TN Father to Pay $10K for Not Filing Jt. Tax Return + $3.5K Atty Fees
Tennessee law case summary on after divorce enforcement in family law from the Court of Appeals.
Deanna Lynne Dodd v. Michael Thomas Dodd – TN Post-divorce Enforcement of MDA
The mother, Deanna Lynne Dodd, filed for divorce from the father, Michael Thomas Dodd, in December 2009. They were married for approximately 10 years and had one minor child. The father was a Certified Public Accountant. The mother worked as a nurse practitioner during the marriage but quit to work for herself as a realtor and interior designer. During the marriage, the father always prepared the couple’s joint tax return.
In August 2010, the court granted a Temporary Order on issues of support and parenting. The Temporary Order also contained a decision by the court regarding tax filing. The court could not require the couple to file their income tax returns jointly. Instead, the court ruled that if either party decided to file separately, each party’s income, expenses and deductions would be calculated for filing jointly and separately and in the case of a disparity, the person who filed separately was required to pay the other party.
Despite this, the father refused to give the mother a joint tax return for their 2009 taxes. As a result, the mother hired her own accountant and filed an individual tax return. She was required by the IRS to pay more than $10,300 in additional taxes as a result of filing as an individual.
Prior to the divorce hearing, the parties signed a Marital Dissolution Agreement (MDA) which stated that they would file an amended 1040 tax return for 2009 and any refund would be given to the mother. A final divorce decree was granted in March 2011.
The father refused to abide by the conditions of the divorce agreement. The father failed to pay his March 2011 mortgage payment, his share of their child’s school fees and medical bills and refused to provide the 2009 tax returns to the court. The mother filed a Petition for Civil Contempt in May 2011 because of the father’s failure to fulfill these obligations. By the time of the hearing, the trial court found that the father had paid most of his financial obligations, but required him to pay the tax liability and the mother’s legal fees of $3,500. The father appealed this decision.
Tennessee father in breach of the MDA
The father’s primary claim on appeal was that the trial court erred in holding him in civil contempt for not fulfilling his financial obligations according to the MDA. He argued that the court’s decision to hold him in contempt was based on allegations by the wife’s lawyer and not supported by any testimony or evidence. He further argued that based on the language of the MDA, which did not use the word “joint” in reference to the tax returns, he had no obligation to turn his files over to the court.
The Appeals court disagreed, explaining that the MDA is an actual, binding contract between the parties. The MDA is therefore enforceable like all other contracts, and it is the court’s role to ensure that the parties’ intentions are understood clearly and the contract enacted. The Appeals court agreed with the lower court that the MDA clearly stated that the parties would file a joint tax return for 2009. By using the word “tax return”, the MDA indicated only one return was required. If the intention of the MDA (and the parties) was for two separate returns to be filed, the words “tax returns”, indicating more than one, would have appeared. It was therefore understood that only one return was required. In the event that the language was unclear, it was the role of the court to interpret the meaning of the agreement based on all of the documentation and evidence in the case. The Appeals court agreed with the lower court that all of this outside documentation showed that the intent was for the father to provide one joint tax return. The father was required to pay the mother’s added tax expenses and legal fees.
No. M2011-02147-COA-R3-CV (Tenn. Ct. App. Aug. 6, 2012)
See original opinion for exact language. Legal citations omitted.
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