Opinion
No. M2004-00538-COA-R3-CV.
Submitted On Briefs July 14, 2005.
Filed December 28, 2005.
Direct Appeal from the Chancery Court for Grundy County; No. A-111; Jeffrey F. Stewart, Chancellor.
Judgment of the Chancery Court Affirmed.
Connie Reguli, Brentwood, TN, for Petitioner/Appellants, John Richard Simmons and Kimberly Dawn Simmons.
R. Dee Hobbs, Chattanooga, TN, for Respondent/Appellee James L. Cordell.
Holly M. Kirby, J., delivered the opinion of the court, in which David R. Farmer, J. joined, and Alan E. Highers, J., dissented.
MEMORANDUM OPINION
This Court, with the concurrence of all judges participating in the case, may affirm, reverse or modify the actions of the trial court by memorandum opinion when a formal opinion would have no precedential value. When a case is decided by memorandum opinion it shall be designated "MEMORANDUM OPINION", shall not be published, and shall not be cited or relied on for any reason in any unrelated case.
This is a child support case. Custody of the minor children was removed from the biological father, and he was convicted of and incarcerated for aggravated sexual battery of his child and the manufacture of methamphetamine. The custodians of the children petitioned to terminate the father's parental rights, adopt the children, and obtain back child support from the father. The father owned 1500 acres of farmland. The trial court terminated the father's parental rights, assessed back child support against him, found him voluntarily underemployed and, based on the income-producing farmland, imputed an earning potential of $45,000. The custodians appeal, arguing that the trial court erred by not imputing a higher earning capacity to the biological father. We affirm.
Respondent Vicki R. Cordell ("Mother") and Respondent/Appellant James L. Cordell ("Father") were married in 1992 and had five children, three of whom are the subject of this appeal. The family lived on approximately 1500 acres of farmland in Grundy County that Father inherited from his parents. They lived in the large home occupied by Father's parents before they died. Father had farmed the land and raised livestock and cut timber for some thirty years. At the time of the hearing in this cause, Father was a little over fifty years old, and the three children were ages 10, 9 and 5 years old.
Two of the children of Mother and Father were out of their custody and adopted by relatives as of the date of the hearing in this cause. One of those children was the subject of Father's Class A felony conviction.
In 1998, the three children were removed from the custody of Mother and Father and taken into protective custody by the State of Tennessee Department of Children's Services ("DCS"). On February 18, 1999, the Juvenile Court of Grundy County entered an order finding the children to be dependent and neglected. Physical custody of the children was awarded to Petitioner/Appellants John Richard Simmons and Kimberly Dawn Simmons ("the Simmons"). John Simmons was a cousin of Father. The Simmons lived on a farm near the Cordells' farm.
In March 1999, Father pled guilty to a Class A felony, aggravated sexual battery of a child, for the rape of one of his children, not the subject of this appeal. For this offense, he was sentenced to a ten-year prison term. Subsequently, both Mother and Father pled guilty to the manufacture of methamphetamine. Mother was sentenced to a six-year prison term, and Father received an additional prison term to be served consecutively with his sentence for aggravated sexual battery.
On June 1, 2001, the Simmons filed a petition in the Chancery Court of Grundy County seeking to terminate the parental rights of both Mother and Father and to adopt the three children. They subsequently amended their petition to include a request for child support from Father, retroactive to the date on which they received custody of the children, in January 1999. Mother's child support obligation was previously adjudicated in Juvenile Court and is not the subject of this appeal.
At the trial on January 8, 2004, neither Mother nor Father contested either the termination of their parental rights or the adoption of the children by the Simmons. Since Mother's child support obligation had previously been established, that was not an issue at trial. Father conceded that he had some obligation of child support, and the trial proceeded on the single issue of establishing the amount of Father's child support obligation from January 1999 to the date of the termination of his parental rights.
At trial, it was undisputed that approximately 500 acres of Father's land was farmland, 500 acres was pasture, and 500 acres was timber. In connection with Father's guilty plea on the methamphetamine charge, 300 acres of his land was forfeited to the federal government. Apparently the land was being rented for a nominal sum, approximately equal of the taxes due. The Simmons presented testimony from several witnesses on Father's farming operations prior to his incarceration and the gross income that could be obtained from farming the land, raising livestock, permitting timber to be cut, and rental income. The witnesses testified that the potential income to be derived from the land was approximately $234,000. Many of Father's financial records were destroyed in a fire in 1999 that burned down the family home on the farm. The only evidence of Father's income prior to his incarceration were his 1998 and 1999 federal tax returns, showing an adjusted gross income of $26,591.00 and $30,026.00, respectively.
The trial court rendered an oral ruling at the conclusion of the trial, and a written order was entered on February 17, 2004. The parental rights of both Mother and Father were terminated on multiple grounds, and the Simmons were permitted to adopt the children. In the February 17, 2004 order, the trial court stated:
. . . [E]vidence was put before this Court regarding the potential income available to [Father], in spite of his incarceration.
* * *
[Father] is the owner of land that has income potential from agriculture including the harvesting of hay, the raising of cattle and the raising of chickens. The testimony of witnesses shows that the potential gross (less reasonable expenses) income from hay on 500 acres is $58,500 per year and on 400 acres is $42,600 per year. Testimony also shows that 500 acres of pasture could produce a gross income (less reasonable expenses) of $145,000 per year. Testimony also show that three chicken houses would produce gross income (less reasonable expenses) of $30,000. [Father's] income tax return shows a gross income of $30,026. There are no tax records available showing the income produced when the farm was in full production.
The Court also finds that [Mother and Father] willfully engaged in criminal conduct that has caused them to be incarcerated.
* * *
It is therefore ordered, adjudged and decreed that [Father] is voluntarily underemployed and [the Simmons] are entitled to a judgment for child support due to them from January 1999 until the date of this hearing. It is ordered that [Father] has an earning potential of $45,000 per year. Child support for three children on this gross income is $1,193 . . . per month. The accumulated arrearage on this monthly obligation is $71,580 . . .
The Simmons were then awarded a judgment for the child support arrearage in the amount of $71,580. From this order, the Simmons now appeal.
There are no issues on appeal relating to Mother.
On appeal, the Simmons argue that the trial court erred in finding Father's earning capacity to be only $45,000. Despite his incarceration, they contend, the evidence supports a finding that he could produce income from his farmland well in excess of that amount, and they ask this Court to impute to Father an earning potential of at least $117,000.
On appeal, Father stipulated that there is cause for terminating his parental rights. In his appellate brief, he states: ". . . [W]hile [Father] disagrees with the lower court's conclusion that he was `voluntarily underemployed' as a result of being incarcerated, this finding is not challenged by him on appeal." He characterizes the evidence offered by the Simmons as "remote" and "speculative," and states:
Rather than rely on conjecture, the trial court considered the actual income earned by [Father]. Then, having found that he was voluntarily unemployed, the lower court imputes a fifty-percent increase to the actual income of [Father] in order to reach a supposed income level of $45,000 per year. This conclusion is supported by both the record and the law.
* * *
The trial court . . . focused . . . on the evidence of income actually earned . . . [and] correctly found that the farm could have been earning more income, and the court's imputation of an additional fifty percent of income to [Father] is entirely reasonable on this record and should not be overturned.
Father, therefore, expressly waives all issues that he could raise on appeal, including issues related to the termination of his parental rights and the finding of voluntary underemployment. He contends that any increase in the level of earning potential attributed to him would be based on speculative evidence, and asks this Court on appeal to "sustain the decision below and dismiss the appeal."
On appeal, the trial court's findings of fact are accorded a presumption of correctness, unless the evidence preponderates otherwise. Tenn. R. App. P. 13(d). The trial court's legal conclusions are reviewed de novo, with no presumption of correctness. In re C.K.G. , 173 S.W.3d 714, 721 (Tenn. 2005).
From our review of the record, we must agree with Father that the evidence in this record is insufficient to support an increase in the earning capacity imputed to him from the farmland he holds. No doubt his farmland can be utilized to generate support for his children, despite his incarceration, but the evidence does not support the increase sought by the Simmons on appeal. Therefore, we must hold in favor of Father and affirm the trial court's award to the Simmons of a judgment in the amount of $71,580.00.
The decision of the trial court is affirmed. Costs on appeal are awarded against the Petitioner/Appellants John Richard Simmons and Kimberly Dawn Simmons, and their surety, for which execution may issue, if necessary.
DISSENTING OPINION
I write separately to voice my dissent to the holding reached by the majority in this case. The majority concludes that Father expressly waived the issue of whether the trial court correctly determined him to be voluntarily unemployed. Although Father did state in his brief that he is not challenging the trial court's determination that he is voluntarily unemployed on appeal, I believe the issue should nonetheless be addressed. In doing so, I would hold that the trial court erred in finding that Father was voluntarily unemployed and in imputing potential income to Father on which to base an award of child support.
Rule 13(b) of the Tennessee Rules of Appellate Procedure provides as follows:
(b) Consideration of Issues Not Presented for Review. — Review generally will extend only to those issues presented for review. The appellate court shall also consider whether the trial and appellate court have jurisdiction over the subject matter, whether or not presented for review, and may in its discretion consider other issues in order, among other reasons: (1) to prevent needless litigation, (2) to prevent injury to the interests of the public, and (3) to prevent prejudice to the judicial process.
Tenn. R. App. P. 13(b) (2005) (emphasis added). The Advisory Commission Comments to the Rule provide as follows:
This subdivision deals with the very difficult question of when an appellate court should consider an issue not raised by the parties. Generally speaking, control over the issues should reside in the parties, not in the court. Accordingly, this subdivision provides that review will typically extend only to the issues set forth in the briefs. Only the absence of subject-matter jurisdiction, whether at the trial or appellate level, must be considered by the appellate court regardless of whether it is presented for review. Cases appealed to the wrong appellate court must be transferred pursuant to Rule 17 of these rules. In all the other situations described in this subdivision, the appellate court has discretion to decide whether it will consider a matter not raised by the parties. It is intended that this discretion be sparingly exercised.
I am mindful of our need to use the discretion vested in this Court under Rule 13(b) conservatively.
There is no greater need for this Court to exercise its discretion to review an issue not presented for review, however, than when a trial court enters a finding in direct contravention of established precedent, thereby causing prejudice to the judicial process. See, e.g., Panzer v. King , 743 S.W.2d 612, 616 (Tenn. 1988) (recognizing that neither of the parties raised the issue of whether a trial court was correct in granting a new trial, our supreme court stated that "[w]e are presented with a classic case for the application of T.R.A.P. 13(b) that expressly grants the appellate courts authority to consider issues not brought up for review by any party"); In re Z.J.S. , No. M2002-02235-COA-R3-JV, 2003 Tenn. App. LEXIS 415, at *14-27 (Tenn.Ct.App. June 3, 2003) (exercising our discretion under Rule 13(b) to vacate the termination of the fathers' parental rights due to serious procedural irregularities); Waterhouse v. Cumberland County Bank , Nos. 03A01-9102-CH-00056, 03A01-9106-CH-00079, 1991 Tenn. App. LEXIS 808, at *4 (Tenn.Ct.App. Oct. 8, 1991) (recognizing that neither party raised the issue of whether the trial court erred in finding that the plaintiff failed to meet certain requirements found in the Tennessee Rules of Civil Procedure, this Court undertook an examination of the issue pursuant to Rule 13(b)); Moore v. Moore , No. 1, 1986 Tenn. App. LEXIS 3201, at *5 (Tenn.Ct.App. Aug. 4, 1986) (noting that, even though the parties did not appeal the issue of whether a valid marriage existed in the first instance, the parties' apparent disregard of the rules governing the marriage process warranted our examination of the issue under Rule 13(b)). The limited exercise of discretion I espouse in this instance promotes this Court's role in correcting clear legal errors by the trial courts of this state so that we do not condone the establishment of an incorrect precedent, thereby preventing confusion for the bench and the bar that would ultimately ensue should we allow such errors to stand.
After reading the trial court's order in this case, there is no mistaking the fact that the trial court concluded that Father was voluntarily unemployed due solely to his incarceration. If any ambiguity did exist in the order, it would be resolved by reference to the trial court's statements to the parties at the conclusion of the hearing in this matter:
I think first I would like to point out and say for the record I do find that Mr. Cordell has voluntarily put himself in a position of not earning any income. He didn't certainly quit a job but he certainly participated in illegal activity that brought about losing his job and becoming incarcerated and put us in this position. No one made him participate in that. It appears he voluntarily chose to do that. So I find that he voluntarily unemployed himself. The question is what could he earn and what could he pay as far as support is concerned? . . . The question of what he could earn is really somewhat in dispute and difficult for this Court to determine based upon the proof before it. And one of the reasons I ask about these prior farm income records is that I think that would have established what he was able to earn off of this farm.
The trial court's finding of voluntary unemployment in its order, which is based on this faulty line of reasoning, constitutes clear error in direct contravention of our existing case law.
"Although there is no requirement that a parent intended to avoid their child support obligations by their actions, we do think that willful or voluntary unemployment or underemployment must result from an intent on the part of the parent to reduce or terminate his or her income." Wilson v. Wilson , 43 S.W.3d 495, 497 (Tenn.Ct.App. 2000) (emphasis added). This Court has previously had occasion to address the correctness of a trial court's finding of willful and voluntary unemployment by an obligor parent under circumstances similar to those in the present case. In Pennington v. Pennington , No. W2000-00568-COA-R3-CV, 2001 Tenn. App. LEXIS 192, at *2 (Tenn.Ct.App. Mar. 14, 2001), a wife filed for divorce from her husband in 1999 and sought child support for the parties' children. In 1994, the husband, a doctor, was incarcerated for illegally writing prescriptions for controlled substances. Id. at *2-3. The husband was released in 1996, however, he was subsequently arrested in 1998 for possession of cocaine and sentenced to a new prison term. Id. at *3. The husband remained incarcerated when the divorce proceedings began in the lower court. Id. at *2. The trial court concluded that the amount of the husband's child support obligation should be based upon his potential earning capacity, utilizing the average of his earnings in the five years preceding his first arrest in 1993. Id. at *7. However, the trial court did not make a finding of willful and voluntary unemployment on the part of the husband. Id. at *10. Having failed to do so, this Court conducted a de novo review of the record to determine whether the husband was, in fact, willfully and voluntarily unemployed. Id. In concluding that the husband was not willfully and voluntarily unemployed, we held as follows:
The case at hand is analogous to [ Wilson v. Wilson, 43 S.W.3d 495 (Tenn.Ct.App. 2000)]. In Wilson, Ms. Wilson argued that because Mr. Wilson's criminal acts were willful and voluntary, he was willfully and voluntarily underemployed. Likewise, in the case at hand, Ms. Pennington asserts that because Mr. Pennington's criminal act, using cocaine, was willful and voluntary, and because this act led to his incarceration and resulting unemployment, he was willfully and voluntarily unemployed. We decline to make this conclusion. Mr. Pennington did not intend to become incarcerated and unemployed when he made the choice to use cocaine; thus, the record does not support a finding that Mr. Pennington was willfully and voluntarily unemployed. Consequently, the trial court's award of child support based on Mr. Pennington's potential income rather than his net income is reversed. We remand this case to the trial court for a determination of Mr. Pennington's net income and to make an award of child support based on Mr. Pennington's net income.
Id. at *13 (emphasis added); see also Coates v. Coates , No. M2001-01928-COA-R3-CV, 2002 Tenn. App. LEXIS 803, at *7 (Tenn.Ct.App. Nov. 15, 2002) ("This court has rejected the proposition that a parent's dishonest acts which led to unemployment constitute willful and voluntary unemployment. As a logical extension of that principle, we have also held that unemployment or underemployment resulting from incarceration is not willful and voluntary." (citations omitted))).
As in Pennington, there is nothing in the record before this Court to indicate that Father intended to become incarcerated and unemployed in an effort to reduce or terminate his income. Thus, the chancellor's calculation of Father's child support obligation based upon his potential income constitutes a clear error of law which this Court should address to prevent prejudice to the judicial process. Accordingly, I would reverse the trial court's holding and remand this case to the chancery court for a determination of Father's net income, consistent with the child support guidelines in effect when this case was tried below, and the entry of a child support award based upon such amount.
This case came to be heard in the chancery court prior to the enactment of the new "income shares" model of the child support guidelines, which took effect in January of 2005. I am cognizant of the limited evidence addressing Father's income in the years prior to his incarceration, which the Appellants attempted to prove in the proceedings below. If, on remand, the chancellor were unable to ascertain Father's net income for the period in question, the child support guidelines in existence when this case came to be heard below provide for such a contingency. See Tenn. Comp. R. Regs. 1240-2-4-.03(3)(e) (1994) (providing the amount of income to be used when the obligor fails to produce sufficient evidence of income).