                 IN THE COURT OF APPEALS OF TENNESSEE
                             AT NASHVILLE
                                   October 10, 2000 Session

     KARINE MARGARET BAILEY v. MICHAEL CHARLES BAILEY

                   Appeal from the Chancery Court for Rutherford County
                          No. 95DR-633    Don R. Ash, Chancellor



                      No. M2000-00325-COA-R3-CV - Filed April 2, 2001


These parties were divorced in September 1995, and their Marital Dissolution Agreement was
incorporated in the decree of divorce. They were parents of two children, and the court approved
the agreement for shared physical custody of the children whereby each parent had custody of both
children fifty percent of the time. The MDA provided, “[T]he parties have agreed to deviate from
the child support award guidelines due to the shared physical custody of the children.” Husband paid
Wife $500 per month, which was not in accordance with the guidelines. In June 1999, Husband filed
a motion to terminate his child support obligation because of a significant increase in Wife’s income.
The trial court denied the application, and Husband appeals. We vacate and remand for further
proceedings.

          Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
                                 Vacated and Remanded

WILLIAM B. CAIN , J., delivered the opinion of the court, in which BEN H. CANTRELL , P.J., M.S. and
WILLIAM C. KOCH , JR., J. joined.

Frank M. Fly and Shawn M. Ashcraft, Murfreesboro, Tennessee, for the appellant, Michael Charles
Bailey.

Josh A. McCreary, Murfreesobor, Tennessee, for the appellee, Karine Margaret Bailey.

                                             OPINION

        Appellant, Michael Charles Bailey, and Appellee, Karine Margaret Bailey, are the parents
of two minor children, Charles Martin Bailey and Hannah Catherine Morag Bailey. The parties were
divorced on September 1, 1995, on grounds of irreconcilable differences. The court approved the
parties’ Marital Dissolution Agreement providing that Appellant would pay to Appellee the sum of
$500 per month for child support. The decree further provided:
       This agreed child support is understood by the parties, and counsel for the parties, not
       to be within the Child Support Guidelines, in compliance with the Family Support
       Act of 1989 (P.L. 100-485), effective October 13, 1989, and implemented in
       Tennessee pursuant to the provisions of Public Chapter 206, Acts of 1989. The sum
       of child support that Husband is to pay represents less than thirty-two percent (32%)
       of Husband’s net income as required by said Child Support Guidelines for two
       children. The parties have agreed to deviate from the Child Support Award
       Guidelines due to the shared physical custody of the children. Child support shall
       continue until the youngest child shall reach her eighteenth (18th) birthday or
       graduate from high school, whichever occurs last.

              4.      That the Marital Dissolution Agreement and Amended Marital
       Dissolution Agreement entered into between the parties is hereby ratified and
       approved by the Court and incorporated into this Final Decree of Divorce as fully and
       completely as copied herein verbatim.

       In more detail, the Marital Dissolution Agreement provided in this respect:

                CHILD SUPPORT AND MAINTENANCE: The physical custody of the
       children will be divided equally between the Husband and Wife, with each party
       paying for the children’s necessities, i.e. food, clothing and shelter while the children
       are with each parent respectively. Under the present circumstances, the Husband
       shall pay to Wife $500.00 for child support until the youngest child reaches the age
       of 18 or graduates from high school whichever occurs last. The parties understand
       that this agreement is not within the Child Support Award Guidelines, in compliance
       with the Family Support Act of 1989 (P.L. 100-485), effective October 31, 1989, and
       implemented in Tennessee pursuant to the provisions of Public Chapter 206, Acts of
       1989. The parties have agreed to deviate from the Child Support Award Guidelines
       due to the shared physical custody of the children. Said payments shall begin upon
       the Husband removing himself from the marital property.

       The parties, since the granting of the divorce, have faithfully adhered to the provisions for
equal custody, and Husband has faithfully paid the $500 per month child support.

        On June 4, 1999, Husband filed his Petition to Terminate Child Support asserting that Wife’s
income since the divorce had increased to the point that such child support should no longer be
required. Wife answered denying any change of circumstance. At the December 14, 1999 hearing
on this petition, evidence was offered by Husband indicating a four fold increase in the income of
Wife since the time of the divorce. As a result of this increase, she had income of approximately
$24,000 per year, as opposed to the approximately $6,000 per year she was earning at the time of the
divorce.




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        At the conclusion of Appellant’s proof, the trial court granted a motion to dismiss holding
that no material change of circumstances had been established to warrant a reduction in the child
support provided for in the Decree of Divorce.

       Appellant filed a timely appeal.

       We have determined that the “significant variance” provisions of Tennessee Code Annotated
section 36-5-101(a)(1) are not applicable to this case for reasons set forth in the Tennessee
Compilation Rules & Regulations which provide:

       These guidelines are designed to apply to situations where children are living
       primarily with one parent but stay overnight with the other parent at least as often as
       every other weekend from Friday to Sunday, two weeks in the summer and two
       weeks during holidays throughout the year. These guidelines are designed to
       consider the actual physical custody of the child(ren), regardless of whether custody
       is awarded to one parent and visitation to the other or such an arrangement is ordered
       to be joint custody or split custody. In situations where overnight time is divided
       more equally between the parents, the courts will have to make a case-by-case
       determination as to the appropriate amount of support.

Tenn. Comp. R. and Regs. r. 1240-2-4-.026 (1994).

       In a similar context, this Court held:
       [I]n the present case, the parties enjoy joint custody of the child and neither party
       falls within the definition of an “obligor” as set out in the guidelines. In fact, the
       guidelines state that they are “designed to apply to situations where children are
       living primarily with one parent . . . . In situations where overnight time is divided
       more equally between the parents, the courts will have to make a case-by-case
       determination . . . .”

Wagner v. Wagner, 2000 WL 329399, at * 5 (Tenn. Ct. App. March 30, 2000) (citing Tenn. Comp.
R. & Regs. r. 1240-2-4-.03(1) & .03(6)).

         In applying a case-by-case analysis where custody is joint and equally divided, as in the case
at bar, child support should be paid on relative ability to pay based on present circumstances. The
proof in this record does not show whether there was a change in the relative earnings of both parties
as to allow this Court to make an appropriate determination. The increased earnings of Appellee are
a factor to be considered, along with any increased earnings of Appellant, in determining an
appropriate amount of child support to be paid under this equal custody arrangement.

       The judgment of the trial court is vacated and the case is remanded for further proceedings
wherein the trial court may hear proof and set child support on an equitable basis, taking into
consideration the present income of both parties.


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Costs of appeal are assessed to Appellee.




                                             ___________________________________
                                             WILLIAM B. CAIN, JUDGE




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