                IN THE COURT OF APPEALS OF TENNESSEE
                            AT NASHVILLE
                                August 27, 2010 Session

           WILLIAM C. KILLIAN v. REBECCA MCMANUS KILLIAN

                 Appeal from the Chancery Court for Marion County
                     No. 6968    Howell N. Peoples, Chancellor


                No. M2010-00238-COA-R3-CV - Filed October 5, 2010


Husband petitioned to reduce or terminate his alimony obligation, and the trial court denied
his petition and awarded wife attorney fees. Husband argues on appeal that the trial court
erred in denying his petition and in awarding wife attorney fees. We affirm the decision of
the trial court in all respects.

 Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed

A NDY D. B ENNETT, J., delivered the opinion of the Court, in which F RANK G. C LEMENT, J R.
and R ICHARD H. D INKINS, JJ., joined.

Marvin Bernard Berke and Megan England Demastus, Chattanooga, Tennessee, for the
appellant, William C. Killian.

Roger E. Jenne, Cleveland, Tennessee, for the appellee, Rebecca McManus Killian.

                                        OPINION

                        F ACTUAL AND P ROCEDURAL B ACKGROUND

      William C. Killian (“Husband”) and Rebecca McManus Killian (“Wife”) were
married in March 1974 and divorced in June 2005. The divorce judgment, which
incorporated the terms of a mediated settlement agreement entered into between the parties,
provides that Husband would pay Wife periodic alimony according to the following
schedule:

       •      $5,000 per month commencing May 1, 2005, through April 1, 2006
       •      $4,500 per month commencing May 1, 2006, through April 1, 2007
       •      $4,000 per month commencing May 1, 2007, until Rebecca Killian’s
              remarriage, death of either of the parties, or modification by the Court.

The judgment further provides that, as agreed between the parties, Wife “may hereafter earn
or otherwise receive from any source $36,000.00 per year without said amount being
considered a change of circumstances for purposes of seeking a modification of alimony.”

       In August 2008, Husband filed a petition to modify his alimony obligation with only
a general allegation of a substantial and material change of circumstances. In an amended
petition filed in November 2008, Husband included the following allegations:

               Following the entry of the Final Decree, petitioner and respondent
       dissolved an existing partnership. Respondent received $360,000 for her share
       in the partnership. Petitioner had to incur $95,000 in additional debt in order
       to complete the transaction.

              Furthermore, petitioner’s income from his law practice has decreased
       since 2004.

              In addition, petitioner has had an increase in debt.

              Respondent has not sought nor acquired meaningful employment since
       September 2004, although she is able to earn income. To the best of
       petitioner’s knowledge, other than normal utility, food and necessary expenses,
       she has no debt.

In October 2009, the court granted Husband’s motion to amend his petition to include two
allegations: (1) that Wife was living with another man, Mark Kelly, who was supporting her
and “indirectly using items for which [Husband] is paying” and (2) that Husband had been
diagnosed with “a neurological disorder that constitutes a substantial material change of
circumstances justifying a modification or termination for periodic alimony.”

       The case was heard on November 4 and 5, 2009. In an opinion and order entered on
December 21, 2009, the court concluded that Husband had failed to meet his burden of
proving a substantial and material change of circumstances and dismissed the petition. The
court made findings of fact, which will be addressed below as pertinent to the arguments
raised on appeal. In February 2010, the court partially granted Wife’s motion to alter or
amend by awarding her attorney fees in the amount of $16,059.41.




                                             -2-
                                   S TANDARD OF R EVIEW

       The trial court’s findings of fact are reviewed de novo on the record with a
presumption of correctness unless the preponderance of the evidence is otherwise. Tenn. R.
App. P. 13(d). Modification of a spousal support award is factually driven. Bogan v. Bogan,
60 S.W.3d 721, 727 (Tenn. 2001). A trial court’s decision to modify its alimony award is
given wide latitude within the trial court’s range of discretion. Id. A trial court abuses its
discretion only when it applies an incorrect legal standard or when it reaches a decision
against logic or reasoning that causes an injustice to the complaining party. Eldridge v.
Eldridge, 42 S.W.3d 82, 85 (Tenn. 2001).

        Decisions to award attorney fees are also reviewed under an abuse of discretion
standard. Huntley v. Huntley, 61 S.W.3d 329, 341 (Tenn. Ct. App. 2001). Thus, we are
required to uphold the trial court’s ruling “as long as reasonable minds could disagree about
its correctness,” and “we are not permitted to substitute our judgment for that of the trial
court.” Caldwell v. Hill, 250 S.W.3d 865, 869 (Tenn. Ct. App. 2007).

                               P ETITION TO MODIFY ALIMONY

        In its ruling, the trial court examined and rejected all of Husband’s arguments for
finding a substantial and material change of circumstances, including his allegations
concerning reduced income from his law practice, Wife’s needs, Husband’s debts,
Parkinson’s disease, and Wife’s relationship with Mark Kelly. On appeal, Husband asserts
that the trial court erred in failing to find a substantial and material change of circumstances
based upon Parkinson’s disease and Husband’s reduced income. Husband also argues that
the trial court failed to properly consider Wife’s needs and earning capacity and the separate
assets of each party.

       Modification of periodic alimony or alimony in futuro may be granted only “upon a
showing of substantial and material change in circumstances.” Tenn. Code Ann. § 36-5-
121(f)(2)(A). The party seeking the modification has the burden of proving the substantial
and material changes that justify it. Elliot v. Elliot, 825 S.W.2d 87, 90 (Tenn. Ct. App.
1991). The change in circumstances must have occurred after the original award. Brewer
v. Brewer, 869 S.W.2d 928, 935 (Tenn. Ct. App. 1993). Such changes are not material if
they were contemplated by the parties at the time of divorce. Seal v. Seal, 802 S.W.2d 617,
620 (Tenn. Ct. App. 1990). A change is considered substantial if it has a significant impact
on either the recipient’s need or the obligor’s ability to pay. Bogan, 60 S.W.3d at 728. A
material change in circumstances is one that is “unforeseeable, unanticipated, or not within
the contemplation of the parties at the time of the decree.” Gentry v. Gentry, No. M2007-



                                              -3-
00876-COA-R3-CV, 2008 WL 275881, at *1 (Tenn. Ct. App. Jan. 31, 2008) (citing Bogan,
60 S.W.3d at 728).

       Once the petitioner establishes a substantial and material change in circumstances, he
or she must then demonstrate that a modification of the award is justified under the factors
relevant to an initial award of alimony, particularly the receiving spouse’s need and the
paying spouse’s ability to pay. Bogan, 60 S.W.3d at 730. Those factors are found in Tenn.
Code Ann. § 36-5-121(i). Where there has been a change in circumstances, “the ability of
the obligor spouse to provide support must be given equal consideration to the obligee
spouse’s need.” Gentry, 2008 WL 275881, at *2 (citing Bogan, 60 S.W.3d at 730).

                                     Parkinson’s disease

       Husband argues that the trial court erred in failing to find that his Parkinson’s disease
constituted a substantial and material change of circumstances. The trial court made the
following findings and conclusions regarding Husband’s diagnosis:

       Petitioner has submitted evidence that he was diagnosed in January 2009 with
       Parkinson’s disease. He is being treated by Dr. Chenk Sengun, a neurologist
       who specializes in movement disorders and Parkinson’s disease at the
       University of Miami. Dr. Sengun testified by deposition (Ex. 1) that Petitioner
       is in the early stages of the disease and described the progressive nature of the
       disease and the therapy and drug regime being used to attempt to slow the
       progression. During the course of Petitioner’s testimony in this proceeding,
       the Court personally observed the physical manifestations of the disease that
       were described by Dr. Sengun. While the evidence does not show that the
       disease has had a significant and substantial impact on Petitioner’s overall
       income, if it continues to progress and the expenses associated with its
       treatment continue to increase, it is certainly foreseeable that Petitioner will
       sustain a substantial and material change of circumstances justifying a
       modification of his alimony obligation. However, the Court is unaware of any
       authority that permits the Court to grant a modification based on a projected
       or anticipated future change of circumstances.

        We agree with Husband that his diagnosis with Parkinson’s disease is material in that
it occurred after the entry of the divorce decree and was not anticipated by the parties. See
Bogan, 60 S.W.3d at 728. To be substantial, a change must significantly affect “the obligor’s
ability to pay or the obligee’s need for support.” Id. Husband argues that Parkinson’s
disease “adversely affects his ability to earn a living.” The evidence of record does not,
however, support that assertion. It is significant that Husband was not diagnosed with

                                              -4-
Parkinson’s disease until January 2009. The hearing in this case occurred in November 2009,
and Husband testified that his earnings from his law practice had been only $65,000 through
September 2009. Husband relies on this testimony regarding his income from one source and
for only part of the year. There was no proof as to Husband’s income from other sources,
including investments, from which he had received substantial income in previous years. It
is also relevant that, at the time of the hearing, Husband had applied for the position of
United States Attorney and testified that he thought he could perform that job. The evidence
does not preponderate against the trial court’s finding that the evidence did not show “a
significant and substantial impact on Petitioner’s overall income.”

       The determination as to whether there has been a substantial and material change of
circumstances is within the discretion of the court. Id. at 727. We conclude that the trial
court did not abuse its discretion in concluding that Husband’s new diagnosis did not
constitute a substantial and material change of circumstances.

                                    Husband’s income

       Husband further argues that the trial court erred in failing to find a substantial and
material change of circumstances based upon his alleged decreased income since the divorce.
The trial court made the following pertinent findings:

       Petitioner has presented tax returns and other evidence to show that his income
       from his law practice has decreased since the divorce. Petitioner has testified
       that the decrease is due to general economic factors, changes in the Worker’s
       Compensation Law, and the effects of Parkinson’s disease. The Court is
       satisfied that his testimony is true. However, this Court is not so much
       concerned with a reduction in income from one source as it is concerned with
       whether Petitioner has sustained a significant change in his income from all
       sources. His tax returns (Exs. 33-35) reflect an average annual adjusted gross
       income for tax purposes of $145,576 for the three years prior to the divorce.
       The Petitioner’s tax returns for the year of the divorce and the three years
       following the divorce (Exs. 36-39) show an average annual adjusted gross
       income (before deduction of his alimony obligation) of $147,713. Petitioner
       may have sustained a decrease in his earnings from his law practice since the
       divorce, but there has not been a significant decrease in his overall income.
       (The Court is cognizant that Petitioner and Respondent filed joint tax returns
       for 2002 and 2003 and that Petitioner and his new wife filed a joint tax return
       in 2008. Petitioner has not claimed that his remarriage has created a change
       in circumstances. And the Court finds that including the income of



                                             -5-
        Petitioner’s new wife does not significantly impact the Court’s findings
        regarding substantial and material change of circumstances.)

        In his brief and at oral argument, Husband challenged the trial court’s calculations
concerning his average earnings since the divorce. The trial court’s post-divorce four-year-
average figure of $147,713 does appear to be based upon adjusted gross income (before
deducting alimony) of $215,797 for 2008, a figure that appears to include income from
Husband’s new wife. The trial court made a specific finding that inclusion of the new wife’s
income did not “significantly impact” its findings regarding whether there had been a
substantial and material change of circumstances. Adding alimony back in to Husband’s own
figure for adjusted gross income for 2008 (Exhibit 53) yields a 2008 income figure of
$206,103, as Husband acknowledged on cross-examination at the hearing. The four-year-
average adjusted gross income based upon this 2008 figure would be $143,872.75. Husband
testified that his new wife’s gross income was “probably $52,000 a year.” There is nothing
in the record to correlate this gross income figure with the 2008 adjusted gross income tax
figures. The evidence does not preponderate against the trial court’s decision to rely upon
the tax return figures for adjusted gross income.1

       In his brief, Husband asserts, without explanation, that his average yearly income
since 2005 was $122,000. Since Husband criticizes the trial court for failing to consider his
reduced earnings from 2009, we surmise that he used the income figure of $65,000, the
amount of net earnings from his law practice through September 2009, for 2009. As
previously discussed, Husband did not put on any proof regarding other income from 2009.
We find no error in the trial court’s decision to consider only those years for which there was
complete income information.

       The evidence does not preponderate against the trial court’s finding that there had “not
been a significant decrease in [Husband’s] overall income.” Accordingly, we find no abuse
of discretion in the trial court’s determination that changes in Husband’s income did not
constitute a substantial and material change of circumstances.

                                Wife’s needs and earning capacity

       Husband’s argument here is that the trial court failed to consider wife’s needs and
earning capacity in its determination. He asserts that Wife overestimated her monthly
expenses and could have gotten a job as a teacher in the local school system with a salary of



        1
         Even if we subtract $50,000 from the adjusted gross income figure for 2008, the four-year-average
adjusted gross income would be $133,796.

                                                   -6-
$35,000 plus benefits. In its decision, the trial court expressly considered Wife’s needs and
income:

       Respondent’s income and expenses are relevant to whether there has been a
       significant and material change of circumstances since the granting of the
       divorce. Respondent last worked full-time in 1990 when she was a Special
       Education teacher. At the time of the divorce, she was working at Curves and
       earning $400 per month. She currently works as a substitute teacher for
       Marion County Schools at approximately $300 per month. Her only other
       source of income is the periodic alimony received from Petitioner. Petitioner
       offered evidence that Respondent could return to a full-time position as a
       Special Education teacher at a salary of more than $30,000 for 10 months
       work. The MDA of the parties provides that Respondent can earn $36,000 per
       year without that being a change of circumstances for purposes of
       modification. Respondent submitted a list (Ex. 4) showing her average
       monthly expenses total approximately $4,500. . . . There is no significant
       change in Respondent’s income or her needs . . . .

        Husband relies upon checks, records of cash deductions, and other documents to argue
that Wife exaggerated her monthly expenses. This is largely a credibility determination, and
we accord great deference to the trial court’s acceptance of Wife’s expense statement. See
Larsen-Ball v. Ball, 301 S.W.3d 228, 235 (Tenn. 2010). Moreover, as noted by the trial
court, the parties’ agreement expressly allows Wife to make up to $36,000 a year without
constituting a substantial and material change of circumstances. The evidence does not
preponderate against the trial court’s conclusion that there had been no significant change
in Wife’s needs or income.

                                        Separate assets

       Husband also asserts that “the separate assets of each party . . . weigh strongly in favor
of modifying Husband’s alimony obligation.” He argues that the trial court “failed to
consider the elements of Tenn. Code Ann. § 36-5-121 in comparing the respective parties’
financial well-being.”

       The factors found in Tenn. Code Ann. § 36-5-121(i) are to be considered once the
petitioner establishes a substantial and material change in circumstances. Bogan, 60 S.W.3d
at 730. In this case, the trial court did not find a substantial and material change of
circumstances. Therefore, the statutory factors arguably did not come into play. Moreover,
“the two most important considerations in modifying a spousal support award are the



                                               -7-
financial ability of the obligor to provide for the support and the financial need of the party
receiving the support.” Id.

       Furthermore, contrary to Husband’s contention, the trial court did consider the parties’
respective financial conditions. The trial court made the following pertinent findings:

              At the time of the divorce, Petitioner owned a one-half interest
              in a partnership called Scenic Investors.           The Marital
              Dissolution Agreement provided that Respondent would receive
              one-half of Petitioner’s interest in Scenic Investors. Following
              the divorce, Scenic Investors, a real estate partnership then
              consisting of Petitioner, Respondent and Phil Roland, was
              dissolved with Petitioner buying out the other two partners. The
              process of dissolution was initiated by Petitioner. Petitioner
              borrowed $95,000 to complete that transaction. Respondent
              received $360,000 from the dissolution. Income received by the
              Respondent from the sale of the asset awarded to her in the
              divorce does not qualify as a change of circumstances.

                     Petitioner showed a net worth of $645,000 right after the
              divorce (Ex. 50). He has asserted that he has had an increase in
              debt since the divorce. This would include the $95,000
              borrowed to purchase Respondent’s interest in the partnership.
              The evidence shows he claimed to have a net worth right before
              filing the Petition to Modify of $1.3 million (Ex. 52), or
              approximately double the amount of his net worth right after the
              divorce. The Court finds that the $95,000 in debt does not
              constitute a substantial change of circumstances.

The trial court subsequently noted that Wife “submitted financial statements (Exs. 11 and 12)
showing her net worth at $769,551.73 after the divorce and at $754,642.00 currently.” The
court found no significant change in Wife’s net worth.

        The evidence does not preponderate against the trial court’s factual findings, and the
trial court acted within its discretion in finding no substantial and material change of
circumstances.




                                              -8-
                                      Public policy argument

        Husband also asserts that “it is against public policy that Wife should continue to
enjoy the same standard of living, or greater, than she enjoyed during the marriage while
Husband continues to incur debt to meet his alimony obligation.” We find no merit to this
argument. The relevant inquiry is whether there has been a substantial and material change
of circumstances, and this inquiry must focus on Husband’s ability to pay and Wife’s needs.
As discussed above, these issues were thoroughly addressed by the trial court, and we find
no abuse of discretion in the trial court’s conclusion. Furthermore, Husband’s assertions
regarding his need to incur debt to pay alimony are not convincing, particularly in light of his
lifestyle. The record contains evidence that, in 2008, Husband made substantial political
contributions (over $5,000) and gifts to a fraternity ($4,000), took several expensive
vacations, dined at numerous expensive restaurants (at least $4,800), and bought a new car.

                                          A TTORNEY F EES

        Husband’s final argument is that the trial court abused its discretion in awarding Wife
attorney fees and discretionary costs. He asserts that this ruling conflicts with Tenn. Code
Ann. §§ 36-5-121(d)2 and 36-5-103 and that the trial court had no authority to award attorney
fees in this case.

      Husband’s argument focuses on Tenn. Code Ann. § 36-5-103(c), which provides as
follows:

        The plaintiff spouse may recover from the defendant spouse, and the spouse
        or other person to whom the custody of the child, or children, is awarded may
        recover from the other spouse reasonable attorney fees incurred in enforcing
        any decree for alimony and/or child support, or in regard to any suit or action
        concerning the adjudication of the custody or the change of custody of any
        child, or children, of the parties, both upon the original divorce hearing and at
        any subsequent hearing, which fees may be fixed and allowed by the court,
        before whom such action or proceeding is pending, in the discretion of such
        court.

Relying on language in Evans v. Evans, M2002-02947-COA-R3-CV, 2004 WL 1882586, at
*13 (Tenn. Ct. App. Aug. 23, 2004), Husband asserts that Tenn. Code Ann. § 36-5-103(c)


        2
        Tenn. Code Ann. § 36-5-121(d) authorizes a court to award various types of alimony, including
alimony in solido, which may be used to cover attorney fees. Courts often award attorney fees in the form
of alimony in solido at the time of the original divorce decree.

                                                  -9-
did not authorize the trial court to award attorney fees in this case because Husband filed an
action to modify alimony, whereas the statute refers to actions to compel compliance with
existing support orders.

       Our analysis in Evans supports the trial court’s award of attorney fees in this case.
Recognizing that our courts have treated post-divorce modification proceedings as a
continuation of the original divorce proceedings, we concluded that “ample authority exists
to authorize a court to award fees in a modification proceeding on the same basis, and
according to the same principles, as a fee award is made in the divorce proceeding and initial
award under . . . Tenn. Code Ann. § 36-5-101.” Id. at *15; see also Richards v. Richards,
No. M2003-02449-COA-R3-CV, 2005 WL 396373, at *13-14 (Tenn. Ct. App. Feb. 17,
2005).

        We conclude that the trial court had authority to award attorney fees to Wife in this
case.

       Husband further argues that the trial court abused its discretion in awarding Wife
attorney fees because she had adequate assets to pay her own attorney fees and Husband had
to borrow money to meet his alimony obligations. The trial court heard extensive proof
concerning the financial condition of the two parties and was able to assess their credibility.
We find no abuse of discretion in the trial court’s decision to award Wife a portion of the
attorney fees she requested in this case.3

      We decline Wife’s request for an award of her attorney fees on appeal based on Tenn.
Code Ann. § 27-1-122 as we do not consider Husband’s appeal frivolous.

                                              C ONCLUSION

       We affirm the trial court’s decision in all respects. Costs of appeal are assessed
against Husband, for which execution may issue if necessary.


                                                                       _________________________
                                                                       ANDY D. BENNETT, JUDGE




        3
        Wife requested a total of $32,118.82 in attorney fees and $1,032.30 in discretionary costs. The trial
court awarded Wife $16,059.41 in attorney fees and all of the requested discretionary costs.

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