Sima Khayatt Kholghi v. Reza Aliabadi

09/18/2020

IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

July 7, 2020 Session

SIMA KHAYATT KHOLGHI v. REZA ALIABADI

Appeal from the Circuit Court for Davidson County

No. 16D-1706 Phillip R. Robinson, Judge

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No. M2019-01793-COA-R3-CV

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This is an appeal from a divorce proceeding. The parties were married for around thirty

years, during which time the husband built a successful business and the wife was a

homemaker and stay-at-home mother to the parties’ two children. After five days of trial,

the trial court classified, valued, and divided the parties’ sizeable marital estate; awarded

the wife alimony in futuro; and ordered the husband to pay a portion of the wife’s attorney’s

fees. Both parties raise various issues on appeal. For the following reasons, we affirm the

decision of the circuit court and remand for further proceedings.

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

Remanded

CARMA DENNIS MCGEE, J., delivered the opinion of the court, in which ARNOLD B.

GOLDIN and KENNY W. ARMSTRONG, JJ., joined.

Donald Capparella and Kimberly Macdonald, Nashville, Tennessee, for the appellant, Reza

Aliabadi (on appeal only).

Helen Sfikas Rogers and Stella V. Kamm, Nashville, Tennessee, for the appellee, Sima

Khayatt Kholghi.

OPINION

I. FACTS & PROCEDURAL HISTORY

Reza Aliabadi (“Husband”) and Sima Khayatt Kholghi (“Wife”) both grew up in

Iran. Husband came to the United States in 1978 at the age of 17. He obtained his GED

in Nashville and attended college for about a year before he and his father started a rug

business in 1981 called Marketing and Sales Management Corporation d/b/a MSM

Industries (“MSM”). In addition to selling rugs, MSM imported and sold nonslip rug pads.

Wife moved to the United States in 1983 at the age of 19. She attended high school

in Denver, Colorado, for one semester and took classes in English as a second language

because she could only understand very basic conversational English. She obtained a high

school diploma and took classes at a community college, but the classes were too difficult

for her. Wife lived with her parents, who had their own rug store in Denver, and she

occasionally helped them at the store without pay.

Wife’s family began conducting business with MSM, and in 1988, Wife met

Husband while he was selling rug pads. In November 1988, the parties had a religious

marriage ceremony in Nashville. On February 14, 1989, they had a legal marriage

ceremony at the courthouse.

Around the time of the marriage, MSM began manufacturing its own nonslip rug

pads utilizing custom-made machinery. Husband and his father had purchased five acres

of land in Smyrna, Tennessee, and constructed a manufacturing plant. Husband and his

father also continued to operate their rug store. Wife occasionally worked at the store,

answering the telephone, taking orders for rug pads, and interacting with customers. She

also traveled to trade shows with Husband. However, Husband never paid Wife a salary

or wages for her work.

In 1993, Wife gave birth to a daughter and stopped working at the store. In 1997,

the parties had a son. Wife was a homemaker and stay-at-home mother for the remainder

of the marriage. Husband’s business continued to grow, which required him to travel

frequently, especially to China. In 2002, Husband and his father bought an adjacent

commercial property in Smyrna, for a total of twelve acres. Their business struggled

financially in 2008 during the economic downturn, and Husband borrowed large sums of

money from members of Wife’s family in Denver. Husband and his father closed their rug

store around that time. Eventually, however, MSM became very successful at

manufacturing not only rug pads but other nonslip products, including yoga mats, shelf

liners, grocery case liners, and toolbox liners. MSM had around eighty employees. At the

time, MSM had two employees who lived out-of-state but traveled to Smyrna on a regular

basis. In order to avoid their frequent hotel bills, Husband and his father purchased a four-

bedroom home in Nashville, at 500 Cinnamon Place, and rented it to MSM for the use of

the two out-of-state employees.

Husband handled all of the parties’ financial matters. The parties built a home in

Nashville with over 12,000 square feet and valued at over $2 million. They had a

housekeeper, luxury vehicles, and enjoyed traveling. Both children attained the age of

majority during the marriage. Toward the end of the marriage, Wife accused Husband of

adultery. She saw hotel reservations for two guests on Husband’s phone and a suspicious

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text message from a woman thanking Husband for giving her so much money. Wife

eventually filed a complaint for divorce on September 8, 2016.1 She asked the court to

grant her a divorce, equitably divide the parties’ marital estate, and award her alimony and

attorney’s fees. Husband filed an answer and counter-complaint for divorce.

On May 22, 2017, Wife filed a motion for pendente lite support. Wife asserted that

Husband had recently moved out of the marital residence, and although he continued to

pay the basic customary household expenses for the home, he had informed Wife that she

was limited to only $2,000 per month from their joint bank account. In addition, Husband

had replaced Wife’s credit card, which previously had a spending limit of $30,800, and

given her a new card with a spending limit of $3,500 per month. At the same time, Wife

alleged, Husband allowed the parties’ grown children to retain their cards and make

charges to the parties’ credit card account. Wife asserted that Husband was spending nearly

$5,000 per month on the parties’ grown children. She attached Husband’s deposition

testimony and his current income and expense statement, which reflected expenses of

$33,888.54 per month. This included $1,944 for their daughter’s apartment, $685 for their

son’s apartment, $683 for their daughter’s car payment, and $323 for their son’s car

payment, in addition to other expenses for them. Husband was also investing $4,000 per

month into investment accounts for the grown children, and both accounts had balances

exceeding $40,000. Husband conceded during his deposition that there was no reason why

the children could not use those account balances to pay for their own expenses, adding,

“I’m just a dad taking care of it.”

Additionally, Wife alleged that Husband had moved out of the marital residence and

into a Brentwood apartment where he was paying $3,000 per month in rent. She suggested

that Husband could have moved into the home on Cinnamon Place, which was a four-

bedroom home currently being used only periodically by one out-of-town employee of

MSM. Wife also complained that Husband had just purchased a 2016 Porsche Panamera

for himself, and he was spending around $2,000 per month on that payment alone while

limiting her to only $2,000 from their joint checking account. Wife asserted that Husband

was the president and CEO of “a multinational company” grossing approximately $10

million per year, while she was a homemaker with no other income. Wife submitted an

income and expense statement listing $14,483 for her monthly expenses, including a

housekeeper and personal chef. She requested an award of pendente lite support in the sum

of $10,000 per month to enable her to pay for her customary standard of living, attorney’s

fees, and expenses for repairs to the marital home in anticipation of listing it for sale.

Husband filed a response in opposition to the motion for pendente lite support,

1

Upon the filing and service of the complaint for divorce, a temporary injunction went into effect

“restraining and enjoining both parties from transferring, assigning, borrowing against, concealing or in

any way dissipating or disposing, without the consent of the other party or an order of the court, of any

marital property.” Tenn. Code Ann. § 36-4-106(d)(1).

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arguing that Wife’s request was unreasonable and excessive. He maintained that $2,000

per month in funds and $3,500 per month in credit card access was sufficient in light of the

fact that he continued to pay the bills associated with the marital residence. Husband

claimed that he canceled Wife’s credit card because she charged attorney’s fees to the

account and exceeded the credit limit by over $12,000. He acknowledged paying $2,000

per month for the new Porsche payment but noted that he was also paying $1,350 per month

for Wife’s Audi lease. He claimed that his decision to rent an apartment for $3,000 was

justified because he wanted to be near his parents’ residence in light of their advanced age

and the fact that he picked up his 85-year-old father in the mornings before commuting to

work. Husband claimed that his apartment was only 2.8 miles away from his parents’

residence and that the Cinnamon Place home was 9 miles away. He agreed to pay

contractors directly for repairs to the marital home but insisted that Wife did not need any

additional pendente lite support. Husband asked the court to order the sale of the marital

home to pay the parties’ attorney’s fees. He claimed that “a large portion” of the income

reflected on his tax returns went to pay the mortgage on his commercial property and that

he did not actually receive that income.

The trial court held a hearing on the motion for pendente lite support on June 9,

2017. The record before us only contains a transcript of the trial court’s oral ruling at the

end of the hearing. At the outset, the trial judge admonished both parties regarding their

excessive spending, explaining that they could no longer do as they wished now that the

divorce action was pending. The trial judge explained that he frowned upon “husbands

running off the deep end and spending and wasting money” but also divorcing wives

“going on spending sprees” and expecting their husbands to pay for it. The trial judge

deemed some of the expenses on Wife’s income and expense statement “outrageous.” As

for Husband, the trial judge said he did not know of any reason why Husband could not

reside in the Cinnamon Place home rather than renting an apartment for $3,000 per month.

The trial judge stated that Husband would have the option of moving into the house he

jointly owned with his father, and if he did not, “as far as I’m concerned, that’s a dissipation

every month, and the Court will deal with that at the final hearing.” As for the Porsche,

the trial judge remarked, “It’s hard for me to get too upset about $2,000 for a Porsche when

the wife is spending certainly less but a substantial amount for her vehicle.” However, the

trial judge cautioned Husband that he was “not a fan of supporting adult children beyond

what you’re supporting your spouse.” The trial judge said he expected Husband’s charges

for the parties’ grown children to “be more reasonable.” He added, “this Court is not going

to approve $7,000 a month for your children to charge on credit cards.” The trial judge

said he was not going to impose a specific limit on what Husband could spend on the

children, but, he added, “if it continues this high, the court is going to consider that a

dissipation also.”

Ultimately, the trial judge ordered Husband to provide Wife with a credit card with

a limit of $15,000, but the judge directed Wife to spend no more than $7,000 per month

except in the case of an emergency. He eliminated Wife’s $2,000 per month withdrawal

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from the joint checking account. Husband was ordered to continue paying the mortgage

and utilities for the marital residence in addition to all insurance. Wife was required to pay

for other household expenses such as yard maintenance, pest control, security system,

housekeeper, etc. The trial judge declined to order Husband to pay Wife’s attorney’s fees

because he had been paying them voluntarily, but he directed Wife to file a motion if it

became an issue.

Thereafter, Wife filed an affidavit of the parties’ realtor, who described numerous

repairs that needed to be made before the marital residence could be listed for sale. The

realtor stated that the home was “in such disrepair” that it was “not marketable in its present

state.” Husband opposed making the repairs and suggested listing the property “as is,”

claiming that his company did not have enough “cash flow” to support spending $100,000

on home repairs. He submitted an affidavit from MSM’s vice president of finance, Mark

Noel, who conceded that “the company grosses over $10 million per year” but said that

other factors should be taken into account “when evaluating [Husband’s] financial

liquidity.” He explained that MSM was currently importing large quantities of inventory

in advance from China in order to improve its profit margins, and it did not currently have

sufficient cash flow to allow Husband to withdraw $100,000 from the company.2 After a

hearing, the trial court directed the parties’ realtor to prioritize which repairs from the home

inspection report were most needed. The court would then determine the repairs to be

completed and require Husband to pay for the ordered repairs, but he would be repaid “off

the top” after the sale of the house.

Husband subsequently filed a motion seeking permission to obtain a home equity

line of credit (“HELOC”) to pay for the repairs to the marital residence. Wife opposed the

motion on the basis that a HELOC would needlessly dissipate the marital assets. She

claimed that Husband was using “accounting gymnastics” to make it appear as if his

business was not profitable and he lacked access to cash. Wife also claimed that Husband

had stopped paying for her attorney’s fees, claiming an inability to pay, while spending

$3,000 per month on his apartment and thousands of dollars in expenses for their grown

children. After another hearing, the trial court entered an order allowing Husband to obtain

a HELOC to pay for the repairs to the marital home. The court also ruled that Husband

would pay Wife’s pendente lite support payments by direct deposit of $7,000 to her bank

account rather than utilizing the credit card.

The divorce trial was held over the course of four days in January 2019. A great

deal of the testimony centered on the valuation of MSM and Husband’s income. Each

party presented expert testimony of a certified public accountant as to these issues.

Determining Husband’s income was no easy task. According to Tom Price, Wife’s expert

2

Testimony at trial established that MSM had increased its inventory at the business in the last

couple of years in part because it had partnered with Amazon and had to maintain a sufficient supply of

inventory to be able to meet two-day shipping requirements.

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witness, both Husband and his father had historically taken what they designated as

“shareholder loans” from MSM every month in addition to traditional compensation. He

explained that Husband and his father typically used the company credit cards for both

personal and business expenses. When the bill arrived each month, they would simply tell

the company’s accountant which expenses they deemed “personal” or “business.” The

designated “business” expenses would be expensed through the business. The “personal”

expenses would also be paid by MSM but would be recorded as a “loan” to each

shareholder. Mr. Price testified that these so-called shareholder loans had been carried on

the company books for years. However, there was no loan document reflecting any loan

terms, no collateral, and no interest owed or paid. According to the company’s records,

MSM paid Husband traditional W-2 compensation of around $215,000 per year. However,

each month Husband would void his paycheck, and the amount of the voided paycheck

would then be credited as a payment toward his shareholder loans. In August 2016, the

month before the complaint for divorce was filed on September 8, MSM records showed

that Husband owed $592,285.96 in shareholder loans. By November 2018, just before

trial, his shareholder loan balance had increased to $1,781,624.46, the largest balance in

the history of the company. Thus, in addition to his traditional compensation, Husband

had drawn $614,985.70 in personal shareholder loans from the company in 2016 and

$449,420.17 in shareholder loans from the company in 2017. In 2018, Husband’s

shareholder loan balance increased by another $383,000. Husband’s “personal” charges

making up the shareholder loans included some items that benefitted Wife, such as

payment of the mortgage for the marital home and the parties’ attorney’s fees. However,

other expenditures did not benefit Wife, such as Husband’s apartment rent and related bills,

a portion of the payment for his Porsche, and expenses for his grown children.

No one could really explain why Husband and his father chose to characterize their

spending as “shareholder loans” rather than additional traditional compensation. The

company’s vice president of finance, Mr. Noel, testified that the practice of taking these

“advances” began before he was employed at the company and that the loan balance had

never been repaid to zero during his twelve years of employment. He opined that, as

owners, Husband and his father could take money out of the company as they saw fit. Mr.

Noel acknowledged that he did not know of any reason why the shareholders would not

have simply increased their salary and said he thought “it could have been done either

way.” Wife’s expert, Mr. Price, suggested that the shareholders might be characterizing

the payments as loans rather than income to avoid the Medicare tax of 2.9% and the six

percent “Hall tax” imposed by the State of Tennessee on corporate distributions.3 When

Mr. Price valued the business, he reclassified the so-called shareholder loans as shareholder

equity distributions (income or cash flow to Husband) because they had been carried on

the books for years, they were not repaid to zero, there was no loan document or interest

paid, and he did not believe the loans would have been repaid anytime in the near future.

Mr. Price also noted that one of MSM’s own documents referred to the shareholder loans

3

MSM operated as a subchapter S corporation.

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as “Owner Equity Distributions.” Husband’s expert, Vic Alexander, considered the

shareholder loans to be valid obligations but conceded that he would not recommend the

practice of making a loan of $1.7 million with no collateral. When Husband was asked

during his deposition why he borrowed from the company rather than taking out additional

compensation, he replied, “I guess taxes and -- I have no idea. I don’t think it makes any

difference at the end of the year.” Wife testified that she had signed the parties’ joint tax

returns over the years but was unaware that Husband was supposedly borrowing money

from MSM rather than earning it as income.

Aside from the issue of shareholder loans, Husband also received rental income

from MSM due to his one-half ownership of the 12-acre commercial property and

manufacturing plant in Smyrna and the Cinnamon Place home in Nashville. In 2017,

Husband received $317,400 in annual rental income for the Smyrna property and $21,600

in annual rental income for the Cinnamon Place property. At the time of trial, Husband

was receiving around $32,000 per month in rent from MSM for the Smyrna property, but

he used approximately $30,000 of that sum to pay the sizeable mortgage payment on the

property. He was receiving $1800 per month in rental income for the unencumbered

Cinnamon Place property.

Wife’s expert and Husband’s expert agreed that Husband’s tax returns for the past

three years reflected an average pre-tax pre-interest “cash flow,” or gross revenue, of

$643,259 per year, which included his traditional compensation and rental income but not

any shareholder loans. The experts also acknowledged that the numbers reflected on the

most recent tax returns for MSM and the parties were somewhat skewed because of large

atypical write-offs taken by MSM during the divorce proceeding. Specifically, in 2016

and 2017, MSM decided to take large deductions for a bad debt of $641,000 from the rug

store that had closed ten years earlier and $410,000 in connection with the rug store’s old

inventory.4 The bad debt write-off also impacted Husband’s personal return. Putting the

nonrecurring write-off aside, Wife’s expert conceded that the “more accurate” annual cash

flow average for Husband was $536,356. Husband’s post-divorce income and expense

statement listed $46,000 per month in “net income” from MSM, which included his

monthly salary and rental income but not shareholder loans. It listed $54,950 in monthly

4

The trial court would eventually find “the timing of the write-off suspect in light of the failure of

the company to take such write-offs in the past.” The court explained:

The Court finds that while it is not unusual for a company to write off obsolete inventory,

there is no evidence that MSM has ever written off obsolete inventory in the history of this

company. . . . The effect of this adjustment resulted in a gross profit percentage which was

significantly less than in recent years.

The court found that MSM showed a loss for 2017 “due to the $410,000 write off,” when it would have had

positive earnings without the write-off. Thus, the court found that consideration of the write-off “unfairly

skews the value of the company” and “skews the valuation of the parties’ share of the business which the

Court finds to be unreasonable and unjust under the circumstances.”

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expenses, for a monthly deficit of $8,950.

Husband was 59 years old at the time of trial and in good health. He and Wife had

been legally married for nearly thirty years. He attempted to explain the suspicious text

message and denied making hotel reservations for himself and another adult, claiming that

the booking application he used set two guests by default. The reservations showing two

adults were for hotels not only in China but also in San Diego, Seattle, Chicago, and

Germantown, Tennessee.

Husband testified that after Wife filed for divorce, he moved out of the master

bedroom and into another bedroom in their 12,000-square-foot home. He testified that he

decided to move out after an argument escalated between him and Wife. Husband testified

that the four-bedroom Cinnamon Place house was being used by MSM for an engineer

from New York who traveled to Nashville two weeks per month. He testified that because

he treated the Cinnamon Place house as a rental property on his own tax returns and the

rent as a business expense on MSM’s returns, he could not live in it for more than fourteen

days without impacting the way it was classified for tax purposes. The Cinnamon Place

property had recently been appraised for $360,000.

The commercial property and manufacturing plant in Smyrna had recently been

appraised for $9.9 million. Husband contended that some if not all of the commercial

property and the business value should be classified as his separate property because he

owned them prior to the marriage. In the event that a portion of the business was deemed

marital, Husband proposed valuing the “marital portion” of his one-half interest in MSM

at approximately one million dollars, but he pointed out that he owed the company about

$1.7 million in shareholder loans. Thus, on his proposed division of property, he valued

his one-half interest in the business as a negative number and reflected it only as a debt of

$565,788 owed to MSM and to be assigned to Husband.

Husband testified that in the event of his father’s death, his father’s interest in MSM

would go into a trust for the benefit of Husband’s mother during her lifetime. Husband

was an only child and testified that he would become the beneficiary of the trust at his

mother’s death. He also testified that he and his father had a buy-sell agreement that would

govern what happened in the event of death. Husband’s father was 87 years old, and his

mother was 82.

Husband conceded that he had stopped paying for his and Wife’s attorney’s fees

roughly a year before trial but insisted that he did not have the funds to do so. Husband

testified that he borrowed money from his father during the divorce proceeding to pay the

parties’ personal income tax obligation of approximately $70,000 and to purchase Wife’s

Audi at the end of its lease for around $40,000. He also maintained that he did not have

the money to pay for the repairs to the marital home and so it was necessary for him to

utilize the HELOC, which had a balance of $130,000 at the time of trial. Husband and his

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father also took out an additional $200,000 loan against the Smyrna property during the

divorce proceeding.

Despite his claimed inability to pay the aforementioned expenses, Husband testified

that he deemed it appropriate to purchase his Porsche for approximately $100,000 because

he thought it helped his business image. His monthly car payment was roughly $2,000.

His apartment rent had increased to $3,200 per month. Husband also acknowledged that

he had continued to pay his adult children’s expenses through the business as shareholder

loans. The parties’ daughter was twenty-five years old, living in an apartment in Atlanta,

and employed full-time throughout the divorce proceeding. She was a college graduate,

and Husband and Wife had paid for her college education. The parties’ son was twenty-

one years old and living in Denver, working for Wife’s family in their business. Husband

testified that after the trial judge admonished him not to spend so much on the parties’

children at the pendente lite hearing, his father began paying for the children’s expenses

and charging it against his own shareholder loans from MSM. Husband acknowledged that

“[n]ow it’s just charged to [his] father’s account instead of [his] account.”

Husband did not dispute Wife’s calculation that he paid around $47,000 in credit

card charges by his son and daughter just while the divorce was pending. Husband also

contributed $4,000 per month to UTMA investment accounts for their grown children

through 2017.5 According to Wife’s calculation, Husband deposited $40,000 in the

children’s investment accounts during the divorce proceeding without her knowledge or

consent. By the time of trial, the children’s accounts each had a balance of approximately

$70,000. Husband also acknowledged making deposits to another account for Son during

the divorce proceeding.

Husband testified that he believed Wife was capable of working full-time. He

opposed her request for alimony in futuro and suggested that she should be limited to

transitional or rehabilitative alimony. Regarding her ability to work, Wife presented the

testimony of Linda Jones, a certified rehabilitation counselor who had performed a

vocational evaluation of Wife prior to trial. Because of Wife’s level of education and the

fact that she was primarily educated in Iran, Ms. Jones thought it was important to

administer an achievement test to gauge Wife’s abilities in basic subjects. She used

standardized testing commonly used in her field as a brief assessment of educational

achievement. Ms. Jones testified that Wife’s greatest problem areas were in language and

verbal skills. Her word reading, sentence comprehension, and spelling were all below the

tenth percentile. Her verbal language scores were in the fifth to ninth percentile. Wife’s

math computation skills were better but only at the eighteenth percentile. Her “grade level”

equivalency was between grades five and eight for each of the various subjects. Given that

Wife did not speak English as her first language, Ms. Jones was not surprised at the low

5

The Tennessee Uniform Transfers to Minors Act is codified at Tenn. Code Ann. § 35-7-101, et

seq.

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reading comprehension levels. She explained that this level of performance was common

for someone who did not have a broad background in the English language. Ms. Jones

testified that Wife was “very cooperative” and appeared to be making a genuine effort,

even asking to revisit questions again when she finished. Ms. Jones had been trained to

identify when people might be trying to manipulate a test, but she did not have any such

concerns about Wife.

Ms. Jones also testified that Wife could text message on her smartphone but did not

email regularly because of her difficulty writing in English, and she did not know how to

use Word or Excel, which were basic programs used in the workplace. Ms. Jones testified

that Wife had no meaningful work history or work skills. Ms. Jones also administered a

career assessment inventory for Wife, which was meant to help her choose a job consistent

with her interests. She testified that the jobs for which Wife indicated the highest level of

interest would require one to two years of training or education. In addition, Ms. Jones

opined that Wife would probably need one year of adult basic skills training to improve

her language skills before beginning that additional education. Wife was around age 55 at

the time of trial, so Ms. Jones estimated that Wife could complete such training by around

age 58. At that age, Ms. Jones believed that the additional benefit Wife would eventually

earn in the workplace would be outweighed by the cost of such training.

Ms. Jones researched the median earnings of female high school graduates at age

twenty, nationally and in Nashville. She considered the income for two readily available

job examples: fast food workers and retail sales workers. Using these figures, Ms. Jones

estimated that Wife could earn between $17,000 and $19,000 per year if she was able to

find a fulltime job. Ms. Jones confirmed that Wife had not applied for any jobs during the

divorce proceeding.

Wife continued to reside in the marital residence at the time of trial, as it had not

been sold. Because of the delays with the home repairs, it was only placed on the market

in October 2018, three months before trial. The home had three levels with an elevator,

six bedrooms, eight full and three half baths, a theater room, an exercise room with a steam

shower, two full kitchens, six fireplaces, laundry rooms on each level, a pool with a

fountain and outdoor shower, and a heated driveway. The home had recently been

appraised for $2.2 million, and it was listed for sale at $2.5 million. Wife predicted that

after the sale and payment of the mortgage and the sales commission, the parties would

receive around $649,000 in proceeds from the sale of the home.

Wife was taking seven medications on a daily basis for issues such as attention

deficit disorder, depression, thyroid issues, and neck pain. She had previously had surgery

due to cancer and been hospitalized due to a blood clot but was in fairly good health at the

time of trial. Wife was considering looking for a job but had not yet started searching. Her

only source of income was the $7,000 per month pendente lite support payment from

Husband pending the sale of the marital residence. Husband also continued to pay the

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mortgage, property taxes, utilities, and insurance for the parties.

Wife’s post-divorce income and expense statement listed zero income and $13,934

in monthly expenses. She testified that this level of spending reflected the standard of

living during the marriage. Wife planned to move to Denver and buy a house there in order

to be near her family. She sought an award of alimony in futuro of at least $10,000 per

month.

A significant amount of testimony focused on the issue of whether Wife might own

an interest in property in Iran. She was one of five children. Her mother was around 83

years old, and her father had passed away in 2010. Wife testified that she did not even

know if her father had a will until the issue was brought up during this divorce proceeding.

Her sister in Denver was the personal representative of her father’s estate when he died,

and Wife had executed a power of attorney giving her sister authority to act for Wife. Wife

testified that when her father died, she and her siblings inherited their childhood home in

Iran, but the house was sold and most of the money went to pay off a large debt owed by

her brother. Wife’s sister who had power of attorney signed the necessary sale documents

for herself and for Wife. Wife said her remaining share of the proceeds was around

$80,000, but that was not money that she ever actually received. Wife explained that she

never actually received any money after her father’s death, as individuals were unable to

bring money from a bank in Iran to the United States because of the relationship between

the two countries. Because of the inability to transfer the funds, her sister took each of the

three sisters’ shares of the inheritance and gave the money to a cousin to invest in real

property. Wife testified that they collectively purchased a condominium, but that an

Iranian bank put a lien on the property and took that property due to debts owed by their

father and brother. Thus, she testified at trial that this real estate was “gone.”

Wife testified that her mother had come to live in the United States for a few years

but that she also still owned a home in Iran. Wife further testified that she learned during

this divorce proceeding that her mother had put the home in Iran in the names of her three

daughters but retained the right to live there.6 An English translation of the original Persian

“Conveyance Document” was introduced at trial, and it stated that “[t]he interests of the

conveyed real estate will belong to the conveyor during her lifetime (for 30 years)[.]”

During discovery, Wife had stated that she had “no present interest” in the property, the

home was titled to her mother as “something akin to a life tenant,” and Wife would “guess”

the home was worth around $850,000 in U.S. currency. At trial, Wife insisted that she

really did not know how much the home was worth. In the event of her mother’s death,

Wife said she also expected to receive one-fifth of a one-fifth share of her family’s rug

business in Denver, equivalent to four percent, in the event that the business was still

ongoing at that time.

6

Wife’s sister testified during her deposition that their mother had power of attorney “from all of

us” and could sign for the siblings.

- 11 -

In addition to presenting the testimony of the various accountants and appraisers,

the parties introduced into evidence thousands of pages of exhibits. At the conclusion of

the four-day trial on January 30, 2019, the trial court took the matter under advisement.

Before the trial court entered a written order in the matter, Wife filed a motion to reopen

the proof to consider the parties’ 2018 joint tax return. The trial court entered an order

reopening the proof upon agreement of the parties. The order stated that the proof would

be reopened in an effort to more accurately ascertain Husband’s correct income and to

further consider the valuation of MSM.

The trial court heard additional testimony on June 17, 2019. According to the

parties’ tax return, Husband had an adjusted gross income of $396,200 for 2018. Husband

testified that this sum included his salary of around $204,000; profit from MSM of $20,000;

and $164,000 in rental income that he never actually received in hand. He testified that the

$20,000 profit was taxable as income to him even though he never withdrew that amount

from the company, although he acknowledged that he could have done so. He testified that

if one considered his tax liability of $75,000, he only “realized” $130,000 for the year.

Husband said that he was also continuing to borrow shareholder loans from MSM in order

to afford paying the mortgage and bills on the marital home and pendente lite alimony of

$7,000 per month. Husband acknowledged that he continued to drive the Porsche and pay

its $2,000 monthly payment. Husband’s expert, Mr. Alexander, also testified regarding

Husband’s income and answered some questions for the trial judge regarding alternative

valuations of MSM.

The trial court entered a final decree of divorce on June 27, 2019. The order itself

spanned forty-five pages, and additional spreadsheets were attached. Wife was awarded a

divorce from Husband on the ground of inappropriate marital conduct. After making

various findings regarding the parties’ educational, work, and medical histories, and

summarizing the relevant events surrounding their thirty-year marriage, the trial court

proceeded to equitably divide the marital estate. The marital home was still listed for sale.

The trial court found that it was a marital asset with a fair market value of $2.2 million

based on the most recent appraisal. The trial court added, “The property is currently on the

market for sale, and the sale price shall determine the actual fair market value of the

property and the resulting proceeds subject to division. However, for the purposes of the

Court’s division of assets, the Court will use the appraised value.” After subtracting the

mortgage indebtedness, the HELOC loan of $130,000, and an eight percent sales

commission of $176,000, the trial court found that “the anticipated equity subject to

division will be $649,065.”

The trial court found that the fair market value of the unencumbered Cinnamon

Place property was $360,000, such that the value of Husband’s one-half share after

subtracting a real estate commission would be $165,600. The trial court found that the fair

market value of the Smyrna commercial property was $9.9 million, but after subtracting

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the mortgages, the resulting equity would be $3,071,328, and Husband’s one-half share

would be $1,535,664. The court found that Husband’s interest in the real property at the

time of the marriage was valued at $82,000, and this would constitute his separate property.

However, the remaining appreciation in equity would constitute marital property. As such,

the final value of the Smyrna property as a “marital asset” was $1,453,664.

After an in-depth analysis of the expert reports and valuations, the trial court valued

Husband’s one-half interest in MSM at $2,420,000. The court valued Husband’s share of

MSM at the time of the marriage at $250,000, which would constitute his separate property.

Therefore, the final value of MSM as a “marital asset” was $2,170,000. Next, the trial

court noted Husband’s insistence that the value of his interest in MSM “should be offset

against the amount of the loans which he owes to the company.” The trial court noted that

if it subtracted the $1.7 million in shareholder loans from its finding as to the value of the

marital asset, Husband’s interest in MSM would only be valued at $388,376. Ultimately,

the trial court declined to deduct the full amount of the shareholder loan, with the following

explanation:

. . . Wife had neither control over the Husband’s borrowing from the

company nor any input into how the loan proceeds were spent. While some

of these proceeds clearly benefited the Wife either directly or indirectly,

other such expenditures were detrimental to her by reducing the value of her

equitable interest in the parties’ share of the business.

The Wife alleges that the Husband has dissipated the marital estate by

his extravagant lifestyle, both before the filing of her complaint for divorce

in September, 2016 and during the approximate 29 months that the divorce

action was pending. Among these expenses were $1,928 per month for a

2016 Porsche sports car totaling approximately $44,342; $3,000 to $3,200

per month for an apartment totaling approximately $87,000, when cheaper

alternatives were readily available; the payment of the parties’ adult

children’s living expenses including his adult daughter’s rent, utilities and

car note and his son’s apartment rent and leased vehicle; paying the

children’s personal expenses on the MSM Industries’ credit card and his Citi

Bank credit card in the amounts of $9,068 and $46,857 respectively; deposits

directly into his adult son’s checking account in the amount of approximately

$22,314; and deposits totaling approximately $40,000 into his adult

children’s U[TM]A accounts during the pendency of this action. The Court

finds the total of these extravagant, unnecessary and dissipative expenses to

be approximately $249,581. (See Trial Exhibits #97, #107A and B, #108,

#109 and the Court’s pendente lite order dated July 14, 2017.) Control over

the charges that the Husband made on the company’s credit card each month

was his alone. He directed the company’s accountant as to which expenses

were to be treated as business-related and which expenses were his personal

expenses, adding to his growing loan balance owed to the company. Further,

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there was never any accounting of his personal expenditures. Based on the

evidence, it is clear to this Court that a portion of these charges were for

accommodations for another adult, and on occasion a child, to join him while

he was purportedly out-of-town on business. There is no evidence that these

“guests” were the Wife or the parties’ children. Indeed, the evidence is to

the contrary. Such expenditures were not in furtherance of the parties’

marital relationship and, therefore, constitute a further dissipation of the

parties’ marital assets. Considering the above dissipation, the exact amount

of which is impossible to calculate; the tremendous disparity in the parties

income; and the likelihood that the Husband will never be required to repay

his share of loans from the company, the Court finds that of the $1,781,624

the Husband borrowed from the company, $1,350,000 of the loans constitute

legitimate marital expenses from which the Wife received benefits and shall

be offset against the value of the company. The remaining $431,624 shall

constitute the Husband’s dissipation in the amount of $249,581 and

approximately $182,043 in separate debts for which he shall not receive

credit against the value of the company and for which he shall be personally

responsible. Based on the foregoing, the Court finds the value of the parties’

interest in MSM Industries to be $820,000. Further, the Court finds that the

Husband shall be personally responsible for the total indebtedness which he

has borrowed from MSM Industries and shall indemnify and hold the Wife

harmless thereon.

The trial court found that Wife owned a one-third interest in her mother’s home in

Iran, which was gifted to her by her mother. The trial court found that neither party

expressed an opinion as to the value of the property or provided the court with an appraisal.

“Without competent evidence,” the trial court explained, “the Court cannot determine the

value of the property but does find that the Wife’s interest constitutes her separate

property.”

In sum, the trial court found that the total value of the parties’ marital estate was

$3,292,816. The trial court proceeded to make findings regarding every statutory factor

listed for consideration when equitably dividing the marital estate. See Tenn. Code Ann.

§ 36-4-121(c). Considering all of the factors, the trial court concluded that “the marital

estate should be divided disproportionately in favor of the Wife.” By necessity, the trial

court noted, Husband would be awarded MSM, which would produce substantial income

and allow Husband to acquire future assets. However, the trial court explained, there was

no income-producing property available to award to Wife to generate income for her.

Therefore, the court found it equitable to award Wife “approximately 60%” of the marital

estate and Husband “approximately 40%.” The trial court awarded Wife sixty percent of

the anticipated sale proceeds from the house and awarded Husband forty percent. Wife

was awarded the Audi, while Husband was awarded the Porsche. Husband was also

awarded the parties’ Gulfstream recreational vehicle valued at $40,000. The trial court

- 14 -

valued and allocated the parties’ various checking and savings accounts totaling around

$17,000, their investment and retirement accounts totaling approximately $134,000, and

the furnishings in the marital residence and the business. Because Husband was awarded

all of the business-related marital assets, Wife was awarded a judgment against Husband

“to adjust the equities between the parties” and to accomplish an equitable division of the

marital estate. Specifically, Husband was ordered to pay a judgment of $1,325,170 in favor

of Wife, at the rate of $100,000 per year until paid in full. Upon the sale of the marital

home, Husband’s share of the proceeds would be applied to the outstanding judgment owed

to Wife.

The trial court then considered the issue of spousal support. Again, the trial court

expressly considered all of the statutory factors for consideration when awarding alimony.

See Tenn. Code Ann. § 36-5-121(i). It concluded that Wife had an earning capacity of

between $17,000 and $19,000 per year. It found that Husband had a pre-tax pre-interest

“cash flow” of $536,056 per year from 2015 to 2017. It found that his income based on

his tax returns was approximately $400,000 during those years and also in 2018. The trial

court found that many of Husband’s monthly expenses were excessive and unnecessary

and/or duplicative. Despite his significant expenses, the trial court found that “he has the

ability to pay spousal support.” The court also found many of Wife’s monthly expenses

excessive and reduced or eliminated many. The trial court ultimately concluded that Wife

had a need of $9,644 per month based on legitimate expenses. However, it found that she

should be capable of earning $1,500 per month ($1,336 after taxes). As such, it found that

she needed $8,308 per month in alimony in futuro. The order provided that Husband would

not begin paying alimony in futuro until the marital residence sold, and he was directed to

continue complying with the pendente lite support order until that time.

Finally, the trial court addressed the issue of attorney’s fees. The trial court noted

that Wife claimed approximately $70,000 in outstanding attorney’s fees and $29,707 in

expert witness fees. Husband claimed to have unpaid attorney’s fees totaling $108,940.

The trial court discussed the fact that Husband experienced difficulties during the litigation

securing information regarding Wife’s interests in assets, including those in Iran. It found

that Wife had likely failed to exercise any due diligence to determine whether any

ownership interest existed. Because of her inaction, the trial court found, Husband was

required to take depositions of Wife’s family members outside the State of Tennessee. The

trial court acknowledged that Wife’s interest in the property in Iran was difficult for her to

access and utilize but noted that it was nonetheless an ownership interest. The court found

that Husband was compelled to expend unnecessary resources in an effort to secure

information that should have been forthcoming and easily ascertainable by Wife. It found

that Husband should not be responsible for the additional and unnecessary attorney’s fees

and litigation costs that resulted. The trial court also acknowledged that Husband had

already paid a portion of Wife’s attorney’s fees and expert fees during the litigation. As a

result, it ordered Husband to pay $40,000 of Wife’s outstanding attorney’s fees in addition

to her expert fee of $29,707.

- 15 -

Within days of the entry of the final decree of divorce, an agreed order was entered

reducing the listing price of the marital home from $2.5 million to $2.2 million. Wife filed

a motion to alter or amend, asking the court “to reexamine the issue of attorney’s fees” and

increase her award. She acknowledged that her outstanding attorney’s fees as reflected on

an exhibit at trial totaled $70,769.80. However, Wife claimed that the aforementioned

exhibit only reflected what she owed “up to the date the trial commenced.” Wife asserted

that she currently owed $124,851.69 in attorney’s fees, including the “trial fees” she

incurred. Additionally, Wife acknowledged that her trial exhibit reflected $29,707.01

owed to her expert witness at the time of trial, but Wife claimed that she “now owes”

$55,378.05 with the trial fees she incurred. Accordingly, Wife asked the court “to consider

these total amounts owed in apportioning attorney fees and make any changes to Husband’s

responsibility for Wife’s fees that the Court deems necessary under the circumstances.”

Husband filed a response arguing that the case was tried over the course of five days, during

which the trial court thoroughly considered all issues presented, and that there was no

reason to relitigate the issue of attorney’s fees. After another hearing, the trial court entered

an order providing that “Wife’s request for the Court to consider Wife’s trial and post trial

attorney fees and reallocate the share of fees for which [Husband] would be responsible is

denied.” Husband timely filed a notice of appeal to this Court.

II. ISSUES PRESENTED

Having retained new counsel on appeal, Husband presents the following issues for

review, which we have quoted from his brief but rearranged:

1. Whether the trial court’s calculation of the marital estate and property

division improperly relied on the appraised and inflated value of the marital

home when the trial court found that the home’s true value is its ultimate sale

price?

2. Whether the court-ordered extensive payments to maintain the marital

home while the home is listed for sale should be credited to [Husband] and

made a part of the property division when they greatly exceed his proven

cash-flow and the court-ordered alimony payments to [Wife]?

3. Whether the evidence preponderates against the trial court’s finding

of dissipation during the divorce proceedings regarding [Husband’s] paying

apartment rent, car payments, and support for the parties’ adult children,

resulting in an erroneous valuation of the marital share of the business, when

(1) [Husband’s] spending reflected his typical expenses during the parties’

marriage; (2) the trial court treated all payments for these categories as

dissipation, contrary to its own findings; and (3) the record lacked any

evidence that these expenses were made to hide, deplete, or divert from

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marital property?

4. Whether the trial court’s property division and alimony calculations

failed to appropriately consider the parties’ separate property, contrary to

Tennessee statute, when (1) the evidence demonstrated [Wife] has an interest

in a very substantial piece of real property; and (2) the evidence did not

support the finding of [Husband’s] supposed inheritance from his family,

including the business?

5. Whether the alimony award should be reversed if the property

division is reversed?

6. Whether the trial court abused its discretion in calculating alimony

when (1) the trial court failed to calculate any reasonable amount of monthly

expenses for [Husband]; (2) the evidence clearly demonstrates that

[Husband’s] cash-flow is substantially lower than the court’s finding on his

income; and (3) [Husband’s] personal and court-ordered obligations greatly

exceed his monthly cash-flow?

In her posture as appellee, Wife restated the issues raised by Husband and also presented

the following additional issues for review:

1. Whether the trial court erred when it did not order Husband to pay a

larger portion of Wife’s attorney’s fees and expert costs; and

2. Whether Wife is entitled to attorney’s fees on appeal.

For the following reasons, we affirm the decision of the circuit court and remand for further

proceedings.7

7

Husband argued in his reply brief that Wife had “waived a majority of her arguments on appeal

by failing to include them in her statement of issues,” including her arguments regarding the parties’

incomes, the shareholder loans, the property in Iran, and Husband’s credibility. Husband cites to various

portions of Wife’s brief from the statement of facts and her argument with respect to the issues of property

division and alimony. We do not find that Wife waived her ability to argue these issues by failing to

designate additional issues on appeal. “Rule 27 of the Tennessee Rules of Appellate Procedure [] generally

only requires that an appellee’s brief contain a statement of the issues presented for review ‘[i]f [the]

appellee is also requesting relief from the judgment.’” Wilson v. City of Memphis, No. W2014-01822-

COA-R3-CV, 2015 WL 4198769, at *11 n.9 (Tenn. Ct. App. July 13, 2015) (quoting Tenn. R. App. P.

27(b)). In Wilson, for example, we found no waiver where the appellee “only seeks to uphold the trial

court’s judgment,” as she did not “appear to be seeking any affirmative relief from this Court.” Id. See

also Mid-S. Maint. Inc. v. Paychex Inc., No. W2014-02329-COA-R3-CV, 2015 WL 4880855, at *9 (Tenn.

Ct. App. Aug. 14, 2015) (explaining that “if Appellees’ argument . . . seeks affirmative relief from this

Court, their failure to designate this argument as an issue in their brief will be fatal to this Court’s review.”)

Here, Wife restated and responded to Husband’s issues and asked this Court to affirm the trial court’s

- 17 -

III. DISCUSSION

A. Valuation of the Marital Home

The first issue we will address is Husband’s contention that “the trial court’s

calculation of the marital estate and property division improperly relied on the appraised

and inflated value of the marital home when the trial court found that the home’s true value

is its ultimate sale price.” Husband asserts that “[t]he trial court’s decision to use the actual

value of the marital home, which it ordered must be sold, to value the marital estate, while

at the same time using the much higher appraised value of the home to calculate the

property division, was fatally inconsistent and must be reversed.”

Despite Husband’s contention, we find nothing in the record to suggest that the trial

court “valued the marital home in two contradictory ways” or used a “much higher”

appraisal value that exceeded “the actual value” of the marital home. The final decree of

divorce states,

The Court finds [the marital home] to be a marital asset with a fair market

value of approximately $2.2 million based on the certified appraisal

introduced into evidence. (See Trial Exhibit #28.) . . . The property is

currently on the market for sale, and the sale price shall determine the actual

fair market value of the property and the resulting proceeds subject to

division. However, for the purposes of the Court’s division of assets, the

Court will use the appraised value.

After subtracting the mortgage and HELOC balances and the estimated real estate

commission, the trial court found “the anticipated equity subject to division will be

approximately $649,065.” The home was listed for $2.5 million at the time of trial.

However, within days of the entry of the divorce decree, the parties agreed to lower the

price from $2.5 million to $2.2 million.

Husband asks this Court to “reverse the property division to clarify what the trial

court meant[.]” The only caselaw he cites in support of this issue is McAlister v. McAlister,

No. M2009-02379-COA-R3-CV, 2010 WL 2977873, at *1 (Tenn. Ct. App. July 28, 2010),

which involved a post-divorce petition to enforce a final decree filed eight years after its

entry. As in this case, the final decree referred to both percentages and precise numbers.

Id. The divorce decree stated:

[T]he Court makes the finding that the value of the marital residence is

$112,500.00. . . . The Court finds that each party’s reasonable share of that

residence is 50% or $56,250.00 each. It is ORDERED, ADJUDGED AND

rulings. She did not waive those arguments by failing to designate additional issues.

- 18 -

DECREED that the Court awards to [Wife] as alimony in solido one-half of

[Husband’s] share of $56,250.00, for an additional share of the house

awarded to [Wife] in the amount of $28,125.00. Therefore, when the house

is sold and if the same does bring $112,550.00, [Husband’s] share would be

$28,125.00. The remaining balance is hereby awarded to [Wife]. The Court

therefore awards to [Wife] 75% of the marital residence and 25% of the

marital residence is awarded to [Husband], the value of which as of this date

awarded is $28,125.00. The Court further finds that to provide [Wife] with

her 75% share of [Husband’s] Pepsico Deferred Compensation Account, the

Court awards her an additional four percent (4%) of the value of the marital

residence. Therefore, when the house is sold upon the youngest child turning

18, [Wife] shall receive 79% of the proceeds as her one-half share of the

marital residence plus the alimony in solido plus her 75% share of the

Pepsico Account, which is a distribution of marital property. Therefore, with

the percentage the Court has finally arrived at, [Husband’s] share of the

marital residence is 21% or the amount awarded to [Husband] as a share of

the marital residence is placed at $23,625.00, which amount he shall be paid

when the marital residence is sold when the youngest child reaches the age

of 18 or graduates from high school whichever is last.

Id. at *2. When the house was sold years later, the wife insisted that the husband was

bound by the “specific dollar figure[s]” cited in the decree, while the husband claimed that

he was required to pay her the percentage. Id. at *3. This Court agreed with the husband.

We explained:

The Final Decree uses the dollar figures to illustrate how the holding with

regard to the percentages will play out if, and only if, the house sells for a

specific stated amount. This position is shown by the Trial Court’s use of

the wording “when the house is sold and if the same does bring

$112,550.00, ....“ (emphasis added). By clear implication, if the house does

not bring that amount when sold then the numbers used in the illustration will

change. The Trial Court placed a value on the house at the time of the divorce

in order to assist it in equitably distributing the marital property. However,

the Trial Court implicitly acknowledged that it had no way of knowing how

much the house would sell for as the Final Decree provided that Wife could

remain in the house until “the youngest child reaches the age of 18 or

graduates from high school whichever is last.” If the house now sells for

more than the value placed upon it in the Final Decree, then both parties will

receive the benefit of any increase in value. Conversely, both will share the

loss if there is a decrease in value. We do not find that the Final Decree

intended for Wife alone to benefit from such a potential windfall or to bear

such a potential loss.

Although perhaps not written as clearly as possible, the Final Decree

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provided that if the parties could not agree on the disposition of the house it

would be sold, with Husband to receive 21% of the net proceeds and Wife to

receive 79% of the net proceeds.

Id. at *4.

In the case before us, the trial court’s order stated that the court was using the

appraised value for purposes of equitably dividing the marital estate but that “the sale price

shall determine the actual fair market value of the property and the resulting proceeds

subject to division.” As such, the trial court only calculated $649,065 as “the anticipated

equity subject to division.” (emphasis added). There is no need for additional clarification

at this point. As in McAlister, because the trial court used percentages, “both parties will

receive the benefit of any increase in value,” and “both will share the loss if there is a

decrease in value.”8 Id.

B. Credit for Pendente Lite Payments

Next, Husband argues that “[t]he over $350,000 in payments that [Husband] has

made to maintain the marital home while it was waiting to be sold should be credited

towards him, and considered as part of the property division, requiring a reversal of the

property division.” Husband’s calculation appears to consist of the amount he had paid

from the date of the pendente lite order until the filing of his brief on appeal. He does not

cite any authority in support of this argument except for “the statute for dividing marital

property,” Tenn. Code Ann. § 36-4-121(c).9 In addition, he fails to cite to any location in

the record to demonstrate that he raised this argument during the five-day trial or at any

other stage before the trial court. Husband did not mention this argument in his pretrial

brief or include such a “credit” in his proposed division of marital property submitted as

an exhibit at trial. As such, we deem the argument waived on appeal. See Martin v. Rolling

Hills Hosp., LLC, 600 S.W.3d 322, 336 (Tenn. 2020) (“[A]s a general rule, issues raised

for the first time on appeal are waived.”) (quotation omitted).

C. Shareholder Loans

We now turn to the more complicated issue regarding the valuation of MSM, the

shareholder loans, and dissipation. “Once property has been classified as marital property,

the court should place a reasonable value on property that is subject to division.” Luplow

v. Luplow, 450 S.W.3d 105, 109 (Tenn. Ct. App. 2014). “‘[W]hen valuation evidence is

8

We reject Husband’s suggestion that the equalizing judgment awarded to Wife must also be

changed depending on the ultimate sale price of the house.

9

This Court found it improper to adjust the division of marital property for pendente lite alimony

received during the divorce proceedings in Barnes v. Barnes, No. M2012-02085-COA-R3-CV, 2014 WL

1413931, at *11-13 (Tenn. Ct. App. Apr. 10, 2014), and in Zimmerman v. Zimmerman, No. M2008-01722-

COA-R3-CV, 2009 WL 1608990, at *7 (Tenn. Ct. App. June 9, 2009).

- 20 -

conflicting, the court may place a value on the property that is within the range of the values

represented by all the relevant valuation evidence.’” Brown v. Brown, 577 S.W.3d 206,

214 (Tenn. Ct. App. 2018) (quoting Owens v. Owens, 241 S.W.3d 478, 486 (Tenn. Ct. App.

2007)). Because “decisions regarding valuation of property present issues of fact, [] the

trial court’s decision regarding value is entitled to great weight on appeal and ‘will not be

second-guessed unless [it is] not supported by a preponderance of the evidence.’” Id. at

214-15 (quoting Owens, 241 S.W.3d at 486).

After valuing the property, “the trial court must divide the marital estate equitably

by weighing the relevant factors enumerated in Tennessee Code Annotated section 36-4-

121(c).” Larsen-Ball v. Ball, 301 S.W.3d 228, 234 (Tenn. 2010). One of those statutory

factors requires the court to consider:

(5)(A) The contribution of each party to the acquisition, preservation,

appreciation, depreciation or dissipation of the marital or separate property,

including the contribution of a party to the marriage as homemaker, wage

earner or parent, with the contribution of a party as homemaker or wage

earner to be given the same weight if each party has fulfilled its role;

(B) For purposes of this subdivision (c)(5), dissipation of assets means

wasteful expenditures which reduce the marital property available for

equitable distributions and which are made for a purpose contrary to the

marriage either before or after a complaint for divorce or legal separation has

been filed.

Tenn. Code Ann. § 36-4-121(c)(5). Thus, “[a] party’s dissipation of marital or separate

property is one of many factors a trial court may take into consideration in making an

equitable division of a marital estate.” Trezevant v. Trezevant, 568 S.W.3d 595, 616 (Tenn.

Ct. App. 2018). “Whether a party has dissipated marital assets is a finding of fact to be

made by the trial court.” Wise v. Bercu, No. M2017-01277-COA-R3-CV, 2019 WL

4747187, at *11 (Tenn. Ct. App. Sept. 30, 2019). “Whether dissipation has occurred

depends on the facts of the particular case.” Larsen-Ball, 301 S.W.3d at 235 (citing 24

Am.Jur.2d Divorce and Separation § 526 (2009)). It will often be a “‘fact and credibility

driven decision.’” Slocum v. Slocum, No. M2016-01881-COA-R3-CV, 2017 WL

4804553, at *6 (Tenn. Ct. App. Oct. 24, 2017) (quoting Watson v. Watson, 309 S.W.3d

483, 492 (Tenn. Ct. App. 2009)).

Our analysis of this issue is somewhat complicated by the fact that this case does

not involve a mere wasteful expenditure of a singular marital asset. As Husband notes in

his brief, the trial court’s finding of dissipation was “imbedded” within its business

valuation of MSM. Husband’s spending led to the creation of a substantial debt, which,

although not characterized as “marital debt” by the parties, had the effect of reducing the

value of a sizeable marital asset. Indeed, using the valuation figures calculated by

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Husband’s expert, Husband claimed that he had no marital equity or interest remaining in

MSM at the time of the divorce trial, and he proposed that MSM should simply be listed

as a negative interest on the marital balance sheet. Thus, the trial court’s decision with

respect to this issue involved the valuation of a marital asset, the consideration of debt, and

related issues of dissipation. The trial court discussed the issue of dissipation in the section

of the divorce decree valuing the marital property and again when discussing the statutory

factors for equitably dividing the marital estate, particularly factor (c)(5).

No matter how we precisely characterize the issue, the trial court’s decision on such

matters is entitled to deference on appeal. Appellate courts “give great weight to the trial

court’s division of marital property and ‘are disinclined to disturb the trial court’s decision

unless the distribution lacks proper evidentiary support or results in some error of law or

misapplication of statutory requirements and procedures.’” Larsen-Ball, 301 S.W.3d at

234 (quoting Keyt v. Keyt, 244 S.W.3d 321, 327 (Tenn. 2007)). The division of the marital

estate “is not a mechanical process,” and the trial court has “broad discretion” in its

decision. Id.

To briefly recap, Husband and his father had historically taken what they designated

as “shareholder loans” from MSM over and above their traditional salaries. They used the

company credit cards for both personal and business expenses, and MSM paid the monthly

credit card bills. Husband would tell the company’s accountant which expenses he deemed

“personal” or “business,” and the personal expenses would be recorded as a “loan” to

Husband. There was no loan document, no collateral, and no interest owed or paid.

Husband would void his monthly paycheck, and that amount would be credited as a

payment toward his loan balance. In August 2016, before the complaint for divorce was

filed on September 8, Husband owed $592,285.96 in shareholder loans. However, his loan

balance tripled during the divorce proceeding. In addition to his traditional compensation,

Husband charged $614,985.70 in shareholder loans in 2016; $449,420.17 in shareholder

loans in 2017; and around $383,000 in 2018. His loan balance was at an all-time high of

$1,781,624.46 by November 2018, shortly before trial. His father’s loan balance was only

$128,119.27. Some of Husband’s credit card charges benefitted Wife, such as payment of

the mortgage for the marital home and the parties’ attorneys’ fees. However, many of the

other charges did not benefit Wife, such as Husband’s apartment rent and related bills, part

of the payment for his Porsche, and living expenses for his grown children.

The trial court valued the marital portion of Husband’s one-half interest in MSM at

$2,170,000. The court noted Husband’s argument that his entire shareholder loan balance

of $1,781,624 should be offset against that value when valuing the parties’ marital asset.

The trial court noted that if it did so, the value of Husband’s marital interest in MSM would

only be $388,376. The trial court ultimately declined to offset the entire balance of the

shareholder loan, finding that a portion of the loan represented “dissipation of the parties’

marital assets” by Husband. Specifically, the trial court only offset $1,350,000 of

shareholder loans against the value of the business as “legitimate marital expenses,”

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holding that the remaining $431,624 in shareholder loans constituted dissipation by

Husband. By our calculation, the trial court deemed 75% of the shareholder loans as

legitimate and 25% as dissipation. This resulted in the trial court reducing its valuation of

the parties’ marital share of MSM from $2,170,000 to $820,000 because of the shareholder

loans.

The trial court gave a lengthy explanation for its decision to classify a portion of the

shareholder loans as dissipation. Simply put, the trial court found that “during the

pendency of this divorce, the Husband has dissipated the marital estate by his extravagant

spending.” The court found that Wife did not have control over Husband’s borrowing from

the company or any input into how the shareholder loans were spent. It found that some

expenditures did not benefit her and in fact “were detrimental to her by reducing the value

of her equitable interest in the parties’ share of the business.” For instance, the trial court

specifically found certain charges “extravagant, unnecessary and dissipative,” including

$1,928 per month on Husband’s new Porsche, totaling $44,342 in payments during the

divorce proceeding; $3,000 to $3,200 in monthly apartment rent, totaling $87,000 during

the divorce proceeding; rent, utilities, and car payments for the grown children, for which

the trial court did not assign a total value; $55,925 in credit card charges by the grown

children; $22,314 in deposits to the adult son’s checking account; and $40,000 in deposits

to the children’s investment accounts. The total of these specifically mentioned charges

was $249,581 (without including any value for rent and vehicles for the children).10 The

trial court found that Husband “insist[ed] on” driving a new Porsche and “insisted on”

renting an apartment for $3,200 per month when cheaper alternatives were readily

available, he could have remained in the marital residence, and he and his father owned the

four-bedroom Cinnamon Place residence nearby. It found that he contributed to the grown

children’s investment accounts and paid their rent, utilities, car insurance, telephone

service, and automobile leases. “To fund all of the foregoing,” the trial court found,

“Husband was borrowing against his business equity.” By listing these expenses as loans

from the business, Husband was “diminishing the value of [his] and Wife’s ownership

interest.” The court found that there was never any accounting of his personal

expenditures, and Husband had total control over the business with little to no accounting

to his elderly father. It found that “his repayment of the approximately $1.78 million debt

to [MSM] [was] unlikely.” The trial court found that some of Husband’s additional charges

were for travel accommodations that included another adult that constituted “further

dissipation” of marital assets. It found Husband’s explanation of his hotel bookings “was

unconvincing and not credible.” The trial court found that it was “impossible to calculate”

the exact amount of Husband’s dissipation. However, considering all of these facts, the

tremendous disparity in the parties’ incomes, and “the likelihood that the Husband will

10

It appears that the trial court may have inadvertently omitted a value for the payment of the

children’s rent, utilities, and car payments. However, the trial court cited an exhibit that listed $56,429.49

in spending for this category in 2016 and $29,784.67 in spending for this category in 2017. In Husband’s

brief on appeal, he included an additional sum of $78,300 for this category.

- 23 -

never be required to repay his share of loans from the company,” the trial court limited the

offset against the value of MSM to only $1,350,000 of the claimed loans. The trial court

added, “The remaining $431,624 shall constitute the Husband’s dissipation in the amount

of $249,581 and approximately $182,043 in separate debts for which he shall not receive

credit against the value of the company and for which he shall be personally responsible.”

The trial court found that subtracting these sums from the shareholder loans “adjusted the

equities” between the parties.

The sole issue Husband raises on appeal is whether his spending met “the legal

requirements for dissipation.” In response, Wife maintains that Husband’s spending did

qualify as dissipation. However, Wife points out that the trial court additionally found it

“highly unlikely” that Husband would ever repay his shareholder loan. She notes her

position at trial was that the value of MSM should not be reduced by these so-called

“loans.” Wife suggests that the trial court reached an “equitable result” by recognizing

most of the shareholder loan as genuine or “legitimate” but considering the remainder as

dissipation.

“Dissipation of marital property occurs when one spouse uses marital property,

frivolously and without justification, for a purpose unrelated to the marriage and at a time

when the marriage is breaking down.” Altman v. Altman, 181 S.W.3d 676, 681-82 (Tenn.

Ct. App. 2005).

The factors that courts most frequently consider when determining whether

a particular expenditure or transaction amounts to dissipation include: (1)

whether the expenditure benefitted the marriage or was made for a purpose

entirely unrelated to the marriage; (2) whether the expenditure or transaction

occurred when the parties were experiencing marital difficulties or were

contemplating divorce; (3) whether the expenditure was excessive or de

minimis; and (4) whether the dissipating party intended to hide, deplete, or

divert a marital asset.

Id. at 682. According to the relevant statute, dissipation means wasteful expenditures that

reduce the marital property available for equitable distribution “made for a purpose

contrary to the marriage either before or after a complaint for divorce or legal separation

has been filed.” Tenn. Code Ann. § 36-4-121(c)(5)(B) (emphasis added). “The timing of

the expenditure or transaction is extremely relevant. It is unlikely that expenditures that

were typical or commonplace during the marriage will constitute dissipation, especially

when the other spouse acquiesced in them.” Altman, 181 S.W.3d at 683 n.5.

Husband seems to suggest that because the parties typically spent extravagantly

during the marriage, he could continue to spend as he desired during the divorce. We

respectfully disagree. Tennessee Code Annotated section 36-4-106 provides:

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(d) Upon the filing of a petition for divorce or legal separation, and upon

personal service of the complaint and summons on the respondent or upon

waiver and acceptance of service by the respondent, the following temporary

injunctions shall be in effect against both parties until the final decree of

divorce or order of legal separation is entered, the petition is dismissed, the

parties reach agreement, or until the court modifies or dissolves the

injunction, written notice of which shall be served with the complaint:

(1)(A) An injunction restraining and enjoining both parties from transferring,

assigning, borrowing against, concealing or in any way dissipating or

disposing, without the consent of the other party or an order of the court, of

any marital property. . . .

(B) Expenditures from current income to maintain the marital standard of

living and the usual and ordinary costs of operating a business are not

restricted by this injunction. Each party shall maintain records of all

expenditures, copies of which shall be available to the other party upon

request.

Tenn. Code Ann. § 36-4-106. “Thus, the legislature has provided that parties to a divorce

action are charged with preserving the marital estate during the pendency of the divorce.”

Armstrong v. Armstrong, No. M2006-02713-COA-R3-CV, 2008 WL 624862, at *8 (Tenn.

Ct. App. Mar. 5, 2008). When dividing the marital estate, courts are directed to consider

the “contribution of each party to the acquisition, preservation, appreciation, depreciation

or dissipation” of the marital property. Tenn. Code Ann. § 36-4-121(c)(5)(A) (emphasis

added). The trial court can allocate marital debt in a manner that will “protect the spouse

who did not incur the debt from bearing responsibility for debts that are the result of

personal excesses of the other spouse.” Alford v. Alford, 120 S.W.3d 810, 814 (Tenn.

2003).

On appeal, Husband asks this Court to review some of the individual categories of

spending mentioned by the trial court and to alter the totals for each category. For instance,

Husband acknowledges that he and his wife were leasing vehicles during the marriage, and

when his lease expired on his “older Porsche” during the divorce proceeding, he “chose to

purchase a newer Porsche for $1,927.94 per month.” This was an increase from his

previous monthly lease payment of $1,306.35. Husband argues that his purchase of a

newer Porsche was not so atypical as to amount to dissipation, or if it was, then the trial

court should have limited the dissipation finding to the amount of the increased payment.

As for the expenditures on the children, Husband does not dispute most of that spending

but does deny that he deposited as much money into his son’s checking account as recited

by the trial court.11

11

Husband does not dispute that his spending included around $175,000 for his grown children,

including $78,300 for their “living expenses” such as rent, utilities, and car notes; $55,925 for the children’s

credit card charges; $40,000 in deposits to their investment accounts; and two to three thousand dollars in

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We decline Husband’s invitation to tweak the trial court’s valuation of MSM in such

a piecemeal fashion. See Telfer v. Telfer, 558 S.W.3d 643, 657 (Tenn. Ct. App. 2018)

(“We are very much disinclined to tinker with a lower court’s decisions regarding the

division of a marital estate.”). Ultimately, the appropriateness of a trial court’s division

depends on its results. Pack v. Pack, No. M2018-00491-COA-R3-CV, 2019 WL 1934818,

at *7 (Tenn. Ct. App. Apr. 30, 2019); see, e.g., Singla, 2018 WL 6192232, at *25 (“The

finding that Husband did not dissipate as much of the marital assets as found by the Trial

Court does not change the analysis in any significant manner. We find no error in the Trial

Court’s distribution of the marital assets as the distribution remains equitable[.]”); Bewick

v. Bewick, No. M2015-02009-COA-R3-CV, 2017 WL 568544, at *10 (Tenn. Ct. App. Feb.

13, 2017) (“[E]ven assuming that Husband did not dissipate assets to the extent found by

the trial court, we find no basis to disturb the trial court’s division of the marital estate.”);

Altman v. Altman, 181 S.W.3d 676, 681 (Tenn. Ct. App. 2005) (“While we have

determined that the evidence does not support the trial court’s conclusion that Ms. Altman

dissipated marital funds[], we find that the manner in which the trial court divided the

marital estate was equitable based on the factors in Tenn. Code Ann. § 36-4-121(c).”); Wix

v. Wix, No. M2000-00230-COA-R3-CV, 2001 WL 219700, at *7 (Tenn. Ct. App. Mar. 7,

2001) (“[T]he trial court erred by concluding that Mr. Wix had dissipated a marital asset .

. . . However, this error does not undermine the remainder of the trial court’s analysis

regarding the division of the marital property and the allocation of the parties’ debts.”)

Here, the trial court acknowledged that it was impossible to calculate the exact total

of Husband’s wasteful and unnecessary expenditures. Even if we were to conclude that

some portion of the expenditures would not neatly fit the definition of dissipation, the trial

court was still authorized to consider Husband’s extreme spending and record-high

shareholder loan balance as a failure to preserve MSM as a marital asset. “Under Section

36-4-121(c)(5), in dividing the marital estate, the trial court is also directed to consider the

contribution of each party toward the ‘preservation’ of marital or separate assets.” Hayes

v. Hayes, No. W2010-02015-COA-R3-CV, 2012 WL 4936282, at *8 (Tenn. Ct. App. Oct.

18, 2012). In the context of marital property, “preservation” of assets means “‘keeping

[them] safe from harm; avoiding injury, destruction, or decay; maintenance . . . not the

creation, but the saving of that which already exists, and implies the continuance of what

previously existed.’” Id. (quoting Flannary v. Flannary, 121 S.W.3d 647, 651 (Tenn.

2003)) (emphasis added). “If a party is found to have dissipated or ‘failed to preserve’ a

marital asset the trial court may adjust the division of marital property accordingly.”

Armstrong, 2008 WL 624862, at *8.

In Pack v. Pack, No. M2018-00491-COA-R3-CV, 2019 WL 1934818, at *7 (Tenn.

deposits to their son’s checking account. Compare Singla v. Singla, No. M2017-01278-COA-R3-CV, 2018

WL 6192232, at *24 (Tenn. Ct. App. Nov. 27, 2018) (affirming the trial court’s finding that a husband

dissipated the marital estate by transferring $45,000 to his parents for their support).

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Ct. App. Apr. 30, 2019), for example, the trial court found that the husband dissipated

marital assets by losing $170,000 in marital funds on risky short-term trades in the stock

market. The trial court added that even if the trading did not constitute dissipation, it was

appropriate to consider “as evidence of his failure to preserve the marital property.” Id.

On appeal, we held that although husband’s history of wasteful expenditures would not

meet the definition of dissipation “as that term is defined in the statute,” it could

nevertheless be considered “as a failure to preserve marital assets.” Id. at *9. We stated,

“Irrespective of whether the court mischaracterized Husband’s stock trading as a

‘dissipation’ of marital assets or a ‘failure to preserve the marital property,’ this fact alone

does not undermine the validity of the manner in which the trial court divided the parties’

marital estate[.]” Id. at *8. See also Flannary, 121 S.W.3d at 651 (“Husband’s careless

handling of the funds could be characterized as a failure to preserve a marital asset under

Tennessee Code Annotated section 36-4-121(c)(5).”); Downing v. Downing, No. M2010-

00045-COA-R3-CV, 2011 WL 2418732, at *7 (Tenn. Ct. App. June 13, 2011) (concluding

that a husband “dissipated the value” of the equity in the marital home by increasing the

mortgage debt without consulting with the wife); Deakins v. Deakins, No. E2008-00074-

COA-R3-CV, 2009 WL 3126245, at *16-17 (Tenn. Ct. App. Sept. 30, 2009) (finding that

a husband’s excessive and reckless spending of HELOC funds resulting in a substantial

encumbrance on the marital home constituted dissipation, but noting that even if the

“dissipation” finding was erroneous, it did not render the property division inequitable);

Marciante v. Perry, No. M2006-02654-COA-R3-CV, 2008 WL 820502, at *7-8 (Tenn. Ct.

App. Mar. 26, 2008) (concluding that the withdrawal of $110,000 from a retirement

account for day trading and a child’s college expenses did not constitute dissipation but

that it could be considered regarding each party’s contribution to the preservation,

appreciation, depreciation, or dissipation of the marital property); Stock v. Stock, No.

W2005-02634-COA-R3-CV, 2006 WL 3804420, at *6 (Tenn. Ct. App. Dec. 28, 2006)

(concluding that a wife’s role in the disappearance of $240,000 could be characterized as

failing to preserve a marital asset); Robinson v. Robinson, No. W2003-01836-COA-R3-

CV, 2005 WL 1105188, at *18-19 (Tenn. Ct. App. May 9, 2005) (concluding that a

husband dissipated his businesses by failing to preserve them, when he and his father

orchestrated the demise of the businesses in order to prevent the wife from receiving any

value from them in the divorce).

At the outset of the divorce proceeding, Husband was admonished to limit his

spending on the parties’ grown children and what the trial court deemed wasteful

expenditures. Instead, Husband increased his shareholder loan balance by over one million

dollars in the course of two years. He was driving a new Porsche and renting an expensive

apartment while at the same time claiming an inability to pay for Wife’s attorney’s fees or

repairs to the marital home. He vehemently opposed providing spending money to Wife

while at the same time providing tens of thousands of dollars to the parties’ two grown

children and charging it as shareholder loans. This reduced the marital property available

for equitable distribution. During Husband’s testimony at trial, the trial judge asked

Husband directly if he was borrowing shareholder loans from MSM and using the money

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to pay his grown children’s expenses. Husband replied, “Yes. As I explained, Your Honor,

they’re my kids. I’ve done everything I could for them.” The trial judge then responded,

“First obligation is to your spouse.” The trial judge observed that Husband was “using that

debt to minimize the value of your company.” Given the trial court’s responsibility to

consider Husband’s “preservation” or “depreciation” of marital assets, Tenn. Code Ann. §

36-4-121(c)(5), we discern no reversible error in the trial court’s decision to recognize 75

percent of the shareholder loan balance as legitimate and 25 percent as illegitimate.

This Court considered an analogous situation in Echols v. Echols, No. E1999-

00619-COA-R3-CV, 2000 WL 688589 (Tenn. Ct. App. May 30, 2000) perm app. denied

(Tenn. Jan. 8, 2001). In that case, the husband argued that the trial court erred by failing

to find that he owed an outstanding debt to his corporation that would reduce the portion

of the marital estate awarded to him by $193,596. Id. at *1. The husband’s accountant

testified that the husband incurred this indebtedness by receiving “advances” from his

corporation, averaging $141,439 per year. Id. at *3. The corporation would periodically

issue him a bonus check that would be applied to reduce his indebtedness. Id. His

accountant explained that “[Husband] just got in the habit of he’d just make a loan and

borrow it from the company and then we’d declare a bonus later and try to wipe out as

much as we could of the loan.” Id. He testified that the husband had a “salary” of about

$107,000 per year. Id. In addressing the indebtedness, the trial court noted that the husband

had control over the loans from the corporation as well as the repayment schedule. Id. It

found that he used the loan account to control the amount of income he took from the

business. Id. The trial court ultimately decided that it would take the debt into account,

but that it would not treat the loan “as a finite figure” and that there should not be a specific

reduction in the husband’s estate by the amount he owed the corporation. Id. On appeal,

we found that the evidence did not preponderate against the trial court’s determination that

the husband’s “debt” to the corporation was “a suspect obligation” and not a “legitimate”

debt. Id. at *3-4. We noted that the husband had exclusive control over when and by how

much his indebtedness was paid, which was “not characteristic of a typical loan.” Id. at

*3. The evidence supported a finding that the “loan” was “not a debt per se” but “a means

by which Husband could control the amount of his income” from the corporation. Id.

Furthermore, we concluded that the husband’s transfer of approximately $50,000 in marital

assets to his corporation at or near the time of the divorce to purportedly reduce this suspect

“debt” constituted the dissipation of marital assets. Id. at *5.

Again, in this case, the trial court did find it appropriate to recognize the majority

of the shareholder loan as a legitimate debt.12 This reduced the valuation of MSM (a

marital asset awarded to Husband) from $2,170,000 to $820,000 solely because of the

shareholder loan. However, considering the fact that the trial court found it “highly

12

In the case at bar, the trial court expressed concern that “for the Court to treat such loans as a

dividend could provide a basis for the Internal Revenue Service to do likewise, creating an immediate and

significant tax liability for possibly both of the parties.”

- 28 -

unlikely” that the loan would ever be repaid, combined with the fact that Husband had

engaged in wasteful spending that significantly increased the amount of the loan balance,

the trial court declined to recognize all of the loan balance as legitimate debt and ordered

Husband to be solely responsible for the remainder in the event that it was repaid.

Considering the very wide discretion afforded to the trial judge in its distribution of the

marital estate, and the unique circumstances of this case, we cannot say that the trial court’s

decision was outside the range of acceptable alternatives. “The trial court is empowered

to do what is reasonable under the circumstances and has broad discretion in the equitable

division of the marital estate.” Keyt, 244 S.W.3d at 328.

D. Separate Property

The next issue raised by Husband is “Whether the trial court’s property division and

alimony calculations failed to appropriately consider the parties’ separate property,

contrary to Tennessee statute, when (1) the evidence demonstrated [Wife] has an interest

in a very substantial piece of real property; and (2) the evidence did not support the finding

of [Husband’s] supposed inheritance from his family, including the business?”

1. Wife’s mother’s home in Iran

First, Husband argues that the trial court abused its discretion by failing to value

Wife’s one-third interest in her mother’s home in Iran. At a hearing on discovery matters

in 2017, Husband’s attorney stated, “I’m getting reports this thing might be worth $7

million.” In her supplemental discovery responses in 2018, Wife stated, “I know this

property to be valuable. I am not a professional appraiser, but I would guess it is worth

about $850,000 US.” Then, at trial in 2019, the following exchange occurred between

Husband’s counsel and Wife:

Q. Ma’am, that house has a value of $850,000, doesn’t it?

A. I do not know the price. Last time prices were $7 million, so I don’t

know.

Q. That house has a value of $850,000, doesn’t it?

A. I still – the answer is no. I mean, you want to do this like – each time

I can say no and no and no, and then you can go on until I make a

mistake and say something. But, no, I do not know how much this

house costs.

Husband testified that he attempted to obtain an appraisal of the property in Iran but that it

was a difficult process involving the judiciary, and when the appraiser went to the property,

“they refused to let them in.”

On appeal, Husband suggests that the trial court ignored Wife’s interest in this asset,

but the record does not support his assertion. One of the factors for the trial court to

- 29 -

consider when dividing the marital estate is “[t]he value of the separate property of each

party.” Tenn. Code Ann. § 36-4-121(c)(6). Likewise, when considering an award of

alimony, the trial court is to consider “[t]he separate assets of each party, both real and

personal, tangible and intangible[.]” Tenn. Code Ann. § 36-5-121(i)(7). Here, the trial

court’s final decree stated:

The Wife owns an interest in certain real estate located at No. 2 Ba

Honar in Mashhad, Iran which was gifted to her by her mother. Neither party

has expressed an opinion as to the value of this property nor has any appraisal

on this property been provided to the Court. Without competent evidence,

the Court cannot determine the value of the property but does find that the

Wife’s interest constitutes her separate property. . . .

...

Although the Wife has a 33.3% interest in real estate in Iran, she

cannot transfer money outside that country due to the current political

climate. The value of this real estate is unknown. The Court finds that other

than this property and her share of the marital estate, the Wife has no other

assets and no separate estate. . . .

Thus, the trial court clearly considered that Wife has a one-third interest in her mother’s

home in Iran as her separate property.13 It simply failed to place a value on it because it

found a lack of competent evidence on that issue.

Looking at Husband’s asset and debt statement and proposed equitable division,

which he submitted as an exhibit at trial, he did not place any value on the Mashhad home

either, or Wife’s interest in it. His proposal simply stated:

13

In his reply brief, Husband suggests that the trial court “made a finding that this property both

was and was not her separate property, contradicting itself.” He argues that the trial court “erred with its

contradictory finding that it is both separate property and not separate property.” Having carefully reviewed

the pages cited by Husband and the entire order, we find no support for this statement. The trial court

consistently referred to the interest as Wife’s separate property.

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Thus, the trial court took the same approach that Husband proposed in his exhibit. Having

suggested the very action about which he now complains, Husband is not entitled to relief

on appeal. See Tenn. R. App. P. 36(a).

2. Husband’s inheritance

Husband also argues that the trial court erred by “assuming that he will inherit his

parent’s estate in full at their death.” Husband argues that the record does not contain a

“will or similar estate document showing that this is true.” Husband acknowledges his own

trial testimony that his father’s interest in MSM will go to a trust at his death for the benefit

of Husband’s mother, and that “[Husband] would not receive anything from the trust until

her death as well.” At trial, Husband also acknowledged that he and his father had a buy-

sell agreement that governed what would happen in the event of death. Still, he argues,

“The evidence preponderated against the trial court’s finding that [Husband] has some

inheritance he will realize at some point in the future and speculated as to its connection to

his economic situation or ability to pay alimony.” He argues that “the trial court abused its

discretion in considering this finding as part of the property division and alimony analyses,

requiring reversal.”

We find no reversible error in the trial court’s consideration of this issue. The final

decree stated:

The Husband has skills as a salesman and the manager of the family business

which continues to be successful and has generated excellent income in the

past. He is an only child, and both of his parents are advanced in years. The

Husband will certainly inherit his parents’ estate which includes the other

one-half interest in the business. It is anticipated that the Husband will

continue to run the business and enjoy a substantial income. . . .

....

The Husband will leave the marriage with a significant debt load.

However, he owns a 50% interest in an on-going business concern that

clearly generates significant income. Further, he is an only child, and both

of his parents are of advanced years. As result, the Husband exercises almost

total control of the business and will almost certainly inherit the other 50%

of the business upon the death of his parents.

Husband conceded at trial that he is the beneficiary of the trust at his mother’s death. His

deposition testimony was also submitted at trial, in which he was asked, “Have you talked

with your father about at his death you would continue to take care of your mother and then

receive the assets?” Husband replied, “That’s understood.”

- 31 -

The trial court has broad discretion to consider equitable factors that it deems

appropriate when dividing the marital property and awarding alimony. See Tenn. Code

Ann. § 36-4-121(c)(12) (directing the court to consider “[s]uch other factors as are

necessary to consider the equities between the parties”); Tenn. Code Ann. § 36-5-

121(i)(12) (requiring consideration of “[s]uch other factors . . . as are necessary to consider

the equities between the parties”). Clearly, this would include the fact that Husband is

likely to become the sole owner of MSM at the death of his parents, who are already of

advanced age. The trial court did not err in its consideration of this issue.

E. Reversal of Property Division

Husband’s next issue was premised on this Court’s reversal of the trial court’s

marital property division based on the issues raised above. In the event that we ruled in his

favor on the first issues and reversed the property division, Husband argued that reversal

of the alimony award must necessarily follow. Because we found no basis for reversing

the division of marital property, this issue is pretermitted.

F. Calculation of Alimony

We now turn to the issue of alimony. Husband argues that the trial court’s alimony

ruling was “clearly unreasonable” because he does not have the ability to pay the amount

awarded by the trial court.

In Tennessee, trial courts are afforded “wide discretion in determining matters of

spousal support.” Gonsewski v. Gonsewski, 350 S.W.3d 99, 105 (Tenn. 2011). A spousal

support decision “is factually driven and involves the careful balancing of many factors.”

Id. As such, “trial courts have broad discretion to determine whether spousal support is

needed and, if so, the nature, amount, and duration of the award.” Id. When reviewing a

spousal support award on appeal, our role “‘is to determine whether the trial court applied

the correct legal standard and reached a decision that is not clearly unreasonable.’” Id.

(quoting Broadbent v. Broadbent, 211 S.W.3d 216, 220 (Tenn. 2006)). We are “‘generally

disinclined to second-guess a trial judge’s spousal support decision.’” Id. (quoting Kinard

v. Kinard, 986 S.W.2d 220, 234 (Tenn. Ct. App. 1998)). Our standard of review “does not

permit an appellate court to substitute its judgment for that of the trial court” and recognizes

that “‘the decision being reviewed involved a choice among several acceptable

alternatives.’” Id. (quoting Henderson v. SAIA, Inc., 318 S.W.3d 328, 335 (Tenn. 2010)).

When reviewing an alimony award, we “presume that the decision is correct and should

review the evidence in the light most favorable to the decision.” Id. at 105-06.

The trial court devoted ten pages of the final order to its analysis of spousal support.

It specifically analyzed each of the statutory factors for consideration. The court noted that

this was a long-term marriage of thirty years and that Husband was 59 years old while Wife

was approximately 55. The court found Husband “healthy and energetic” while Wife had

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been treated for cancer and some other issues but did not have any significant disability or

illness. The trial court found that the parties had established a “very high” standard of

living during the marriage, living in a large home that was expensively furnished and

driving luxury vehicles. It found that neither the parties nor their children “wanted for

anything” over the last fifteen years of the marriage.

The trial court acknowledged that Wife was awarded a disproportionate share of the

marital estate but noted that none of the assets awarded to her would produce any

significant income. The court anticipated that Wife would in all probability have to use a

portion of the assets to purchase a new residence. The trial court acknowledged that

Husband would leave the marriage with a significant debt load but pointed out that he

would own one-half of an ongoing business that was clearly generating significant income.

It also noted that Husband retained a portion of his interest in MSM and a portion of the

commercial property in Smyrna as separate property. Also, as previously noted, the court

considered the fact that Husband would almost certainly inherit his father’s one-half

interest upon the death of his parents, who were already of advanced age.

The trial court found a “great disparity in the earning capability of the parties,”

considering that Wife had “almost no work experience” while Husband had “decades of

sales and business management skills.” It found that Wife primarily worked as a mother

and homemaker during the marriage. It found that she would not be able to rehabilitate

herself to earn a salary remotely equivalent to Husband’s. The trial court found that Wife’s

age and limited reading skills would make it difficult for her to compete in the job market.

However, the court concluded that “[i]f given an opportunity in the right job,” she could

earn between $17,000 and $19,000 per year, or $1,336 per month after taxes. Wife’s

income and expense statement listed zero income and $13,934 in monthly expenses. The

trial court carefully reviewed Wife’s expenses and reduced or eliminated many, leaving

$9,644 in monthly expenses that the court deemed reasonable. Subtracting her potential

income from that figure, the trial court found that Wife needed alimony of $8,308 per

month.

The court noted that Husband was awarded the parties’ business interests and that

he “has substantial cash flow.” It found that Husband’s “average pre-tax, pre-interest cash

flow” was $536,056 between 2015 and 2017, and in 2018, his tax return reflected income

of $396,200. It also noted that Husband’s actual reported “wages” were only $206,615.

Husband’s post-divorce income and expense statement stated that he received $46,000 per

month in “net income” from MSM, which Husband explained consisted of his salary and

rental income.

Husband’s post-divorce income and expense statement listed $54,950 in monthly

expenses. Thus, he claimed a monthly deficit of negative $8,950. The trial court also

reviewed Husband’s expenses and found some of them excessive and unnecessary, such as

his Porsche payment and $3,288 monthly apartment rent. The trial court then referenced

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Husband’s “list of his other monthly expenses . . . of approximately $33,888.” That was

the total listed on Husband’s monthly expense statement at the time of the pendente lite

hearing in 2017. The 2017 expense list was also submitted as an exhibit at trial during

Wife’s testimony and discussed with regard to Husband’s level of spending, especially on

the children. In its alimony analysis, the trial court noted that this list contained

“duplications of expenses,” which the court subtracted. It then concluded, “This leaves

monthly expenses of $24,556 in addition to those listed above for a total of approximately

$80,324 per month.”

The trial court found that “despite the significant debt with which the Husband

leaves the marriage, the Court finds he has the ability to pay spousal support.” It ordered

Husband to pay alimony in futuro of $8,308 per month beginning after the sale of the

marital residence. Pending the sale, Husband would continue to comply with the pendente

lite support order already in place.

On appeal, Husband argues that the trial court “did not make a finding as to

[Husband’s] reasonable monthly expenses from which to calculate his ability to pay

alimony.” From our review of the trial court’s lengthy analysis, the trial court did make a

finding as to Husband’s expenses. After reviewing both of Husband’s income and expense

statements and concluding that numerous expenses should be removed, it stated, “This

leaves monthly expenses of $24,556 in addition to those listed above for a total of

approximately $80,324 per month.” Thus, it appears that the trial court erroneously

combined Husband’s expenses from both income and expense statements to reach its total.

Husband’s own “Post-Divorce Income & Expense Statement” lists only $54,950 in

expenses.

We deem it appropriate to look only to the expenses listed on Husband’s updated

post-divorce income and expense statement. On that statement, Husband listed $54,950 in

monthly expenses, but this sum included his payment of the mortgage and related bills for

the marital home. Because Husband’s alimony in futuro obligation will not begin until the

marital home sells, those expenses should be deducted from his post-divorce expense total

for purposes of determining his ability to pay alimony in futuro. According to Husband’s

brief on appeal, the mortgage, utilities, and insurance on the marital home total $11,403.58

per month. Subtracting this sum from Husband’s expense list, we reach a monthly total of

$43,546.42. Husband’s post-divorce expense list also included the following additional

payments attributable to the marital residence: $537 for the HELOC payment; $140 for the

Homeowners Association; and $1,285 for property taxes. Subtracting these expenses that

will not be necessary once the marital home is sold, we reach a monthly total of $41,584.42.

Husband also included a full car payment of $1,928 for his Porsche, when his corporate

vice president of finance testified that Husband only pays ten percent of the payment from

his shareholder loan while the business pays ninety percent. As such, we reduce Husband’s

monthly vehicle payment to $192.80. This reduces Husband’s monthly expense by another

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$1,735.20, to $39,849.22 in total monthly expenses.14

Again, Husband’s own income and expense statement listed $46,000 in monthly net

income from salary and rental income alone. This did not include the substantial amount

of shareholder loans that Husband receives each month. Husband withdrew $614,985.70

in shareholder loans in 2016; $449,420.17 in 2017; and around $383,000 in 2018. Both of

the experts at trial (and also Husband) agreed that the parties were able to live their

extravagant lifestyle because of the shareholder loans. Wife’s expert explained that

Husband’s reported salary simply did not align with his claimed expenses of over $50,000

per month or the assets he had accumulated. He said Husband required distributions from

the company to maintain that level of spending. Husband’s expert likewise testified that

Husband had been able to meet his obligations exceeding his cash flow because of the

shareholder loans from the company. Husband also acknowledged that in order to live in

a $2.5 million home and maintain the family’s standard of living, he was borrowing from

the company to pay for it all. Husband now insists that he was simply living beyond his

means. Although that may be true to some extent, we think the evidence shows that

Husband does have the means to maintain his extravagant lifestyle. There is nothing in the

record to suggest that Husband will not continue to have access to shareholder loans, and

we agree with the trial court’s conclusion that it is highly unlikely that Husband will ever

repay the obligation. As the trial court noted in its alimony analysis, “Husband is in total

control of the income.”

In the Echols case discussed above, in which the husband had a similar “suspect”

debt obligation to his corporation, this Court found it appropriate to consider his “average

advances from the Corporation of over $140,000 annually” when reviewing the award of

alimony.15 2000 WL 688589, at *7. The alimony statute broadly permits the consideration

of each party’s “financial resources” in addition to any other factor affecting the equities

between the parties. Tenn. Code Ann. § 36-5-121(i)(1), (12). Considering Husband’s

monthly net income of $46,000, his additional access to shareholder loans, and his monthly

expenses, the record supports the trial court’s conclusion that he has the ability to pay

alimony in futuro of $8,308 per month.

Husband also “requests a credit for the amounts paid pursuant to the Pendente Lite

order that exceed his ability to pay.” Again, however, he cites no authority for his argument

that he is entitled to such a credit and does not point to anywhere in the voluminous trial

14

We recognize that Husband will also have an annual payment to Wife for the judgment to

equalize the division of marital property.

15

This situation is distinguishable from Goodman v. Goodman, 8 S.W.3d 289, 292 (Tenn. Ct. App.

1999), in which the husband was borrowing “from a trust in which his mother [was] the beneficiary.” He

had to pay back the loans with interest, and his mother could end the loans at any time. Id. at 294.

Considering these facts, we held that such loans should not have been considered as income to the husband

for purposes of setting alimony. Id. at 295.

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record where he requested such a credit before the trial court.16 Husband is not entitled to

the requested relief on appeal.

G. Attorney’s Fees

Finally, we address Wife’s issues regarding attorney’s fees. Wife argues that the

trial court erred by failing to order Husband to be responsible for a larger portion of her

attorney’s fees and expert witness fees. Wife notes that she raised this issue in her motion

to alter or amend.

In the final decree of divorce, the trial court found that Wife claimed $70,769 was

owed to her attorney and that $29,707 was owed to her expert witness. It found that

Husband owed his attorney $108,940. In analyzing Wife’s request for Husband to pay her

attorney’s fees, the trial court noted its observation during the proceedings that Husband

experienced difficulties securing information regarding Wife’s ownership interest in assets

both inside the United States and abroad. The trial court found that “Wife pled ignorance”

when asked about her assets, which necessitated the taking of depositions of her family

members outside the State of Tennessee. It noted that Husband’s efforts led to the

discovery of Wife’s one-third interest in the home in Iran and the possibility of an interest

in assets belonging to her parents in Denver. The trial court recognized that Wife’s interest

in the property in Iran was difficult for her to access and utilize but said “the ownership

interest exists nonetheless.” The court found that Wife either intentionally attempted to

hide her interest or, more likely, failed to exercise due diligence to determine whether an

ownership interest existed. In either event, the court reasoned, Husband was “compelled

to expend unnecessary resources in an effort to secure information” that should have been

forthcoming from Wife. The court found that this resulted in both parties expending

additional and unnecessary attorney’s fees, for which Husband should not be responsible.

As a result, the court explained that it was reducing Wife’s attorney’s fee award due to the

unnecessary fees incurred by both parties. Husband was ordered to pay Wife’s outstanding

expert witness fee of $29,707 in addition to $40,000 toward her outstanding attorney’s fee.

The trial court noted that Husband had already paid an additional portion of Wife’s

attorney’s fees during the divorce proceeding without being ordered to do so.17

Thereafter, Wife filed a motion to alter or amend, asking the court to “reexamine”

the issue of attorney’s fees. She conceded that her exhibits at trial only reflected the

16

This Court rejected a similar argument in Inzer v. Inzer, No. M2008-00222-COA-R3-CV, 2009

WL 2263818, at *10 (Tenn. Ct. App. July 28, 2009) (“Husband also sought a credit for the $12,000 in

alimony pendente lite paid during the six months before the final judgment was entered . . . . Husband cites

no authority justifying his request for a credit against the final alimony award and we find no basis for

granting his request.”).

17

The trial exhibit reflecting Wife’s itemization of attorney’s fees showed $167,307.77 billed

through December 31, 2018, with payments of $96,537.97 and an outstanding balance of $70,769.80.

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amounts she owed “up to the date the trial commenced.”18 After adding the amounts

incurred for the original four-day trial in addition to the additional hearing for reopening

the proof, Wife claimed that she currently owed $124,851.69 for attorney’s fees and

$55,378.05 for expert fees. She asked the court to “consider these total amounts” and

“make any changes” to the final decree of divorce that the court deemed necessary.

Husband filed a response, asserting that the parties had already completed a five-day trial,

the trial court had thoroughly considered all the issues in a 47-page order, and Wife offered

no explanation as to why it was necessary to relitigate the issue of attorney’s fees. After a

hearing, the trial court entered an order denying the motion to alter or amend, stating that

Wife’s request for the court to consider her trial and post-trial attorney’s fees and to

reallocate the award was denied.

We will review the trial court’s two orders on this matter separately, beginning with

the ruling in the final decree of divorce. An award of attorney’s fees is appropriate in a

divorce proceeding “‘when the spouse seeking them lacks sufficient funds to pay his or her

own legal expenses, or the spouse would be required to deplete his or her own resources to

pay them.’” Olinger v. Olinger, 585 S.W.3d 919, 922 (Tenn. Ct. App. 2019) (quoting

Gonsewski, 350 S.W.3d at 113). Whether to award such fees is in the sound discretion of

the trial court. Id. “While there are no strict parameters for the exercise of such discretion,

an award of attorney’s fees should generally be ‘just and equitable under the facts of the

case.’” Cooley v. Cooley, 543 S.W.3d 674, 687 (Tenn. Ct. App. 2016) (quoting Sherrod v.

Wix, 849 S.W.2d 780, 785 (Tenn. Ct. App. 1992)).

Given the trial court’s reasoned explanation for its decision to award Wife only a

portion of her outstanding attorney’s fees, we cannot say that the trial court abused its

discretion. “We have no qualms with the trial court’s refusal to sanction an award for fees

that it determined were unnecessarily incurred.” Erdman v. Erdman, No. M2018-01668-

COA-R3-CV, 2019 WL 6716305, at *6 (Tenn. Ct. App. Dec. 10, 2019).

We now turn to the denial of Wife’s motion to alter or amend.

As a general matter, there are four basic grounds upon which a motion to

alter or amend may be granted. First, the moving party may demonstrate that

it is necessary to correct manifest errors of law or fact upon which the

judgment is based. Second, the motion may be granted to permit the moving

party to present newly discovered or previously unavailable evidence. Third,

the motion may be justified by an intervening change in the controlling law.

Fourth, the motion may be granted when necessary to prevent a manifest

injustice.

18

Wife’s trial brief stated, “Wife estimates her unpaid attorney fees and costs will be between

$60,000 to $80,000 as accumulated during this case and for the trial.”

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Bough v. Tenn. Dep’t of Corr., No. E2017-02350-COA-R3-CV, 2018 WL 4181877, at *3

(Tenn. Ct. App. Aug. 30, 2018) perm. app. denied (Tenn. Jan. 17, 2019) (quoting Hughes

v. Tenn. Bd. of Parole, No. W2005-00838-COA-R3-CV, 2005 WL 3479632, at *4 (Tenn.

Ct. App. Dec. 20, 2005)).

Essentially, Wife asked the court to consider evidence not presented at the original

trial.

When a party files a Rule 59 motion seeking to alter or amend a judgment

and attempts to present additional evidence in support of such a motion, the

trial court should consider: the moving party’s effort to obtain the additional

evidence that the moving party seeks to present; the moving party’s

explanation for failing to offer the evidence earlier in the proceedings; the

importance of the new evidence to the moving party’s case; the unfair

prejudice to the non-moving party; and any other relevant consideration.

Sellers v. Walker, No. E2014-00717-COA-R3-CV, 2015 WL 1934489, at *7 (Tenn. Ct.

App. Apr. 29, 2015) (quoting Legens v. Lecornu, No. W2013-01800-COA-R3-

CV, 2014 WL 2922358 at *14-15 (Tenn. Ct. App. June 26, 2014)). “In order to sustain a

motion to alter or amend under Rule 59.04 based on newly discovered evidence, ‘it must

be shown that the new evidence was not known to the moving party prior to or during trial

and that it could not have been known to him through exercise of reasonable

diligence.’” Kirk v. Kirk, 447 S.W.3d 861, 869 (Tenn. Ct. App. 2013) (quoting Seay v. City

of Knoxville, 654 S.W.2d 397, 399 (Tenn. Ct. App. 1983)). When the litigants have already

had a trial and one party seeks to present new evidence by a motion to alter or amend,

courts should be cautious in altering the judgment. Legens, 2014 WL 2922358, at *15.

“Rule 59.04 motions are not opportunities to re-litigate the issues previously adjudicated

at trial.” Burris v. Burris, 512 S.W.3d 239, 247 (Tenn. Ct. App. 2016).

“A trial court’s decision on a motion to alter or amend is reviewed under an abuse

of discretion standard; this standard of review does not permit the appellate court to

substitute its judgment for that of the trial court.” Harmon v. Hickman Cmty. Healthcare

Servs., Inc., 594 S.W.3d 297, 298 (Tenn. 2020). Here, the trial court’s order states that the

trial court denied Wife’s request for the court to consider her additional attorney’s fees

after hearing argument of counsel “and testimony of the parties.” We have no transcript of

the hearing and no basis for concluding that the trial court abused its discretion in denying

the motion to alter or amend.

Finally, Wife requests an award of her attorney’s fees on appeal. She cites no

statutory or contractual authority for her request but appeals to the discretion of this Court.

We respectfully deny Wife’s request for attorney’s fees on appeal. See In re Mattie L., No.

W2018-02287-COA-R3-PT, 2020 WL 1867372, at *8 (Tenn. Ct. App. Apr. 14, 2020)

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perm. app. granted (Tenn. Aug. 11, 2020)19 (“We decline to award attorney’s fees to a

party that cannot identify a contractual, statutory, or some other basis for such an award.”)

IV. CONCLUSION

For the aforementioned reasons, we affirm the decision of the circuit court and

remand for further proceedings consistent with this opinion. Costs of this appeal are taxed

equally to the appellant, Reza Aliabadi, and to the appellee, Sima Khayatt Kholghi, for

which execution may issue if necessary.

_________________________________

CARMA DENNIS MCGEE, JUDGE

19

The application for permission to appeal filed in In re Mattie L. addressed other grounds and did

not raise any issue regarding the opposing party’s request for attorney’s fees on appeal.

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