Session Date January 13, 2015
Appeal from the Chancery Court for Bradley County No. 06-191 Jerri S. Bryant, Chancellor
John P. Konvalinka and Jillyn M. O'Shaughnessy, Chattanooga, Tennessee, for the appellant, Billy Joe Walker.
Jerry Hoffer, Cleveland, Tennessee, for the appellee, Heather Walker Sellers.
Thomas R. Frierson, II, J., delivered the opinion of the court, in which D. Michael Swiney and John W. McClarty, JJ., joined.
THOMAS R. FRIERSON, II, JUDGE
I. Factual and Procedural Background
The plaintiff, Heather Walker Sellers ("Mother"), and the defendant, Billy Joe Walker ("Father"), were divorced on February 23, 2007. Two children were born of their marriage. At the time of the divorce, the children were four years old and two years old respectively. The parties entered into an agreed Permanent Parenting Plan ("PPP") and Marital Dissolution Agreement, both of which were incorporated into their Final Decree. The PPP provided, inter alia, that Father would pay $800 per month in child support to Mother, which was a $21 upward deviation from the calculation reflected on the respective child support worksheet. According to the PPP, because Father was self-employed with fluctuating income, the parties agreed that Father's income would be established at $9, 750 per month, an amount the parties determined to be "fair and equitable." The attached child support worksheet demonstrated that the parties factored in payment of day care expenses for the children, who were not yet of school age. The parties did not, however, consider Father's payment of self-employment taxes.
On April 18, 2012, Mother filed a petition seeking modification of the PPP and review of Father's child support obligation. Mother sought review of the child support obligation due to Father's fluctuating income and also because the children's day care expense had ended. Father filed a response and counter-petition requesting a review of his child support obligation, asserting that the obligation should be decreased and that his payment of self-employment taxes should be considered. By agreement, the parties resolved issues regarding co-parenting and entered into an amended PPP. The trial court approved the agreed, amended PPP, reserving the remaining issues of child support and court costs for subsequent hearing.
The trial court conducted a hearing on February 28, 2013. At the beginning of the hearing, Mother's counsel stated, inter alia:
based on our review of the numbers and calculations as far as Ms. Sellers goes, at this time we are satisfied that there is no substantial variance and as such that the child support would remain the same. . . . I understand that Mr. Walker wishes to have that review and request for a downward modification, which I think would be his burden of proof
Father's counsel responded by affirming that Father did seek a downward modification of child support. Father's counsel accordingly asked the court to determine each party's respective income, who would pay health insurance expenses, and whether income should be imputed to Mother due to her underemployment.
The trial court heard testimony from both parties and Father's accountant. Father's accountant testified that he prepared Father's tax returns from information provided by Father regarding his gross sales for the year. The accountant presented the trial court with Father's Schedule Cs for 2009 through 2012, which depicted the amounts of profit generated by Father's automobile sales. Father asserted that his tax returns were the proper measure of his income. By contrast, Mother contended that Father's income should be measured by the amounts of money he deposited annually into his personal bank account, which was significantly greater than the income shown on his tax returns. At the conclusion of the proof, the trial court took the matter under advisement.
In a written order issued July 17, 2013, the trial court found that Father's original income determination of $9, 750 per month was a compromise between the parties because they had recognized that Father's income fluctuated. The trial court determined instead that Father's current income should be set based on the average of the total deposits to his personal bank account for the three years preceding the hearing. In support of its determination, the trial court stated that it did not accord great weight to the testimony of Father's accountant because the accountant did not audit or personally verify Father's financial information. The trial court questioned Father's testimony regarding his income because his bank deposits were sufficiently greater than his reported income or profit. The court did not find credible Father's claims that any additional amounts deposited were monies he received from loans. Considering the evidence, the court thus determined Father's income to be $8, 080 per month, a reduction from his income in 2007. The court set Mother's income at $300 per week and the resultant child support award at $1, 073 per month based on the applicable child support worksheet.
Father subsequently filed a motion to alter or amend the judgment, asserting that his income was calculated incorrectly because several deposits to his personal bank account were derived from sources other than the business. Father attached numerous pages of documentation to support this assertion. Father maintained that Mother's income should have been set at a higher amount. Father also averred that his payment of the children's health insurance premiums was not considered in the child support calculation. Alternatively, Father argued that the trial court should not have modified child support because Mother's attorney conceded at the hearing's outset that there was no significant variance. See Tenn. Code Ann. § 36-5-101(g)(1). Mother subsequently filed a motion seeking attorney's fees and retroactive child support.
The trial court entered an order regarding these motions on November 18, 2013. The court found that the parties did agree during the hearing that Father's payment of health insurance premiums should be included in the calculation, but the court did not adjust its determination of Father's income. The court stated that while Mother did not request an increase in support, "once child support becomes an issue, the court is under an obligation to set child support at the appropriate amount." The trial court also found that Mother should receive retroactive child support and attorney's fees but did not make any specific monetary awards. Mother subsequently sought a garnishment for the retroactive child support award. Father filed a motion to stay the garnishment on January 2, 2014.
On April 10, 2014, the trial court entered an order staying the garnishment, awarding a specific amount of attorney's fees to Mother, setting child support at $1, 017 per month based upon a child support worksheet prepared by Father that included his payment of health insurance premiums, and setting the amount of Father's arrearage. Father timely appealed.
II. Issues Presented
Father presents the following issues for review, which we have restated slightly:
1. Whether the trial court erred in its calculation of Father's child support obligation by improperly determining the amount of Father's income.
2. Whether the trial court erred in its calculation of Father's child support obligation by failing to consider Father's self-employment taxes.
3. Whether the trial court erred in its calculation of Father's child support obligation by improperly determining the amount of Mother's income.
III. Standard of Review
This Court has described the proper standard of review for child
support determinations as follows:
Setting child support is a discretionary matter. Accordingly, we review child support decisions using the deferential "abuse of discretion" standard of review. This standard requires us to consider (1) whether the decision has a sufficient evidentiary foundation, (2) whether the court correctly identified and properly applied the appropriate legal principles, and (3) whether the decision is within the range of acceptable alternatives. While we will set aside a discretionary decision if it rests on an inadequate evidentiary foundation or if it is contrary to the governing law, we will not substitute our judgment for that of the trial court merely because we might have chosen another alternative.
State ex rel. Vaughn v. Kaatrude, 21 S.W.3d 244, 248 (Tenn. Ct. App. 2000). See also Massey v. Casals, 315 S.W.3d 788, 798 (Tenn. Ct. App. 2009) ("We note that determinations of child support lie within the discretion of the trial court."). Further, where issues of credibility and weight of testimony are involved, this Court will accord considerable deference to the trial court's factual findings. In re M.L.P., 228 S.W.3d 139, 143 ...