Lawyer Not Voluntarily Underemployed for Purpose of Alimony Calculation

The husband and wife in this Shelby County, Tennessee, case married in 1999.  The wife had been a teacher in Memphis, and the husband had a law degree and worked with his father in a litigation practice.  They had three children.

The couple’s financial situation soured around 2017, and the next year, the wife began an affair with an old friend from grade school.  The wife filed for divorce in 2018.  The next year, the husband began working for another firm, but had an arrangement by which he continued to operate his former firm.    One large case concluded, and over the course of two years, the husband received $288,000 in fees, and in another case, he received $421,000 in fees.  He was also able to sell a building owned by his firm and received proceeds of about $280,000.

The three-day trial took place in 2001, and a primary issue in the case was the husband’s income.

Shortly before trial, the husband ended his employment with the other firm, explaining that the environment was miserable.  It was a high-volume firm, and he was not accustomed to such a practice.  His workload was so heavy that he feared he would commit legal malpractice.

The husband explained that the two large cases from which he received fees were ones that he had worked on for many years.

The wife had employed an expert witness, Michael Pascal, a certified valuation analyst, to report on the husband’s income for support purposes.  He set the income as being attributable to recent years, and averaged those amounts.  Ultimately, he pegged the husband’s income at about $347,000 per year.

The husband’s expert, Cynthia MacAulay, CPA, set the income much lower, since the she spread the two large cases over a longer period of time.  Ultimately, she set his average income at about $201,000 per year.

The trial court held that it was not appropriate to average the fees over the lifetime of the case.   It settled on a five-year average of income of $255,000.  It used this figure in property division and support calculations. After lengthy post-trial proceedings, the husband appealed to the Tennessee Court of Appeals.

After addressing fault and property division issues, the court turned to the husband’s income.  The lower court had essentially found the husband to be voluntarily underemployed, and the husband contested this finding.  The appeals court agreed with the husband.  He had worked for his father’s firm for many years throughout the marriage, and only went to work for the other firm during a period of financial crisis.  His income at the new firm had already fallen off, he had to commute 140 miles each workday, and he was unfamiliar with much of the work.  Overall, the Court of Appeals found these to be objectively reasonable reasons for leaving that job.

Since the lower court had imputed income to determine alimony and support, the Court of Appeals concluded that that portion of the lower court’s judgment would need to be vacated.

After addressing the other issues in the case, the Court of Appeals vacated and modified the lower court’s judgment, and affirmed in part.

No. W2022-01722-COA-R3-CV (Tenn. Ct. App. Nov. 5, 2024).

See original opinion for exact language.  Legal citations omitted.

To learn more, see Alimony Law in Tennessee, and our video, How is alimony decided in Tennessee?