McKee v. McKee

Facts:  The parties were married 26 years and have two children (now adults).  Wife, a pediatric dentist, earned an average annual income of $524,280 in the five years preceding the divorce as compared to Husband’s $81,362 as a banker.  The trial court valued Wife’s dental practice at $97,200 instead of the $460,000 urged by Husband.  The trial court then divided the marital estate 75% to Wife, 25% to Husband.  Finally, the trial court denied Husband’s request for alimony in futuro.  Husband appealed.

The Court of Appeals affirmed the trial court.

Regarding valuation of Wife’s dental practice, the Court began by acknowledging that “professional good will is not a marital asset which would be accounted for in making an equitable distribution of the marital estate.”  The issue turned on the classification of patient records: were they professional goodwill or business goodwill?

While [Wife’s expert] and [Husband’s expert] agree that it is inappropriate to consider personal goodwill in valuing a business for divorce purposes, they differ in their categorization of patient files.  [Wife’s expert] believes patient files fall under the category of personal goodwill and therefore should not be considered for valuation purposes.  [Husband’s expert], on the other hand, believes that patient files are a separate asset from goodwill.

After noting that a trial court’s valuation is to be given “great weight” on appeal, the Court concluded the trial court’s finding was within the range of reasonableness and was supported by the preponderance of the evidence.

Regarding the seemingly lopsided division of the marital estate, the Court noted the parties deposited their respective earnings in separate accounts and placed great emphasis on Wife’s lopsided contribution to the acquisition of the marital estate.

Wife contributed $16,000 or $17,000 to the purchase of the parties’ marital home from her separate pre-marital savings in 1983.  Wife also paid the mortgage and insurance on the home from her earnings, as well as $160,000 in improvements to the home, including a 1,000 square foot addition, a garden shed, landscaping, an irrigation system, a remodel of three bathrooms, and furnishings.  Wife claims that Husband made no financial contribution to the marital home other than being a co-signer on the loan.

The parties’ vacation home in Sewanee, Tennessee was also purchased solely by Wife for $850,000 in 2002.  Wife paid $125,000 for the down payment and closing costs on the home from her earnings.  Husband co-signed on the loan.  Wife was also responsible for making the mortgage and insurance payments on the Sewanee residence, which totaled $375,000 during the entirety of the marriage. . . .

Wife claims that she exclusively paid for the children’s preschool, aftercare, private school tuition, books, clothing, cell phones, gas, uniforms, vehicles, activity fees, insurance, college tuition, and all miscellaneous expenses. Husband asserted that he also supported the children financially, such as the time [Child] ran out of money during a trip to New Orleans and Husband deposited $500 into his account. [Child] testified that Husband supported him in the form of “[c]ash, spending money, enough to get breakfast in the morning on the way to school and grab lunch.” He estimated that amounted to approximately $50 per week.

The trial summarized its rationale as follows:

[Wife] built her business, paid the vast majority of all expenses, provided most of the care for the children and saved her money. [Husband] pursued his career, played, partied and failed to account for his earnings. Under those circumstances, an equal division of the property is not equitable.

The Court of Appeals agreed, stating:

An equal division of marital property is appropriate when an evaluation of the factors in Tenn. Code Ann. § 36-4-121(c) show that the parties are approximately equally situated.  In this instance, it is difficult to imagine a marriage where the statutory factors weighed more heavily on one side.  Wife was both the primary wage earner and the primary caregiver.  She paid the mortgages and insurance on both homes, tuition for private schools, and other major expenses.  Husband maintains that he gave the children some spending money, provided health insurance for the family, and took the children biking and hunting.  These are laudable actions but quite minor in the context of a 26-year marriage.

Regarding alimony, the Court acknowledged the large income disparity between the parties but concluded,

Husband did not suffer “economic detriment” of the kind described in Tenn. Code Ann. § 36-5-121(c)(1) in that he did not subordinate his career in order to focus on “nurturing the personal side of the marriage” or to build “the economic strength of the family unit.”   Husband’s choosing of a career that provides substantial income, but not as substantial as that of Wife, is not a basis for finding an economic disadvantage. . . .

Husband contributed comparatively little to the marital estate financially, and although he did make contributions as a parent, he did not suffer the “economic detriment” described under Tenn. Code Ann. § 36-5-121(c) by subordinating his career in order to make contributions as a homemaker or parent. Husband’s actions also played a significant role in the demise of the marriage. Under these circumstances, we affirm the trial court’s denial of alimony to Husband.

McKee v. McKee (Tenn. Ct. App. Aug. 17, 2010).

Information provided by K.O. Herston, Tennessee Divorce Lawyer.

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K.O. Herston is a family-law attorney in Knoxville, Tennessee whose practice is devoted exclusively to family law, including divorce, child custody, child support, alimony, prenuptial agreements, and other aspects of family law.

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