The Tennessee Court of Appeals recently reaffirmed in Jensen v. Jensen that equitable does not mean equal when it comes to the division of marital estates in Tennessee, and that considerable deference is given to a trial court’s factual and credibility findings on discretionary decisions, including alimony determinations.

In Jensen v. Jensen, the Tennessee Court of Appeals modified a Hamilton County trial court’s award of transitional alimony to limit it to a five-year period, in absence of a determinate period being set by the trial court, and affirmed the trial court’s ruling in all other respects, including a net negative award to the husband from the marital estate, as well as the award of alimony in solido to the wife for her reasonable attorney’s fees and significant dissipation on behalf of the husband.¹

The Jensen parties were married for 11 years and the parents of two minor children. The couple separated in March 2021. At the time, both were employed and worked remotely. The wife worked in digital marketing, and the husband in online advertising.² Shortly before the parties separated, in February 2021, the husband shut down his business, for which he was the sole proprietor.³

After the parties separated, the husband moved from Hamilton County, Tennessee, to Texas, where he lived with a paramour and her child. The husband also incurred a large amount of debt after the separation for his own benefit.⁴ The trial court ultimately assessed such debt to the husband and applied the four factors set forth in the Tennessee Supreme Court case Alford v. Alford: “(1) the debt’s purpose; (2) which party incurred the debt; (3) which party benefitted from incurring the debt; and (4) which party is best able to repay the debt.”⁵ The trial court found the husband incurred a lot of credit card debt after the separation “for his own purposes outside of the marriage or because of his infidelity.”⁶ The husband claimed that he had incurred this debt for household and marital purposes, but the trial court found the husband was not credible, both at the final hearing and during two prior contempt hearings.⁷ The trial court further found the husband was better able to repay the debt based on a history of funds deposited into husband’s accounts.⁸

The trial court’s final division of the marital estate awarded the wife a net portion of $352,177, and the husband a net portion of negative (-) $31,746.⁹ The trial court further awarded the wife transitional alimony in the amount of $100 per month without a termination date and two awards of alimony in solido, one in the amount of $66,844 to compensate the wife for half of the assets dissipated by the husband, and the second in the amount of $64,387 for the reasonable attorney’s fees she incurred in prosecuting the divorce.¹⁰

On March 3, 2023, the husband filed a notice of appeal. On March 5 of that year, the husband filed for Chapter 7 bankruptcy protection in Texas.¹¹ On March 9, following a hearing, the trial court entered an order on the wife’s motion for attorney’s fees and expenses and awarded the wife the sum of $64,387.50 for her reasonable attorney’s fees and expenses.

The appellate court entered an order on May 12, staying the appeal pursuant to 11 U.S.C § 362(a); however, the court lifted the stay in August 2023 after both parties urged for the appeal to proceed in their respective statements.¹²

Equitable Division

On appeal the husband argued, among other things, that the division of the marital estate was inequitable.¹³ Regarding the division of the marital estate, the husband pointed to a mathematical error in the trial court’s decision and questioned the value placed on the marital residence.¹⁴ The husband did not explain specifically why he believed the overall distribution was inequitable, but the appellate court still reviewed the trial court’s rationale for the distribution of the estate “[b]ecause a straightforward review of the distribution raise[d] a question as to whether the negative award to husband was equitable.”¹⁵ The court noted and found that the overall effect of the mathematical errors on the part of the trial court were harmless and “resulted in a total net award to [the] husband from the marital estate greater than the trial court initially calculated,” although “the award was still a negative one at the time of the divorce judgment.”¹⁶ The court considered the trial court’s “thorough consideration of the statutory factors” under Tenn. Code Ann. § 36-4-121(c) and “its credibility determinations,” and noted that many of the debts assessed to the husband were discharged in bankruptcy during the pendency of the appeal, before it concluded that “the evidence preponderated in favor of the trial court’s division” of the marital estate.¹⁷

Pursuant to Tenn. R. App. P. 14(a), the appellate court took “judicial notice of the post-judgment fact that many of the debts assessed to [the] husband in the divorce would have been discharged through his bankruptcy” after the divorce. Accordingly, on “somewhat different reasoning,” the court determined that the “negative total distribution to [the] husband,” inclusive of the many debts discharged in bankruptcy during the pendency of the appeal, resulted in an equitable distribution.¹⁸

Transitional Alimony

Pursuant to Tenn. Code Ann. § 36-5-121(g)(1), transitional alimony is a sum payable to one party to the other “for a determinate period of time” and when rehabilitation is not necessary, but the economically disadvantaged spouse needs assistance to “adjust to the economic consequences” of a divorce.¹⁹ As explained by the Tennessee Supreme Court, “transitional alimony is designed to aid a spouse who already possesses the capacity for self-sufficiency but needs financial assistance in adjusting to the economic consequences of establishing and maintaining a household without the benefit of the other spouse’s income.”²⁰ However, “the lack of a determinative period goes against the statute’s transitional alimony requirements.”²¹

The Tennessee Supreme Court has repeatedly held and emphasized that “trial courts have broad discretion to determine whether spousal support is needed and, if so, the nature, amount, and duration of the award.”²² Decisions regarding spousal support are “factually driven” and involve “the careful balancing of many factors,” including those specifically outlined in Tenn. Code Ann. § 36-5-121.²³ Appellate courts generally avoid second-guessing a trial court’s spousal support decision absent an abuse of discretion,²⁴ as it is the appellate court’s role to determine whether “the correct legal standard” was applied and if the trial court “reached a decision that is not clearly unreasonable.”²⁵ Such abuse of discretion standard considers “that the decision being reviewed involved a choice among several acceptable alternatives” and “envisions a less rigorous review of the lower court’s decision and a decreased likelihood that the decision will be reversed on appeal.”²⁶ Accordingly, appellate courts presume alimony determinations are correct and review the evidence in the light most favorable to the decision.²⁷

Regarding the award of transitional alimony, the husband in Jensen asserted that the wife had a “substantial earning capacity” and that “she earned more than husband at the time of the divorce.” Yet the husband did not dispute the trial court’s finding regarding the wife’s income or expenses, which showed a monthly shortfall of $3,035, and the appellate court agreed with the trial court that the wife established a need for alimony.²⁸

The husband further disputed the trial court’s findings regarding his ability to pay spousal support. At trial, the husband claimed his gross annual income was $68,000, or $5,667 per month.²⁹ However, the wife submitted a three-year average of the husband’s gross business income from 2017-2019, based on the parties’ joint income tax returns, that showed a gross annual income of at least $105,829, or $8,819 monthly, to the husband.³⁰ The trial court found the wife credible and accepted and adopted the income figures proposed by the wife, over the husband’s objection, finding expressly that the husband’s “earning capacity was far greater than his current salary” and the husband was not credible.³¹ The trial court further found that the husband “had been the proprietor of a commission-based business but by the time of trial was no longer earning commissions in his current employment.”³² The trial court incorporated its findings from two contempt hearings into its final decree, one of which included a finding that when the husband “shut down his business” that such was “a voluntary, willful choice.”³³

At trial, the husband “failed to present a complete picture of his income for 2020 or 2021,” and the appellate court “determined that the trial court acted within its discretion by adopting a three-year average of husband’s income from 2017 to 2019.”³⁴ Notably, the husband relied “solely on his own trial testimony, which the trial court did not find credible.”³⁵ Additionally, the trial court found, and the appellate court noted in its opinion, other facts persuasive in weighing the factors outlined in Tenn. Code Ann. § 36-5-121 regarding spousal support. In relation to factor nine, the standard of living established during the marriage, the trial court found the parties “enjoyed a very nice standard of living” during the marriage and that the husband paid the initiation fee and monthly bills to four country clubs, the mortgage, payments on the wife’s Range Rover and for nice family vacations.³⁶ The trial court also found that the parties managed to pay “$9,000 more each month on their combined mortgage and California taxes” than they paid in Hamilton County, Tennessee.³⁷

In making the transitional alimony awarded modifiable, the trial court “found that wife’s shortfall was greater than [the] [h]usband’s ability to pay,” and the trial court anticipated that the husband’s income “would increase after the divorce.”³⁸ The appellate court found “the $100 monthly award was predicated on the parties’ financial situation at the time of the divorce,” and that the evidence preponderated in favor of the trial court’s determination that the wife had a need for and the husband had the ability to pay monthly transitional alimony  in the amount of $100.³⁹ The appellate court agreed that transitional alimony was the “appropriate type of periodic spousal support” due to the wife’s “proven earning capacity.”⁴⁰ However, relying on the requirement that transitional alimony be “for a determinate period of time” pursuant to Tenn. Code Ann. § 36-5-121(g)(1), the appellate court modified the monthly transitional alimony award of $100 for a period of five years, beginning from the date of entry of the final decree of divorce.⁴¹

Practice Point

In the Jensen case, the facts surrounding the parties’ standard of living and the husband’s actions, both leading up to and during the divorce proceedings, were highly determinative of the outcome in this case when considering the applicable statutory factors, and the negative credibility finding against the husband serves as yet another reminder to family law practitioners of the difficulties that litigants will face, both at the trial and appellate level, if they are found to be dishonest and uncredible. |||

MARLENE ESKIND MOSES is a partner at Gullett Sanford Robinson & Martin, and formerly was manager and founder of MTR Family Law PLLC, a family and divorce law firm in Nashville. She is a past president of the American Academy of Matrimonial Lawyers. She has held prior presidencies with the Tennessee Board of Law Examiners, the Lawyers’ Association for Women and the Tennessee Supreme Court Historical Society. She is the immediate past president of the International Academy of Matrimonial Lawyers and is on the executive committee of the American College of Family Trial Lawyers. The National Board of Trial Advocacy has designated Moses as a Family Law Trial Specialist.

ANSLEY OWENS TILLETT is a graduate of Belmont University College of Law and is part of the family law practice at Gullett Sanford Robinson and Martin PLLC in Nashville and co-chair of the NBA Domestic Committee.

NOTES

1. Jensen v. Jensen, No. E2023-00315-COA-R3-CV, 2024 Tenn. App. LEXIS 388 at *1-2, *52 (Tenn. Ct. App. Sept. 4, 2024).
2. Jensen. 2024 Tenn. App. LEXIS 388 at *2.
3. Id. at *43.
4. Id. at *48.
5. Id. See Alford v. Alford, 120 S.W.3d 810, 814 (Tenn. 2003).
6. Id. at *16 and *49.
7. Id. at *50. In an April 2022 contempt order, the trial court not only found that the husband was “not credible,” it also determined that the husband was “voluntarily underemployed” and “that rather than satisfying child support and other agreed-upon liabilities, he had chosen to satisfy certain other financial liabilities,” which included $2,500 per month for a townhome not occupied by the husband and a payment of $15,000 towards the husband’s credit card.”
8. Id. at *16 and *49.
9. Id. at *16.
The trial court’s written opinion stated the net award to the husband was negative (-) $119,315. However, on appeal, the husband cited a mathematical error as to the value of assets awarded to him, which the wife did not dispute. The wife also cited a second mathematical error in the judgment due to 10 of the husband’s credit cards being listed twice. Id. at *28-29. The wife claimed the two errors combined resulted in the husband receiving $87,569 more of the marital division than the trial court already determined to be equitable, even though the net amount awarded to the husband was still negative.
10. Id. at *17 and *53-54. The trial court found the husband had dissipated a total of $133,688 in marital funds on his paramour and her child or otherwise for the husband’s benefit after the separation. The husband was ordered to pay $25,000 of said alimony in solido amount immediately and the remainder at the rate of $500 per month. Id. at *17.
11. Id. at *9.
12. Id. at *21.
13. Husband also argued, unsuccessfully, that the trial court erred in adopting the wife’s proposed permanent parenting plan, which required him to participate in reunification therapy with the children in person, despite husband living in Texas. See Jensen at *47-51. The husband further argued in his statement of the issues that the trial erred in awarding the wife attorney’s fees in the form of alimony in solido while his bankruptcy stay was in effect; however, the husband failed to develop an argument within the argument section of his brief regarding such issue. See Jensen at *86-87.
14. Id. at *27-28. Again, the wife did not dispute the mathematical error cited by the husband but pointed to a second mathematical error, which resulted in an award to the husband greater than he would have received otherwise.
15. Id. at *40-41. See Schrader v. Schrader, No. E2005-02641-COA-R3-CV, 2007 WL 27118 (Tenn. Ct. App. Jan. 4, 2007) (finding that leaving a husband in a negative position could not be “characterized as equitable”).
16. Jensen, 2024 Tenn. App. LEXIS 388 at *41.
17. Id. at *53. Pursuant to Tenn. R. App. P. 14(a), the appellate court took “judicial notice of the post-judgment fact that many of the debts assessed to [the] husband in the divorce would have been discharged through his bankruptcy” immediately after the divorce.
18. Id. at *52.
19. Tenn. Code. Ann. § 36-5-121(g)(1).
20. Gonsewski v. Gonsewski, 350 S.W.3d 99, 109 (Tenn. 2011).
21. See Garner v. Garner, No. E2019-01420-COA-R3-CV, 2020 WL 4354918, at *10 (Tenn. Ct. App. July 29, 2020).
22. Gonsewski v. Gonsewski, 350 S.W.3d 99, 105 (Tenn. 2011).
23. Kinard v. Kinard, 986 S.W.2d 220, 235 (Tenn. Ct. App. 1998).
24. Kinard, 986 S.W.2d at 234.
25. Broadbent v. Broadbent, 211 S.W.3d 216, 220 (Tenn. 2006).
26. Lee Medical Inc. v. Beecher, 312 S.W.3d 515, 524 (Tenn. 2010).
27. 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).
28. Jensen, 2024 Tenn. App. LEXIS 388 at *68.
29. Id. at *69.
30. Id. at *60 and *69-70.
31. Id. at *72. The trial court determined the wife’s gross monthly income was $11,503 and her net monthly income was $8,485, inclusive of child support. Id. at *17 and *59.
32. Id. at *72.
33. Id. at *72.
34. Id. at *73.
35. Id. at *75.
36. Id. at *48 and *61. At trial, the husband testified that the country club dues alone were $70,000 the prior year. The trial court also found that the husband was also previously paying for many household expenses through his business.
37. Id. at *47 (emphasis added).
38. Id. at *76.
39. Id. at *76-*77.
40. Id. at *78.
41. Id. at *79.