                    IN THE COURT OF APPEALS OF TENNESSEE
                                 AT JACKSON
                                          JUNE 17, 2008 Session

              CATHY LAKELAND ALLEN v. JOHN FOX ALLEN, JR.

                      An Appeal from the Chancery Court for Shelby County
                       No. 00-0092-3    Kenny W. Armstrong, Chancellor



                     No. W2007-02224-COA-R3-CV - Filed December 10, 2008


This is a petition to modify alimony. In the parties’ divorce decree, the husband was ordered to pay
the wife alimony in futuro based in part on the wife’s chronic, incurable health condition. About
six years later, the husband filed this petition to reduce or terminate his alimony obligation, arguing
that (1) the wife’s health condition had not declined as was originally anticipated, and (2) his income
had decreased and the wife’s income had increased. The trial court denied the husband’s petition,
concluding that a material change in circumstances had not occurred. The husband now appeals.
We affirm, concluding that the trial court did not err in finding that the husband did not prove a
material change in circumstances and in denying his petition to modify his alimony obligation.

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

HOLLY M. KIRBY, J., delivered the opinion of the Court, in which ALAN E. HIGHERS, P.J., W.S., and
WALTER C. KURTZ, SR. J., joined.

Larry Rice and Rachel Gallant, Memphis, Tennessee, for the appellant, John Fox Allen, Jr.

Mitchell D. Moskovitz, Adam N. Cohen, and Zachary M. Moore, Memphis, Tennessee, for the
appellee, Cathy Lakeland Allen.

                                                    OPINION

        On June 27, 2000, Plaintiff/Appellee Cathy Lakeland Allen (“Wife”) was granted a divorce
from Defendant/Appellant John Fox Allen, Jr. (“Husband”).1 Because the issue in this appeal relates
only to Wife’s alimony award, we focus on the facts and proceedings pertaining to that issue.

        At the time of the divorce trial, Husband and Wife were 49 years old and 43 years old,
respectively, and had been married about fifteen years. Husband had completed three years of


         1
       This is the second appeal in this case. The background facts are set out in our first decision, Allen v. Allen,
W2000-01844-COA-R3-CV, 2001 WL 687078 (Tenn. Ct. App. June 11, 2001).
college, but he never obtained a degree. During the majority of the parties’ marriage, Husband
worked as a finance manager for automobile sales at local automobile dealerships earning between
$70,000 and $80,000 annually. Two months before Wife filed her complaint for divorce, Husband
voluntarily left his employment as a finance manager and accepted employment as a loan originator
with First Horizon, a division of First Tennessee Bank, earning between $40,000 and $50,000
annually. At the trial, Husband testified that he would earn between $40,000 and $50,000 during
his first year with First Horizon, but after being there for two or three years, he had the potential to
earn between $60,000 and $80,000 per year.

       Wife holds a bachelors of science degree in office administration. During the marriage, Wife
primarily worked as an administrative assistant for various businesses, earning at most $30,000 per
year. Approximately a year before the divorce, Wife accepted a position as the concierge of the
Plaza Club for Blues City Baseball with the Memphis Redbirds baseball team, earning $38,000 per
year.

        In 1990, five years after the parties were married, Wife was diagnosed with lupus, an
immune system disorder. Wife’s lupus was classified as moderately severe. She is required to take
numerous medications to control her lupus, and the condition has necessitated her taking leaves of
absence from her employment. At the divorce trial, Wife’s physician, Lowell B. Robison, M.D.
(“Dr. Robison”), testified that Wife’s condition would “very likely get some worse over the years,”
but he could not predict how much worse.

       After the divorce trial, the trial court found that Husband was voluntarily underemployed and
imputed to him an annual income of $70,000. Based on this amount, the court ordered Husband
to pay Wife alimony in futuro initially in the amount of $1,300 per month, increasing to $1,800 per
month when the parties’ son no longer resided with Wife.2

        After the trial court entered the divorce decree, Husband filed his initial appeal arguing,
inter alia, that the trial court erred in awarding Wife alimony in futuro rather than rehabilitative
alimony. Allen v. Allen, No. W2000-01844-COA-R3-CV, 2001 WL 687078 (Tenn. Ct. App. June
11, 2001). The appellate court upheld the alimony award. It affirmed the trial court’s finding that
Husband was voluntary underemployed, commenting that, if Husband was unable to pay the
alimony, “it is because [Husband] is voluntarily underemployed.” Id. at *4. The appellate court
noted the trial court’s implicit threshold determination that rehabilitation for Wife was not feasible
and quoted at length the trial court’s analysis:

         I have taken into account the relevant earning capacity, obligations, needs, and
         financial resources of these parties, including their incomes from pension, profit
         sharing, retirement plans, and all other sources.



         2
           The original decree set the increase to take effect either twelve months after entry of the decree or when the
parties’ son moved out, whichever was later. The parties’ son moved out of Wife’s residence in July 2006. Accordingly,
Husband’s alimony obligation increased from $1,300 per month to $1,800 per month at that time.

                                                          -2-
       I’m also considering the relative education and training of each party, and the ability
       and opportunity of each of these parties to secure any additional education and
       training and necessity.

       I’m also considering the duration of the marriage, the age and mental condition of
       each of the parties. And I find that the mental condition of the wife has been
       considerably adversely effected by these proceedings, and by the conduct of her
       husband. I also find that her physical condition, in considering that, is substantially
       worse than her husband’s, who has none.

       And I’m going to take into account her disability and inability, because of a chronic
       debilitating disease, and more particularly on that, I find this: While she’s
       functioning at a certain level right now, her rheumatologist, Dr. Robinson [sic], on
       Page 10 of his deposition, Line 18: “If you consider the overall prognosis,
       discontinuing these fluctuations that are likely to occur, it certainly is not going to-”
       this is the answer “-is not going to get any better, and very likely will get some worse
       over the years. I can’t predict the degree of worse, though.” Now, that is a very
       telling statement.

       In his deposition, he also points out that during these ten years she has never had the
       benefit of a remission. In essence, what he says is she’s just going to get worse.
       Further on in his testimony, he testifies ... that in his opinion, she has a moderately
       severe case of Lupas (sic). Her prognosis is not good.

Id. at *5-6. Like the trial court, the appellate court relied specifically on the testimony indicating
that Wife’s lupus would very likely get somewhat worse, which could impact her ability to work.
However, the appellate court recognized that, at the time of trial, the condition was not adversely
affecting Wife’s work schedule. Id. at *5. The appellate court observed that “Lupus has no known
cure, but patients who respond well to treatment and medication can lead active, healthy lives.” Id.
Overall, the appellate court found that “the trial court properly considered the relevant factors” in
concluding that rehabilitation for Wife was not feasible, and it concluded that the award of alimony
in futuro was supported by the evidence. Id. at *6.

        Less than a year later, on May 16, 2002, Husband filed a petition to reduce or eliminate his
alimony obligation. In his petition, Husband cited as a change in circumstances the fact that, in
2001, he earned only $52,000 due to a restructuring of his pay by his employer. On November 4,
2002, Wife filed a motion to dismiss the petition. Husband subsequently indicated that he would
dismiss his petition, and the trial court ordered Husband to reimburse Wife for her attorney’s fees,
costs, and lost wages resulting from his petition.




                                                 -3-
        On July 20, 2006, Husband filed a second petition to modify his alimony obligation, again
alleging a substantial and material change in circumstances.3 He argued that his income had
declined significantly, and that Wife’s health and income had “significantly exceeded the expectancy
of the Court when the Final Decree of Divorce was entered.” In Wife’s response to Husband’s
petition, she conceded that her income had increased slightly, but maintained that her health was
essentially unchanged since the divorce decree was entered. She attached to her response an
affidavit of Dr. Robison in which he stated, “[Wife’s] condition associated with her systemic lupus
erythematosus has remained virtually the same since my original diagnosis in 1990.”

        On January 4, 2007, the trial court conducted a hearing on Husband’s petition to modify
alimony. The trial court heard testimony from both Husband and Wife. Husband told the trial court
that he was still working at First Horizon, a division of First Tennessee Bank, as a loan consultant,
the same position he held at the time the divorce decree was entered. In 2005, he earned $100,000,
but in 2006, he earned only $83,000. Husband attributed his decrease in income to a variety of
factors, including a contraction in the market, a rise in interest rate earnings, and a change in the
Bank’s commission structure.4 With his decrease in earnings, an unexpected tax lien levied against
his 2006 income, and in light of his other general living costs, Husband said that he had become
delinquent on some of his bills and struggled to make his monthly car note, utilities, and rental
payments. He acknowledged owning two cars and a motorcycle, but claimed that he owed the
motorcycle and one of the cars to his lawyer for his legal fees, and that he had no equity in the other
vehicle. He said that his rent, car payments, and gas expenses had increased since the divorce, while
other expenses such as groceries and motorcycle insurance had decreased.

        At the time Husband filed his petition, he was not certain about the amount of Wife’s
income. He learned through discovery that she was earning about $10,000 more per year than she
was earning at the time of the divorce. It was Husband’s understanding that the trial court had based
the alimony award on the assumption that Wife’s health would decline. Husband said that he was
aware that Wife had been working additional hours and had taken on a second job at the Redbirds
stadium at night, and consequently gathered that her condition had not in fact worsened. He had not
reviewed Wife’s medical records since the divorce.

        Wife also testified. She said that, at the time of the divorce, she was earning about $38,000
per year working for the Redbirds. At the time of the hearing, she was earning about $48,600 per
year working as the Redbirds Season Ticket Manager. Wife indicated that her health was unchanged
from the time the divorce decree was entered; she still suffered from severe to moderate lupus, still
took five medications for this condition, and still had to miss work at times due to her condition.


         3
           Husband’s petition was filed in response to Wife’s petition for civil and criminal contempt against Husband
related to Husband’s failure to make his June alimony payment and to procure life insurance. In August 2006, the trial
court entered a consent order dismissing Wife’s petition for contempt.
         4
          One of Husband’s co-workers testified that, just in the previous five years, there had been fourteen to sixteen
commission cuts, and that their employer implemented a new commission structure for 2007 that would mean a twenty
to twenty-five percent reduction in Husband’s earnings from his income in 2006.

                                                          -4-
She continued her monthly visits to see Dr. Robison, the same physician who was treating her at the
time of the divorce.

        Wife testified that she was current on all of her bills. She owned a house and had refinanced
the note to accelerate the mortgage by ten years. She bought a Chevrolet Tahoe for herself and, with
her son, bought a Tracker. Wife’s other expenses included tithing $300 per month to her church,
dog daycare, and expenses necessary to care for her mother. Since the divorce, Wife had bought
herself a fur coat for $2,950, and had given about $20,000 to $30,000 in furniture and other items
to Goodwill, to her son, and to a women’s shelter.

        On January 30, 2007, the trial court entered an order denying Husband’s petition to modify
his alimony obligation. It made the factual finding that Wife’s medical condition had not changed
since the original divorce trial and, consequently, “as a matter of law that there cannot be a
substantial and material change of circumstances since the entry of the Final Decree of Divorce that
would permit the Court to modify the award of alimony of Wife.” The trial court later entered a
final order awarding Wife $3,500 in attorney’s fees attributable to Husband’s petition. The trial
court indicated that Husband owed Wife a total of $8,100 in the form of unpaid attorney’s fees and
alimony arrearages through January 30, 2007, and ordered Husband to pay Wife $100 per month
toward this debt. From this order, Husband now appeals.5

        On appeal, Husband argues that the trial court erred in concluding that he had not shown a
material change in circumstances. Husband contends that a material change in circumstances can
arise from the non-occurrence of a predicted event, which is what happened in this case. He asserts
that the trial court’s initial alimony award was based on the prediction that Wife’s lupus would get
worse. Because her health has not worsened, as predicted, a substantial and material change in
circumstances has occurred to justify modification of the alimony award. In addition, he argues,
the parties’ financial positions have changed significantly since the divorce. Husband’s income is
declining and he is unable to pay all of his necessary expenses, while Wife’s income has increased
and she is able to afford luxuries, such as a fur coat and automobiles. Her net worth has increased,
while his has decreased. Thus, Husband argues, a substantial and material change in circumstances
has occurred with respect to his ability to pay and Wife’s need for continued alimony payments.

        In response, Wife argues that nothing has changed since the divorce and that, consequently,
Husband is not entitled to a modification in his alimony obligation. Furthermore, she argues,
Husband’s assertion that the trial court premised its alimony award on the prediction that Wife’s
condition would worsen is simply inaccurate. Rather, the trial court considered “the relevant factors
[in] section 36-5-101(d)(1) of the Tennessee Code” in making its alimony award. Allen, 2001 WL
687078, at *6. Therefore, she argues, the trial court’s decision should be affirmed.
        Modification of an alimony award is factually driven, calling for the careful balancing of
many factors. Bogan v. Bogan, 60 S.W.3d 721, 727 (Tenn. 2001) (citations omitted). The trial

         5
          On September 2, 2008, this Court remanded the case to the trial court for the limited purpose of permitting
Husband to obtain a final appealable order. The record has since been supplemented to include a copy of the final order
obtained by Husband.

                                                         -5-
court is given wide latitude, and its decision will not be disturbed unless it is “not supported by the
evidence or is contrary to the public policies reflected in the applicable statutes.” Id. The Supreme
Court of Tennessee has explained:

       Because modification of a spousal support award is factually driven, a trial court’s
       decision to modify its award is given wide latitude within the trial court’s range of
       discretion. See Watters v. Watters, 22 S.W.3d 817, 821 (Tenn. Ct. App. 1999). A
       trial court abuses its discretion only when it “ ‘applie[s] an incorrect legal standard,
       or reache[s] a decision which is against logic or reasoning that cause[s] an injustice
       to the party complaining.’ ” Eldridge v. Eldridge, 42 S.W.3d 82, 85 (Tenn. 2001)
       (quoting State v. Shirley, 6 S.W.3d 243, 247 (Tenn. 1999)). We shall presume the
       correctness of the trial court’s factual findings so long as the evidence does not
       preponderate against them. See Tenn. R. App. P. 13(d); Crabtree v. Crabtree, 16
       S.W.3d 356, 360 (Tenn. 2000). However, we review the trial court’s conclusions of
       law under a de novo standard with no presumption of correctness. See Burlew v.
       Burlew, 40 S.W.3d 465, 470 (Tenn. 2001).

Perry v. Perry, 114 S.W.3d 465, 466-67 (Tenn. 2003). The need of the recipient spouse and the
obligor’s ability to pay remain the most important factors in making an initial determination of
alimony; the initial award may be modified only upon a showing of a substantial and material
change in circumstances. Wright v. Quillen, 83 S.W.3d 768, 772 (Tenn. Ct. App. 2002). The party
seeking modification has the burden of proving that the requested modification is justified. The
change in circumstances must have occurred after the original award and must be a change that was
not contemplated at the time of the divorce. Id.

        Husband first argues that the trial court erred in determining, as a matter of law, that the
failure of predicted circumstances could not constitute a material change in circumstances. He cites
language in this Court’s opinion in Husband’s first appeal, quoting the trial court’s summary of Dr.
Robison’s testimony. The trial court found from Dr. Robison’s testimony that, although Wife was
“functioning at a certain level right now,” her condition, in the words of Dr. Robison, “is not going
to get any better, and very likely will get some worse over the years.” Allen, 2001 WL 687078, at
*5-6. Because Wife’s condition in fact remained unchanged, Husband argues, the premise of the
trial court’s decision proved to be untrue, and the failure of this predicted circumstance to occur
constitutes a material change in circumstances justifying modification of his alimony obligation.

        Husband’s argument is grounded on the postulate that the trial court’s award of alimony was
based on a finding that Wife’s condition would in fact worsen within a given period of time. We
disagree with this assertion. Although Dr. Robison testified that Wife’s condition would “very
likely get some worse over the years,” his rather unspecific prognostication was further qualified
by the statement that he could not “predict the degree of worse.” Id. at *5. Notably lacking in Dr.
Robison’s explanation of Wife’s prognosis was any sort of timetable. Thus, Husband established
at the hearing only that Wife’s condition had not yet worsened. There is no indication in the proof
that she is cured, that her condition has improved, or even that her condition in fact will not “get


                                                 -6-
some worse over the years.”6 Therefore, we agree with the trial court’s finding that Husband had
not shown a material change in circumstances with respect to Wife’s condition.7

        Husband also argues that a modification in his alimony obligation is justified because there
has been a decrease in Wife’s need for the alimony as well as Husband’s ability to pay. Husband
argues that Wife does not need the alimony because she now earns more money than she was
earning at the time of the divorce. He points out that she is able to stay current on all of her bills,
owns her home, tithes $300 per month to her church, pays for dog daycare of $175 per month,
spends thousands of dollars to support her mother, and provides support for two of her nieces as
well. She also financed two vehicles and a fur coat, and has given both money and furniture to
charity. Since the divorce, her net worth has increased. Meanwhile, Husband’s income has
diminished, and he does not own a home, cannot stay current on his bills, and owes more on his cars
than they are worth. To make his alimony payments, he has had to borrow from his 401k and take
out loans from TitleMax. Therefore, Husband argues, apart from Wife’s physical condition, the
proof established a substantial and material change in circumstances sufficient to justify a
modification in his alimony obligation.

       In response, Wife argues that the increase in her income was foreseeable and was not a
“material and substantial” change that would justify a modification in her alimony award.
Moreover, Wife points out that, contrary to Husband’s contention, his income has increased, not
decreased, since the time of the divorce, and the anticipated decrease in his income is not a material
change that would justify a reduction of her alimony award.

       In order to determine whether a material change in circumstances has occurred, we must
compare the circumstances as they existed at the time of the divorce with the circumstances at the
time Husband filed his petition for modification. The record shows that, at the time of the divorce,
Wife was earning $38,000 per year working for the Redbirds. Husband was deemed to be
voluntarily underemployed, with an earning capacity of $70,000 per year.8 By July 2006, when
Husband filed his petition to modify, Wife’s income had risen to $48,600 per year, and Husband’s
income had increased to $83,000 per year, each with the same employers they had at the time of the
divorce. Thus, as Husband noted, Wife’s financial position improved over the six-year period
following the divorce. Husband’s position, however, has improved as well. The fact that Husband’s


         6
         Conversely, had Wife’s condition in fact worsened, it would be difficult for her to seek an increase in alimony
based on this fact. Dr. Robison’s testimony emphasized the unpredictability of the timetable for progression of the
disease.
         7
          Thus, we need not decide whether any failed predicate could constitute the necessary material change in
circumstances to justify a modification in the alimony award. We conclude only that such a predicate was not
established in this case.
         8
           We note that the finding that Husband was voluntarily underemployed and the finding of his earning capacity,
were based on his prior employment as a finance manager for local automobile dealerships, an industry that has
contracted considerably since the time of the parties’ divorce, and even since the time of the hearing on Husband’s
petition to modify.

                                                          -7-
income declined in 2006 to $83,000 from the $100,000 he earned in 2005 does not mean that he is
in a worse position than he was at the time of the divorce.9

        Moreover, the increase in Wife’s income of $10,600 over a period of over six years, which
amounts to an annual increase of about 4%, was a modest increase that cannot be characterized as
unforeseeable at the time of the divorce. In Wright v. Quillen, 83 S.W.3d 768 (Tenn. Ct. App.
2002), the wife argued that she should no longer be required to make alimony payments to the
husband because of an increase in his income and standard of living. The husband admitted that his
employment income had increased over 50%, that he had begun receiving social security benefits,
and that he never used the alimony payments made by the wife but had been saving the extra money.
The appellate court upheld the trial court’s denial of the wife’s petition to reduce her alimony
payments, holding that a modification based on an increase in the obligee’s income “is proper only
where the initial alimony award was based on a presumption that the recipient would not continue
to increase his/her income through the pursuit of his/her career.” Wright, 83 S.W.3d at 774 (citing
McCarty v. McCarty, 863 S.W.2d 716, 720 (Tenn. Ct. App. 1992)). The appellate court observed
that the critical issue was whether the increase in the obligee’s income was foreseeable. In the
instant case, there is no indication in the record that, so long as Wife’s physical condition permitted
her to continue working, a modest increase in her income was unforeseeable at the time of the
divorce. At the hearing on his petition, Husband admitted “that everyone at sometime may receive
a cost of living raise or something like that.”

        Finally, Husband asks the Court to look at the evidence of the alleged decrease in his
standard of living and inability to pay his bills, compared to the evidence that Wife refinanced her
home, financed two vehicles, and purchased some luxury items for herself. We cannot conclude that
this evidence demonstrates a material change in circumstances that occurred since the divorce. In
view of the amount of money earned by both parties since the divorce, even considering the
substantial alimony payments subtracted from Husband’s income, Husband’s assertions that he
struggles to pay his bills while Wife is able to maintain her standard of living shows only that Wife
is better able to manage her funds.10 Particularly since Wife’s physical condition leaves her
uncertain as to how long she will be able to continue working, such money management is
necessary.

        Considering all of these circumstances, we cannot conclude that the trial court erred in
determining that Husband did not establish a material change in circumstances. Therefore, we
affirm the trial court’s denial of Husband’s petition to modify.
        Wife requests her attorney’s fees incurred in this appeal. Whether to award attorney’s fees
on appeal rests within the sound discretion of this Court. Archer v. Archer, 907 S.W.2d 412, 419


         9
         In the divorce trial, Husband said that he was earning between $40,000 and $50,000 per year, and expected
within two to three years to be making between $60,000 and $80,000 per year. Allen, 2001 WL 687078, at *1.
         10
           We note that the evidence presented at the hearing included testimony indicating that Husband’s income is
expected to further decrease. Our holding is limited to the evidence of the parties’ circumstances as of the date of the
hearing.

                                                          -8-
(Tenn. Ct. App. 1995). Under all the circumstances of this case, we deny Wife’s request for
attorney’s fees in this appeal.

       The decision of the trial court is affirmed. Costs on appeal are to be taxed to Appellant John
Fox Allen, Jr., and his surety, for which execution may issue, if necessary.




                                                      ___________________________________
                                                      HOLLY M. KIRBY, JUDGE




                                                -9-
