Claude Ellis v. Melisa Jane Godfrey Ellis

08/29/2022

IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

April 13, 2022 Session

CLAUDE ELLIS v. MELISA JANE GODFREY ELLIS

Appeal from the Chancery Court for Bradley County

No. 2011-CV-148 Jerri S. Bryant, Chancellor

No. E2020-00869-COA-R3-CV

In this divorce case, Claude Ellis (“Husband”) challenges the trial court’s division of the

marital estate, the award of spousal support and attorney’s fees to Melisa1 Jane Godfrey

Ellis (“Wife”), and the trial court’s finding that Husband dissipated marital assets. We

hold that the trial court misclassified some of the assets in contention as marital, and we

remand for a reconsideration of the division of the marital estate in light of this holding.

Because the issue of attorney’s fees as alimony in solido is only properly considered after

the issues of estate valuation and distribution are settled, we vacate the award of alimony

in solido, so that the trial court has the opportunity to reconsider the award if the court finds

it necessary. We affirm the trial court’s judgment in all other respects.

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

Affirmed in Part and Vacated in Part; Case Remanded

KRISTI M. DAVIS, J., delivered the opinion of the Court, in which D. MICHAEL SWINEY,

C.J., and JOHN W. MCCLARTY, J., joined.

Amy J. Farrar, Amanda Moore, and Kate Nyquist, Murfreesboro, Tennessee, for the

appellant, Claude Ellis.

Nathan L. Kinard and Harold L. North, Chattanooga, Tennessee, for the appellee, Melisa

Jane Godfrey Ellis.

OPINION

1

Wife’s first name is sometimes spelled “Melissa” in the documents filed with the trial court, but

in her handwritten signature it is spelled “Melisa,” as in many other documents in the record. Wife is often

referred to as “Lisa,” the name she apparently goes by.

I. BACKGROUND

The parties were married on December 26, 1996. This was Wife’s first marriage

and Husband’s third; he had three children from prior marriages. One child was born to

the parties, who had reached adulthood by the time of the divorce trial. Husband filed for

divorce on June 24, 2011. He presented the parties’ prenuptial agreement, asking the trial

court to enforce it and divide their property accordingly. The trial court invalided the

agreement, finding that Husband did not provide full and fair disclosure of the nature,

extent, and value of his property and holdings. On Husband’s interlocutory appeal, this

Court affirmed the invalidation of the prenuptial agreement. Ellis v. Ellis, No. E2013-

02408-COA-R9-CV, 2014 WL 6662466, at *1 (Tenn. Ct. App. Nov. 25, 2014).

Following remand from the first appeal, Wife’s first counsel, Martha Meares and

Paul R. Dillard, filed a motion to withdraw, which was granted. Meares and Dillard then

filed a notice of attorney’s charging lien against Wife’s property in the amount of

$368,259.95 for unpaid attorney’s fees and expenses. Wife’s new counsel filed an

objection to the attorney’s charging lien, requesting “a hearing to determine the

reasonableness of the unpaid legal fees and expenses.” This issue was reserved until after

the conclusion of trial.

The divorce trial took place on February 19-21, 2019. The trial court heard the

testimony of the parties, two of Husband’s business associates, and Husband’s accountant.

Husband was a successful businessman, so there were numerous assets in contention that

the trial court was required to classify and divide, which it did in detail in an extensive

order and chart captioned “Master Asset List.” The trial court summarized its classification

and division of assets and liabilities as follows:

the Court finds the total net marital estate to be $3,026,378, after deducting

the total marital liabilities of $718,561.44, the Campus Loan, which

originated during the marriage in violation of the statutory injunction. This

number includes $921,805 in unaccounted for or dissipated assets being the

$600,000 in receivables by Husband and the $321,805 excess cash at closing

per Exhibit 198. This also includes the items awarded to Wife in the amount

of $273,727 as part of the marital assets. However, because Husband’s

businesses, which were acquired during the marriage, through his income,

credit, and efforts during the marriage, are entangled with [his business

associate] Mr. Triplett and covered by the campus loan, the Court finds that

the parties’ interest in marital property is difficult to equitably divide with

Wife. Pursuant to Husband’s testimony, he felt trapped in this marriage, and

therefore, wanted Wife to come away from this marriage with absolutely

nothing. His efforts have attempted to accomplish this. Given the fact that

2

he is the person more at fault in this case, the Court finds Husband to have

entangled his assets in a way that attempts to thwart this Court’s awarding

anything to the Wife. Husband failed to rebut any presumption that any

assets acquired during the marriage, which are presumed to be marital, are

not marital. He has provided no proof of the amounts of any of the loans in

this case or any security interest in the assets on [the Master Asset List]. The

Court resolves issues of credibility in favor of Mr. Triplett and against

Husband.

In order to equitably divide the parties’ marital assets, the Court awards Wife

a judgment against Husband in the amount of $1,239,462. Wife will retain

a lien on all of Husband’s interest in marital property to secure the payment

of this amount. . . . Husband shall pay on this judgment at the rate of $100,000

semi-annually. While this amount may seem quite large, the Court will note

that Husband is receiving $3,026,378 in marital assets, which includes the

$921,000 that he has dissipated or not accounted for. Additionally, Husband

is receiving $859,000 in separate assets.

A careful reading of the above reveals that some of the numbers appear to be

irreconcilable. The trial court found the total net marital estate to be $3,026,378, stating

that this amount “includes the items awarded to Wife in the amount of $273,727 as part of

the marital assets.” But then the trial court found that “Husband is receiving $3,026,378

in marital assets,” which is 100% of the net marital estate. We need not dwell too long on

this apparent discrepancy, because our holding that the trial court misclassified at least one

large asset, which will be discussed further below, necessitates vacating the division of the

marital estate and remand for reconsideration.

The trial court awarded Wife alimony in futuro in the amount of $3,600 per month.

Regarding Wife’s request for alimony in solido, the trial court stated as follows:

Wife lacks sufficient funds to pay her own legal expenses and the only way

she has been able to hire an attorney and pay for the same is through the

generosity of her mother. The Court finds she is not being awarded

substantial funds of liquid assets from which to pay her legal fees, based on

the division of the parties’ marital property. It is clear from this case that

much of the costs to Wife have been in an effort to protect her interest in any

assets that may be marital and to protect her right to alimony. . . .

Husband has the resources to pay Wife’s attorney fees as alimony in solido.

Husband has a much greater earning capacity than Wife. He has many more

financial resources, including income from his business, as well as from other

3

properties. . . . The Court will secure Wife’s alimony in solido for attorney

fees by granting her a judgment against Husband, in an amount to be

determined at a subsequent hearing[.]

Following the divorce trial, the trial court entered an order on February 13, 2020,

stating the following in pertinent part:

That pursuant to the novelty of the issues presented and the argument of

counsel with regard to the conflict between the Attorney’s Charging Lien

filed by Meares and the award of attorney fees yet to be determined in the

Court’s Order of July 10, 2019, and in consideration of the issue raised by

Meares with regard to the attorney/client privilege, the Court finds that two

(2) separate hearings are necessary. The first hearing shall address the

objection to Attorney’s Charging Lien and the second hearing shall address

the attorney fee award as set out in the Court’s Order of July 10, 2019.

[Husband] shall not be present for the hearing on the Attorney’s Charging

Lien and shall be precluded from participation in said hearing.

* * *

That the Court shall conduct a hearing on the objections filed by [Wife] to

determine whether or not said objections to the attorney charging lien are

well-taken. If the Court finds that [Wife] is not responsible for fees objected

to, [Husband] shall not be liable for those fees. If the Court finds that all or

a portion of the fees objected to are proper in the hearing on the attorney

charging lien, the Court shall then set a hearing on the award of attorney fees

pursuant to the July 10, 2019 Order to determine the obligation of [Husband].

That after entry of the Order from the above hearing on the objections, the

Court shall then conduct a hearing on the award of attorney fees against

[Husband]. [Husband] and his attorney shall have a right to object to the

reasonableness and necessity of either all, or a portion of the bill for Attorney

Meares from the attorney charging lien hearing, and the affidavit of fees

submitted by [Wife’s] present attorney, by presenting evidence at the hearing

on the award of attorney fees.

Husband objected to his exclusion from the first hearing on Meares’ charging lien,

arguing that he should have a right to be present and participate in a hearing where the trial

court would determine the reasonableness and necessity of attorney’s fees for which he

may be held responsible. The trial court overruled this objection, and the first hearing took

4

place on March 2, 2020. Wife and former counsel Meares testified. The trial court entered

a ten-page order analyzing at length the evidence and applicable law, and finding that

Meares represented Wife “faithfully, honestly, and consistently” and “discharged her

duties with the utmost good faith.” Noting that “[t]his was a difficult case and the

interwoven business and personal expenses was quite complicated,” the trial court

concluded that “the fees requested by [Meares and Dillard] were both reasonable and

necessary for the preparation of this case for [Wife] and are ordered to be paid by [Wife]

and form a basis of a lien on behalf of Attorney.”

Then, the second hearing took place for the purpose of determining Husband’s

responsibility for Wife’s attorney’s fees as alimony in solido. The parties stipulated that

the fees requested by Wife’s second attorney, totaling $21,625, were reasonable and

necessary, and the trial court awarded Wife those fees. Husband and his counsel were

present and allowed the opportunity to argue, present evidence, and cross-examine

witnesses. At this hearing, both former counsel Meares and Dillard testified, as did the

parties. The trial court entered another order containing thorough and detailed findings

and conclusions, stating in pertinent part:

This Court found, during the [divorce] trial, that [Husband] was using his

businesses as a personal checking account and hiding that information in the

business records. Researching those business records took an exorbitant

amount of time in this case. . . . The Court finds this amount of time,

particularly over the last nine (9) years of dealing with this case, is all

reasonable and necessary. [Husband] has come forth with no proof to the

contrary.

The trial took many hours. This hearing over the bill was lengthy and

[Husband] has not proven any charge was either unreasonable or unnecessary

in this matter. Had [Husband] been more forthcoming with his information,

the discovery would have been much easier. Had [Husband] not moved

assets and disclosed information before he borrowed money and had he not

changed titles to some of his assets, there would have been less money

incurred in attorney fees. The Court hereby finds that all the attorney fees

requested by Ms. Meares are both reasonable and necessary in this case.

* * *

The Court finds [Husband] is not credible concerning his monthly income

and expenses, or his assets.

* * *

5

During the divorce, [Husband] took excess cash out of his business, in the

amount of $182,000 in 2016, $62,000 in 2014, $77,000 in 2014, pursuant to

trial exhibit 198. All of these were without an accounting. Further, trial

exhibits 314 and 315 show [Husband] bought and sold properties in this case

without court approval and in violation of the statutory injunction.

[Meares] postponed her fees in an effort to continue to represent a client who

had no separate assets and whose husband said, after many years of marriage,

wife was entitled to only one-half interest in a motorhome. Ms. Meares did

good work on behalf of her client and while at first blush the Court might

find $360,000 in requested attorney fees to be unreasonable, the Court has

considered the time devoted to the legal services in this case. The number of

years this case has been pending, the novelty and difficulty of the questions

involved, the skill performed by the service, the conduct of [Husband], and

the hourly rate in this case are not contested. The Court has considered the

other factors in Connors v. Connors, [594 S.W.2d 672 (Tenn. 1980)]

including the results obtained, the experience, reputation and ability of the

lawyer representing [Wife] all appear to be reasonable.

Husband timely filed a notice of appeal.

II. ISSUES PRESENTED

Husband presents the following issues:

1. Whether the trial court erroneously classified Husband’s separate property as

marital property.

2. Whether the evidence preponderates against the trial court’s division of the marital

estate.

3. Whether the trial court abused its discretion by awarding alimony in futuro.

4. Whether the trial court abused its discretion in awarding alimony in solido in the

form of her attorney’s fees.

5. Whether the trial court erred in finding that Husband had dissipated certain assets.

Wife raises the issue of whether she should be awarded attorney’s fees on appeal.2

2

As a preliminary argument, Wife asserts that Husband has waived any issue regarding the trial court’s

classification of the parties’ property by failing to comply with Tenn. Ct. App. R. 7, which provides that

“[i]n any domestic relations appeal in which either party takes issue with the classification of property or

debt or with the manner in which the trial court divided or allocated the marital property or debt, the brief

of the party raising the issue shall contain, in the statement of facts or in an appendix, a table in a form

substantially similar to the form attached hereto.” Wife did not raise this issue in her statement of the issues

6

III. ANALYSIS

A. Classification and Division of Assets

Husband challenges the trial court’s classification and division of assets and debts.

Our Supreme Court has defined the applicable standard of review of issues regarding

property classification and division in divorce proceedings:

The classification of particular property as either separate or marital is a

question of fact to be determined in light of all relevant circumstances. See

Langford v. Langford, 220 Tenn. 600, 421 S.W.2d 632, 634 (1967);

Cutsinger v. Cutsinger, 917 S.W.2d 238, 241 (Tenn. Ct. App. 1995). This

Court gives great weight to a trial court’s decisions regarding the division of

marital assets, and we will not disturb the trial court’s ruling unless the

distribution lacks proper evidentiary support, misapplies statutory

requirements or procedures, or results in some error of law. Keyt v. Keyt,

244 S.W.3d 321, 327 (Tenn. 2007). As to the trial court’s findings of fact,

“we review the record de novo with a presumption of correctness, and we

must honor those findings unless there is evidence which preponderates to

the contrary.” Id. However, we accord no presumption of correctness to the

trial court’s conclusions of law. Id.

Snodgrass v. Snodgrass, 295 S.W.3d 240, 245-46 (Tenn. 2009).

The trial court must classify all of the assets possessed by the divorcing parties as

either separate or marital before equitably dividing the marital estate. Larson-Ball v. Ball,

301 S.W.3d 228, 231 (Tenn. 2010). “Separate property is not part of the marital estate and

is therefore not subject to division.” Id. The governing statute, Tenn. Code Ann. § 36-4-

121(b), provides the following definitions of marital and separate property, in pertinent

part:

(1)(A) “Marital property” means all real and personal property, both

tangible and intangible, acquired by either or both spouses during the course

of the marriage up to the date of the final divorce hearing and owned by either

or both spouses as of the date of filing of a complaint for divorce, except in

the case of fraudulent conveyance in anticipation of filing, and including any

property to which a right was acquired up to the date of the final divorce

hearing, and valued as of a date as near as reasonably possible to the final

divorce hearing date. . . .

presented. Husband presented a Rule 7 table in substantial compliance under the circumstances here, and

we do not find he has waived the issue of classification and division of the assets in contention.

7

(B)(i) “Marital property” includes income from, and any increase in

the value during the marriage of, property determined to be separate property

in accordance with subdivision (b)(2) if each party substantially contributed

to its preservation and appreciation;

* * *

(D) As used in this subsection (b), “substantial contribution” may

include, but not be limited to, the direct or indirect contribution of a spouse

as homemaker, wage earner, parent or family financial manager, together

with such other factors as the court having jurisdiction thereof may

determine;

* * *

(2) “Separate property” means:

(A) All real and personal property owned by a spouse before marriage

...;

(B) Property acquired in exchange for property acquired before the

marriage;

(C) Income from and appreciation of property owned by a spouse

before marriage except when characterized as marital property under

subdivision (b)(1); [and]

(D) Property acquired by a spouse at any time by gift, bequest, devise

or descent[.]

After classifying and valuing marital property, a trial court must equitably divide it

between the parties. See Tenn. Code Ann. § 36-4-121(a)(1); Luplow v. Luplow, 450

S.W.3d 105, 109 (Tenn. Ct. App. 2014) (citing Miller v. Miller, 81 S.W.3d 771, 775 (Tenn.

Ct. App. 2001)). An equitable division of marital property does not require that the

property be divided equally. Id. at 109-10 (citing Robertson v. Robertson, 76 S.W.3d 337,

341 (Tenn. 2002)). Nor does it require that each party receive a share of every item

classified as marital property. Morton v. Morton, 182 S.W.3d 821, 833-34 (Tenn. Ct. App.

2005) (quoting King v. King, 986 S.W.2d 216, 219 (Tenn. Ct. App. 1998)). According to

Tenn. Code Ann. § 36-4-121(c),

In making equitable division of marital property, the court shall consider all

relevant factors including:

(1) The duration of the marriage;

(2) The age, physical and mental health, vocational skills, employability,

8

earning capacity, estate, financial liabilities and financial needs of each of

the parties;

(3) The tangible or intangible contribution by one (1) party to the education,

training or increased earning power of the other party;

(4) The relative ability of each party for future acquisitions of capital assets

and income;

(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.

(6) The value of the separate property of each party;

(7) The estate of each party at the time of the marriage;

(8) The economic circumstances of each party at the time the division of

property is to become effective;

(9) The tax consequences to each party, costs associated with the reasonably

foreseeable sale of the asset, and other reasonably foreseeable expenses

associated with the asset;

(10) In determining the value of an interest in a closely held business or

similar asset, all relevant evidence, including valuation methods typically

used with regard to such assets without regard to whether the sale of the asset

is reasonably foreseeable. . . .

(11) The amount of social security benefits available to each spouse; and

(12) Such other factors as are necessary to consider the equities between the

parties.3

The trial court has broad discretion in devising an equitable division of marital property.

Flannary v. Flannary, 121 S.W.3d 647, 650 (Tenn. 2003). This Court will not overturn

the trial court’s determination unless “it is inconsistent with the statutory factors or lacks

proper evidentiary support.” Trezevant v. Trezevant, 568 S.W.3d 595, 607 (Tenn. Ct. App.

3

In an amendment to this statute that became effective on March 31, 2022, our legislature added a thirteenth

factor: “The total amount of attorney fees and expenses paid by each party in connection with the

proceedings; whether the attorney fees and expenses were paid from marital property, separate property, or

funds borrowed by a party; and the reasonableness, under the factors set forth in Rule 1.5 of the Tennessee

Rules of Professional Conduct, and necessity of the attorney fees and expenses paid by each party.” Tenn.

Code Ann. § 36-1-121(c)(13).

9

2018) (citing Baggett v. Baggett, 422 S.W.3d 537, 543 (Tenn. Ct. App. 2013)).

Husband argues that the trial court misclassified several assets as marital, when they

should have been classified as his separate holdings. The parties submitted to the trial court

the Master Asset List, in which they stipulated to the value of most of the assets and

indicated their assertions as to how they should be classified. The trial court took this list

and made handwritten notes designating the court’s valuations, classifications, and to

whom it awarded the property. The trial court attached and incorporated this list as an

exhibit to its divorce decree. In addition, the trial court made specific findings regarding

some of the assets in the body of its order.

Two of the largest assets in contention are Wedgecorp, a Tennessee corporation

primarily involved in real estate development, and Quality Machining Service, LLC

(“QMS”). Wedgecorp, started by Husband well before the marriage, is his separate

property. The trial court found that QMS, which is owned 51% by Wedgecorp and 49%

by David Triplett, began during the marriage. The court classified QMS as marital

property. In its order, the trial court found as follows regarding these two entities:

The largest asset held by Husband is a corporation called Wedgecorp, which

he owned prior to the marriage. . . .Wedgecorp has a current value of

$1,667,000. Since Wedgecorp owns 51% of QMS, Wedgecorp alone has a

value of $527,000 and is Husband’s separate property. QMS, whose value

is $1,140,000 was started during the marriage and is marital property. It was

created by Husband and Mr. Triplett.

Mr. Triplett . . . verified QMS began in 1998, and it initially involved

himself, Mr. Winter, Mr. Spinks and Wedgecorp. The Court credits this

testimony and not that of Husband, who stated this business began in 1996.

Mr. Triplett further testified that over the years he and Husband acquired

[full] ownership of QMS[.]

Real property was purchased for QMS by Husband during the marriage, and

later sold partially to Mr. Triplett. QMS is owned 51% by Wedgecorp and

49% David Triplett. The marital portion of QMS is $581,400 and Mr.

Triplett’s portion is $558,600.

* * *

The Court finds Wife did not substantially contribute to Husband’s business

Wedgecorp (absent QMS), and as such, it was and remains Husband’s

separate property. However, QMS, which is owned 51% by Wedgecorp,

10

began during the marriage. Husband’s income and efforts during the

marriage were used to purchase land and equipment for this business. QMS

is, therefore, marital property. While Wife did not work for QMS, she did

contribute to the home and raised the parties’ child. Wife became a stay-at-

home mother at Husband’s insistence, after Husband found out she was

pregnant. Under T.C.A § 36-4-121(5)(A), Wife’s contribution as a

homemaker and parent is to be given the same weight as that of Husband as

wage earner. She has not held a job since their marriage in 1996, other than

after the parties’ separation. Husband put Wife on the payroll at Wedgecorp

and paid her a salary. Wife drew approximately $43,000 per year from

Wedgecorp or QMS for purposes of buying groceries, having spending

money, improving the [marital residence] on Osment Road, and caring for

the parties’ minor child. It was also a benefit to Husband for tax purposes to

have Wife as one of his employees.

It is undisputed that Husband has never held a direct, personal ownership interest in

QMS. All of the evidence supports the trial court’s conclusion that “QMS is owned 51%

by Wedgecorp and 49% David Triplett.” Moreover, the trial court expressly held that

Wedgecorp is Husband’s separate property, a proposition that Wife does not dispute. Wife

states in her brief that “it is not surprising that the trial court did not use precise terminology

when discussing Wedgecorp and QMS” and argues as follows:

The trial court did say that Wedgecorp was Mr. Ellis’ separate property. And

the trial court was fully aware that Mr. Ellis did not directly own QMS[;]

rather, it was 51% owned by Wedgecorp. There is a simple explanation to

reconcile this apparent inconsistency. The court envisioned QMS’s value as

an increase in the value of Wedgecorp. That the trial court conceptualized

awarding QMS as a subset of Wedgecorp’s value is evident in its statement

that Ms. Ellis did not substantially contribute to “Wedgecorp (absent QMS).”

The negative inference from the phrase “absent QMS” is that she did

“substantially contribute” to Wedgecorp in relation to its investment in QMS.

(Citations to record in original omitted). There is language in the trial court’s order, quoted

above, that may reasonably support this interpretation. However, the trial court also found

that “Wife did not participate in any of his businesses,” and further stated as follows:

Wife testified she helped Husband as much as she was allowed during the

marriage. She went out with potential clients and entertained people on

houseboats and on trips they took. She also testified she cooked and took

food to the houseboat to entertain clients and stayed behind to clean after

everyone left on Sundays. She further testified she would attempt to help

11

Husband with his receipts, both before and after the marriage, and would do

some cleaning at Wedgecorp. The Court finds these two contributions did

not cause Wedgecorp to increase in value.

When Wife was asked “did you ever do anything for QMS?” she answered “no.” The trial

court expressly found that Wife did not substantially contribute to the preservation and

appreciation of Wedgecorp. The evidence in the record does not support a finding that

Wife substantially contributed to QMS.

QMS is a corporate entity separate from Wedgecorp. It is not owned by Husband

and consequently cannot be classified as marital property. To consider QMS as merely an

increase in the value of Wedgecorp would be to improperly disregard the corporate forms

of these entities. Wife did not argue at the trial level that the corporate veil of either

Wedgecorp or QMS should be pierced on equitable grounds. She argues for the first time

on appeal that although “the veil-piercing question was not presented to the trial court . . .

there was ample evidence to support piercing the veil.” This Court was recently presented

with a similar situation in Barton v. Barton, No. E2019-01136-COA-R3-CV, 2020 WL

6580562, at *4 (Tenn. Ct. App. Nov. 10, 2020), and held:

Wife now attempts to raise the issue, for the first time on appeal, of whether

the trial court impliedly pierced the corporate veil in her recasting of

Husband’s issues and points to the evidence in the record relative to the

factors considered when a court is called upon to pierce the corporate veil of

an LLC. See Edmunds v. Delta Partners, L.L.C., 403 S.W.3d 812, 829-30

(Tenn. Ct. App. 2012); Federal Deposit Ins. Corp. v. Allen, 584 F.Supp. 386,

397 (E.D. Tenn. 1984). In her arguments, however, she does not cite us to

the record where the trial court was ever called upon to pierce the corporate

veil of the LLCs involved. Indeed, the record contains only two references

to this concept, both in pleadings filed by Husband, who certainly was not

advocating for its application. . . .

Furthermore, the court’s order contains no consideration of any of the eleven

Allen factors, which courts in this State use to determine whether to pierce

the corporate veil of a limited liability company. Edmunds, 403 S.W.3d at

829-30; Allen, 584 F.Supp. at 397. Nor does the order contain any language

by the trial court demonstrating that it was ever asked to pierce the corporate

veil or thought it necessary to do so. Parties will not be permitted to raise

issues on appeal that they did not first raise in the trial court. Barnes v.

Barnes, 193 S.W.3d 495, 501 (Tenn. 2006). Accordingly, Wife having not

raised this issue in the trial court, the issue is waived.

12

As in Barton, we hold that Wife waived her argument regarding piercing the corporate veil

by not raising it in the trial court.

The trial court found the value of Wedgecorp’s 51% interest in QMS to be $581,400.

Our holding that it was misclassified as marital means that the size of the marital estate has

changed by a significant amount. We vacate the finding that QMS is marital property and

remand to the trial court for an opportunity to reconsider the distribution of the marital

estate in light of this modification.4 See, e.g., Anderson v. Anderson, No. M2018-01248-

COA-R3-CV, 2019 WL 3854663 at *1 (Tenn. Ct. App. Aug. 19, 2019) (“Based on this

change of classification, the trial court should also consider whether the change in value

necessitates a revision of the equitable division of the marital estate”).

The real property upon which QMS primarily operates is located at 1455 Blythe

Ferry Road. Husband argues that the trial court also misclassified his 50% interest in it as

marital. The trial court found as follows regarding this asset:

1455 Blythe Ferry Rd. — This property Husband received from his brother

in 2005. This property was acquired during the marriage. He sold half . . .

of his interest in this property to David Triplett. This is the property upon

which QMS operates. QMS pays Husband and Mr. Triplett $12,000 per

month each for rent. From that rent payment, each pays $6,000 toward the

“Campus Loan” and each keeps $6,000 for their personal use. QMS uses

the building, and QMS pays rent on the building. . . . The parties have

stipulated the value of this asset to be $1,270,000. Since Husband’s business

owns 51% of it, the Court assigns his value as $635,000, and the Court

awards that to Husband; however, it is marital property. Recently money

was borrowed against this building. At the closing of the new loan, Husband

took $182,000 in cash per Mr. Triplett. Husband cannot remember what he

did with the money. This negatively impacts his credibility.

(Italics added). The italicized language above suggests that the trial court found this real

estate to be owned either by Wedgecorp or QMS ̶ it is not entirely clear which. However,

there is no evidence in the record that it is owned by either corporate entity.

Husband testified that his brother transferred 1455 Blythe Ferry to him “in

probably” 1995, before the marriage in 1996. On January 14, 2005, both Husband and

4

Moreover, regarding the debt encumbering some of the QMS property, the trial court held that “[s]ince

the Court has assigned the marital portion of QMS to Husband, it finds that 51% of this debt is to be

considered marital. That amount is $718,561.44.” We also vacate the finding that the debt of QMS is

marital, further complicating the division of the marital estate and providing another reason to remand for

the trial court’s reconsideration.

13

Wife signed a quitclaim deed transferring an undivided one-half interest in the property to

Husband and David Triplett as tenants in common. Mr. Triplett testified that 1455 Blythe

Ferry is owned by him and Husband, and the title reflects this ownership. Because the trial

court’s classification of the real property at 1455 Blythe Ferry is based on the

misconception that it was owned by Wedgecorp or QMS, we vacate the court’s ruling in

this regard for reconsideration of the proper disposition of this asset.

The quitclaim deed was proffered into evidence and the trial court heard testimony

regarding the circumstances surrounding its execution, including Wife’s testimony.

However, the trial court made no reference to the quitclaim deed in its order. On appeal,

the parties offer competing theories and arguments regarding the effect of the quitclaim

deed on the classification of the property. On remand, the trial court should consider and

address the effect of the quitclaim deed on the classification of 1455 Blythe Ferry and the

resultant division of the marital estate.

The marital residence is located at 1098 Osment Road in Cleveland, Tennessee. The

trial court ruled as follows regarding the marital residence:

This property was allegedly obtained by Husband a few years prior to the

marriage; however, he did not record the deed until 2005. The deed

recordation shows that the value of the property, at that time, was $150,000.

The parties have stipulated its current value is $350,000. The Court finds

that Wife has substantially contributed to the value increase of this property.

Wife’s work in supervising and participating in the remodeling of the home

certainly has increased its value. The Court finds the property has a $200,000

increase in value. The Court finds the $200,000 increase in value to be

marital property. The first $150,000 in value is separate property of the

Husband. Because this was separate property of Husband’s, the Court

awards this property to Husband. Wife shall retain a lien in the amount of

$200,000 on the property to secure part of her division of marital property.

This lien will accrue interest at the statutory rate. Husband has five years to

pay off this lien. His payments will be paid in equal monthly installments.

Wife did help this piece of property increase in value. There were many

photographs provided and testimony regarding the renovations the parties

had done during the marriage. . . . Wife used her money to enhance the value

and provided value as the homemaker and caretaker of the parties’ child.

Husband argues that the trial court erred in finding that Wife substantially contributed to

the preservation and appreciation of the marital residence. Husband asserts that the entire

value of the marital residence should be classified as his separate property.

14

At the time of trial, Wife had lived in the marital residence for almost 22 years,

serving as the homemaker, housekeeper, and primary caregiver to the parties’ child. She

testified that she used her money to pay for improvements to the house such as painting,

wallpaper, and landscaping. Wife did yard work, including landscaping and mowing. She

painted and wallpapered some of the rooms herself. She paid household bills. Our General

Assembly has specifically provided that “‘substantial contribution’ may include, but not

be limited to, the direct or indirect contribution of a spouse as homemaker, wage earner,

parent or family financial manager.” Tenn. Code Ann. § 36-4-121(b)(1)(D). The evidence

does not preponderate against the trial court’s classification or disposition of the marital

residence.

Husband also takes issue with the trial court’s imposition of a lien to secure Wife’s

interest in the marital residence. Tennessee Code Annotated section 36-4-121(e)(2)

provides that “[t]he court may impose a lien upon the marital real property assigned to a

party as security for the payment . . . pursuant to property division.” The trial court, after

having the opportunity to see and evaluate the parties’ demeanor and testimony, and their

conduct in litigation for many years, found that Husband “wanted Wife to come away from

this marriage with absolutely nothing,” and that his considerable and extensive “efforts

have attempted to accomplish this.” Under the particular circumstances of this case, we do

not find the trial court abused its discretion in imposing the lien.

Husband challenges the trial court’s classification of two parcels of real estate

located at 3811 and 3807 Old Tasso Road. The trial court ruled that because they were

purchased by Husband and Mr. Triplett during the marriage, Husband’s portion was marital

property. Husband states that he owned the property before the marriage, sold it, and then

bought it back during the marriage. He argues that his “ownership merely changed forms,

as he took this separate asset . . . and converted it to another asset (cash) and then used that

asset to re-purchase” the property. We do not agree. The property was acquired by

Husband during the course of the marriage. The fact that he may have once owned it before

the marriage is not particularly relevant, when the asset used to effectuate the sale and re-

purchase of the property is non-identifiable, entirely fungible cash. We affirm the trial

court’s classification of Husband’s interest in 3811 and 3807 Old Tasso Road as marital

property.

B. Alimony in Solido: Wife’s Attorney’s Fees

As our Supreme Court has stated,

It is well-settled that an award of attorney’s fees in a divorce case constitutes

alimony in solido. See Tenn. Code Ann. § 36–5–121(h)(1) (“alimony in

solido may include attorney fees, where appropriate”); Herrera v. Herrera,

15

944 S.W.2d 379, 390 (Tenn. Ct. App. 1996). . . . As with any alimony award,

in deciding whether to award attorney’s fees as alimony in solido, the trial

court should consider the factors enumerated in Tennessee Code Annotated

section 36–5–121(i). A spouse with adequate property and income is not

entitled to an award of alimony to pay attorney’s fees and expenses. Umstot

v. Umstot, 968 S.W.2d 819, 824 (Tenn. Ct. App. 1997). Such awards are

appropriate only when the spouse seeking them lacks sufficient funds to pay

his or her own legal expenses, see Houghland v. Houghland, 844 S.W.2d

619, 623 (Tenn. Ct. App. 1992), or the spouse would be required to deplete

his or her resources in order to pay them, see Harwell v. Harwell, 612 S.W.2d

182, 185 (Tenn. Ct. App. 1980). Thus, where the spouse seeking such an

award has demonstrated that he or she is financially unable to procure

counsel, and where the other spouse has the ability to pay, the court may

properly grant an award of attorney’s fees as alimony. See id. at 185.

Gonsewski v. Gonsewski, 350 S.W.3d 99, 113 (Tenn. 2011) (emphasis added). This Court

has also held that in making an award of attorney’s fees as alimony in solido, “a court must

carefully consider the relevant factors set forth in Tenn. Code Ann. § 36-5-121(i).” Yattoni-

Prestwood v. Prestwood, 397 S.W.3d 583, 597 (Tenn. Ct. App. 2012); accord Ellis v. Ellis,

621 S.W.3d 700, 708 (Tenn. Ct. App. 2019).

In Barton, 2020 WL 6580562 at *1, we vacated the trial court’s division of the

marital estate and remanded “for further consideration of the valuation of the parties’ net

marital business interests.” There, as in this case, the husband challenged the trial court’s

award of attorney’s fees as alimony in solido. The Barton Court held:

Although an issue is also raised as to the propriety of the award of attorney’s

fees to Wife, we do not reach this issue[.] An award of attorney’s fees in

divorce cases is treated as a form of spousal support, and the award is

characterized as alimony in solido. The issue is only properly considered

after the foregoing issues of estate valuation and distribution are settled. We

therefore vacate the trial court’s award of attorney’s fees. See Trezevant,

568 S.W.3d at 624 (“[T]he court’s award of attorney’s fees to Wife is also

vacated by virtue of the need to re-evaluate the marital estate.”).

Id. at *11 (internal quotation marks and citations omitted). As in Barton, we vacate the

award of alimony in solido to allow the trial court the opportunity to reconsider it, after its

reconsideration of the distribution of the marital estate. The trial court has already twice

heard and ruled on the propriety and reasonableness of the attorney’s fees charged by

Meares and Dillard in exhaustive detail, so it is certainly not required to reconsider these

issues on remand. However, because the issue of attorney’s fees as alimony in solido “is

16

only properly considered after the . . . issues of estate valuation and distribution are

settled,” id., the trial court may reconsider as it deems necessary.

Husband takes issue with the procedure utilized by the trial court to deal with Wife’s

challenge to the fees of her former counsel. Specifically, he argues that he should have

been allowed to participate in the first hearing, the purpose of which was stated by the trial

court as “to determine whether or not [Wife’s] objections to [Meares’] attorney charging

lien are well-taken.” Meares strenuously objected to Husband being present at this first

hearing, citing concerns about information protected by attorney-client privilege. She

notified the trial court that she had several times inquired to the Board of Professional

Responsibility as to what should be done, but the BPR refused to advise her other than to

cite to Tennessee Supreme Court Rule 8, RPC 1.6, which provides in pertinent part:

(a) A lawyer shall not reveal information relating to the representation of a

client unless:

(1) the client gives informed consent;

(2) the disclosure is impliedly authorized in order to carry out the

representation; or

(3) the disclosure is permitted by paragraph (b) or required by paragraph (c).

(b) A lawyer may reveal information relating to the representation of a client

to the extent the lawyer reasonably believes necessary:

* * *

(5) to establish a claim or defense on behalf of the lawyer in a controversy

between the lawyer and the client, to establish a defense to a criminal charge

or civil claim against the lawyer based upon conduct in which the client was

involved, or to respond to allegations in any proceeding concerning the

lawyer’s representation of the client[.]

We are of the opinion that the better practice under these unusual circumstances

would have been to conduct a single hearing and serially address any objections made by

the client regarding claimed privileged information as they arose, determining whether

Tenn. Sup. Ct. R. 8, RPC 1.6(a)(1), or (b)(5), or other potentially pertinent legal principle,

may apply in each instance. This would avoid claims of unfairness or due process violation

such as Husband makes here. In this case, however, Husband’s claims were remedied, as

best they could be, by the second hearing. The 289-page transcript from the second hearing

is in the record, as is the lengthy transcript from the first hearing. As already noted,

Husband had a full and fair opportunity at the second hearing to argue his case and present

evidence regarding the attorney’s fee award. The trial court comprehensively and

independently analyzed the reasonableness and necessity of the attorney’s fees and the

17

proof presented at the second hearing, without reference to, or application of, any res

judicata principle. Under these particular circumstances, any error by refusing to allow

Husband to be at the first hearing was remedied by the second hearing, and so it was not

reversible error.

C. Dissipation of Marital Assets

We next address Husband’s argument that the trial court erred in finding his

dissipation of marital assets as a factor in its division of the marital property. “Dissipation

of assets” is statutorily defined at Tenn. Code Ann. § 36-4-121(5)(B) as “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.” In Larson-Ball v. Ball, 301 S.W.3d 228,

235 (Tenn. 2010), the Supreme Court explained the concept of dissipation as follows:

Whether dissipation has occurred depends on the facts of the particular case.

24 Am.Jur.2d Divorce and Separation § 526 (2009). The party alleging

dissipation carries the initial burden of production and the burden of

persuasion at trial. Burden v. Burden, 250 S.W.3d 899, 919 (Tenn. Ct .App.

2007), perm. to app. denied, (Tenn. Feb. 25, 2008). Dissipation of marital

property occurs when one spouse wastes marital property and thereby

reduces the marital property available for equitable distribution. See Altman

v. Altman, 181 S.W.3d 676, 681–82 (Tenn. Ct. App .2005), perm. to app.

denied, (Tenn. Oct. 31, 2005). Dissipation “typically refers to the use of

funds after a marriage is irretrievably broken,” Broadbent v. Broadbent, 211

S.W.3d 216, 220 (Tenn. 2006), is made for a purpose unrelated to the

marriage, and is often intended to “hide, deplete, or divert” marital property.

Altman, 181 S.W.3d at 681-82. In determining whether dissipation has

occurred, trial courts must distinguish between dissipation and discretionary

spending. Burden, 250 S.W.3d at 919–20; 24 Am.Jur.2d Divorce and

Separation § 526 (2009). Discretionary spending might be ill-advised, but

unlike dissipation, discretionary spending is typical of the parties’

expenditures throughout the course of the marriage. Burden, 250 S.W.3d at

919-20.

The trial court found that Husband engaged in a pattern of mingling business and

personal assets and debts, pulling out excess cash from various property transactions, and

hiding assets in an attempt to keep them from Wife after the divorce was filed. The court

made the following findings, as pertinent to the dissipation issue:

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Exhibit 290 shows Husband was contending his total assets were $1,400,000.

This is a compilation of various financial statements beginning in 1998

provided to the Court. . . . On Exhibit 290(B), a financial statement filled out

on November 6, 2009, Husband stated his assets were worth $3,500,000 and

he had a salary of $100,000, with notes receivable of $600,000. . . . On

Exhibit 290(D), the personal financial disclosure dated March 1, 2012,

Husband represented that his total net worth was $3,464,000. He again stated

his salary was $135,000 per year, that he had a notes receivable of $600,000,

and that his ownership in QMS was valued at $1,650,000. After the divorce

was filed in 2011 and while the parties were involved in a bitter divorce on

appeal in 2014, the 2014 financial statement reveals Husband’s opinion that

his total assets were approximately $2,546,000. Exhibit 290(G) showed

much the same. Interestingly, Exhibit 290(H) reduces Husband’s cash on

hand to $10,000 versus the $100,000 it was previously, and no longer records

any notes receivable in excess of $600,000, as had been carried on the

previous financial statements, and Husband claimed a net worth of

$2,750,000. There has been no explanation provided to this Court as to the

disposition of the $600,000 notes receivable by Husband, and is possibly in

violation of the statutory injunction in divorce cases.

* * *

Mr. Triplett and Husband combined several of their other notes in June 2014

and again in December 2016 and borrowed $1,785,000 known as the

“Campus Loan.” The campus loan encumbered several pieces of property,

some separate property of Husband, and all marital property of the parties.

This was in violation of the statutory injunction. This campus loan provided

funds to be used to add on to the QMS building and also returned cash to

Husband. While Mr. Triplett testified that certain monies came out of this

campus loan to pay off other debts, there was no proof offered of that during

this trial. . . . Mr. Triplett admitted his recitation of the disbursements from

the campus loan were a proposal. He does not know what Husband actually

did with his portion of the proceeds.

* * *

Wife has alleged the “Campus Loan” was a way to bleed off some of the

equity in the property and place it outside her reach. In support of that theory,

Wife provided Exhibit 315 and Exhibit 198. Exhibit 198 showed that during

the pendency of this divorce, Husband received $182,054.55 excess cash at

a closing in 2016. Additionally, on March 24, 2014, Husband received

19

$62,451.72 excess cash from the closing. On June 27, 2014 Husband

received $77,299.12 excess cash at closing. Without approval of the Court,

Husband sold several assets and was able to keep the proceeds.

* * *

Husband does not keep his business and personal expenses separate. . . .

Several other documents, including Exhibits 312 and 313, indicate Husband

received cash, during the pendency of this divorce, which remains

unaccounted for. Husband took unaccounted for cash out of his businesses

in the amount of $321,805 per Exhibit 198. The Court also finds the

unexplained disappearance of the $600,000 in notes receivable, makes ready

division of marital assets a frustrating proposition.

The issue of dissipation is a fact-intensive question. Larson-Ball, 301 S.W.3d at

235. It is also a question that often hinges on the trial court’s assessment of the demeanor

and credibility of witnesses at trial, as in this case. See, e.g., Halkaides v. Halkaides, No.

W2004-00226-COA-R3-CV, 2004 WL 3021092, at *4 (Tenn. Ct. App. Dec. 29, 2004)

(where “considerable sums simply disappeared from the [husband’s] business” and

husband “simply has failed to bring forth credible evidence demonstrating that the funds

were used legitimately and not dissipated,” “[w]e afford great deference to the trial court’s

determinations on matters of witness credibility, and the evidence does not preponderate

against the trial court’s findings that [the husband] dissipated at least $100,000 in marital

assets.”).

In the present case, Husband has not pointed to evidence in the record that tends to

preponderate against the above-quoted factual findings. He argues that “failing to recall a

line item on a ten-year-old financial statement does not amount to dissipation,” quickly

glossing over the fact that this “line item” is six hundred thousand dollars in “notes

receivable.” Giving due deference to the trial court’s perspective of witness credibility,

among other things, we hold it did not err in its analysis of asset dissipation as a factor in

the distribution of the marital estate.

D. Alimony in Futuro

Our standard of review of the trial court’s decision to award Wife $3,600 per month

in alimony in futuro is as stated by the Supreme Court:

For well over a century, Tennessee law has recognized that trial courts should

be accorded wide discretion in determining matters of spousal support. This

well-established principle still holds true today, with this Court repeatedly

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and recently observing that trial courts have broad discretion to determine

whether spousal support is needed and, if so, the nature, amount, and duration

of the award.

Equally well-established is the proposition that a trial court’s decision

regarding spousal support is factually driven and involves the careful

balancing of many factors. Kinard v. Kinard, 986 S.W.2d 220, 235 (Tenn.

Ct. App. 1998); see also Burlew, 40 S.W.3d at 470; Robertson v. Robertson,

76 S.W.3d 337, 340-41 (Tenn. 2002). As a result, “[a]ppellate courts are

generally disinclined to second-guess a trial judge’s spousal support

decision.” Kinard, 986 S.W.2d at 234. Rather, “[t]he role of an appellate

court in reviewing an award of spousal support is to determine whether the

trial court applied the correct legal standard and reached a decision that is not

clearly unreasonable.” Broadbent v. Broadbent, 211 S.W.3d 216, 220 (Tenn.

2006). Appellate courts decline to second-guess a trial court’s decision

absent an abuse of discretion. Robertson, 76 S.W.3d at 343. An abuse of

discretion occurs when the trial court causes an injustice by applying an

incorrect legal standard, reaches an illogical result, resolves the case on a

clearly erroneous assessment of the evidence, or relies on reasoning that

causes an injustice. Wright ex rel. Wright v. Wright, 337 S.W.3d 166, 176

(Tenn. 2011); Henderson v. SAIA, Inc., 318 S.W.3d 328, 335 (Tenn. 2010).

This standard does not permit an appellate court to substitute its judgment

for that of the trial court, but “‘reflects an awareness that the decision being

reviewed involved a choice among several acceptable alternatives,’ and thus

‘envisions a less rigorous review of the lower court’s decision and a

decreased likelihood that the decision will be reversed on appeal.’”

Henderson, 318 S.W.3d at 335 (quoting Lee Medical, Inc. v. Beecher, 312

S.W.3d 515, 524 (Tenn. 2010)). Consequently, when reviewing a

discretionary decision by the trial court, such as an alimony determination,

the appellate court should presume that the decision is correct and should

review the evidence in the light most favorable to the decision.

Gonsewski, 350 S.W.3d at 105-06 (internal citations and footnote omitted).

A trial court’s award of spousal support is governed by Tenn. Code Ann. § 36-5-

121(i), which provides:

In determining whether the granting of an order for payment of support and

maintenance to a party is appropriate, and in determining the nature, amount,

length of term, and manner of payment, the court shall consider all relevant

factors, including:

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(1) The relative earning capacity, obligations, needs, and financial resources

of each party, including income from pension, profit sharing or retirement

plans and all other sources;

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

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

necessity of a party to secure further education and training to improve such

party’s earnings capacity to a reasonable level;

(3) The duration of the marriage;

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

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

physical disability or incapacity due to a chronic debilitating disease;

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

employment outside the home, because such party will be custodian of a

minor child of the marriage;

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

intangible;

(8) The provisions made with regard to the marital property, as defined in §

36-4-121;

(9) The standard of living of the parties established during the marriage;

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

contributions to the marriage as monetary and homemaker contributions, and

tangible and intangible contributions by a party to the education, training or

increased earning power of the other party;

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

deems it appropriate to do so; and

(12) Such other factors, including the tax consequences to each party, as are

necessary to consider the equities between the parties.

The marriage lasted from late 1996 until Husband filed in 2011. They had been

litigating the divorce case for nearly eight years at time of trial. At that point, in 2019,

Wife was 54 years old and Husband was 71. Husband testified that he was retired, but the

evidence was not entirely consistent regarding when he retired and how much work he

continued to do for his companies thereafter. Wife did not work outside the home during

the marriage, but she did draw a “salary” from Wedgecorp. The trial court found as follows

in its alimony analysis:

During the pendency of the divorce, Husband paid Wife anywhere from

$41,000 to $43,000 per year as her spending money. She used this money

for herself and the child, as well as projects improving the home. She is

requesting alimony in futuro as she has been out of the job market for more

than twenty years. Her previous jobs include doing data entry, secretarial

22

work, and working in a factory. She is currently attempting a career in real

estate; however, this career does not seem to produce adequate amounts of

income to sustain her, nor meet her reasonable needs.

. . . The Court specifically finds Wife is unable to achieve, with reasonable

effort, an earning capacity that will permit her standard of living after the

divorce, to be reasonably comparable to the standard she enjoyed during the

marriage or the post-divorce standard of living of Husband.

* * *

It is clear in this case that Wife’s earning capacity is much less than that of

Husband. There will be certain needs that she [will have] including but not

limited to, her car is currently older, a place to live, and health insurance, that

beginning a new career at this point in her life may be unable to meet. She

certainly has no pension, profit sharing, retirement plans, or other resources

to obtain monies to sustain herself. The parties have each cashed in their

retirement accounts.

Both parties have the same relative education. Wife will probably need to

secure further education and/or training to improve her earning capacity to a

reasonable level. Each party appears to be in good mental and physical

condition. The parties’ child has now attained the age of majority and Wife

no longer needs to stay at home to take care of him. Husband has a large

amount of separate assets, both real and personal, particularly compared to

Wife’s lack of assets. The Court has been forced to divide the marital

property in such a way that does not provide Wife with assets without the

need for alimony. The parties enjoyed a nice standard of living during the

marriage, taking many trips with “clients” and friends.

Wife has made both tangible and intangible contributions to the marriage, as

a homemaker and mother. She has also taken care of things in the home, so

Husband could spend the majority of his time “developing and entertaining

clients to increase the value of his business.” Both parties are at fault for this

divorce; however, Husband’s fault in staying out multiple nights during the

week and coming home intoxicated, certainly weighs heavier in the fault

category.

It is axiomatic that “the two most important factors considered are the need of the

disadvantaged spouse and the obligor spouse’s ability to pay.” Perry v. Perry, 114 S.W.3d

465, 467 (Tenn. 2003); Gonsewski, 350 S.W.3d at 110. The trial court determined that

23

Wife had the need for, and Husband the ability to pay, alimony in futuro of $3,600 per

month. Wife’s testimony reveals that her efforts to get into real estate sales prior to trial

were almost entirely unsuccessful. The trial court found that Wife “has made

approximately minimum wage for the past two (2) years,” and the evidence does not

preponderate against this finding. The trial court reviewed Wife’s statement of income and

expenses, removed some of the estimated expenses it found to be inflated or unreasonable,

and concluded that Wife established a monthly deficit of $3,599 per month.

Regarding Husband’s income, the trial court found:

In earlier hearings, regarding alimony pendente lite, the Court found

Husband was hiding some of his income. . . At the hearing in July 2018,

Husband admitted his income was, at least, $17,000 per month. This is not

accurate. In that figure, he failed to include $1,200 per month he receives on

the 3807 Old Tasso Road property[.] He also did not include his gambling

income, which Husband testified he wins more than he loses. Exhibit 7 was

Husband’s affidavit of income and expenses which shows a Blythe Ferry

Road expense. Husband has attempted to show he pays expenses that

Wedgecorp or QMS pays.

The company, not Husband, pays the 3601 Tasso Road property payment. . .

. Not included in his income in this matter is approximately $70,000 to

$80,000 per year the company pays on the company’s American Express

bills to cover his meals for eating out, gas, and his “entertainment expenses.”

In trying to parse through his testimony compared to the trial exhibits, the

Court finds in 2016, Husband deposited $349,000 into his checking account,

$25,000 of which came from gambling. The Court finds his effective

monthly income is at least $24,000 per month. Husband’s monthly expenses

are not reasonable and are not credible on Exhibit 7. In addition, Husband

left off several sources of income, pursuant to the testimony of his business

partner, Mr. Triplett.

As can be discerned from the above, Husband’s efforts to obfuscate his finances by creative

accounting, and a simple lack of candor and honesty, have rendered it impossible to say

with certainty what his income is. The evidence does not preponderate against the trial

court’s findings, many of which are dependent upon its credibility determinations, and it

does support the conclusion that Husband has the ability to pay alimony in futuro in the

amount of $3,600 per month. The trial court applied the correct legal standards and reached

a decision that is not clearly unreasonable, and consequently we affirm its alimony in futuro

award to Wife.

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E. Attorney’s Fees Incurred on Appeal

Finally, Wife asserts that she is entitled to attorney’s fees on appeal. This decision

is soundly within the discretion of this Court. Archer v. Archer, 907 S.W.2d 412, 419

(Tenn. Ct. App. 1995). “When considering a request for attorney’s fees on appeal, we also

consider the requesting party’s ability to pay such fees, the requesting party’s success on

appeal, whether the requesting party sought the appeal in good faith, and any other

equitable factors relevant in a given case.” Chaffin v. Ellis, 211 S.W.3d 264, 294 (Tenn.

Ct. App. 2006) (citing Darvarmanesh v. Gharacholou, No. M2004-00262-COA-R3-CV,

2005 WL 1684050, at *16 (Tenn. Ct. App. July 19, 2005)). Under all of the circumstances

of this case, we hold each party responsible for their own attorney’s fees on appeal.

V. CONCLUSION

The judgment of the trial court is modified to classify the interest in QMS as

Husband’s separate property. The judgment that the property located at 1455 Blythe Ferry

Road is marital is vacated and remanded to the trial court for reconsideration in light of

this opinion. Upon remand, the trial court may reconsider the award of attorney’s fees to

Wife as alimony in solido, after its reconsideration of the distribution of the marital estate,

if the trial court deems it necessary. The judgment of the trial court is affirmed in all other

respects. Costs on appeal are assessed one-half to the appellant, Claude Ellis, and one-half

to the appellee, Melisa Jane Godfrey Ellis, for which execution may issue if necessary.

_______________________________

KRISTI M. DAVIS, JUDGE

25