                   IN THE COURT OF APPEALS OF TENNESSEE
                              AT KNOXVILLE
                                     September 1, 2010 Session

       MICKEY JOE HALL v. KIMBERLIE KAE DAVENPORT HALL

                      Appeal from the Chancery Court for Knox County
                       No. 152947-3   Michael W. Moyers, Chancellor


                   No. E2009-01889-COA-R3-CV - Filed October 5, 2010


This is a post-divorce child support modification case. Kimberlie Kae Davenport Hall1
(“Wife”) filed a petition against her former husband, Mickey Joe Hall (“Husband”), seeking
an increase in child support. Wife’s petition, filed October 23, 2001, was followed by
numerous hearings before special masters2 over the course of several years. The masters
filed reports from each of the hearings, all of which were objected to by one or both of the
parties. Interspersed among the masters’ hearings, the trial court addressed various matters
including the issue of child support. On January 23, 2009, the trial court held a hearing at
which it ruled that the Income Shares formula for calculating child support under the Child
Support Guidelines (“the Guidelines”) as they existed at the time of the hearing, i.e., on
January 23, 2009, was applicable to the calculation of support for the period from November
1, 2001, forward. The final order being appealed by Wife applied the formula and
determined that Husband had overpaid his child support by $27,377.25. The court allowed
Wife certain offsets which reduced the final judgment against Wife to $24,810.65. We
affirm in part and vacate in part and remand for an upward modification of Husband’s
support due to a “hardship” imposed on Wife by the rigid application of the Income Shares
formula.

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


        1
        Wife’s name in the trial court was spelled “Kimberli” in most filings. The notice of appeal spelled
her name “Kimberlie” as the case is styled in this court. Appellant’s brief spells her name “Kimberlie Kay.”
From documents in the record, it appears her name is “Kimberli Kae.” We are not inclined to assign a new
case name. Obviously, it is of no real consequence to the outcome.
        2
         There are conflicting references in the record and in the briefs to the “title” of the fact finder.
Sometimes he is referred to as “referee” and sometimes he is called “master” or “special master.” Because
we believe the proceedings in this case were pursuant to Tenn. R. Civ. P. 53, rather than routine referrals to
an appointed child support referee, we have generally used the term master instead of referee.
C HARLES D. S USANO, J R., J., delivered the opinion of the Court, in which D. M ICHAEL
S WINEY, and J OHN D. M CC LARTY, JJ., joined.

J. Terry Holland, Knoxville, Tennessee, for the appellant, Kimberlie Kae Davenport Hall.

Nicholas D. Bunstine, Knoxville, Tennessee, for the appellee, Mickey Joe Hall.

                                        OPINION

                                             I.

        Wife proceeded pro se in the divorce proceeding that led to a judgment entered
September 12, 1995. The divorce was granted on stipulated grounds and the judgment
incorporated the parties’ marital dissolution agreement (“the MDA”). The judgment recites
that the MDA “makes adequate and sufficient provision for the custody and maintenance of
the parties’ minor children.” Under the MDA as incorporated into the divorce judgment,
Wife was awarded “physical custody” of the minor children, Ashton and Aaron, subject to
a fairly standard visitation schedule for Husband. The monetary arrangements vis-a-vis the
children were as follows:

             Husband shall pay to Wife the sum of $200.00 (two hundred
             dollars) per month as and for his monthly child support
             obligation. Said sum, in addition to all the other provisions
             herein for the support of the children, equals or exceeds the
             child support guidelines as set by the State of Tennessee. . . . .
             In addition, husband will continue to purchase $100.00 (one
             hundred dollar) face value savings bonds (one for each child),
             each month until each child graduates high school or reaches
             their nineteenth birthday. Both parties will cooperate in
             attempting to have the earnings qualified as tax deductible for
             college use.

             Husband shall keep the minor children covered on a policy of
             major medical insurance. The parties shall divide any expenses
             not covered by said insurance such as deductible. This includes
             dental and orthodontic benefits as well. The minor children
             have life insurance policies insuring their lives. Wife shall pay
             twenty-five percent of each child’s annual premium and husband
             shall be responsible for and pay seventy-five percent of each

                                            -2-
                 child’s annual premium till said policies are paid up in full.
                 Husband will keep as a minimum fifty percent of all his life
                 insurance policies presently in full force and effect naming the
                 two minor children as beneficiaries of said policies with wife to
                 be trustee over the funds in the event the children are minors
                 upon husband’s death.

                 Husband and wife agree to designate both children equally as
                 beneficiaries for a minimum of fifty percent of all their IRA and
                 401K accounts offered through their employment until the
                 children reach majority.

                                                  *   *     *

                 Each party will be responsible for one-half of all clothing, shoes,
                 and extracurricular activities, such as lessons and sports.

(Paragraph numbering in original omitted.)

        Wife’s petition filed on October 23, 2001, was filed in Blount County where the
divorce was granted. Because the parties had moved to Knox County, the case was
transferred to the trial court before any proceedings were held. The petition alleges “a
material and substantial change of circumstances since the signing of the [MDA] that
justifies the modification of child support obligations of the parties.” Among other changes,
the petition specifically alleges a substantial increase in Husband’s income greater than 15%,
and asks that support be set at 32% of Husband’s total income rather than the previously-
agreed to payment of “one-half of all clothing, shoes, and extracurricular activities.”
Husband answered the petition after which the parties attended three mediation sessions
aimed at resolving the issues raised in the petition.3 The mediation resulted in an agreed
order resolving all issues except child support, with an agreement to an expedited procedure
for resolving the child support issue:




        3
        The parties agreed at oral argument that we have all parts of the record needed for determining this
case. We will proceed with this understanding and assume that anything we have not been furnished is
extraneous. For example, it is clear, only from an agreed order that we have been furnished, that there were
pleadings filed related to the visitation schedule, in addition to the petition to modify, that were considered
by the mediator in the course of the several meetings and dealt with in an agreed order. We can glean what
we need to know from the order, without knowing the jot and tittle of all the pleadings that led to the order.

                                                      -3-
                 That in order to obtain an expeditious4 resolution, the issue of
                 child support will be referred to a Substitute Referee, who will
                 hear testimony from the parties and their witnesses, argument of
                 counsel and determine this portion of the case pursuant to
                 applicable law. . . . [T]he Honorable Stan C. Briggs, Referee of
                 the Juvenile Court, will determine the child support issue and
                 submit Findings and Recommendations to this Court for
                 approval.

        The first hearing on Wife’s petition was before Child Support Referee Stanley C.
Briggs. On May 30, 2003, Referee Briggs (“Master No. 1”) filed his “Findings and
Recommendations” which we will summarize. Many of the payments made by Husband
under the MDA did not qualify as child support while others that might otherwise qualify
were subject to such fluctuations as to potentially lead to disagreements. The 1995 MDA and
judgment were in violation of Tenn. Code Ann. § 36-5-101(a)(2)(A) and Tenn. Comp. R. &
Regs. ch. 1240-2-4-.03(4) which both require that a definite sum be set for child support.
Therefore, Master No. 1 concluded, following the initial hearing before him, that it was
incumbent upon him to calculate the amount of support that Husband should be paying under
the Guidelines. Based on Husband’s 1994 income of $49,689.76, his support obligation at
the time of the divorce should have been set at $1,000.64 per month. Husband’s 2002
income had risen to $69,336.00, and based entirely on this figure, support at the time of the
hearing would have been $1,341.44. However, because of an increase in Husband’s
parenting time with the children, a downward deviation was in order – based upon a daily
support rate of $41 multiplied by 61 days – for a monthly decrease of $224.18. The new
support figure effective as of the date of filing of Wife’s petition to modify was $1,117.26
per month, i.e., $1,341.44 less $224.18. The difference between the monthly support
required in 1995, i.e., $1,000.64, and the support required in 2001, i.e., $1,117.26, was
$116.62, a figure less than the required “significant variance” of 15% for modifying child
support. Even though a modification of support was not authorized on the basis of a
significant variance, modification was permitted by the master “to provide for a definite sum
of support each month.” Therefore, Master No. 1 recommended that support be set at
$1,000.64, retroactive to the date of filing of Wife’s petition. Upon giving Husband credit
for an average payment of $425.15 per month based upon the total payments made by him
in the relevant time period, Master No. 1 calculated an arrearage of $9,207.36 based upon




        4
         This reference is somewhat ironic since a petition filed in 2001 was not finally concluded in the trial
court until 2009.

                                                      -4-
an underpayment of $575.465 per month for 16 months. Also, Master No. 1 recommended
that the arrearage be paid at the rate of $100 per month.

        Husband and Wife both filed timely objections to Master No. 1’s recommendations.
Primarily, Husband objected that there was no significant variance; therefore, there was no
basis to modify the MDA. Wife, on the other hand, objected that Master No. 1 failed to find
a basis for modification and also challenged his determination that the arrearage should be
paid at the rate of $100, contending it was too low. She also argued that the arrearage should
be paid with interest.

       At some point, Wife filed a motion asking that Husband be held in contempt for not
paying support in accordance with Master No. 1’s recommendation. Also, it appears that
Husband, in March 2006, filed a motion to change custody and reduce support. As an
affirmative defense to Wife’s motion for contempt, Husband averred “that the Findings and
Recommendations of February 13, 2003 by the Special Master has been objected to by both
parties, and said objections have not been addressed by the Court as of this date.” Husband
also alleged “that the parties appeared before [Master No. 1] on May 23, 2005 for
supplemental Findings and Recommendations as a result of the change in the child support
laws [and] [t]hat [Master No. 1] has yet to issue these supplemental Findings and
Recommendations.” Husband also averred that a new parenting plan had been entered
increasing his parenting time with Aaron and that support should be based on the new
parenting schedule. The court verbally ordered the parties to comply with Master No. 1’s
report until ordered otherwise.

       On November 28, 2006, the trial court referred the matter to Attorney John K. Harber
as special master (“Master No. 2”) pursuant to Tenn. R. Civ. P. 53 for findings on specific
issues. Master No. 2 held a hearing on February 8, 2007, to determine “the [Husband’s]
child support obligation effective 6-1-05” and “the [Husband’s] child support obligation
effective 10-26-06.” Master No. 2 filed his report on February 20, 2007. Master No. 2
found he was unable to determine, at the time of his report, the support obligation effective
October 26, 2006, because the parties had not yet filed their 2006 tax returns. Master No.
2 recommended that he reconvene as soon as both parties had filed their 2006 tax returns and
address any modification of support “effective 10-26-06.” As to the obligation effective June
1, 2005, Master No. 2 found “a significant variance has occurred in the Father’s income and
child support obligation justifying a modification of child support.” Based on tax returns,
Master No. 2 determined that Husband’s monthly income for child support purposes was
$5,295. Because Wife’s 2005 income was inflated by a withdrawal from retirement funds,


        5
        This figure appears to be a few pennies off but no complaint was made regarding the arithmetic of
Master No. 1. It is de minimus and will not be further considered by us.

                                                  -5-
Master No. 2 averaged her 2003, 2004 and 2005 income and found that her monthly income
for child support purposes should be figured at $6,856. Master No. 2 found that Aaron spent
101 days with Husband and Ashton spent 33 days with him. Husband’s child support
obligation effective June 1, 2005 was found to be $863 per month.

       Wife objected to Master No. 2’s report on numerous grounds. She made the following
objections: (1) the change from $1,000.64 to a lesser number should not be effective earlier
than the date of Husband’s motion to reduce support; (2) that she paid a 10% tax penalty on
her early withdrawal of retirement and the penalty should have been deducted from her gross
income; and (3) that the report did not provide for a payment on the arrearage.

        After Master No. 2 ’s report was filed, Husband stopped paying toward the arrearage,
and Wife filed a second motion for contempt. The motion was heard May 4, 2007, and an
order was entered May 25, 2007. The trial court refused to hold Husband in contempt, but
required him to pay Wife’s attorney’s fees for prosecuting the motion for contempt. The
order entered on the motion for contempt discusses at length the status of the case in regard
to the reports of the special masters.

              That although there is no Order down from the previous hearing
              in this Court on similar issues, said hearing having been
              conducted on or about November 29, 2006, all parties agree and
              the Court recollects that the issue of the status of [Master No. 1]
              and his Findings were resolved for purposes of going forward
              with support and that the Court as a part of its ruling then
              specifically ordered that [Master No. 1’s] Findings would be
              followed until modified by subsequent hearing. Further [Master
              No. 1’s] Findings called for an arrearage amount to be paid at
              the rate of One Hundred Dollars ($100) a month.

              The Court recalls that . . . [Master No. 2] was appointed by the
              Court for the purpose of making certain Findings and
              Conclusions and indeed the Court has received findings from
              [Master No. 2] which were filed in mid February 2007.

                                          *   *     *

              From all of the foregoing it is therefore ORDERED as follows:

              That [Master No. 2’s] ruling from February 2007, as further
              modified by any subsequent rulings from additional hearings

                                              -6-
              shall be the rule of this case without regard to his status as
              Special Referee or Special Master until such rulings shall be
              affirmed, modified or otherwise accepted by this Court.

                                          *   *     *

              That the arrearage previously found by [Master No. 1] and the
              payment thereon previously ordered by [Master No. 1] shall
              continue to be the rule of the case until same is affirmed,
              modified or otherwise approved by this Court.

(Paragraph numbering in original omitted.)

       On July 10, 2007, Master No. 2 filed his findings and recommendations regarding
Husband’s child support obligations for 2006 and 2007. Based on the income of the parties
and the amount of parenting time with the children, all as reflected on the worksheets in the
record, Master No. 2 found Husband’s support obligation to be $215 per month from March
14, 2006, to December 31, 2006, and $362 per month from January 1, 2007, forward.

       Husband objected to the July 2007 report of Master No. 2 on the ground that it
miscalculated his rental income and that the master should not have set the 2007 support at
a higher figure without finding a significant variance in his income. Wife also filed
objections to the July 2007 report.

       On August 3, 2007, Husband filed a motion asking that his child support payments
be suspended and that the matter be remanded to Master No. 2 in light of Wife’s notification
that she was relocating to Colorado with daughter Ashton and was willing to allow Aaron
to reside with Husband. According to Husband, this would affect the child support
obligations to the point that Wife would owe Husband support. Wife opposed the motion to
suspend, primarily on the ground that their son would graduate from high school in May
2008, and therefore, any recalculation of support would be temporary. Wife also pointed out
that Master No. 1 had not filed a report from the second hearing he had held.

       On September 11, 2007, the court entered an order on numerous pending motions.
The court granted Wife permission to relocate with her daughter, suspended ongoing child
support payments, ordered Husband to continue to pay $100 per month toward the arrearage,
treated Wife’s objections to the July 2007 report of Master No. 2 as withdrawn, took
Husband’s objections under advisement, took the motion to remand to Master No. 2 under
advisement, and reserved all other matters for further hearing.



                                              -7-
       In April 2008, Wife filed a motion to terminate support for Aaron in light of his
impending May 2008 graduation and to recalculate support for her daughter who was
residing with Wife. Wife reiterated her insistence that some ruling be made on the original
report of Master No. 1 filed in May 2003, and that interest be added to the arrearage.

       On May 15, 2008, Master No. 1 finally filed his findings with regard to the hearing
conducted by him on May 23, 2005, a hearing held for the purpose of “reevaluat[ing] child
support pursuant to the Tennessee income shares guidelines effective January 18, 2005.”
Master No. 1 treated the 15% significant variance requirement as not applicable. He
calculated Wife’s income at $5,853.33 per month and Husband’s at $5,234.59 per month,
including $422.50 rental income. Master No. 1 refused to allow the “paper loss” for
depreciation taken on Husband’s tax return. Master No. 1 summarized his findings and
calculations as follows:

                 The income shares guidelines indicate that [Husband’s] share of
                 the BCSO 6 of $770.33 is reduced by 20%, $154.07, due to
                 parenting time adjustment. His support was increased by
                 $107.44 for the special expense deviation [for extracurricular
                 activities] to a total of $678.44 per month, which was a
                 substantial 32% decrease from the former support. The
                 [Husband’s] income has increased from $4,140.81 monthly in
                 1994 to $5,234.59 per month in 2005 and it is found appropriate
                 to employ the hardship provision to increase support to $839.54
                 per month.

                 The difference between the February 13, 2003 support of
                 $1,000.64 and $839.54 of $161.10 has accrued as a credit
                 against the judgment of $9,207.36, assuming the [Husband] has
                 paid per the prior recommendation. The total credit from May,
                 2005 through April, 2008 would be $5,799.60.

       On May 26, 2008, Wife objected to Master No. 1’s second report on multiple grounds,
including the fact that three years had elapsed between the hearing date and date of filing of
the report. On May 16, 2008, the court held a hearing on Wife’s motion to terminate support
for Aaron and to recalculate support for daughter Ashton. The court entered an order on
September 9, 2008, nunc pro tunc to May 16, 2008, requiring Husband to pay $534.00 per
month for Ashton.



       6
           “BCSO” means “Basic Child Support Obligation.”

                                                 -8-
       On January 23, 2009, the court held a hearing upon all outstanding issues and entered
an order on April 3, 2009. As pertinent, the court ordered:

              The Court finds that any modifications of child support shall
              utilize the existing Income Shares formula for said modification.

                                          * * *

              Based on the court’s findings of fact, [Husband’s] child support
              obligation from November 2001 is as follows:

              (A) [Husband] shall pay the monthly sum of $672.00 per moth to
              [Wife] for the months of November, and December of 2001 . . . .

              (B) [Husband] shall pay the monthly sum of $792 per month to
              [Wife] in 2002 . . . .

              (C) [Husband] shall pay the monthly sum of $616 per month to
              [Wife] in 2003 . . . .

              (D) [Husband] shall pay the monthly sum of $614 per month to
              [Wife] in 2004 . . . .

              (E) [Husband] shall pay the monthly sum of $619 per month to
              [Wife] in 2005 . . . .

              (F) [Husband] shall pay the monthly sum of $215 per month to
              [Wife] in 2006 . . . .

              (G) [Husband] shall pay the monthly sum of $70 per month to
              [Wife] in 2007 . . . .

              (H) [Wife] shall pay the monthly sum of $146 per month to
              [Husband] in 2008 from January 1, 2008 through May 31, 2008
              ....

              (I) [Husband] shall pay the monthly sum of $654 per month to
              [Wife] in 2008 from June 1, 2008 through December 31, 2008
              ....



                                             -9-
              (J) [Husband] shall pay the monthly sum of $654 per month to
              [Wife] beginning January 2009. . . .


                                           * * *

              That the parties shall attempt to determine any child support
              arrearages owed to either party as a result of the court’s findings
              herein, and advise the Court of same. That, accordingly, this
              issue is reserved at this time.

(Paragraph numbering in original omitted.) In another order entered the same date, the court
held that Wife was not entitled to reduce her income for the amount she paid in state income
tax and the taxes she paid on an early withdrawal of retirement funds in 2005.

        The court entered its final order on August 11, 2009, in which it found that Husband
had overpaid his child support obligation by $27,377.25 through December 31,2008. The
court allowed Wife an offset of $2,566.60 for overpayment of her share of extracurricular
activity expenses. Accordingly, the court awarded Husband a judgment against Wife for
$24,810.65.

                                              II.

        Wife appeals, raising numerous issues, all of which turn on whether the trial court
erred in rigidly applying the 2006 Income Shares formula to Wife’s petition to modify child
support filed in October 2001. Wife stresses the obvious: that numerous hearings were held
on her October 2001 petition, none of which resulted in a final judgment until 2009.

                                             III.

       The resolution of this convoluted procedural history turns on a question of law. We
review a trial court’s determination of law de novo, with no presumption of correctness.
Vantage Technology, LLC v. Cross, 17 S.W.3d 637, 644 (Tenn. Ct. App. 1999). Prior to the
adoption of the Guidelines, trial courts were allowed broad discretion to set child support
according to their view of the means and condition of the parents. Brooks v. Brooks, 61
S.W.2d 654, 654 (Tenn. 1933). The adoption of the Guidelines has limited that discretion;
decisions regarding support must be made within the parameters of the Guidelines. Berryhill
v. Rhodes, 21 S.W.3d 188, 193 (Tenn. 2000); Smith v. Smith, 165 S.W.3d 279, 282 (Tenn.
Ct. App. 2004). Generally, a trial court’s factual findings that approve a master’s factual
findings are considered conclusive. Dalton v. Dalton, No. W2006-00118-COA-R3-CV,

                                             -10-
2006 WL 3804415, at *3 (Tenn. Ct. App. W.S., filed Dec. 28, 2006). However, this general
rule is not followed where the finding is based on an underlying error of law or is a mixed
question of fact or law. Id. Where the trial court makes its own factual findings which reject
or modify a master’s findings, we review those findings de novo accompanied by a
presumption of correctness unless the evidence preponderates against those findings. Parks
v. Eslinger, No. M1999-02027-COA-R3-CV, 2003 WL 237597, at *6 (Tenn. Ct. App. M.S.,
filed Feb 4, 2003). Where the trial court makes no factual findings, we simply review the
record de novo for the preponderance of the evidence, without a presumption of correctness.
Kesterson v. Varner, 172 S.W.3d 556, 566 (Tenn. Ct. App. 2005).

                                                      IV.

       We are aware of two cases, both unpublished, which discuss whether amended
versions of the Guidelines apply to petitions to modify child support made before the
amendments were adopted. The cases are Boyd v. Bates, No. M2007-02345-COA-R3-CV,
2008 WL 3342998 (Tenn. Ct. App. M.S., filed August 11, 2008), and Pruett v. Pruett, No.
E2007-00349-COA-R3-CV, 2008 WL 182236 (Tenn. Ct. App. E.S., filed Jan. 22, 2008).
Boyd concerns the Income Shares formula amendment that became effective January 18,
2005,7 and Pruett concerned the later June 2006 amendment8 . Pruett held, in no uncertain
terms, that the Guidelines as amended in 2006 apply to petitions to modify support filed


       7
           As quoted in Boyd, the 2005 version states:


                  (1) Beginning on the effective date of these rules, all modifications shall
                  be calculated under the Income Shares Guidelines, whether the action
                  was pending before the effective date or filed after the effective date,
                  where a hearing which results in an order modifying support is held
                  after the effective date of these rules. Tenn. Comp. R. & Reg. 1240-2-4-
                  .05(1) (emphasis added).

Boyd, 2008 WL 3342998, at *5 (emphasis in original).


       8
           As quoted in Pruett, the 2006 amended versions states:

                  The Child Support Guidelines established by this Chapter shall be
                  applicable in every judicial or administrative action to establish, modify, or
                  enforce child support, whether temporary or permanent, whether the action
                  is filed before or after the effective date of these rules, where a hearing
                  which results in an order establishing, modifying or enforcing support is
                  held after the effective date of these rules. (emphasis added). Tenn. Comp.
                  R. & Regs., ch. 1240-2-4-.01(2)(a) (2006).

Pruett, 2008 WL 182236, at *5 (emphasis in original).

                                                      -11-
before the amendment, in those cases where the hearing on the petition is held after the
effective date of the amendment. Pruett, 2008 WL 182236, at *5. Further, Pruett clearly
holds that it is not the hearing before a referee or master that controls; it is the hearing
wherein the trial court took “some affirmative action . . . ‘upon the report of the master’ ” Id.
(quoting Tenn. R. Civ. P. 53.04(2)). In this regard, Pruett is in accord with Boyd’s holding
that

               the applicability of the income shares guidelines does not
               depend on the date on which the petition to modify is filed.
               Rather, it depends on the date of the hearing that results in an
               order modifying support.

Boyd, 2008 WL 3342998, at *5. Where a matter is referred to a special master, there is no
“order modifying support” for the purpose of determining which version of the Guidelines
applies until the court of record acts upon the report. Pruett, 2008 WL 182236, at 5.
Accordingly, we are constrained to hold that the trial court did not err in applying the
Guidelines, as amended in 2006, to Wife’s petition to modify support. Our holding that
Pruett applies to the instant case disposes of Wife’s argument that we should modify the
holdings of Pruett and Boyd to the point of treating the pre-Income Shares version of the
Guidelines as the controlling version because that is what was in effect when Master No. 1
first acted on the petition to modify. Again, the critical date is the “date of the hearing that
results in an order modifying support,” Boyd, 2008 WL 3342998 at *5, and not the date of
the hearing before the master.

         As far as the facts of this case are concerned, our holding as to the correct version of
the Guidelines to be applied to the calculations, however, is not the end of the matter. Wife
argues strenuously that “the facts in this case are unique, unusual, and realistically should be
treated substantially differently than . . . the current unreported cases . . . .” Wife argues that,
under the circumstances, “application of the Income Shares Guidelines is simply
inappropriate.” One of her issues is phrased in terms of questioning whether the application
of Income Shares “works an inequitable hardship.” She also argues that “it is inappropriate
to utilize Income Shares to determine and modify the child support from what was previously
Ordered and followed by the parties under Court Order of some six (6) years.” Similarly,
Wife argues that “it cannot be said to be equitable to enforce a law . . . that actually modifies
by a factor of Twenty-Five Thousand Dollars . . . the obligation of support.”

       Although Wife does not specifically assert in her brief that the trial court “should have
applied the ‘hardship provision’ ” in the 2006 amended version of the Guidelines to soften
the blow, her arguments are tantamount to that assertion. Because the substance of the issue
is addressed and the facts are argued, it is appropriate for us to decide the issue on substance

                                               -12-
rather than form. Northeast Knox Utility District v. Stanfort Const., 206 S.W.3d 454, 461
(Tenn. Ct. App. 2006). The issue of “hardship” is properly before us.

        In fact, Husband asserts that Wife “failed to prove to the trial court that a significant
hardship existed such that the hardship provisions available under the guidelines were
applicable to this cause.” We disagree with Husband. Neither the final order entered August
11, 2009, nor the order entered April 3, 2009, specifically addressed whether strict
application of the Income Shares formula would impose a hardship on Wife. However, the
trial court specifically observed in the hearing held January 23, 2009, that an upward
deviation in child support based on hardship to Wife, as found by Master No. 1 in his second
report, would be a more appropriate way to deal with the dilemma and the equities of the
situation, rather than simply ignoring the change in the law. Also, the court acknowledged
in the hearing held June 2, 2009, that the result it was reaching “seems inequitable.” The
omission of a specific finding would appear to be a matter of oversight rather than a factual
finding that the hardship provision should not be applied. As we have indicated, Master No.
1, in his second report, found that a modification based on hardship was required. Master
No. 1 increased Husband’s support by 50% of the difference between the amount he was
paying under a straight percentage calculation and the amount calculated under the Income
Shares formula.

        In contemplation that the application of the Income Shares formula could significantly
affect the amount of child support, the amendment carried an escape clause to soften the
blow to the custodial parent. The 2006 provision states:

              (h) Hardship Provisions Due to Modification of Order.
              Any time following the effective date of these Rules when a
              tribunal is considering modification of an order initially
              established under Tennessee's Flat Percentage Guidelines, and
              the tribunal finds a significant variance between the amount of
              the existing child support order and the amount of the proposed
              child support order calculated under this chapter, which change
              results from the application of the guidelines rather than from
              the change in the income and/or circumstances of the parties,
              then the tribunal may modify the current child support order up
              to the full amount of the variance or may apply a hardship
              deviation as described below in parts 2-4.

Tenn. Comp. R. & Regs. ch. 1240-02-04-.07(h)(2006) (emphasis added).




                                              -13-
        The phrasing of the hardship provision appears to be tailor made to the present
situation. For approximately four years the parties, by order of the court of record, followed
the recommendation of Master No. 1 in his first order setting Husband’s ongoing support
obligation at $1,000.64 under the flat percentage rate of 32%. For an interim period of time
in 2007, based on an order of the court of record, Husband paid support of $839 based on
Master No. 2’s first report. Then, in its order entered April 4, 2009, the court modified
Husband’s monthly support obligation using Income Shares. The new support obligation set
amounts varying from $70 per month to $792 per month. Even at the high end, there is a
significant variance that is largely the result of the new formula. This is true up until January
1, 2008, when Wife began paying support to Husband based on the changes in the parties’
incomes and on her relocation. At this point, changes in support were at least as much a
matter of “the change in the income and/or circumstances of the parties” as was the new
formula.

       We therefore hold that the evidence preponderates in favor of a finding that strict
application of the 2006 version of the Guidelines to Wife’s petition to modify works a
hardship significant enough to require the trial court to “modify the current support order”
up to January 1, 2008. We also believe, and so hold, that the modification should be at least
50% of the difference between what Husband was ordered to pay under the straight
percentage rate and what he was ordered to pay under Income Shares. There is no magic
formula by which we have reached the percentage of 50%. It is simply the minimum amount
that we believe will be necessary to alleviate the hardship on Wife based on the amount of
the change and the time for which it retroactively took away support that Wife received and
ostensibly spent on her children. We will leave it to the trial court on remand to determine
the exact percentage rate for the time periods identified by the trial court in his last order up
to January 1, 2008, so long as it is at least 50%. It will also be necessary for the trial court
on remand to calculate the dollar amount of Husband’s support obligation based upon the
percentage determined by the court for each of the applicable time periods. From January
1, 2008, forward, the trial court’s decrees will control without modification by this opinion.

       Other than Wife’s assertion that this matter should be remanded to the trial court to
employ the straight percentage method utilized by Master No. 1 and to therefore rule on the
original objections to Master No. 1’s report, we do not perceive that the focus of either party
is on the particular numbers as found after the numerous hearings. Therefore, we have
focused more on the method than the mechanics. We have found nothing to indicate that the
evidence preponderates against the income figures used by the trial court to reach its final
figures. In light of the holdings we have announced, we have considered whether we should
have the trial court, on remand, consider and rule on all of the objections to the first report
of Master No. 1. We reject that approach for several reasons. First, it is the impact of the
Income Shares formula on the previously ordered support, rather than the correctness of the
previous order, that is the focus of the hardship provision. Second, we do not perceive the

                                              -14-
substance of the objections to be significant vis-a-vis the number that would be produced
based on 32% of Husband’s income at the time the petition to modify was filed. It also
appears that several of the objections were waived in the course of the last two hearings
before the trial court. Finally, counsel for both Husband and Wife indicated at oral argument
that their clients preferred to have this case brought to a close as simply and expeditiously
as possible, with as little left on remand as possible.

       Wife specifically asks us to address one additional issue, i.e., “the issue wherein
during the evidence adduced at the hearing on January 23, 2009, [Husband] was found to
have lied substantially both on his income tax returns as well as to the Court.” Contrary to
Wife’s argument, the trial court did not find that Husband had lied. Wife made the same
argument to the trial court, i.e., that her cross-examination exposed a lie. The trial court’s
response was, “I don’t find that testimony terribly persuasive.” The trial court is obviously
in a better position than this court to determine the credibility of a witness. Therefore, we
“extend considerable deference” to credibility findings by the trial court. Richards v. Liberty
Mutual Ins. Co., 70 S.W.3d 729, 732 (Tenn. 2002). Courts have held that a chancellor’s
finding which turns on credibility will not be reversed “unless, other than the oral testimony
of witnesses, there is found in the record clear, concrete and convincing evidence to the
contrary.” Tennessee Valley Kaolin Corp. v. Perry, 526 S.W.2d 488, 490 (Tenn. Ct. App.
1975).

       Wife points us to Husband’s testimony about one piece of property in Loudon County
which Husband admitted that he rents out. However, Husband testified that this property has
never been a good rental property and has never turned a profit. Insurance and taxes exceed
any rent collected. He considers his renter, a single mother, to be a charity case, and he often
allows her to pay her rent by allowing relatives to do work on the house. Such equivocal
cross-examination testimony, especially in the absence of any documents, does not make the
strong showing needed for us to reverse the trial court on the issue of Husband’s credibility
with respect to rental income.

                                               V.

        The judgment of the trial court is affirmed in part and vacated in part. That part of the
judgment following the holdings of Pruett and Boyd to require application of the 2006
version of the Guidelines to the petition to modify filed October 23, 2001, is affirmed. That
part of the judgment that set specific support amounts for Husband prior to January 1, 2008,
without allowing a modification upward by a percentage of the difference in the amount that
Husband was paying under the straight percentage method, i.e., $1,000.64, and the amount
Husband was required to pay under the 2006 Income Shares formula is vacated. The portion
of the trial court’s judgment setting child support from January 1, 2008, forward is affirmed.

                                              -15-
Costs on appeal are taxed to Husband. This case is remanded to the trial court, pursuant to
applicable law, to recalculate Husband’s support for the periods of time before January 1,
2008, by adding to the amounts decreed by the trial court in its last order, a percentage of the
difference between the amount Husband had been paying as ordered by Master No. 1, i.e.,
$1,000.64, and the amount as calculated under Income Shares. The trial court on remand
shall determine the various percentages by which support shall be increased for the periods
of time prior to January 1, 2008, but not to be less than 50%.




                                                     _______________________________
                                                     CHARLES D. SUSANO, JR., JUDGE




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