Wife Receives $1.1 Million Alimony in Solido in TN Divorce
Tennessee alimony law case summary following 18 years of marriage. Divorce and alimony law from the Tennessee Court of Appeals.
AMY RUDD HALLIDAY v. TODD ERIC HALLIDAY – Tennessee Business Valuation and Alimony Law
This appeal deals with the valuation of a business and its impact on determining alimony.
Amy Rudd Halliday, the wife, and Todd Eric Halliday, the husband, were married in June 1992 and had two children. The wife filed for divorce in May 2009 and in January 2011, after almost 19 years of marriage, the court entered a divorce decree. The court found the husband’s monthly income to be $50,000; the wife earned nothing. The wife was awarded 28% of the marital property, $1.1 million in alimony in solido and $2,500 in alimony in futuro. The husband appealed the trial court’s valuation of his business, which resulted in the $1.1 million alimony award, and claimed that the court abused its discretion when it gave the award of alimony in futuro.
The appeals court first addressed the issue of valuating the business. The husband owned six businesses, all in the area of real estate. The husband argued that the court erred in the valuation of the businesses because the discounts applied for lack of control and lack of marketability were not high enough. The court relied on three expert witnesses, Robert E. Yates II, David C. Wood, and Kurt A. Myers, all certified public accountants. These experts explained that a discount for lack of control is given when there is a partnership in a business and the minority owner has less control, making his or her interests in the business worth less. Mr. Yates explained that a discount for lack of marketability relates to how quickly an owner’s interest in the business can be converted to cash if that owner sells his interest. The experts valued each of the six businesses, determined whether or not there should be a lack of control or lack of marketability discount and the amount of the discount if applicable. The court’s decisions regarding these two types of discounts fell within the range provided by the experts. The appeal on the issue of the valuation of the businesses was denied.
The husband further claimed on appeal that $2,500 per month in alimony in futuro was inappropriate since the wife could be rehabilitated and there was no economic disadvantage. The lower court found that prior to the divorce, the family depended on an after-tax income of $8,000 a month, and also enjoyed vacations, gambling trips and membership in a country club and contributed to charities. While the husband had the businesses, as a result of the divorce the wife’s earnings dropped to $48,000 a year as a school teacher plus $4,000 a month of rental income and $3,800 in child support, giving her a gross income of $11,200 a month. The wife testified that monthly expenses for her and the children came to over $14,000 a month. As a result, the court correctly found that the wife’s earning capacity did not enable her to achieve a standard of living comparable to the one she had prior to the divorce or comparable to the husband’s post-divorce standard of living.
No. M2011-01892-COA-R3-CV (Tenn. Ct. App. Dec. 6, 2012).
See original opinion for exact language. Legal citations omitted.
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