36-4-121(c) sets forth
the guiding factors to be considered in dividing marital property. These include,
inter alia, the duration of the marriage, the parties' age, physical and mental
health, vocational skills, employability, earning capacity, financial needs, and
relative contribution to the marital estates. In making an equitable division, the
court should also consider the economic circumstances of each party at the time
the division of property is to become effective and the relative ability of each for
future acquisitions of capital assets and income. In addition, as discussed above,
one party’s dissipation of assets can be considered in formulating a property
division that is equitable. Tenn. Code Ann. § 36-4-121(c). A trial court's
decision on the division of marital property warrants deference unless it is
inconsistent with these factors or unsupported by a preponderance of the
evidence. See Barnhill, 826 S.W.2d at 449-450.
Here, the trial court divided the major assets of the parties equally. We
are not convinced that an equal division was equitable in this situation, however,
considering that this was a twenty-eight year marriage, the husband has a
significantly greater earning capacity, and the wife's income is limited by her
-10- health problems. The wife’s economic situation at the time of divorce is worse
than the husband’s.
As explained above, the wife will be able to meet her minimal living
expenses with the award of alimony only as long as she is able to remain in the
marital residence with its low mortgage payment or can find another place to live
at a similar low monthly cost. The only evidence in the record is that no such
other accommodation can be found. Thus, the trial court’s decision to have the
marital residence sold greatly reduces the likelihood that the wife can subsist on
her monthly income.
The wife has asked that she be awarded the marital home. While we
find that request reasonable in light of the wife’s financial situation and the very
low mortgage payments, we are unable to make such an award on the basis of the
record before us. Such an award could render the distribution to the husband
inequitable without modification of the distribution of the other major assets: the
separate lot and the husband’s retirement fund. We know nothing about the
value of the retirement account, the amount of monthly benefits which will
become available or when such benefits will become available. This prevents us
from equitably modifying the distribution of the other assets in order to award
the marital residence to the wife.
Because, however, we think it would be equitable and reasonable for
the wife to retain the residence, if the other major assets can be distributed
equitably, we remand this case to the trial court to hear evidence regarding the
present value of the retirement accounts in order to reconsider distribution of the
marital property in an equitable manner which will allow the wife to retain the
marital residence.
-11- While we regret the delay and additional expense involved in this
remand, we are simply unable to equitably divide the marital estate when we do
not know the value of one of the major assets. On remand, we are certain the
trial court will encourage the least expensive method for obtaining and
introducing the additional fact needed for its reconsideration.
In this reconsideration, the trial court should also consider the
husband’s dissipation of $20,000 in the six months prior to his filing for divorce.
While the trial court stated that both parties had dissipated money throughout the
marriage, we think the pre-filing reduction in husband’s account is more relevant
to a determination of the equities involved in the distribution of property than
wife’s spending of her earlier settlement monies. Even if the trial court
determines that it should also consider the wife’s $6000 in back pay she received
in May 1997, which was spent during the parties’ reconciliation, as an offsetting
dissipation, the difference between the two amounts is considerable. In addition,
the husband was unable to document that any of the $20,000 was spent to benefit
the wife or the marriage, and was unable to fully explain where the money went.
In view of these facts, and in view of the factors discussed above, we are of the
opinion that an equitable distribution of the marital property would result in the
wife receiving a greater than fifty percent share of the major assets.
VI.
The wife contends that the trial court erred in limiting her award of
attorney fees to $1,200 when her actual fees and expenses were $3,345.88. The
husband responds that the award must be presumed to be appropriate.
Trial courts have broad discretion in determining whether to require
one spouse to pay for the other's legal expenses. See Loyd v. Loyd, 860 S.W.2d
-12- at 413. We see no error in the trial court's decision.
VII.
Accordingly, the trial court's decision to divide only the property the
parties possessed at the time of separation is affirmed. That portion of the
judgment dividing the marital property is affirmed except for the portion dealing
with the residence, the separate lot, and the husband’s retirement accounts. The
order to sell the residence and the lot and equally divide the proceeds, as well as
the distribution of the retirement funds is vacated, and the case is remanded for
further fact finding regarding the present value of the retirement accounts and for
consideration of an equitable distribution which will not require sale of the
marital residence and will result in a more equitable distribution in accordance
with this opinion. The trial court's decision on the alimony award is affirmed as
modified. The award of attorney fees is affirmed. This case is remanded to the
trial court for proceedings consistent with this opinion and such further
proceedings as may be necessary. Costs of this appeal are to be shared equally
between the parties.
____________________________ PATRICIA J. COTTRELL, JUDGE
CONCUR:
_________________________________ WILLIAM C. KOCH, JR., JUDGE
_________________________________ WILLIAM B. CAIN, JUDGE
-13-