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Schrade v. Schrade

Court of Appeals of Tennessee, Knoxville

February 13, 2017


          Session December 14, 2016

         Appeal from the Probate and Family Court for Cumberland County No. 17129 Larry Michael Warner, Judge

         This appeal concerns an effort to reduce an alimony obligation. James S. Schrade ("Husband") filed a petition for reduction of alimony in the Probate and Family Court for Cumberland County ("the Trial Court") against ex-wife Cassandra Jean Ament Schrade ("Wife").[1] Husband cited changed economic conditions that rendered him unable to meet his alimony obligation without tapping into his separate property. At trial, Husband also presented proof that a rebuttable presumption arose that Wife did not need the alimony as her adult children lived with her. The Trial Court found no material change in circumstances and also declined to find that the rebuttable presumption applied. Husband appeals. Finding the language of the marital dissolution agreement ("the MDA") unequivocal and as market fluctuations are foreseeable, we affirm the Trial Court in its finding of no material change in circumstances. However, Husband presented sufficient proof to trigger the statutory rebuttable presumption for cohabitation with third parties, and we remand to the Trial Court for a determination on that issue. We affirm, in part, and, vacate, in part, the judgment of the Trial Court, and remand for further proceedings consistent with this Opinion.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Probate and Family Court Affirmed, in Part, and, Vacated, in Part; Case Remanded

          Clayton M. Whittaker, Chattanooga, Tennessee, for the appellant, James S. Schrade.

          Cassandra Jean Ament Schrade, Crossville, Tennessee, pro se appellant.

          D. Michael Swiney, C.J., delivered the opinion of the court, in which Charles D. Susano, Jr. and John W. McClarty, JJ., joined.




         Husband and Wife divorced in 2008. Under the MDA, Husband was required to do the following, in relevant part:

Investment Accounts and Retirement Accounts: The parties acknowledge that they have been living on the income from an Orange County Trust and a stock portfolio, and that these funds from this Trust and this stock portfolio are owned by the Husband, or attributable to him. The Husband agrees that he will pay the Wife from these funds 35% of the regular monthly distributed amounts, each month, from both accounts. Further, from the stock portfolio, the Husband agrees that regardless of the distribution from the stock portfolio, the Wife shall never receive less than $1, 200.00 per month, even if $1, 200.00 is greater than the previously agreed 35%. This 35% of the Orange County Trust and stock portfolio, as indicated above, shall be received by the Wife as periodic alimony, and said payments shall be begin on the first day of the month following the entry of the Final Judgment of Divorce.

         In September 2013 Husband filed a petition to modify his alimony support. Husband's petition stated the following, in part:

6. With respect to alimony, Petitioner would show that when the parties divorced, the annual dividends from the Orange County Trust were approximately $80, 000.00. Since then, the amount of dividends has dropped dramatically. For example, last year, the trust produced only $55, 147.00 annually. This year, the trust had produced only $22, 460.00 through July. Petitioner cannot invade the corpus of that trust. A graph and chart showing the decline in income from the Orange County Trust is attached hereto as collective Exhibit D.
7. At the time of the divorce, based on the current economic conditions, Petitioner reasonably believed that the Orange County Trust would produce annual income of $100, 000.00 to $120, 000.00. However, the opposite has proven true, and the income from said trust continues to significantly and materially decline.
8. From the Knoxville account, Petitioner takes a distribution of $3, 776.00 each month. From that amount, Petitioner pays Respondent $1, 200.00. That account, which held $1, 876, 311.00 in 1997, was down to $294, 708 on August 31, 2013.
9.Petitioner has lost the rental income that he was receiving when he divorced, and he is no longer able to produce income from farming due to his health, current market conditions, and because Respondent has significantly interfered with Petitioner's access to the farming acreage. Petitioner is now totally dependent on income from the Orange County Trust and the Knoxville account.
10.Petitioner is at risk of losing his health insurance and is in danger of not being able to afford basic needs, including medical treatment. A list of Petitioner's average monthly expenses is attached as Exhibit E.
11.The changes in Petitioner's investment income since the divorce constitute a substantial and material change in circumstances, and those circumstances were not anticipated by Petitioner at the time that the First or Amendment to MDA was executed.

         In March 2016, a hearing was held on Husband's petition to modify alimony. Husband and Wife testified. Husband testified, in part, as follows:

Q. In regards to the way that this has played out after the divorce, can you tell the Court what is the current status of the funding for the Orange County Trust? Is it sufficient is what I'm asking.
A. I have no control over it. The history of that account is that my father and my uncle and several others that sat on the Board of Directors of the bank, he set that trust up with the bank that he was a director of.
Q. Let me ask you. So in regards to the Orange County Trust, because you can't touch the corpus, has it been depleted?
A. No.
Q. The ordinary affects of the market downturn that occurred in 2008, were there any affects on the Orange County Trust?
A. Oh, yes, yes.
Q. Did you believe at the time when you negotiated that divorce the economy would not improve?
A. I thought it was at its bottom and would go back to where I was earning 100, 000 ...

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