Facts: Husband and Wife divorced after 22 years of marriage.
During the last eight years of marriage, they jointly owned and operated a durable medical supplies company. Prior to starting the company, Wife worked as an elementary school teacher.
Both parties contributed to the company’s success. While Husband was responsible for the financial aspects of the business, Wife was the “face” of the company, focusing on marketing and networking.
After their separation, there were periods of time where the trial court put Husband solely in charge of the company and periods of time where Wife was solely in charge of the company.
After hearing the proof, the trial court awarded the company to Husband, specifically finding that the best prospect for successful operation of the company lies in the hands of Husband.
The marital estate was divided 51.8% to Husband and 48.2% to Wife.
The trial court also awarded Wife rehabilitative alimony followed by alimony in futuro.
On Appeal: the Court of Appeals affirmed the trial court.
Husband argued Wife is not economically disadvantaged.
“Economically disadvantaged” is a legal term of art. Its meaning is reflected in Tennessee’s alimony statute, Tennessee Code Annotated § 36-5-121(c)(1), which states, in pertinent part:
Spouses have traditionally strengthened the family unit through private arrangements whereby one (1) spouse focuses on nurturing the personal side of the marriage, including the care and nurturing of the children, while the other spouse focuses primarily on building the economic strength of the family unit. This arrangement often results in economic detriment to the spouse who subordinated such spouse’s own personal career for the benefit of the marriage.
Tennessee Code Annotated § 36-5-121(c)(2) further describes the “economically disadvantaged spouse” as one who “suffers economic detriment for the benefit of the marriage.”
In McKee v. McKee, the trial court explained the meaning of “economically disadvantaged” as follows:
[Husband] also requests alimony on the basis that he is economically disadvantaged because [Wife] earns more money. That is not is what is meant by economically disadvantaged. The legislature sets forth the policy basis for alimony in T.C.A. § 36-5-121(c)(1). . . .
In essence, a homemaker who sacrifices career opportunities for the marriage suffers a relative economic disadvantage. . . . [Husband] did not subordinate his career for the benefit of the marriage. Since he suffered no relative economic disadvantages, alimony is inappropriate.
The McKee Court affirmed the trial court’s ruling, stating, “[A]lthough [Husband] did make contributions as a parent, he did not suffer the ‘economic detriment’ described under T.C.A. § 36-5-121(c) by subordinating his career in order to make contributions as a homemaker or parent.”
If a court finds a spouse is not “economically disadvantaged,” then that spouse is not entitled to alimony and the court’s inquiry goes no further. Thus, before considering the statutory factors for alimony, Tennessee courts must first make the threshold finding that a party is “economically disadvantaged” as that term of art has been interpreted by Tennessee’s appellate courts.
Here, the Court found Wife is economically disadvantaged because she sacrificed her earning capacity to increase Husband’s:
On this record, we find no error in the court’s determination that Wife was relatively economically disadvantaged. . . . Since 2009, Husband and Wife devoted all their time and energy to [the company]. Both parties contributed to [the company’s] financial success, which allowed them to enjoy a high standard of living. The court divided the marital estate essentially equally but awarded [the company], the only income-producing asset, to Husband. Without the business she helped to build, Wife will be forced to start anew while Husband enjoys greater economic potential. Husband’s higher earning capacity postdivorce can be directly linked to Wife’s efforts to establish and grow the business.
Thus, the trial court’s judgment was affirmed.
Information provided by K.O. Herston: Knoxville, Tennessee Divorce and Family-Law Attorney.