Turner v. Turner

 FILED
  Dec. 15, 1995

                IN
Cecil Crowson, Jr.           THE COURT OF APPEALS OF TENNESSEE
  Appellate Court Clerk
                               MIDDLE SECTION AT NASHVILLE


                 REBECCA DIANE TURNER (TURPIN), )
                                                )
                     Plaintiff/Appellee,                 )
                                                )        Warren Circuit
                                                )        No. 5322
                 VS.                            )
                                                )        Appeal No.
                                                )        01-A-01-9503-CV-00080
                 CHARLES DANIEL TURNER,         )
                                                )
                     Defendant/Appellant.       )



                          APPEAL FROM THE CIRCUIT COURT FOR WARREN COUNTY
                                     AT McMINNVILLE, TENNESSEE

                              THE HONORABLE CHARLES D. HASTON, JUDGE



                 For the Plaintiff/Appellee:             For the Defendant/Appellant:

                 J. Stanley Rogers                       Marguerite H. Stewart
                 Christina Henley Duncan                      CAMP & STEWART
                 ROGERS, RICHARDSON & DUNCAN             McMinnville, Tennessee
                 Manchester, Tennessee




                                    VACATED AND REMANDED




                                                    WILLIAM C. KOCH, JR., JUDGE
                               OPINION

      This appeal involves an acrimonious post-divorce dispute over child
support and visitation. After their divorce in 1990, the mother filed several
petitions in the Circuit Court for Warren County seeking to hold the father in
contempt. The father also filed several petitions to modify his child support
because of his inability to pay. This appeal involves the denial of the father's
latest petition for modification and the summary suspension of his visitation for
not paying child support. We have determined that the evidence preponderates
against the trial court's conclusion that the circumstances with regard to the
father's income have not changed and that the father's visitation should be
suspended. Accordingly, we vacate the order dismissing the father's petition and
remand the case for further proceedings.


                                        I.


      Rebecca Diane Turner (now Turpin) and Charles Daniel Turner were
married in September 1984. They had two children before separating in May
1987. After an unsuccessful attempt at reconciliation, Ms. Turner filed for divorce
in June 1989. On August 15, 1990, the trial court entered a final order granting
Ms. Turner the divorce and awarding her custody of the parties' children. The
trial court also granted Mr. Turner visitation rights and ordered him to pay
$704.13 per month in child support and to pay for the children's medical
insurance. The trial court later denied Mr. Turner's post-trial motion to alter or
amend the child support award but granted him additional visitation.


      In early November 1990, Ms. Turner sought to have Mr. Turner held in
contempt for being $2,166.52 in arrears in his child support. Mr. Turner
responded with a petition admitting that he was delinquent in his child support
payments and requesting a reduction in his child support because he was
financially unable to comply with the August 1990 order. Thereafter, Mr. Turner
paid all the child support due through November 30, 1990, and agreed to pay an
additional $475 for the children's medical expenses. Following a hearing in

                                       -2-
January 1991, the trial court entered an order on February 1, 1991, finding Mr.
Turner in contempt for failing to pay child support and to obtain medical
insurance for his children. The trial court decided not to act on Mr. Turner's
petition to modify his child support because "he comes to the Court with unclean
hands." In addition, the trial court directed Mr. Turner to begin paying an
additional $177 per month to reimburse Ms. Turner for obtaining medical
insurance for the children through her group insurance plan at work.


       Ms. Turner filed a second petition in May 1991 seeking to hold Mr. Turner
in contempt for inappropriate conduct while he was returning her son from
visitation. In December 1993, she filed her third contempt petition complaining
that Mr. Turner had harassed and abused her and the children and that he was
seriously delinquent in his child support obligations.1 Following an ex parte
hearing, the trial court ordered Mr. Turner's arrest and suspended his visitation
rights. Mr. Turner responded, as he had in the past, that he was financially unable
to meet his child support obligations and again requested the trial court to reduce
his child support.


       Following a January 1994 hearing, the trial court filed an order on February
14, 1994, finding Mr. Turner in criminal contempt for violating the orders
prohibiting him from harassing and abusing Ms. Turner and the children and also
finding him in civil contempt for failing to make his child support payments. The
trial court sentenced Mr. Turner to ten days for the criminal contempt to be served
consecutively with a six-month sentence for civil contempt but determined that
Mr. Turner could purge himself of the civil contempt by paying $40,908.86.2 The

       1
         Ms. Turner stated that as of November 15, 1993, Mr. Turner was $19,365.19 delinquent
in his child support, that he had not paid $3,019.10 in additional medical expenses, and that he
had not reimbursed her for $1,796.50 in premiums for the children's medical insurance.
       2
         This amount included $20,773.45 in back child support through January 15, 1994,
$2,095.50 for medical insurance premiums through January 15, 1995, $3,464.10 for unpaid
medical expenses, $11,388.42 to reimburse Ms. Turner for the payment of a second mortgage
indebtedness on their former residence, $1,278.86 to reimburse Ms. Turner for a payment to the
Internal Revenue Service, $900 to reimburse Ms. Turner for a payment to Citizens Fidelity Bank,
and a $1,008.93 payment directly to the Internal Revenue Service.




                                              -3-
trial court also ordered that Mr. Turner's visitation would be summarily suspended
if he did not make prompt and timely support payments.


      The trial court summarily suspended Mr. Turner's visitation before he was
released from jail because he failed to pay his child support. Mr. Turner filed
another petition in July 1994 requesting modification of his child support and
reinstatement of his visitation. On December 20, 1994, the trial court filed an
order denying Mr. Turner's petition because he had not demonstrated a material
change in circumstances between 1990 and 1994.


                                        II.


      The determinative issue on this appeal involves the trial court's denial of
Mr. Turner's petition to modify his child support. The trial court's rationale is not
readily apparent. The record, however, indicates that the trial court used the
wrong test for determining whether Mr. Turner was entitled to relief and that Mr.
Turner might be entitled to relief if the correct test were used.


                                         A.


      We turn first to the proper standard for determining whether an existing
child support order should be modified. Prior to July 1, 1994, trial courts could
modify existing child support awards "only upon the showing of a substantial and
material change in circumstances." See Tenn. Code Ann. § 36-5-101(a)(1)
(amended 1994). The General Assembly replaced this standard in 1994 by
enacting legislation providing that:
             In cases involving child support, upon application of
             either party, the court shall decree an increase or
             decrease of such allowance where there is found to be
             a significant variance, as defined in the child support
             guidelines . . . between the guidelines and the amount of
             support currently ordered unless the variance has
             resulted from a previously court-ordered deviation from
             the guidelines and the circumstances which caused the
             deviation have not changed.



                                        -4-
Tenn. Code Ann. § 36-5-101(a)(1) (Supp. 1995).3 In accordance with the
amended statute, the Department of Human Services promulgated a public
necessity rule defining a "significant variance" as "15% or $15 per month." See
20 Tenn. Admin. Reg. 28 (Aug. 1994).4


       The amended statute and the public necessity rule took effect on July 1,
1994 and, therefore, applied to Mr. Turner's petition. The trial court should have
used them to determine whether Mr. Turner's child support obligation should be
modified. While the trial court did not explain the basis for its decision, its denial
of the petition on the ground that there had been "no change in circumstances"
indicates that the trial court applied the wrong test. By the time of the hearing, the
"material change of circumstances" test had been replaced by the "significant
variance" test.


                                               B.


       Mr. Turner operates an auto salvage business in McMinnville called
Highway 55 Auto Sales and Salvage. The business is a sole proprietorship, and
over the years, Mr. Turner has comingled his personal and business finances. He
pays for his utilities, rent, food, and other items from his business account, and he
conceded at the 1994 hearing that he was "living out of the business." He testified
that he is occasionally involved with cash transactions but that he does not possess
large amounts of cash that he has not reported to his accountant.


       In 1989, the year in which Ms. Turner filed for divorce, his business
reported a net profit of $9,857 on gross sales of $229,753. His business tax
returns for that year showed that his inventory cost was $118,431 and that his
business expenses were $101,465. His 1989 adjusted gross income for tax

       3
           Act of April 21, 1994, ch. 987, § 3, 1994 Tenn. Pub. Acts 1007, 1010.
       4
        This rule took effect on July 1, 1994. A permanent rule with the same substance as the
public necessity rule took effect on December 14, 1994. See Tenn. Comp. R. & Regs. r. 1240-2-
4-.02(3) (1994).




                                               -5-
purposes was a negative $51,956 because of $63,843 in net operating losses being
carried forward from 1986 and 1988.


       In 1990, the year in which the trial court granted the divorce and ordered
Mr. Turner to pay $704.13 in child support, his business's gross sales had fallen
to $127,967, and his net profit was a negative $11,721. His inventory cost and
business expenses that year were $63,520 and $76,641 respectively.


       Mr. Turner's business was on the financial edge. In addition to problems
with creditors, he faced assessments from the Internal Revenue Service and other
assessments for delinquent payroll taxes. In June 1990, he filed a petition under
Chapter 13 of the Bankruptcy Code in order to put his creditors on hold and to
reorganize his finances.5 His business has never recovered beyond its 1989 or
1990 levels. In 1993, his gross receipts amounted to $112,969, and his net profit
was $12,114; however, his personal adjusted gross income was only $6,606
because of
net operating loss carry-overs from 1991 and 1992.


       Mr. Turner testified at the November 1994 hearing that his monthly income
was less than $1,000 and that he was currently able to pay the amount of child
support required by the guidelines as well as $25 to $50 per week toward the
arrearage. Ms. Turner produced no evidence to the contrary; however, her lawyer
argued with some effect that Mr. Turner was a "very street-smart person" and
suggested that Mr. Turner had under-reported his income in 1990 and that he was
still under-reporting it in 1994.


                                           C.


       The current guidelines require that decisions to modify existing child
support orders must be based on a comparison of the amount of the existing
support obligation and the amount that the obligation would be if it were based on

       5
        The bankruptcy proceeding was apparently dismissed in February 1992 because of Mr.
Turner's failure to abide by the repayment plan.


                                           -6-
the obligor parent's current income. A modification must be made if the existing
support obligation varies by fifteen percent or more from the amount that the
obligation would be based on the obligor parent's current income. Tenn. Comp.
R. & Regs. r. 1240-2-4-.02(3). In cases where the variance equals or exceeds
fifteen percent, the guidelines permit refusing to decrease child support in only
two circumstances: (1) when the obligor parent is "willfully or voluntarily
unemployed or under-employed" and (2) if the variance results from "a previous
decision of a court to deviate from the guidelines and the circumstances which
caused the deviation have not changed." Tenn. Comp. R. & Regs. r. 1240-2-4-
.02(3).


      Determining the amount of the noncustodial parent's income is the most
important element of proof in a proceeding to set child support. Kirchner v.
Pritchett, App. No. 01-A-01-9503-JV-00092, slip op. at 4, ___ T.A.M. ___, ___
T.F.L.L. ___ (Tenn. Ct. App. Dec. ___, 1995); Susan F. Paikin et al., Child
Support, 2 Fam. L. & Prac. (MB) § 33.11[1][a] (1995). This is the case both when
setting initial support and when considering requests for modification of an
existing support obligation. The noncustodial parent's income is, in fact, doubly
important in a modification proceeding because the child support guidelines
require the courts to examine the basis for the current support order and the
noncustodial parent's current income.


      The record contains no information with regard to the basis of the trial
court's August 1990 decision to set Mr. Turner's child support at $704.13 per
month. Ms. Turner chose not to present proof in the present proceeding. Instead,
her lawyer relied on cross-examining Mr. Turner and his accountant and then
urged the trial court to consider the "volumes and volumes of proof about the
financial affairs of this couple" presented in prior hearings. None of this prior
proof was in the record, and thus it would have been inappropriate for the trial
court to rely on its memory of the proof in these prior proceedings. See Rast v.
Terry, 

, 555 (Tenn. 1976); Myers v. Thomas, App. No. 01-A-01-
9111-CH-00412, slip op. at 4, 17 T.A.M. 15-15 (Tenn. Ct. App. Mar. 25, 1992),
perm. app. denied (Tenn. Sept. 14, 1992).

                                        -7-
      The trial court's 1990 decision with regard to child support could have been
based on three alternative rationales. The first alternative is that $704.13 could
have been the amount required by a straight application of the guidelines based on
the number of children to be supported and the evidence concerning Mr. Turner's
income at the time. The second alternative is that the trial court could have found
that Mr. Turner understated his income in 1990 and, therefore, concluded that his
income was more than otherwise shown by the proof. The third alternative is that
the trial court could have decided that the facts warranted deviating from the
guidelines.


      It is unlikely that the original amount of Mr. Turner's child support was
based on the proof of his 1989 or 1990 income. Under the October 1989 version
of the guidelines, Mr. Turner's monthly gross income would have to have been
approximately $3,230 to justify requiring him to pay $704.13 per month to support
two children. Mr. Turner apparently produced the same evidence of his income
in 1990 that he submitted in 1994. The proof of his income in 1989 and 1990 does
not begin to approach $3,230 a month in gross income. Based on his business's
net profit, the proof indicates that his income was less than $850 per month.


      With regard to the second alternative, the record contains no indication that
the trial court based its decision on its belief that Mr. Turner had understated his
income or that any of his business expenses were actually income. Ms. Turner
suggested at the 1994 hearing that this was the case; however, the 1990 order does
not indicate that the trial court disbelieved Mr. Turner's testimony with regard to
his income. The trial court did not confirm at the 1994 hearing that it had found
Mr. Turner's evidence unbelievable. The present record provides us with no
independent basis for concluding that the trial court took Mr. Turner's credibility
into consideration when it originally set his child support.


      The third alternative is that the trial court could have decided to deviate
from the child support guidelines. The version of the guidelines in existence in
1990 required trial courts to "make a written finding that the application of the
child support guidelines would be unjust or inappropriate." Tenn. Comp. R. &

                                        -8-
Regs. r. 1240-2-4-.02(8) (1989).6 The 1990 order does not contain written
findings that applying the guidelines to Mr. Turner in 1990 would have been
inappropriate or unjust. Without these findings, we can only conclude that the
trial court did not decide to deviate from the guidelines in 1990.


       We have not reviewed the possible rationale for the 1990 order in order to
collaterally question its validity.        This order and the other earlier orders
concerning child support have become final and are the law of the case. Our sole
purpose is to demonstrate that the present record contains no evidence that the
original child support decision resulted from a finding that Mr. Turner was
willfully under-employed or that the facts of the case required deviation from the
guidelines. In the absence of these two circumstances, the evidence indicates that
there is at least a fifteen percent variance between Mr. Turner's current child
support obligation and the amount of his obligation if it were based on the amount
of his present income.


                                             D.


       We hear these cases de novo and are empowered, when necessary, to grant
the parties the relief to which they are entitled under the applicable law and the
facts of the case. See Tenn. R. App. P. 13(b), (d). We cannot, however, grant
relief when the record does not contain sufficient evidence upon which to base a
reasonable decision. Kirchner v. Pritchett, supra, slip op. at 7; McClain v.
Kimbrough Constr. Co., 

, 201 (Tenn. Ct. App. 1990). In cases
where the record indicates that more satisfactory proof can be presented, we have
invoked Tenn. Code Ann. § 27-3-128 (1980) to remand the case for more
satisfactory evidence to enable the trial court to render a more appropriate
decision. Haury and Smith Realty Co. v. Piccadilly Partners, I, 

,
616 (Tenn. Ct. App. 1990).



       6
        The current regulations have preserved and expanded on the requirement of written
findings when a trial court decides to deviate from the guidelines. Tenn. Comp. R. & Regs. r.
1240-2-4-.02(7) (1994).


                                            -9-
      The present record does not contain sufficient evidence to enable us to
determine the amount of Mr. Turner's present income and, therefore, to determine
whether a significant variance exists between the amount of his current child
support obligation and the amount of support that would be required based on his
present income. Accordingly, the denial of Mr. Turner's petition for modification
in his child support must be vacated, and the case must be remanded to decide
these questions. This hearing should not devolve into a collateral attack on the
validity of the August 1990 order or any other order dealing with child support
that is now final. The only purposes for this hearing are to determine Mr. Turner's
present income and then to determine whether a significant variance exists. Ms.
Turner will have the burden of demonstrating which of Mr. Turner's claimed
business expenses should be considered income to him for the purpose of
calculating child support. If there is a significant variance, then the court should
comply with Tenn. Comp. R. & Regs. r. 1240-2-4.-.02(3), unless it makes a
written finding to support deviating from the guidelines.


                                        III.


      Mr. Turner also takes issue with the trial court's refusal to permit him to
visit his children because he is delinquent in paying his child support. While we
are not prepared to say that this sanction is never appropriate, we find that the
present facts do not warrant suspending Mr. Turner's visitation rights.


      Child custody and visitation decisions should be guided by the best interests
of the child. Luke v. Luke, 

, 221 (Tenn. 1983); Contreras v. Ward,

, 289 (Tenn. Ct. App. 1991). They are not intended to be punitive.
Pizzillo v. Pizzillo, 

, 757 (Tenn. Ct. App. 1994); Barnhill v.
Barnhill, 

, 453 (Tenn. Ct. App. 1991). As a general rule, the most
preferable custody arrangement is one which promotes the children's relationships
with both the custodial and noncustodial parent. Rogero v. Pitt, 

,
112 (Tenn. 1988); Pizzillo v. Pizzillo, 884 S.W.2d  at 755.




                                       -10-
       Ms. Turner argues in her brief that the children are adversely affected by
Mr. Turner's failure to support them, and thus their best interests will be served
by cutting off their visitation with their father unless he begins supporting them.
This assertion would have some merit if the record contained proof to substantiate
it. We find no such proof. The record, however, contains some support for
concluding that the children are not going without basic necessities because Ms.
Turner is presently able to provide for their needs.


       The courts may deny or condition continuing visitation on the grounds of
parental neglect. See Mimms v. Mimms, 

, 745 (Tenn. Ct. App.
1989) (parental neglect may be considered in relation to the children's best
interests).   The denial of visitation is warranted, however, only when the
noncustodial parent is financially able to support his or her children but refuses
to do so. Since the trial court has not conclusively determined that Mr. Turner is
at present willfully refusing to support his children even though he is financially
able to do so, we have determined that the order curtailing Mr. Turner's visitation
rights should likewise be vacated and that this issue should likewise be addressed
and definitively decided on remand. Pending the remand hearing, the trial court
should enter an interim order permitting Mr. Turner visitation on whatever terms
the trial court determines are just and appropriate.


                                       IV.


       We vacate the orders denying Mr. Turner's petition for a modification of his
child support obligation and denying him visitation and remand the case for
further proceedings consistent with this opinion. We also tax the costs of this
appeal in equal proportions to Rebecca Diane Turner (Turpin) and to Charles
Daniel Turner and his surety for which execution, if necessary, may issue.


                                        __________________________________
                                        WILLIAM C. KOCH, JR., JUDGE

CONCUR:



                                       -11-
__________________________________
SAMUEL L. LEWIS, JUDGE


__________________________________
BEN H. CANTRELL, JUDGE