Mitchell Lloyd MaGill v. Mary R. MaGill

IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

August 9, 2004 Session

MITCHELL LLOYD MAGILL v. MARY R. MAGILL

Appeal from the General Sessions Court for Roane County

No. 5460A Dennis W. Humphrey, Judge

No. E2003-02209-COA-R3-CV - FILED AUGUST 31, 2004

This is a divorce case. The trial court granted Mary R. MaGill (“Wife”) a divorce based upon the

inappropriate marital conduct of her spouse, Mitchell Lloyd Magill (“Husband”); awarded Wife

rehabilitative alimony of $600 per month for four years, plus attorney’s fees of $600; and divided

the parties’ marital property. Husband appeals the trial court’s award of rehabilitative alimony. In

a separate issue, Wife contends that the trial court failed to divide marital assets in the form of two

businesses, i.e., MaGill Electric and C&M Lounge. She also seeks an award of damages for a

frivolous appeal. We affirm.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the General Sessions Court

Affirmed; Case Remanded

CHARLES D. SUSANO , JR., J., delivered the opinion of the court, in which HERSCHEL P. FRANKS, P.J.,

and D. MICHAEL SWINEY , J., joined.

Scarlett Beaty Latham, Albany, Kentucky, for the appellant, Mitchell Lloyd MaGill.

Tom McFarland, Kingston, Tennessee, for the appellee, Mary R. MaGill.

OPINION

I.

The trial court dissolved a marriage of 17 years. At the time of their divorce, Husband was

47 years old, and Wife was 42. No children were born to their union.

This matter was initially heard on October 3, 2002, and an order was thereafter entered

granting Wife an absolute divorce. The order reserved all other issues. A hearing on the division

of the parties’ property and alimony was held on July 31, 2003. Apparently, the parties did not have

a court reporter present at this latter hearing; as a consequence of this, there is no verbatim transcript

of the evidence. Husband, instead, filed an amended statement of the evidence along with exhibits.

Wife does not dispute the accuracy of the statement. The parties and Wife’s daughter of an earlier

marriage were the only witnesses in this case.

Wife testified that Husband earned “over $50,000 per year” and that he worked for “cash

money”, pocketing “thousands” of dollars that he failed to “report[] to the IRS.” Wife stated that

she was employed at Harriman Hospital earning $6.47 per hour.

According to Wife, during the parties’ marriage, she made deposits of $3,000 to $4,000 per

month for C&M Lounge, which is apparently a bar-type establishment. Wife also tendered several

exhibits that were received into evidence. These exhibits – apparently reflecting various business

transactions – were offered in an attempt to prove that Husband’s sole proprietorship, MaGill

Electric, earned more money than reported on the parties’ tax returns. In her affidavit of assets, Wife

listed the current revenues of MaGill Electric as $50,000 per year and the current revenues of C&M

Lounge as $25,000 per year. Husband listed the value of MaGill Electric as “[u]nknown” and did

not list a value for C&M Lounge.

Husband disagreed with Wife’s testimony regarding his income; he produced joint tax returns

in order to support his claim. Husband also testified that C&M Lounge never made “much money”.

Husband stated that “the tax returns accurately reflected his net earnings after costs of goods,

business expenses and other allowable deductions were taken into consideration.”

The trial court entered a final judgment on August 11, 2003. In its final judgment, the trial

court made the following findings with respect to alimony.

At the time of the divorce, [Wife] testified, she earned at the hospital

$5.48 an hour and now earns $6.47. She has a high school education

and is 42.

* * *

[Husband] maintained [C&M Lounge] operated at a loss and denied

concealing income. . . .

[Husband] also denied the income attributed to him during-cross

examination, which revealed a cash flow of several hundred thousand

dollars each year. He explained that the expense of materials were

depicted in the records obtained from his computer and submitted

during the hearing. He denied concealing income from that business

as well.

[Wife], however, maintained in her testimony that at the bar she often

made the deposits of $3,000.00 to $4,000.00 each month, and that as

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an electrician, [Husband] would often accept cash that would not be

reported as income. [Husband’s] actual income is in dispute.

* * *

The Court resolves these conflicts in favor of [Wife] and finds

[Husband’s] testimony to not be credible.

* * *

In reviewing the wife’s Affidavit of Expenses, the Court finds her

monthly expenses and her income to be an accurate representation of

her financial state and agrees that an ward of alimony and an award

of attorney’s fee[s] to be appropriate. . . .

The trial court ordered Husband to pay Wife rehabilitative alimony in the amount of $600

per month for four years and awarded wife $600 in attorney’s fees. This appeal followed.

II.

Our review of this non-jury case is de novo upon the record of the proceedings below with

a presumption of correctness as to the trial court’s factual findings, “unless the preponderance of the

evidence is otherwise.” Tenn. R. App. P. 13(d). The trial court’s conclusions of law are not accorded

the same deference. Brumit v. Brumit, 948 S.W.2d 739, 740 (Tenn. Ct. App. 1997).

III.

Tenn. Code Ann. § 36-5-101(d)(1)(E)(i)-(xii) (Supp. 2003), sets forth the factors to be

considered by a court in addressing the issue of alimony:

(i) The relative earning capacity, obligations, needs, and financial

resources of each party including income from pension, profit sharing

or retirement plans and all other sources;

(ii) The relative education and training of each party, the ability and

opportunity of each party to secure such education and training, and

the necessity of a party to secure further education and training to

improve such party’s earning capacity to a reasonable level;

(iii) The duration of the marriage;

(iv) The age and mental condition of each party;

(v) The physical condition of each party, including, but not limited to,

physical disability or incapacity due to a chronic debilitating disease;

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(vi) The extent to which it would be undesirable for a party to seek

employment outside the home because such party will be custodian

of a minor child of the marriage;

(vii) The separate assets of each party, both real and personal,

tangible and intangible;

(viii) The provisions made with regard to the marital property as

defined in § 36-4-121;

(ix) The standard of living of the parties established during the

marriage;

(x) The extent to which each party has made such tangible and

intangible contributions to the marriage as monetary and homemaker

contributions, and tangible and intangible contributions by a party to

the education, training or increased earning power of the other party;

(xi) The relative fault of the parties in cases where the court, in its

discretion, deems it appropriate to do so; and

(xii) Such other factors, including the tax consequences to each party,

as are necessary to consider the equities between the parties.

IV.

Husband argues that the trial court erred in awarding rehabilitative alimony to Wife “solely

on the basis of her claim that the Husband has unreported income.” Husband asserts that the trial

court failed to find that “Wife is capable of or in need of rehabilitation” and failed to “consider the

other factors set forth in Tenn. Code Ann. [§] 36-5-101 in determining whether alimony was

appropriate in this case.”

Because the amount of alimony to be awarded is within the sound discretion of the trial court

in view of the particular circumstances of the case, appellate courts will not alter such awards absent

an abuse of discretion. Lindsey v. Lindsey, 976 S.W.2d 175, 180 (Tenn. Ct. App. 1997). In

determining the propriety, nature, and amount of an alimony award, courts are to consider the

statutory factors set forth in Tenn. Code Ann.§ 36-5- 101(d)(1)(E)(i)-(xii). “[T]here is no absolute

formula for determining the amount of alimony.” Aaron v. Aaron, 909 S.W.2d 408, 410 (Tenn.

1995). The two most important factors in setting the amount of an alimony award are need and the

ability to pay, with need being “the single most important factor.” Id. (quoting Cranford v.

Cranford, 772 S.W.2d 48, 50 (Tenn. Ct. App. 1989) (citations omitted)).

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Tenn. Code Ann. § 36-5-101 clearly reflects a legislative preference for an award of

rehabilitative alimony. See Tenn. Code Ann. § 36-5-101(d)(1)(C) (Supp. 2003).1 Under this statute,

rehabilitation

means to achieve, with reasonable effort, an earning capacity that will

permit the economically disadvantaged spouse’s standard of living

after the divorce to be reasonably comparable to the standard of living

enjoyed during the marriage, or to the post-divorce standard of living

expected to be available to the other spouse, considering the relevant

statutory factors and the equities between the parties.

It is clear that “[t]he prior concept of alimony as lifelong support enabling the disadvantaged spouse

to maintain the standard of living established during the marriage has been superseded by the

legislature’s establishment of a preference for rehabilitative alimony.” Robertson v. Robertson, 76

S.W.3d 337, 340 (Tenn. 2002) (citations omitted).

With respect to the propriety of the award of rehabilitative alimony, we are mindful of the

two critical factors–need and ability to pay. See Aaron, 909 S.W.2d at 410. Our review of the record

indicates that Wife is age 42, has a high school education; and earns $6.47 per hour as an employee

of Harriman Hospital. Husband’s income was in dispute at the trial below. Wife claimed that

husband would often accept–and not report–cash for his work as an electrician and that she made

deposits of up to $4,000 each month for the bar. Husband denied concealing income from his

business and denied that he had an annual cash flow of several hundred thousand dollars. The trial

court “resolve[d] these conflicts in favor of [Wife] and [found] [Husband’s] testimony to not be

credible.” Generally speaking, the issue of witness credibility is for the trial court. See Galbreath

v. Harris, 811 S.W.2d 88, 91 (Tenn. Ct. App. 1990).

It is clear that Wife is economically disadvantaged vis-a-vis Husband. The trial court, in an

effort to rehabilitate Wife, ordered Husband to pay $600 per month for 48 months. Based upon

Wife’s need, Husband’s ability to pay, and the relevant factors under Tenn. Code Ann. § 36-5-

101(d)(1)(E)(i)-(xii), we cannot say that the evidence preponderates against the trial court’s finding

that Wife could be rehabilitated. Accordingly, we do not find that the trial court abused its discretion

in making this award.

1

Tenn. Code Ann. § 36-5-101(d)(1)(C), states, in pertinent part, that

[i]t is the intent of the general assembly that a spouse who is economically

disadvantaged relative to the other spouse, be rehabilitated whenever possible by

the granting of an order for payment of rehabilitative, temporary support and

maintenance.

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V.

Wife argues that the trial court held that MaGill Electric and C & M Lounge are marital

property, but failed to divide the parties’ interests in the businesses. As a result, Wife maintains that

both businesses are “undistributed” martial assets.

Property may be equitably divided and distributed between the parties once it is properly

classified as marital. See Tenn. Code Ann. § 36-4-121(a)(1) (Supp. 2003). “Trial courts have wide

latitude in fashioning an equitable division of marital property.” Brown v. Brown, 913 S.W.2d 163,

168 (Tenn. Ct. App. 1994) (citation omitted). Such a division is to be effected upon consideration

of the statutory factors found in Tenn. Code Ann. § 36-4-121(c) (Supp. 2003). However,

an equitable property division is not necessarily an equal one. It is not

achieved by a mechanical application of the statutory factors, but

rather by considering and weighing the most relevant factors in light

of the unique facts of the case.

Batson v. Batson, 769 S.W.2d 849, 859 (Tenn. Ct. App. 1988). It is not necessary that both parties

receive a share of each piece of property. Thompson v. Thompson, 797 S.W.2d 599, 604 (Tenn. Ct.

App. 1990). Appellate courts are to defer to a trial court’s division of marital property unless the trial

court’s decision is inconsistent with the statutory factors or is unsupported by the preponderance of

the evidence. Brown, 913 S.W.2d at 168.

The record in this case is devoid of any evidence as to the value of MaGill Electric and C &

M Lounge. Wife’s affidavit simply lists the annual gross income of each business without providing

further evidence as to their value, if any, as a going concern. Both businesses appear to be a sole

proprietorship which continued to be operated by Husband following the parties’ separation. In the

absence of evidence of tangible assets or other assets of value, we find no error in the failure of the

trial court to specifically address these two businesses which appear, essentially, to be nothing more

than the person of Husband.

VI.

Wife maintains that Husband’s appeal is frivolous and that she should be awarded damages.

We find Wife’s argument to be without merit and deny her claim for damages.

VII.

The judgment of the trial court is affirmed. This case is remanded to the trial court for

enforcement of the trial court’s judgment and for collection of costs assessed below, all pursuant to

applicable law. Costs on appeal are taxed to the appellant, Mitchell Lloyd MaGill.

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_______________________________

CHARLES D. SUSANO, JR., JUDGE

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