Tennessee Husband Awarded $61,000 in Attorney’s Fees Sanctions

Tennessee law case summary on sanctions and attorney’s fees in Tennessee divorce and family law from the Tennessee Court of Appeals.

RODNEY W. SCHUTT v. JODIE ANN MILLER (SCHUTT)

Rodney W. Schutt , the husband, and Jodie Ann Miller (Schutt), the wife, were married in 1990 and had one daughter, born in 1993.  The husband filed for divorce in October 2007.

The parties participated in mediation on October 8, 2008 which resulted in a Mediation Agreement.

The Mediation Agreement signed by the parties listed their investment accounts and provided that their IRA accounts would be divided evenly between them,  the husband was to pay the wife $3,600 per month in alimony for five years and once the marital home was sold, the alimony was to increase to $4,000 per month.  Also, the wife received a sum of $55,000 upon the sale of the marital home.  After the mediation, the parties’ attorneys started drafting a marital dissolution agreement (MDA) that would incorporate the terms of the Mediation Agreement.

At the time the mediation agreement was signed, the husband was unemployed.  A month later, the husband received a job offer that included a base salary of $225,000 per year plus stock options.  On November 17, 2008 he began work.  He did not immediately tell Wife that he had secured employment.  An MDA was signed and a final decree entered on November 20, 2008.

At this point, a long-term court battle began, in which the wife attempted to have the MDA revoked because the husband had withheld information from her about his new job.  The wife filed a motion to alter and amend the final decree of divorce.  Her motion said that the husband had failed to disclose to her the terms of his new employment, that his base salary of $225,000 per year would affect his alimony payment and that she was entitled to half of the stock options.  Soon after, the investments listed in the mediation agreement and MDA were disbursed and the value of these investments had dropped from the time of the initial agreement.   Soon after, the husband’s new job ended since the company was not able to pay salaries.  The husband received only two months of salary and no stock options.

In total, the wife filed over 83 post-divorce requests to the court, asking simultaneously that the MDA be set aside and enforced.  In September 2009, the husband filed a request for sanctions against the wife.  The husband argued that the wife’s efforts to have the MDA set aside had no basis in fact and were done for an improper purpose.

In January 2011, the trial court gave an oral ruling against setting aside the MDA and awarded the husband more than $61,000 in fees as sanctions, in accordance with Rule 11 of the Tennessee Rules of Civil Procedure.   The trial court held that the wife had all the information she could reasonably have acquired regarding the husband’s assets.   The court also ruled that the wife should reasonably have known that the husband was looking for work, but also that the husband had no obligation to tell her about his new employment since it began after the MDA was signed.  The court also found her motions contradictory, at times asking that the MDA be implemented and at others asking for its revocation.  In the written ruling two months later, the court held that the husband had met the burden of proof required under Rule 11 and that the wife had no information, knowledge or evidence on which to base her allegations.

The Court of Appeals

Rule 11.02 of the Tennessee Rules of Procedure requires that when a pleading or motion is filed (in this case, the wife’s request to revoke the MDA), the person filing the motion, is not doing so to harass the other party or cause delays in the litigation or increases in costs and that the allegations and facts in the pleading or motion, are based on evidence or are likely to have evidential support after a reasonable inquiry is made.   Rule 11.03 permits the court to impose sanctions on the attorneys or the parties if the court determines that 11.02 has been violated, and must include the specific conduct that caused the violation.

The wife argued that the husband’s request to impose sanctions on her did not describe the specific conduct which violated Rule 11.02.  The appeals court disagreed and held that the motion did describe the specific conduct.  The motion said that the wife had not evidentiary support for her claim.  The motion was filed on the same day the wife testified that she could not find any assets belonging to the husband which had not been disclosed to her prior to the mediation.  The motion also said that the wife’s motion was filed in order to harass the husband and increase his legal costs.

No. W2010-02313-COA-R3-CV (Tenn. Ct. App. Sep. 27, 2012).

See original opinion for exact language.  Legal citations omitted.

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