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Stratienko v. Stratienko

Court of Appeals of Tennessee, Knoxville

March 31, 2017


          Session December 13, 2016

         Appeal from the Circuit Court for Hamilton County No. 13D2251 L. Marie Williams, Judge

         In this domestic relations action, the parties divorced following a twenty-six-year marriage. The trial court valued the parties' marital assets, including the husband's medical practice, and fashioned an equal distribution. In addition, the court awarded the wife alimony in futuro in the amount of $5, 000 per month as well as alimony in solido in the amount of $4, 500 per month for ten years. The court further ordered the husband to maintain his $1, 000, 000 life insurance policy in effect to secure the wife's spousal support awards. The husband has appealed. We modify the trial court's judgment to provide for a lien on a portion of the husband's assets sufficient to secure his alimony in solido obligation in the amount of $540, 000, and accordingly reduce his court-ordered obligation with regard to maintenance of a life insurance policy in the amount of $1, 000, 000 to the amount of $500, 000. We affirm the trial court's judgment in all other respects. We deny the wife's request for an award of attorney's fees on appeal.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed as Modified; Case Remanded

          William H. Horton, Chattanooga, Tennessee, for the appellant, Alexander Stratienko.

          Glenna M. Ramer, Chattanooga, Tennessee, for the appellee, Lisa Stratienko.

          Thomas R. Frierson, II, J., delivered the opinion of the court, in which D. Michael Swiney, C.J., and John W. McClarty, J., joined.



         I. Factual and Procedural Background

         Dr. Alex Stratienko ("Husband") filed a complaint for divorce against Lisa Stratienko ("Wife") following twenty-four years of marriage. Two daughters were born of the marriage, both of whom had attained the age of majority prior to trial. At the time of trial, Husband was a cardiologist in Chattanooga who had started his own practice, Cardiac and Vascular Associates, P.C. ("CVA"), in 1999. The parties also began a business during the marriage known as McNeal Properties, LLC ("McNeal"), which constructed and manages the office building housing CVA and other professional practices.

         Before the parties' marriage in 1989, Husband had completed college and medical school and was in his third year of a cardiology fellowship at a hospital in Virginia. Wife had earned her Bachelor's degree and was in the process of obtaining a Master's degree while working as a ward secretary at the same hospital. Wife was employed outside the home during the initial years of the marriage until the birth of the parties' eldest daughter in 1992. By that time, the parties had moved to Pennsylvania to reside near Husband's aging parents, for whom Wife helped provide care. Wife explained that Husband's father was diagnosed with Alzheimer's Disease and could no longer drive and that Husband's mother had never driven. Therefore, Wife transported the couple to doctor's appointments and provided other care.

         In 1993, the parties, along with Husband's parents, relocated to Chattanooga, where Husband began employment with the Chattanooga Heart Institute. The parties' younger daughter was born in 1996. Wife served as a stay-at-home mother for the children for several years while Husband worked in the medical practice. Husband left his employment with Chattanooga Heart Institute in 1998 and was later sued by the practice regarding a non-compete agreement.

         In 1999, the parties began CVA. Husband acknowledged at trial that Wife assisted him with CVA's business operations during the early years while he worked an arduous schedule. Wife described this period as "busy" in that Husband's father was extremely ill, Husband was working more and thus less involved at home, and Wife was providing care for the children and Husband's parents while helping Husband with the practice. Wife testified that she performed duties such as supervising staff, making deposits, filing charts, designing and decorating the office, interacting with CVA's accountant, managing the health insurance and retirement plans, and marketing the practice. Husband worked sixty to eighty hours per week at CVA. He also taught continuing education classes for other physicians, for which Wife designed and printed materials and advertising, managed hotel and catering arrangements, and maintained an accounting. Wife was not compensated for her work.

         According to Wife, when Husband began his employment through CVA, his income increased tremendously. In 2000 or 2001, the parties built an approximately 5, 000-square-foot home on Lookout Mountain. Both were involved in the design and construction of the home. When Wife's father passed away in 2002, Wife inherited one-third of his 1.3-million-dollar estate. From this inheritance, Wife deposited cash into the parties' joint account and also made deposits into the children's educational funds.

         During this approximate timeframe, the parties, with the assistance of a friend named Oscar Brock, located a lot near all three Chattanooga hospitals, upon which they endeavored to construct a commercial building to accommodate CVA and other medical tenants. Husband, Wife, and Mr. Brock formed McNeal and, through the company, purchased the parcel and built a commercial building thereon. Wife testified that she and Mr. Brock met with architects and designed the facility. Wife further related that she worked closely with the builder and selected décor and fixtures. After CVA moved to this new location, Wife continued to perform work for CVA without compensation. According to Wife, she assumed some duties of a practice manager, often working forty or more hours per week. She also performed various responsibilities for McNeal, including designing and marketing the office space, creating a brochure, and procuring tenants. Wife likewise received no compensation for her work for McNeal.

         In 2003, Husband became enmeshed in litigation with Erlanger Hospital regarding his hospital privileges. Wife testified that she "stood in" for Husband during depositions and performed work relevant to the case so that Husband could continue to concentrate on his medical practice. According to Husband, Wife "spearheaded" his defense, spending tremendous amounts of time on the litigation. Husband also related that the proceedings cost them hundreds of thousands of dollars through the years, which proved difficult on their marriage, the children, and their quality of life. Wife opined that litigation expenses actually totaled approximately three million dollars.

         The parties appear to agree that their marriage began to deteriorate during this time, although their opinions differ regarding the reasons. Their discord reached a zenith around Christmas 2011, when Wife claimed Husband became verbally abusive toward their eldest daughter and physically abusive toward Wife. The parties separated shortly thereafter, with Wife and the children remaining in the marital residence and Husband moving to a rental property. Husband admitted that following his departure, he removed $375, 000 from the parties' joint checking account, leaving a balance of $5, 000 for Wife's use. Husband did not dispute Wife's testimony that he informed Wife he would thereafter provide her an "allowance" in the amount of $5, 000 per month. Husband asserted that this amount was commensurate with their pre-separation expenses so long as he continued to pay the taxes and insurance on the marital residence. Wife explained that Husband subsequently provided her with $5, 000 per month for the first eight months of 2012 and then stopped sending her money altogether until the trial court ordered him to pay temporary alimony beginning in February 2014. According to Wife, because she had no other source of income, she was forced to liquidate her separate, inherited assets and to charge expenses on her credit cards in order to defray her living expenses and legal fees during that time.

         In 2012, Mr. Brock instituted an action against Husband and Wife upon being "excluded" from McNeal by the parties due to his failure to meet a capital call. Husband filed the instant divorce action in November 2013. By the time of trial, the parties remained involved in litigation with Mr. Brock to determine their respective ownership interests in McNeal.

         On December 26, 2013, Wife filed a motion in the case at bar seeking an award of alimony and child support pendente lite. The trial court entered a temporary order on January 17, 2014, directing the parties to participate in mediation and ordering Husband to pay temporary spousal support in the amount of $20, 000 per month. The court conducted a hearing regarding temporary alimony in April 2014, subsequently ruling that Husband would pay Wife $18, 000 per month pending trial. Wife was ordered to pay the taxes and insurance related to the marital residence.

         Early in this litigation, the parties reached an agreement regarding certain issues, including that (1) Husband could expend monies to purchase a condominium for his own use, (2) Husband would continue to provide health and dental insurance coverage for Wife and the remaining minor child pending trial, (3) Husband would provide Wife with $45, 000 to pay toward her attorney's fees, (4) Husband would continue paying temporary alimony of $18, 000 per month, and (5) Wife would have unfettered access to the McNeal business records. An acrimonious environment intensified through the remainder of the proceedings, however, as each party filed numerous motions for relief, including several motions alleging contemptuous conduct by the opposing party and motions seeking sanctions. The trial court conducted a bench trial on June 2 and 3, 2014. At the conclusion of trial, Wife's counsel was afforded additional time to file the deposition of an asset valuation expert. On April 13, 2015, the court awarded Wife an additional $48, 000 toward her legal expenses. In its order, the court noted that the parties had agreed to initiate the process of placing the marital residence on the market for sale.

         The trial court issued a memorandum opinion on December 8, 2015. Noting that the parties had been married for twenty-six years, the court declared the parties divorced pursuant to Tennessee Code Annotated § 36-4-129. The court determined that both parties had credibility issues "because of the drive of each to accomplish a specific result." In support, the court stated: "While this is typical of many parties in a contested divorce, the intellectual capacity of these parties exacerbates the phenomenon."

         With regard to the statutory factors relative to an equitable distribution of property, the trial court found that both parties made equal contributions to the marriage, financial and otherwise. Although Husband asserted that Wife wasted money and overspent following the parties' separation, the court found that Wife's spending was consistent with the lifestyle established during the marriage. The court also noted that despite Husband's contention that Wife "wasted" money on litigation, "[t]he Court finds it disingenuous of [Husband] to criticize [Wife's] involvement in litigation and the expense incident thereto when his litigation history is comparable." The court also determined that Wife had contributed a portion of her inherited assets to the parties' joint estate. The court concluded that Wife had not dissipated marital assets.

         As demonstrated by the proof, both parties were in good physical and mental health and were of comparable ages, with Husband sixty-two years of age and Wife fifty-eight years of age at the time of trial. The trial court determined that Husband possessed "vastly" greater vocational skills, employability, and earning capacity than Wife. The court also noted that although neither party contributed to the education of the other, Wife had relocated several times to support Husband's career and care for his parents.

         Concerning an equitable distribution, the trial court attempted to fashion a division of marital property that was largely equal. Specifically, the court ordered that the marital residence be sold and the proceeds divided equally. Wife was awarded the parties' partial ownership interest in a condominium in South Carolina, which the court valued at $450, 000. Husband was awarded a condominium purchased by the parties for Husband's mother. Various financial accounts and stocks were divided equally. Husband was awarded CVA at a value of $245, 000. Due to the pending litigation regarding ownership of McNeal, the court declined to determine a value concerning that asset. Instead, Husband was ordered to transfer to Wife a sufficient interest in McNeal such that her ownership therein would equal that of Husband and CVA. The court ultimately awarded Wife a payment of $259, 406 in cash in order to equalize the marital property distribution.

         With reference to Wife's claim for spousal support, the trial court determined that alimony was appropriate because Husband had demonstrated an ability to pay and Wife had proven (with Husband conceding) that she manifested a reasonable level of need. The court found that the post-divorce standard of living expected to be available to Husband would be substantially greater than that expected to be available to Wife in the absence of alimony. Because neither rehabilitative nor transitional alimony would accomplish the objective of providing Wife a comparable standard of living to that enjoyed during the marriage, the court determined that long-term alimony was appropriate.

         As to the appropriate amount of an alimony award, the trial court calculated Wife's reasonable needs post-divorce to be $15, 500 per month. The court deducted Wife's anticipated income from investments of approximately $5, 760 per month, establishing a remaining need of approximately $9, 740 per month. As a result, the court awarded Wife alimony in futuro in the amount of $5, 000 per month plus alimony in solido of $4, 500 per month for ten years. With regard to the alimony in solido award, the court determined that Husband's greater income and ability to accumulate assets would enable him to retire early, with the court further opining that "his animosity towards [Wife] makes that possibility more probable." The court also ordered Husband to maintain his $1, 000, 000 life insurance policy to secure Wife's alimony awards.

         Because Husband had deducted sums from his alimony pendente lite payments despite previously being directed not to do so, the court specifically found such conduct to be contemptuous. The court also determined that Wife's needs preceding the award of assets from the court's equitable distribution exceeded her needs post-divorce, such that the court declined Husband's request to retroactively modify the temporary alimony. The court also declined to award attorney's fees to either party, concluding that each had the ability to pay his or her own fees. The court entered a final order on December 18, 2015, incorporating its written memorandum opinion.

         Both parties filed motions seeking relief pursuant to Tennessee Rule of Civil Procedure 59, in addition to numerous other motions regarding enforcement of the trial court's adjudication. The trial court denied the Rule 59 motions, except to modify the equalizing payment owed by Husband by deducting a previously ordered $50, 000 payment of attorney's fees to Wife. Husband timely filed the instant appeal.

         II. Issues Presented

         Husband presents the following issues for our review, which we have restated slightly:

1. Whether the trial court erred in its determination that Husband should pay Wife temporary alimony in an amount that exceeded the parties' pre-separation standard of living and included expenses for the children.
2. Whether the trial court erred in its determination of the nature and amount of alimony in futuro and in solido awarded to Wife.
3. Whether the trial court erred by requiring Husband to maintain his $1, 000, 000 life insurance policy to secure his alimony obligations to Wife.
4. Whether the trial court erred in its valuation and allocation of marital assets and debts.
5. Whether the trial court erred by awarding to Wife an equal interest in the governing rights of McNeal when the parties demonstrated a history of discord regarding business operations.
6. Whether the trial court erred by allowing Wife to remain as sole custodian of the children's educational funds.

         Wife presents the following additional issues for review, which we have also restated slightly:

7. Whether the trial court erred by declining to award to Wife her attendant attorney's fees and declining to assess fines against Husband after finding him in contempt.
8. Whether the trial court erred by declining to award additional attorney's fees to Wife because Husband's litigation strategy was abusive.
9. Whether Wife should receive an award of attorney's fees on appeal.

         III. Standard of Review

         In a case involving the proper classification and distribution of assets incident to a divorce, our Supreme Court has elucidated the applicable standard of appellate review as follows:

This Court gives great weight to the decisions of the trial court in dividing marital assets and "we are disinclined to disturb the trial court's decision unless the distribution lacks proper evidentiary support or results in some error of law or misapplication of statutory requirements and procedures." Herrera v. Herrera, 944 S.W.2d 379, 389 (Tenn. Ct. App. 1996). As such, when dealing with the trial court's findings of fact, we review the record de novo with a presumption of correctness, and we must honor those findings unless there is evidence which preponderates to the contrary. Tenn. R. App. P. 13(d); Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993). Because trial courts are in a far better position than this Court to observe the demeanor of the witnesses, the weight, faith, and credit to be given witnesses' testimony lies in the first instance with the trial court. Roberts v. Roberts, 827 S.W.2d 788, 795 (Tenn. Ct. App. 1991). Consequently, 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 (Tenn. Ct. App. 2007) (citing Seals v. England/Corsair Upholstery Mfg. Co., 984 S.W.2d 912, 915 (Tenn. 1999)). The trial court's conclusions of law, however, are accorded no presumption of correctness. Langschmidt v. Langschmidt, 81 S.W.3d 741, 744-45 (Tenn. 2002).

Keyt v. Keyt, 244 S.W.3d 321, 327 (Tenn. 2007). Questions relating to the classification of assets as marital or separate are questions of fact. Bilyeu v. Bilyeu, 196 S.W.3d 131, 135 (Tenn. Ct. App. 2005).

         Further, as this Court has previously held:

Because Tennessee is a "dual property" state, a trial court must identify all of the assets possessed by the divorcing parties as either separate property or marital property before equitably dividing the marital estate. Separate property is not subject to division. In contrast, Tenn. Code Ann. § 36-4-121(c) outlines the relevant factors that a court must consider when equitably dividing the marital property without regard to fault on the part of either party. An equitable division of marital property is not necessarily an equal division, and § 36-4-121(a)(1) only requires an equitable division.

McHugh v. McHugh, No. E2009-01391-COA-R3-CV, 2010 WL 1526140, at *3-4 (Tenn. Ct. App. Apr. 16, 2010) (internal citations omitted) (emphasis in original). See also Manis v. Manis, 49 S.W.3d 295, 306 (Tenn. Ct. App. 2001) (holding that appellate courts reviewing a distribution of marital property "ordinarily defer to the trial judge's decision unless it is inconsistent with the factors in Tenn. Code Ann. § 36-4-121(c) or is not supported by a preponderance of the evidence.").

         Regarding alimony, our Supreme Court has "repeatedly and recently observ[ed] that trial courts have broad discretion to determine whether spousal support is needed and, if so, the nature, amount, and duration of the award." See Gonsewski v. Gonsewski, 3 ...

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