Tracy Lynn Muhlstadt v. Larry David Muhlstadt

IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

April 12, 2013 Session

TRACY LYNN MUHLSTADT v. LARRY DAVID MUHLSTADT

Appeal from the Circuit Court for Wilson County

No. 2011CV215 Clara W. Byrd, Judge

No. M2012-01267-COA-R3-CV - Filed July 19, 2013

Petition to modify child support obligation was filed by Father; Mother filed a counter-

petition requesting that the court make a determination as to where their child would attend

school. The trial court dismissed Father’s petition when he did not provide information to

support his assertion that he no longer received a portion of the income upon which his child

support obligation was based and therefore he failed to show a change of circumstance

relative to his income. The court found that it would be in the child’s best interest to attend

school in the school for which Mother’s residence was zoned and granted Mother’s counter-

petition; the court also awarded attorney fees to Mother. We affirm the court’s decision

relative to the child’s school enrollment. We reverse the order dismissing Father’s petition

for modification and remand the case for reconsideration; we reverse the award of attorney

fees.

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

Part and Reversed In Part; Case Remanded

R ICHARD H. D INKINS, J., delivered the opinion of the court, in which F RANK G. C LEMENT,

J R. and A NDY D. B ENNETT, JJ., joined.

John B. Holt, Springfield, Tennessee, for the Appellant, Larry David Muhlstadt.

Amanda G. Crowell, Lebanon, Tennessee, for the Appellee, Tracy Lynn Muhlstadt (Chilelli).

OPINION

Tracy Muhlstadt (“Mother”) and Larry Muhlstadt (“Father”), the parents of one child

born July 19, 2007, were divorced on July 10, 2008 in Robertson County Circuit Court. An

Agreed Permanent Parenting Plan Order was incorporated into the final decree in which

Mother was named Primary Residential Parent; residential parenting time was split equally

and Father ordered to pay $365.00 per month in child support.

On April 1, 2011, Father filed a Petition for modification of child support, alleging

that there had been significant variances in the parties’ incomes, and that a material change

in circumstances existed warranted a reconsideration of child support.1 On August 26,

Mother filed a counter-petition, requesting the court issue an order requiring the child to

attend Castle Heights Elementary, the school for which Mother’s residence was zoned. On

February 24, 2012, Father filed an answer.

At a hearing on March 29, 2012, the case was continued to April 30 to allow Father

to provide documentation showing income and other documents relating to a trust in his

father’s name, the Andrew C. Muhlstadt Trust (the “Muhlstadt trust”), from which he

received funds at the time the original child support obligation was set. Following the April

30 hearing, the court entered an order on May 9 dismissing Father’s petition and granting

Mother’s request that the child attend Castle Heights Elementary. On May 23, 2012, the

court entered an order granting Mother attorneys’ fees and costs totaling $6,384.75 for her

defense of the action. Father filed a notice of appeal on June 8.

Father raises the following issues:

1. Did the trial court err in the finding of [Father’s] income for a determination

of child support?

2. Did the trial court err in its determination that the minor child should attend

school in [Mother’s] zoned school district?

3. Did the trial court err in the award to [Mother] of attorney fees?

DISCUSSION

We review the trial court’s findings of fact de novo, presuming them to be correct

unless the evidence preponderates against the findings. Demers v. Demers, 149 S.W.3d 61,

68 (Tenn. Ct. App. 2003) (citing Huntley v. Huntley, 61 S.W.3d 329, 334 (Tenn. Ct. App.

2001)). We review the court’s conclusions of law de novo with no presumption of

correctness. Id.

1

Mother requested that the case be transferred to Wilson County Circuit Court because both parties

had resided in Wilson County since 2008; the case was transferred on May 3 and Mother filed an answer

on May 4.

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I. F ATHER’S P ETITION FOR M ODIFICATION OF C HILD S UPPORT

Father asserts that the trial court erred when it dismissed his petition based upon the

finding that he was receiving income that, in fact, he was not receiving; Father contends that

the evidence shows that he was no longer receiving an annual payment of $22,000 from the

Muhlstadt trust that he had been receiving at the time child support was set.

Modification of an award of child support is governed by Tenn. Code Ann. § 36-5-

101(g)(1); the modification must be based on a “significant variance, as defined in the child

support guidelines . . . between the guidelines and the amount of support currently ordered.”

Id. Tenn. Comp. R. & Regs. 1240-02-04-.05(2)(c) defines a significant variance as “at least

a fifteen percent (15%) change between the amount of the current support order (not

including any deviation amount) and the amount of the proposed presumptive support order.”

Tenn. Comp. R. & Regs. 1240-02-04-.05(3) sets forth the procedure for determining whether

a significant variance is present under the circumstances presented in this case:

To determine if a modification is possible, a child support order shall first be

calculated on the Child Support Worksheet using current evidence of the

parties’ circumstances. . . . If the current child support order was calculated

using the income shares guidelines, compare the presumptive child support

order amounts in the current and proposed orders. . . . If a significant variance

exists between the two amounts, such a variance would justify the

modification of a child support order unless, in situations where a downward

modification is sought, the obligor is willfully and voluntarily unemployed or

underemployed, or except as otherwise restricted by paragraph (5) below or

1240-2-4-.04(10) above.

Once a significant variance has been shown, Tenn. Comp. R. & Regs. 1240-02-04-.05(5)

directs the court as follows:

[T]he tribunal shall increase or decrease the support order as appropriate in

accordance with these Guidelines unless the significant variance only exists

due to a previous decision of the tribunal to deviate from the Guidelines and

the circumstances that caused the deviation have not changed. If the

circumstances that resulted in the deviation have not changed, but there exist

other circumstances, such as an increase or decrease in income, that would

lead to a significant variance between the amount of the current order,

excluding the deviation, and the amount of the proposed order, then the order

may be modified.

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The statement of evidence introduced at the hearing2 included the following matters

related to Father’s receipt of payments from the Muhlstadt trust:

30. Father’s employment income for 2011 was Forty Thousand, Six Hundred

Thirteen and 54/100 ($40,613.54) Dollars.

***

32. Mother testified that [Father] has always received gifts from a Trust Fund

in Illinois. The parties received Forty-Four Thousand Dollars in trust fund

income from paternal grandmother during the six years of their marriage.

Mother testified that after the divorce, Father would receive Twenty-Two

Thousand Dollars per year from the trust fund and the minor child would

receive Twenty-Two Thousand Dollars per year from the trust fund.

33. [Father] acknowledges that his Father, upon his passing, set up a Trust

Fund for the benefit of the [child’s] paternal grandmother, and that the

[child’s] paternal grandmother receives income from the Trust.

34. Father stated that he is not the owner of the trust, that he has no control of

the Trust and that he has not and does not receive any benefits directly from

the Trust.

35. Father testified that the gifts received by Father in the past had come

directly from the [child’s paternal] grandmother.

36. [Father] submitted a letter from the attorney managing the trust in Chicago,

Illinois, indicating that the [child’s paternal] grandmother is the only

beneficiary that is required to receive distributions from the Trust and all other

distribution[s] were at the discretion of the Northern Trust Company, located

in Chicago Illinois, as Trustee.

***

47. Father testified that he now receives distributions from the Trust on an “as

needed” basis.

Other evidence at trial included Father’s 2011 W-2 wage statement from his employment

with the Metropolitan Board of Education and his 2011 federal income tax return; both list

Father’s 2011 wages as $40,614.00. Also introduced were statements from Father’s account

at Wilson Bank & Trust from July 2009 through February 2012. The statements showed

2

There was no transcript of the March 29 or April 30 hearings filed as part of the record on appeal.

The record shows that Mother filed a Statement of Evidence with the trial court on August 15, 2012, to which

Father filed objections on August 27. The record on appeal did not contain an order from the trial court

approving Mother’s statement of evidence or resolving Father’s objections; as a consequence the case was

remanded for the court to approve a statement of the evidence in accordance with Tenn. R. App. P. 24(f).

The trial court entered an Order Regarding Statement of the Evidence on June 26, 2013.

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regular monthly deposits from the Metropolitan Government, consistent with Father’s

employment with the Metropolitan Board of Education. The statements also showed

periodic, unassigned deposits, totaling $15,301.46 in 2009; $15,798.19 in 2010; and

$2,330.20 in 2011.3

With respect to Father’s continued receipt of the $22,000 gift, the court concluded:

The Court finds that Father has the ability to provide documentation with

regard to the trust and/or its distributions and has not provided it. Father has

not proved that he cannot obtain $22,000 per year from the trust at this time

and has testified that he now receives distributions on an “as needed” basis.

It is not clear to the court that the Father could not obtain even more than

$22,000 per year from the trust if he requested it. Father has failed to provide

trust documents, K-1s or any documentation regarding gifts which could be

indicated on his mother’s tax returns.

We disagree with the court’s conclusion; the dismissal of his petition is not supported

by the record. The evidence is consistent with Father’s testimony that he no longer receives

the $22,000.00 he was receiving at the time the original child support obligation was set and

that he receives money from his mother on an “as needed” basis. The evidence also shows

that he is not a beneficiary of the Muhlstadt trust and, thereby has no ability to compel the

trustee to provide him with information regarding the trust; that he does not receive

distributions directly from the trust; and that he has no ability to compel payments to him

from the trust. There is no evidence showing or a finding by the court that Father’s failure

to provide the trust documentation was wilful or contrived; indeed, a wilful failure to provide

the information would be contrary to Father’s interest in presenting the petition. While Tenn.

Comp. R. & Reg.§ 1240-02-04-.04(3)(a)(1)(xviii), governing the determination of child

support, provides that “gross income” for purposes of setting support includes “[g]ifts of

cash”, Father’s inability to provide the specific information which the court referenced in its

order does not permit the court to effectively impute gift income to him in the absence of

proof that he continued to receive such.4

3

The monthly deposits were: $15,000.00 in August 2009; $248.00 in November 2009; $53.46 in

December 2009; $1,770.00 in January 2010; $5,472.89 in March 2010; $6,565.11 in June 2010; $1,465.03

in October 2010; $1,500.00 in November 2010; $25.15 in December 2010; $60.00 in January 2011; $435.28

in February 2011; $217.83 in March 2011; $1,000.00 in April 2011; $36.09 in May 2011; $200.00 in

November 2011; and $381.00 in December 2011; $1,060.00 in January 2012; and $1,025.00 in February

2012..

4

We note also the following observation relative to Father’s receipt of funds from his Mother in the

(continued...)

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Accordingly, we reverse that portion of the judgment dismissing Father’s petition to

modify child support and remand the case for a redetermination of Father’s support

obligation.

II. M OTHER’S C ROSS-P ETITION R ELATIVE TO THE C HILD’S S CHOOL Z ONE

In Mother’s counter-petition, she alleged that the parties were unable to agree on a

preschool for the child and requested the court order that the child be enrolled in public

school in the school to which Mother’s residence was zoned; Mother asserted that to do so

would be in the child’s best interest. Father contends that the court, in its order, “gave no

deference to the parenting plan,5 the parties’ employment circumstances, and the financial

situation.”

As we have previously noted,

Trial courts have broad discretion to fashion parenting plans that best serve the

interests of the children. They must, however, base their decisions on the

evidence presented to them and upon the proper application of the relevant

principles of law. While we are reluctant to second-guess a trial court's

decisions regarding a parenting plan, we will not hesitate to do so if we

conclude that the trial court's decision is not supported by the evidence, that

the trial court's decision rests on an error of law, or that the child's interests

will be best served by another parenting arrangement.

Shofner v. Shofner, 181 S.W.3d 703, 716 (Tenn. Ct. App. 2004). In Eldridge v. Eldrige, 42

SW3d 82 (Tenn. Ct. App. 2001) the Tennessee Supreme Court laid out the abuse of

discretion standard in domestic relations cases:

Under the abuse of discretion standard, a trial court's ruling “will be upheld so

long as reasonable minds can disagree as to propriety of the decision made.”

4

(...continued)

in the portion of the order in which the court discussed Mother’s cross-petition:

Father’s mother has signed a letter of intent to pay all private school tuition for the minor

child at Ezell Harding Christian School in Nashville, Tennessee. For her to do so when

Father filed a Petition that he is no longer receiving a monetary gift upon which child

support should be based indicates that there may be a control issue between Father and his

mother.

5

In the parenting plan, the parties were given joint authority to make educational decisions.

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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.” The abuse of discretion

standard does not permit the appellate court to substitute its judgment for that

of the trial court.

Eldridge, 42 S.W.3d at 85 (internal citations omitted).

The statement of evidence included the following pertinent to the granting of the

cross-petition:

6. The Mother has remarried and has a child born to that marriage.

***

8. The Mother has been employed for more than ten (10) years in the

insurance industry, with her office being located in Brentwood, Tennessee.

***

10. The Father has been employed for eight (8) years as a school teacher at

Antioch High School, located in Davidson County, Tennessee.

11. The Mother’s residence is zoned for Castle Heights Elementary School in

Lebanon Special School District.

12. The Father’s residence is zoned for Gladeville Elementary School in the

Wilson County School District.

13. The Father desires that the minor child attend private school at Ezell-

Harding Academy, located at 574 Bell Road, Antioch, TN 37013.

14. The Father proposed that the tuition to the private school be paid as a gift

from the paternal Grandmother.

15. The paternal Grandmother signed a financial responsibility form in which

she agreed to be “responsible party number two” (or cosigner) with regard to

the financial responsibility for Ezell-Harding Academy as set forth in Trial

Exhibit #3.

***

17. Ezell-Harding is less than ten (10) minutes from Father’s employment.

18. The Mother desires that the child attend Castle Heights Elementary School,

which is the public school where she is zoned.

19. Castle Heights is approximately five (5) minutes from where Mother

resides.

20. The Mother states that the maternal grandmother lives close to Castle

Heights Elementary School, and could be there to assist picking up the child

in an emergency, as neither parent works in Lebanon.

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21. Castle Heights is approximately twenty (20) minutes from Father’s

residence, and approximately forty (40) minutes from where Father works.

***

41. The Mother is opposed to the minor child attending school in Nashville

and has asked that the Court allow her to enroll the child in the public school

for which she is zoned.

42. The Mother testified that she desired for the child to be an active part of

the community in which he and his younger sister reside and to participate in

school, sports, and extracurricular activities in Wilson County, Tennessee.

43. The Father did not request that the Court order the child to attend the

public school for which he is zoned.

In its order granting the cross-petition, the court discussed the testimony referenced above

at length and the best interest of the child, giving consideration to the parties’ financial

situation6 and the fact that, while Mother and Father both lived in Wilson County, neither

worked there; the court noted that “there is an advantage to enrollment at Castle Heights

because the child has a great-grandmother in good health who can take him or pick him up

from school as needed.”

The court’s determination that the best interest of the child would be served by

enrolling him in Castle Heights Elementary School is supported by the evidence; the court

did not abuse its discretion in granting Mother’s petition.

III. A WARD OF A TTORNEYS’ F EES TO M OTHER

We next address Father’s contention that the trial court’s award of attorneys’ fees to

Mother was error. The decision to award attorney fees and the amount awarded are

d is c re tio n a ry w i t h th e tria l c o u rt. M e lv in v . J o h n s o n – M e lv in , N o .

M2004–02106–COA–R3–CV, 2006 WL 1132042, at *9 (Tenn. Ct. App. Apr. 27, 2006).

Accordingly, a trial court’s decision will be upheld unless the court abuses its discretion;

such abuse will be found if the court applies “incorrect legal standards, reach[es] an illogical

conclusion . . . , or employ[s] reasoning that causes an injustice to the complaining party.”

Kline v. Eyrich, 69 S.W.3d 197, 203 (Tenn. 2002); Konvalinka v. Chattanooga–Hamilton

Cnty. Hosp. Auth., 249 S.W.3d 346, 358 (Tenn. 2008).

6

The court noted that “[b]ased on the parties’ income, neither is able to pay private school tuition”

and that the Court “cannot order the Father’s mother to pay [the tuition at Ezell-Harding].”

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In Tennessee, generally each party must pay their own attorneys’ fees unless there is

a statute or a contractual provision that provides otherwise. Taylor v. Fezell, 158 S.W.3d

352, 359 (Tenn. 2005) (citation omitted). Tenn. Code Ann. § 36-5-103(c) provides:

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.

This statute has been interpreted by the courts as “allowing for the award of attorney's fees

to a party defending an action to change a prior order on the theory that the defending party

is enforcing the prior order.” Hansen v. Hansen, 2009 WL 3230984, No. M2008-02378-

COA-R3-CV, at *3 (Tenn. Ct. App. Oct. 7, 2009) (citations omitted).

In light of our holding that Father’s child support obligation should be reconsidered

on remand, we vacate the award of attorney fees to Mother; the award of fees should be

reconsidered in accordance with the disposition of Father’s petition to modify.

CONCLUSION

For the foregoing reasons, the judgment of the trial court is affirmed in part, reversed

in part, and the case remanded for further proceedings in accordance with this opinion.

___________________________________

RICHARD H. DINKINS, JUDGE

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