Blount v. Blount

1

HEATHER DANIELLE RADER BLOUNT v. JAMES EDWARD BLOUNT

No. W2022-01722-COA-R3-CV

Court of Appeals of Tennessee, Jackson

November 5, 2024

Session April 9, 2024

Appeal from the Circuit Court for Shelby County No. CT-005694-18 Yolanda Kight Brown, Judge

This is an appeal from a three-day divorce trial in which both parties presented expert testimony regarding how to calculate the husband's income for purposes of paying support. The husband raises nine issues on appeal regarding proof of marital fault, the valuation of marital property, and the alimony and attorney fees awarded to the wife. For the following reasons, we vacate in part and affirm the decision of the trial court as modified.

Tenn R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Vacated in Part, Affirmed as Modified, and Remanded

Rex L Brasher, Memphis, Tennessee, for the appellant, James Edward Blount.

Lori R. Holyfield, Munford, Tennessee, for the appellee, Heather Danielle Blount.

CARMA DENNIS MCGEE, J., delivered the opinion of the court, in which ANDY D. BENNETT, J., and J. STEVEN STAFFORD, P.J. W.S., joined.

OPINION

CARMA DENNIS MCGEE, JUDGE

I. FACTS & PROCEDURAL HISTORY

James Edward Blount ("Husband") and Heather Danielle Blount ("Wife") married in 1999, when both parties were 27 years old. Wife had a master's degree in education and a minor in psychology, and she had been teaching at a public elementary school in Memphis. Husband had a law degree and was working with his father, who was also an attorney, at the Blount Law Firm, a general litigation and personal injury practice started by Husband's grandfather. Wife continued working as a teacher for the first year of the marriage but then quit working when she became pregnant with the parties' first child. The parties would ultimately have three sons born during the marriage, in 2001, 2002, and 2004, and Wife was a homemaker during that period of time. In 2005, the parties purchased a home for $398,000. In 2006, Wife went back to work as a teacher at the private Christian school where the parties' oldest son was attending. Wife's salary averaged around $30,000, but her employment greatly benefitted the family because she received a fifty percent discount off private school tuition for the three children and provided health insurance for the family.

Around the same timeframe when Wife went back to work in 2006, Husband's father decided to move the Blount Law Firm's office from Memphis to Collierville. He purchased an old farmhouse in Collierville that needed renovation. This move would ultimately have a negative impact on the law practice. Due to unforeseen expenses and delays with the renovation, and the lack of a client base in Collierville, the firm's business decreased after the move. Husband and Wife refinanced their mortgage loan for $400,000 and began making interest-only payments. Around 2009 or 2010, Husband's father realized that the move was a mistake and put the building on the market, where it would remain for nearly a decade. Husband's father died in 2011. The bank note on the Collierville property led to additional financial struggles for Husband thereafter. The lender threatened to foreclose if Husband did not refinance. He was eventually able to obtain financing through another bank, but then he had "a huge note" on the property. In addition, the ongoing expenses to maintain the property were very high. The Collierville property remained on the market throughout this time, with Husband hoping to keep it out of foreclosure until he could find a buyer. For several years during this timeframe, Husband and Wife did not pay income taxes to the Internal Revenue Service, as they used the money to pay the office and household expenses instead.

The parties' financial situation got even worse around 2017, when their period of making interest-only payments on their mortgage ended and the principal payments "kick[ed] in." The interest-only payments had been about $1,375 per month, and the new payment amount was around $3,400 per month. In addition, the annual tuition per student at the children's private high school (prior to any discount) was over $17,000. Husband suggested that the parties send the children to a nearby public school to relieve some of the financial burden on the family, but Wife refused. Their oldest son began his senior year of high school in August 2018.

Also in August 2018, Wife began having an affair with an old friend from grade school with whom she had recently reconnected via social media. She began traveling to Knoxville to stay with her paramour, while telling Husband that she was going to visit family members there. Eventually, however, Husband discovered Wife's affair. Wife informed Husband of her desire to get a divorce and stated that the primary reason she wanted a divorce was due to their financial issues. Husband was offered a job at a bigger law firm during this period and decided to take the job in an effort to save his marriage, given that he had been unable to sell the Collierville building and was struggling financially. Husband did very minimal work for the new firm in late 2018 but would "really start[]" in January 2019. On December 20, 2018, however, after nineteen years of marriage, Wife filed a complaint for divorce, alleging inappropriate marital conduct and irreconcilable differences. She sought to be named primary residential parent and asked that Husband be ordered to pay child support and alimony. One week later, on December 31, 2018, Husband finally sold the office building in Collierville.

In January 2019, Husband began working for the other law firm with a special arrangement that permitted him to continue operating the Blount Law Firm. The Blount Law Firm no longer had a physical office, but Husband maintained all of the state filings for the PLLC, maintained the firm's website and phone number, and continued advertising. Husband's contract with the other firm provided that his percentages of the total fees recovered on cases differed based on whether the case was brought in through his own efforts or through the other firm. Husband would receive a larger percentage on cases that he brought in through the Blount Law Firm. In addition, he was permitted to keep cases that originated with the Blount Law Firm before he joined the other firm, so he designated certain cases as exclusively belonging to the Blount Law Firm. Husband worked on those cases as he saw fit and did not have to pay the other firm any of the fees he recovered on those designated cases.

Wife had remained employed as a teacher at the private Christian school where the parties' children attended for the past thirteen years, but it was a violation of the school's code of conduct for her to file for divorce. The crux of the issue was whether Wife had an inappropriate relationship with someone. After a meeting, she and the school administrators came to a "mutual decision" that she would not return for the next school year. Thus, Wife ended her employment at the school in May 2019. In addition to losing Wife's annual salary of $33,378, the family also lost the tuition discount and their health insurance. Beginning in March 2019, however, Husband began receiving attorney fees from the resolution of two large class action lawsuits that he had been working on for many years, which he had retained as cases belonging exclusively to the Blount Law Firm. For one of those cases, Husband received $288,404 in attorney fees (received in three payments over two years). For the second case, he received $421,863 in attorney fees and expenses.

In the meantime, Husband filed an answer and counter-complaint for divorce, asserting irreconcilable differences and that Wife was guilty of inappropriate marital conduct and adultery. He sought to be named primary residential parent and requested an award of alimony. Wife filed a motion for pendente lite alimony, child support, and attorney fees. In December 2019, a consent order was entered providing that Husband would continue to pay all household expenses that he had traditionally paid, which encompassed everything except the water bill for the marital home. The order stated that Husband was now also paying for health insurance for the family. Husband, Wife, and the parties' children continued to reside in the marital home throughout this period, with Husband living in the playroom. Another consent order was entered, which stated that the parties would take the necessary steps for the children to continue attending the private Christian school and pay the tuition with marital funds. According to Husband, the Blount Law Firm received the proceeds from the sale of the Collierville office building in 2019, totaling around $280,000, which, combined with the class action fees, enabled him to pay for the tuition and all of these expenses for the family.

In August 2019, Wife began working at another private school, where she was paid around $30,000 per year. When the Covid-19 pandemic began in early 2020, the school transitioned to online classes. According to Wife, she was not sure what was going to happen for the fall semester and started to reevaluate her options during the summer. Wife decided that the insurance industry was "a good path" and became licensed to sell various types of insurance. In October 2020, she began working at State Farm.

In November 2020, Wife filed a motion for injunctive relief asking the trial court to remove Husband from the marital residence and award her exclusive use of it, noting increased tension in the home and that Husband was in a romantic relationship as well. Although Husband initially opposed the motion, he agreed to vacate the marital residence by December 1, 2020. ...