Rust v. Rust

• Court: Court of Appeals of Tennessee
• Decided: May 21, 1997
• Docket: 01A01-9608-CH-00361
• Status: Published

Opinion

JAMES DOYLE RUST, II, ) ) Plaintiff/Appellant, ) ) Appeal No. ) 01-A-01-9608-CH-00361 VS. ) ) Rutherford Chancery ) No. 90DR-360 KAREN RUTH WAX RUST ) GERBMAN,

Defendant/Appellee. ) ) ) FILED May 21, 1997

Cecil W. Crowson COURT OF APPEALS OF TENNESSEE Appellate Court Clerk MIDDLE SECTION AT NASHVILLE

APPEALED FROM THE CHANCERY COURT OF RUTHERFORD COUNTY AT MURFREESBORO, TENNESSEE

THE HONORABLE ROBERT E. CORLEW, III, CHANCELLOR

RONALD L. STONE 6th Floor, 211 Printers Alley Nashville, Tennessee 37201 Attorney for Plaintiff/Appellant

BRAD W. HORNSBY (At trial) JAY B. JACKSON (On appeal) BULLOCK, FLY & McFARLIN 301 N. Spring Street P. O. Box 398 Murfreesboro, Tennessee 37133-0398 Attorney for Defendant/Appellee

AFFIRMED AND REMANDED

BEN H. CANTRELL, JUDGE

CONCUR: LEWIS, J. KOCH, J.

OPINION Mr. Rust experienced a dramatic decline in income after his divorce, and

petitioned for a reduction in his child support obligation. Following a lengthy course

of litigation, the trial court reduced his obligation from $1,500 per month to $690 per

month, and made the reduction retroactive to the date he petitioned for the

modification.

Mr. Rust appealed, arguing that even this drastically reduced obligation

was in excess of the presumptively correct amount to be awarded under the child

support guidelines. His former wife’s position on appeal was that it was error to order

any reduction at all in child support, because the husband was willfully

underemployed. Other issues on appeal involved the modification of the alimony

award, the conduct of the wife’s attorney, and a finding of contempt against the

husband. We affirm the trial court in all respects.

I. The Proceedings

In October of 1989, James Doyle Rust left the marital home that he had

shared with Karen Rust. The couple had three young children, one of whom had

been born in March of that same year. Mrs. Rust filed a petition for child support, and

an agreed order was entered on July 10, 1990, which obligated Mr. Rust to pay $1500

per month in child support, to provide medical insurance for Mrs. Rust and the three

children, and to pay all their uninsured medical and dental expenses.

Mr. Rust quickly fell behind on his child support obligation, and Mrs. Rust

filed a petition for contempt and for judgment on the arrearages. The petition was still

pending when the wife filed for divorce on October 16, 1990.

The parties subsequently entered into a Marital Dissolution Agreement,

which was incorporated into the Final Decree of Divorce, filed March 19, 1991.

-2- Divorce was granted to the wife on the ground of irreconcilable differences, and child

support was set at $1,200 per month. The contempt case and divorce complaint were

consolidated for the purpose of resolving all the pending issues in a single proceeding.

A judgment against Mr. Rust for the child support arrearage in the amount of $7,192

was made a part of the decree, but execution on the judgment was stayed pending

continuing payment on the obligation of $100 per month.

Further litigation followed, largely involving visitation and schooling for

the children, the details of which it is unnecessary to recite here, except insofar as the

court’s order resolving those issues also modified Mr. Rust’s support obligations once

again.

The court ordered that child support again be increased to $1,500 per

month. Because of a physical condition that made it difficult for Mrs. Rust to obtain

medical insurance, Mr. Rust’s insurance obligation as to her was replaced with a

requirement that he pay her $150 per month for sixty months. The court later

characterized this obligation as alimony. Mr. Rust was ordered to continue to provide

medical insurance for his children.

Mrs. Rust subsequently remarried and took her new husband’s last

name. Henceforth in this opinion she will be referred to as Mrs. Gerbman. Mr. Rust

also remarried. On September 3, 1993, Mr. Rust filed a pro se Petition to Modify

Child Support. He claimed that his net income, which had been $4,100 per month at

the time the prior support order was issued, had been reduced to $1,300 per month.

Mrs. Gerbman answered, and filed a counter-petition for contempt, alleging Mr. Rust’s

failure to make monthly payments on the judgment, and on his child support. She

claimed that he was understating his income, and that he was voluntarily

underemployed.

-3- Both parties subsequently filed numerous motions which raised

additional issues and lengthened the course of the proceedings. After disposing of

those issues, the court issued its ruling from the bench, and ordered Mrs. Gerbman’s

attorney to draft the order. Mr. Rust’s attorney moved the court to amend the

judgment, and the court responded to his objections before the amended order, from

which this appeal was taken, was finally entered and approved by both counsel. The

date was April 30, 1995, more than twenty months after Mr. Rust filed his pro se

petition.

The court reduced Mr. Rust’s child support to $690 per month, and

made the reduction retroactive to September 3, 1993. The court also reduced the

alimony payment (the money previously ordered to be paid in lieu of medical

insurance) to $75 per month, retroactive to the same date, but extended the period

during which it had to be paid to 120 months, so that the total payout ($9,000)

remained unchanged.

Giving retroactive effect to these modifications reduced, but did not

eliminate the arrearages Mr. Rust had accumulated, and the court’s order included a

new schedule for paying off those arrearages. The court also found Mr. Rust to be

in contempt for having made only one child support payment during the first four

months of 1995, and for failing to comply with the court’s order to attend a seminar for

divorcing parents. The judge ordered Mr. Rust to serve four days in the Rutherford

County jail for his contempt.

II. Child Support

The Tennessee legislature has provided specific direction to the courts

charged with setting child support, by ordering that uniform child support guidelines

-4- be established. See Tenn. Code Ann. § 36-5-101(e). The guidelines are promulgated

by the Department of Human Services, and are based on a flat percentage of the

obligor’s net income. By law they create a rebuttable presumption that the amount of

child support determined by an application of the guidelines is the correct amount to

be awarded.

In applying the guidelines, the courts determine the income of the obligor

parent for the year or years immediately preceding the filing of the petition for support,

and find the corresponding amount of support in the guideline tables for that level of

income and the number of children for whom support is being sought. Since the

obligor is expected to pay future support out of future income, the rebuttable

presumption of correctness obviously indicates a corollary presumption that prior

earnings are a reliable predictor of future earnings.

It is not easy for the obligor to attack this corollary (nor should it be),

since past income is easier to verify than future income is to predict, and since the

order remains within the court’s control and subject to modification if future events

result in a significant change in the obligor’s income, or his earning capacity.

In the present case, the proof showed that although Mr. Rust had been

able to earn a very good living from the sale of automobiles, he frequently came into

serious conflict with his employers. He worked for several different dealerships, but

his income was highest when he was employed as finance manager at Superior

Motors in Nashville. He earned $83,362 during eleven months in 1992, and made

timely payments on his child support during that time. According to Mr. Rust, he had

to quit that job because of stress related to his employer’s order that he falsify certain

entries on the books of the company, and because of a worsening alcohol problem

related to that stress. Bill Proctor, comptroller of Superior Motors, denied any

-5- wrongdoing by the company, but confirmed that Mr. Rust had a drinking problem that

created concern and difficulties for the employer.

After leaving Superior Motors, Mr. Rust changed his line of work, and

began selling insurance. He earned no income during the period while he was being

trained. After he acquired his license, he managed to earn a net income of $13,986

in 1993. During that year, he fell behind on his child support payments again, but

managed to avoid a threatened contempt by making two payments that amounted to

$5,600, from the sale of the house that had belonged to his present wife.

Mr. Rust testified that when the books were closed on his 1994

transactions, he expected them to show that he had netted between $18,000 and

$20,000. He had acquired some large institutional clients, and hoped that

commissions from them would result in a 1995 net income between $40,000 and

$50,000. However problems with his new marriage plunged him back into alcohol

abuse, and he testified that he had been attending an outpatient alcohol rehabilitation

program for the five or six weeks preceeding the hearing of April 29, 1995. The

program involved at least three three-hour sessions each week. The effect of Mr.

Rust’s problems on his 1995 income was uncertain.

These facts were before the trial court when it ordered that child support

be set at $690 per month. Such an award for the support of three children

corresponds to an annual income of $25,200 for the obligor. Both parties disputed the

correctness of the trial court’s determination, but in light of the fluctuations and

uncertainty surrounding Mr. Rust’s income, we do not believe the trial court erred.

In his motion to alter or amend the court’s judgment, Mr. Rust argued

that the only correct way to calculate the retroactive portion of his obligation would

have been to base it directly on his income for those years. He contended that such

-6- a calculation would result in an obligation of only about $350 per month for 1993, and

$550 per month for 1994. The court’s response to the motion included a finding that

Mr. Rust was voluntarily underemployed during those years, and that “he had the

capability and capacity to earn more than he asserted.”

Mrs. Gerbman seized on this finding to argue that Mr. Rust was not

entitled to any reduction at all. She reasoned that the language of Rule 1240-2-4-

.03(d) of the Child Support Guidelines, precluded any downward modification under

the facts of this case:

If an obligor is willfully and voluntarily unemployed or underemployed child support shall be calculated based on a determination of potential income, as evidenced by educational level and/or previous work experience.

Since the earlier order of child support was based on an income level

that Mr. Rust admittedly achieved (and in fact subsequently exceeded), Mrs. Gerbman

argued that as a matter of law, the trial court was not permitted to reduce his

obligation.

We believe that both parties have taken too restrictive a view of the

power of the trial court to fashion an equitable order within the constraints of the child

support guidelines. A finding that an obligor is voluntarily underemployed enables the

court to set a child support amount commensurate with his earning capacity rather

than his actual earnings. Such a finding obligates the court to ascertain that capacity;

it does not create an automatic determination that he remains capable of earning what

he has earned in the past.

In the present case, there is evidence that even aside from his difficulties

at Superior Motors, the automobile sales business has been a source of constant

stress for Mr. Rust, and has worsened his alcohol problem. Hopefully, the insurance

business will offer him a more stable working environment, and a reliable income that

-7- will be of benefit to himself and his three young children. In light of the facts in the

record, we cannot say that the trial court erred in finding that at this point in his new

career, Mr. Rust’s potential income could only sustain a child support obligation of

$690 per month.

III. Alimony

A second issue on appeal involves the alimony payments that Mr. Rust

was ordered to make in lieu of medical insurance. The trial court found that the

payments were in the nature of rehabilitative alimony, and that the court accordingly

retained jurisdiction to modify it. As we discussed above, the court chose only to

modify the payment schedule, and it left the size of the total obligation unchanged.

Once again, both parties objected to the trial court’s action on grounds that are

diametrically opposed to each other.

Mr. Rust argued that the payments should have been terminated

because of the rebuttable presumption stated in Tenn. Code Ann. § 36-5-101(a)(3),

which reads as follows:

(3) In all cases where a person is receiving alimony in futuro and the alimony recipient lives with a third person, a rebuttable presumption is thereby raised that:

(A) The third person is contributing to the support of the alimony recipient and the alimony recipient therefore does not need the amount of support previously awarded, and the court therefore should suspend all or part of the alimony obligation of the former spouse; or

(B) The third person is receiving support from the alimony recipient and therefore does not need the amount of alimony previously awarded and the court therefore should suspend all or part of the alimony obligation of the former spouse.

Mrs. Gerbman argues that when the trial court modified the insurance

obligation to make it a fixed number of payments of a fixed size, without stating any

-8- conditions or limitations on the award, the award was converted into alimony in solido,

which the court no longer had any power to modify. Thus, she impliedly argues, the

court was in error in reducing the monthly payments, and extending the length of the

payment obligation.

The advent of rehabilitative alimony as a distinct category of spousal

support has added complexity to the problem of correctly classifying an alimony

award. Whereas alimony in solido and alimony in futuro can usually be distinguished

without difficulty, rehabilitative alimony has some of the characteristics of both. It has

a calculable total value like alimony in solido, but it is modifiable like alimony in futuro.

In the present case, the trial court modified an insurance obligation of

indefinite duration (which, if it was alimony, was alimony in futuro) to an obligation of

limited duration and fixed total value (which could theoretically be considered either

rehabilitative alimony or alimony in solido). Responding to arguments from both sides,

the chancellor stressed the purpose of the original award and the circumstances that

made its initial modification necessary. Based on these considerations, he concluded

that the modification created the kind of temporary support that remained within the

jurisdiction of the courts to adjust as circumstances required.

We do not believe the chancellor erred in this determination, but we do

not adopt the appellant’s argument that the rebuttable presumption found in Tenn.

Code Ann. § 36-5-10(a)(3) thereby applies to this case. We note that the terms of the

statute refer specifically to alimony in futuro, not to rehabilitative alimony, and that the

two forms of modifiable alimony are based on opposite findings as to the possibility

of the obligee spouse becoming capable of providing his or her own support. Of

course even without the presumption, Mr. Rust was not prevented from asserting that

Mrs. Gerbman’s remarriage eliminated her need for further spousal support. But he

did not make that argument, nor is there any evidence in the record to support it.

-9- IV. Contempt

Mr. Rust argues that the trial court erred in finding him in willful contempt

and sentencing him to four days in jail, because inability to pay is a defense to

contempt. He claims that he was not capable of complying with the trial court’s order

during the four month period when he failed to pay his child support. He attributed

this alleged incapacity to two problems: lack of income during the relevant period, and

impairment of judgment due to a deteriorating domestic situation that plunged him into

alcohol abuse.

However by his own admission Mr. Rust had some income every month

during the relevant period, and we do not believe that his personal problems, grave

though they may have been, excused him from the duty to support his children by his

former marriage. As for the argument that his alcoholism somehow made his non-

compliance with the court’s orders involuntary, it does not appear to us to be based

on sound reasoning or to be supported by any precedent or other authority that we are

bound to respect.

V. Attorney Disqualification

In the course of the prolonged struggle between the parties, Brad

Hornsby, the wife’s attorney filed a motion to terminate Mr. Rust’s visitation privileges.

The ground was that “recently discovered evidence” of felony warrants against Mr.

Rust in Florida and South Carolina indicated that Mr. Rust “poses a risk of flight with

the parties’ children.”

In response, Mr. Rust’s attorney filed a motion to disqualify Mr. Hornsby,

arguing that he was guilty of blatant misrepresentation to the court. Mr. Rust claimed

that as a family friend and advisor on financial and legal matters, Mr. Hornsby had

- 10 - long been aware of the disputes Mr. Rust had with former employers in those states,

including their threats to swear out criminal warrants against him, and that he had

specific knowledge as to the Florida warrant at least thirty-one months before he

presented it to the court as “newly discovered evidence.”

Mr. Rust further claimed that Mr. Hornsby had threatened him with

criminal prosecution to get him to sign the marital dissolution agreement, and that Mr.

Hornsby’s prior relationship with the parties gave him knowledge of confidential

information about Mr. Rust that should have precluded his subsequent representation

of Mrs. Gerbman.

The trial court considered Mr. Rust’s allegations and dismissed the

motion to compel Mr. Hornsby to withdraw. The court found that Mr. Hornsby had not

established an attorney-client relationship with either of the parties prior to the

beginning of the divorce proceedings, and that he had therefore not violated DR 4-101

of the rules of the Code of Professional Responsibility in regard to preserving the

confidences and secrets of a client. The court also found that Mr. Hornsby had not

violated DR 7-105, which prohibits using the threat of criminal prosecution to gain

advantage in a civil matter. The court did not directly address the question of Mr.

Hornsby’s alleged misrepresentation, but presumably found that Mr. Rust did not meet

his burden of proof on that issue, or that the allegation, if proven, was not sufficiently

grave to warrant disqualification.

We believe that it rests within the sound discretion of the trial court to

determine whether an an attorney should be disqualified from appearing before it in

a particular case. That discretion is rooted in the court’s general powers, found in

Tenn. Code Ann. § 16-1-102(4), to “[c]ontrol, in furtherance of justice, the conduct of

its officers, and all other persons connected with a judicial proceeding before it, in

every matter pertaining to the proceeding”. The court’s decision should not be

- 11 - reversed except for abuse of that discretion. We do not find that the chancellor

abused his discretion, and we accordingly affirm his decision.

VI.

At the conclusion of the opinion which preceded his final order, the

chancellor wrote, “[i]t certainly is the hope of the Court that with the conclusion of

these proceedings, the bitter disputes and ill-feelings which the parties have

experienced toward each other will cease. Certainly the lives of the minor children will

be enriched by such cessation.” This court heartily concurs. The order of the trial

court is affirmed. Remand this cause to the Chancery Court of Rutherford County for

further proceedings consistent with this opinion. Tax the costs on appeal to the

appellant.

_____________________________ BEN H. CANTRELL, JUDGE

CONCUR:

_______________________________ SAMUEL L. LEWIS, JUDGE

_______________________________ WILLIAM C. KOCH, JR., JUDGE

- 12 -