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Harrison v. Harrison

Court of Appeals of Tennessee, Knoxville

May 22, 2017

LYNNE E. HARRISON
v.
EDWIN B. HARRISON, JR.

          Session March 24, 2017

         Appeal from the General Sessions Court for Loudon County No. 13-DV-200 Rex A. Dale, Judge.

         This divorce case involves a marriage of eight years' duration. Because the parties had reached an agreement with regard to the division of certain marital assets, the trial court was requested during a bench trial to divide the parties' retirement and pension accounts, or the marital portion thereof, and other limited marital assets and liabilities. The trial court considered the relevant statutory factors and apportioned the remaining assets and liabilities 60% to the wife and 40% to the husband. The trial court also awarded the husband $1, 000.00 in attorney's fees and $180.42 in court reporter fees. The husband has appealed. Discerning no reversible error, we affirm.

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

          Edwin B. Harrison, Jr., Lenoir City, Tennessee, Pro Se.

          William Lee Gribble, II, Maryville, Tennessee, for the appellee, Lynne E. Harrison.

          Thomas R. Frierson, II, J., delivered the opinion of the court, in which D. Michael Swiney, C.J., and Charles D. Susano, Jr., J., joined.

          OPINION

          THOMAS R. FRIERSON, II, JUDGE.

         I. Factual and Procedural Background

         This appeal results from a divorce action filed in the Loudon County General Sessions Court ("trial court"). On July 29, 2013, the plaintiff, Lynne E. Harrison ("Wife"), filed a complaint for divorce against the defendant, Edwin B. Harrison, Jr. ("Husband"). Both parties were sixty years of age at the time of trial. Prior to trial, the parties entered into an agreed order, which stated that Wife would pay Husband $63, 000.00 for his share of the parties' equity in the marital residence, with Husband quitclaiming any interest in the home to Wife. The parties further agreed that Husband would remove all of his personalty and his truck from the home. Husband was also allowed to retain his BMW automobile free from any claim by Wife while Wife was allowed to retain her Hyundai automobile free from any claim by Husband as part of the agreement.

         The trial court conducted a bench trial on December 4 and 8, 2014, and June 22, 2015. The issues remaining for adjudication by the trial court were: (1) equitable distribution of the parties' retirement and pension accounts, or the marital portion thereof; (2) equitable allocation of a liability to the Internal Revenue Service; (3) Husband's claim for a portion of a homeowner's insurance premium refund received by Wife; (4) Wife's claim for a portion of prepaid car insurance premiums credited to Husband; (5) Wife's claim for reimbursement of expenses related to the marital residence for August 2013; (6) Wife's claim for reimbursement of medical and dental premiums and prescription costs she paid for Husband; and (7) Husband's claim for reimbursement of Discover credit card purchases. Following the trial, the court entered a "Final Order" on March 2, 2016.

         In its Final Order, the trial court discussed and analyzed the statutory factors relative to an equitable distribution of marital property pursuant to Tennessee Code Annotated § 36-4-121. During this eight-year marriage, no children were born. The parties are of the same age. The court determined that both parties appeared to be in good physical and mental health, although Husband claimed to have a heart problem, for which he provided no medical proof. The court found that neither party would be restricted from employment for health reasons.

         It is undisputed that Wife had worked for Oak Ridge National Laboratory ("ORNL") for thirty-three years until her retirement in 2012. Wife earned a gross salary at this employment of $50, 000.00 to $60, 000.00 per year, with a net salary of approximately $3, 500.00 per month. The court noted that Wife's wages totaled approximately $360, 471.00 during the marriage. Wife testified that the majority of her earnings were spent in payment of the parties' household expenses. Wife also reported that Husband assumed responsibility for all financial dealings during the parties' marriage.

         The trial court found that Husband was "not employed, but claims he had two online collections businesses" at the time of the marriage. Husband indicated that although he had monetary judgments in his favor, they were largely uncollectible. The court further found that Husband also claimed his businesses owed him amounts through promissory notes, such that he received approximately $300, 000.00 in repayment of those obligations instead of a salary during the marriage, resulting in favorable tax consequences for the parties. The court noted, however, that Husband presented no documentation to support this claim. Although Husband also claimed to have received a lump-sum pension payment of $40, 514.00 during the marriage, which he purportedly invested for the parties' benefit, he provided no documentation of what happened to these funds.

         The trial court also found that Husband claimed to be in the business of recruiting as well as selling life insurance and annuities at the time of trial. The trial court took into account Husband's experience in financial and technological employment. Although Husband described his ownership of various trusts at the time of the marriage, he testified they had been largely depleted by the time of trial. Husband also claimed separate assets, consisting of a Honda Goldwing motorcycle valued at $13, 500.00 and an interest in a condo in Destin, Florida, valued at $14, 500.00.

         Regarding future employment prospects, the trial court found that both parties possessed vocational abilities rendering them employable. According to the court, the parties' small estate would most likely be dissipated if the parties ceased working. The court noted that while Wife was capable of paying her monthly expenses from her current pension income, Husband claimed a monthly shortfall of $3, 400.00.

         The trial court determined Wife to be a credible witness while finding Husband's credibility to be "highly suspect." In support, the court specifically found that Husband presented "two false exhibits" in an effort to provide proof of monies that he purportedly contributed to the marital estate. As the court observed, Husband later admitted that the Quicken program he used to generate these documents was unreliable, and he was unable to provide supporting documentary evidence of his claims. The court further stated in its final judgment:

The court finds that Husband continually made large unsubstantiated claims totaling multi-million dollar figures that benefitted the marriage. However the court finds that Husband's financial contributions to the marriage were more in the line of business and stock trade losses coupled with depreciation of assets and tax credit deductions on the 1040 Federal income tax returns that were filed jointly for the parties for the years 2006 through 2010. At the time of the hearing, Husband had not filed 1040 Federal income tax returns for 2011, 2012, and 2013, forcing wife to file separately for each of those years, resulting in very little, if any financial benefit to the marriage by the Husband.

         The trial court found that Wife's "tangible contribution of a steady, continued income stream during the marriage was sufficient to meet monthly household expenses for the most part." The court further found that the parties lived "somewhat lavishly" for a time, taking multiple vacations that were paid for or deducted as an expense for tax purposes by Husband. As the court noted, Wife "admitted that Husband was able to pay what her income did not pay." Based on Wife's steady income throughout the marriage, however, the trial court determined that Wife's financial contribution to the marriage was "much more significant than that of the Husband."

         Moreover, the trial court determined that each party maintained the ability to continue to accumulate future assets and income if he or she chose to do so. The court also found that the parties jointly decided to increase Wife's contributions to her 401(k) during the marriage; however, the growth of the marital estate was marginal due to Husband's reported stock losses of nearly $160, 000.00.

         Considering all of the factors enumerated in Tennessee Code Annotated § 36-4-121, the trial court concluded that the marital assets and liabilities should be divided 60% to Wife and 40% to Husband. In furtherance of this distribution, the court determined that Wife's Roth IRA, valued at $13, 518.00, was Wife's separate property because it was funded with premarital contributions. To the extent that this asset increased in value during the marriage, the court determined that Husband did not substantially contribute to such increase, finding instead that any increase was attributable solely to market fluctuation.

         Wife's traditional IRA, containing the funds rolled over from her 401(k) when she retired, was valued at $82, 335.00 and divided 40% to Husband and 60% to Wife. The court specifically noted that "[t]he parties stipulated that $82, 335.00 represents both the funds she invested and growth that occurred during the marriage as a marital asset subject to equitable division." The court also directed that a Qualified Domestic Relations Order ("QDRO") be prepared by the parties, dividing the marital portion of Wife's employer-provided pension 60% to her and 40% to Husband.

         With respect to the liability owed to the Internal Revenue Service ("IRS"), the trial court found that Husband failed to file tax returns on behalf of the parties for the years 2011 through 2013 in a timely fashion. Having received notification of this failure, Wife filed her own separate returns for those tax years on May 14, 2014. Consequently, Wife incurred a tax liability for the respective years. The court noted that Husband "proffered no proof as to his income for 2011, 2012, and 2013, nor what the difference would be had they filed jointly for these years . . . ." The court therefore concluded that Husband's failure to timely file the tax returns resulted in Wife's being forced to file separately "to avoid penalties, interest, a threatened 'forced filing, ' and other consequences from the IRS." Because the tax liability represented by the filing of Wife's returns was determined to be a marital debt, the court ordered Husband to pay 40% of that liability, or $4, 616.00. Husband was also ordered to pay 40% of the tax preparation fee, or $230.00.

         Regarding the parties' claims for various reimbursements, the trial court denied Husband's claim seeking a portion of the refund of a homeowner's insurance premium received by Wife. The court also denied Wife's claim seeking a portion of a prepaid credit for an automobile insurance premium received by Husband. The court further denied Wife's claim for expenses related to the marital residence that she paid in August 2013. The court did, however, order Husband to reimburse Wife for the cost of medical and dental insurance premiums Wife paid on Husband's behalf through December 2015 in the amount of $5, 661.00. The parties were ordered to calculate the amount of such reimbursement due to Wife for 2016, through thirty days from the date of entry of the Final Order, and submit it as an amendment to the order. Husband was further directed to reimburse Wife $90.00 for prescription charges he placed on Wife's credit card.

         With reference to Husband's claim that Wife owed certain amounts for expenses she charged on a joint Discover credit card, Wife was ordered to reimburse Husband for her personal expenses plus one-half of the parties' joint expenses, for a total of $1, 106.00. The court attached to its order a master asset list detailing the equitable division of the parties' assets and debts. Husband was awarded attorney's fees in the amount of $1, 000.00, due to Wife's counsel's late appearance and/or failure to appear at depositions and hearings. The court also awarded Husband "associated court reporter fees for those delays, " directing the parties to calculate those amounts and submit an amended order.

         On March 22, 2016, the trial court entered an "Amendment to Final Order, " in which the court directed that Wife be reimbursed the additional sum of $583.96 by Husband for his medical and dental insurance premiums paid by Wife in 2016. Finally, Wife was restored to her maiden name of Lynne Walker. Following the entry of this order, Husband filed a notice of appeal.

         Upon receipt of the record by this Court, it was discovered that the question of the amount of court reporter fees owed to Husband had never been adjudicated by the trial court. This Court therefore entered an order on March 14, 2017, directing the parties to secure an order from the trial court resolving the issue of the amount of court reporter fees no later than noon on March 23, 2017. On March 21, 2017, the trial court entered an order setting the amount of court reporter fees at $180.42. The trial court clerk transmitted a supplemental record to this Court containing such order. Upon submission of a final judgment, this Court treated Husband's premature appeal as timely pursuant to Tennessee Rule of Appellate Procedure 4(d).

         II. Issues Presented

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

1. Whether the trial court erred by failing to state the effective date for calculation of Husband's portion of Wife's pension.
2. Whether the trial court erred in its classification of Wife's Roth IRA as separate property or, in the alternative, whether the trial court's valuation of Wife's traditional IRA was incorrect.
3. Whether the trial court erred by assessing to Husband a portion of the income tax liability incurred by Wife for the years 2011-2013.
4. Whether the trial court erred in its valuation of certain items of marital personalty.
5. Whether Husband is entitled to damages by reason of the failure of Wife's counsel to provide Husband with the required notice regarding COBRA insurance benefits.
6. Whether Husband is entitled to damages by reason of the failure of Wife's counsel to prepare and submit a QDRO.
7. Whether the trial court's award of attorney's fees to Husband was inadequate.

         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 ...


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