PETITION TO REHEAR DENIED. ALIMONY INCREASED IN SUPREME COURT WITHOUT WIFE'S SPECIFIC REQUEST. (Aaron v. Aaron, 10 TFLL 3-1, 20 TAM 46-2, Supreme Court, Nov. 6, 1995, Birch, 3 pp. For publication.) The trial judge, Chancellor Peete, Chancery Court for Shelby County, awarded the divorce to the wife on her counter-petition and divided the marital property. The wife was awarded periodic alimony of $1,500 per month, child support, an attorney fee and certain education expenses. The alimony obligation was protected by an insurance policy. The husband appealed; the Court of Appeals modified the Chancellor's order by capping the periodic alimony award at six years, reversing the order requiring the husband to pay education expenses, and ordering that the wife's attorney fee be paid from the sale of marital property. The wife's petition for permission to appeal was granted; she represented herself in the appeal. The Supreme Court reinstated the order requiring the husband to pay the wife's attorney fee, removed the cap on the alimony award, reinstated the order requiring the husband to pay the wife's education expenses, and increased the periodic alimony award to $2,500 per month. The husband petitioned for rehearing on the increased periodic alimony award. The opinion on the Petition to Rehear confirmed the alimony increase but declined to make it retroactive to the date of the divorce decree, as the wife had requested; the increase became effective on the date of release of the Supreme Court's order.
Comment: The husband argued that it was error for the Supreme Court to increase the periodic alimony when it was not requested by the wife's pleading. He had appealed the Chancellor's periodic alimony award to the Court of Appeals, which had placed the cap on it. The Supreme Court affirmed the increase, noting that (1) the wife's counter-complaint had requested alimony and included a prayer for general relief, (2) her brief in the Supreme Court indicated that the trial court had left her in a dramatically lesser financial situation, and (3) the Tenn. Rules of Appellate Procedure, Rule 13(b), grants the court's discretion to consider issues not presented for review in order to achieve fairness and justice.
THE ALIMONY EXEMPTION OF TCA 26-2-111(1)(E) IS EFFECTIVE ONLY IF CLAIMED IN EACH JUDICIAL PROCEEDING IN WHICH EXECUTION, SEIZURE, OR ATTACHMENT OF ALIMONY IS SOUGHT. (In re Storey, Storey v. Bradford Furniture Co., 10 TFLL 3-2, 20 TAM 50-1, Sup. Ct., Dec. 4, 1995, White, 11 pp.) The bankrupt debtor, Lenore Storey, was divorced from Carl Storey on Feb. 14, 1991; the trial judge awarded her periodic alimony of $2,500 per month. The husband appealed and the Court of Appeals capped the alimony at 36 months, [6 TFLL 5-14, 835 S.W.2d 593 (Tenn. App. 1992) p.a.d. May 5, 1992].
Prior to the divorce Lenore Storey had purchased furniture on credit from Bradford Furniture Company. Bradford sued and was awarded judgment for $33,117.83. Carl Storey was behind on his alimony obligation. On Nov. 20, 1992, Bradford garnisheed Carl Storey. On Jan. 8, 1993, Lenore filed her alimony exemption claim in the Chancery Court.
In Nov. of 1993, Lenore filed a Chapter 7 Petition in Bankruptcy in the Middle District of Tennessee. Two days later Carl paid $10,000 into an escrow account maintained by Lenore's attorney. On Jan. 24, 1994, Lenore filed an exemption claim in the Bankruptcy Court. Both Bradford and the Trustee filed objections to her claim of exemption.
The bankruptcy judge, Judge Lundin, held that Bradford held a valid lien on all unpaid alimony through Feb. 7, 1993, and that, therefore, Bradford had a lien on the $10,000 held by Lenore's attorney because it was due before Feb. 7, 1993. Judge Lundin declined to rule on who had a lien on alimony due between Feb. 7, 1993, and Feb. 23, 1994. A Certified Question was directed to the Tennessee Supreme Court asking whether it was necessary to file an exemption claim in each judicial proceeding in which the debtor wants protection or if a single exemption claim is effective as to all subsequent attempts to effect collection. The appellate opinion held that the alimony exemption of TCA 26-2-111(1)(E) is effective only if claimed in each judicial proceeding in which execution, seizure, or attachment is sought.
Comment: The U.S. Bankruptcy Code, 11 USC 522(b)(1), allows a debtor to claim either state or federal exemptions unless the state has elected to opt out of the federal scheme. Tennessee has elected to opt out, so the only exemption a Tennessee debtor may claim is that provided by state law. In 1980, an alimony exemption was added to the statute, TCA 26-2-111(1)(E), which provides that a bona fide Tennessee citizen residing permanently in the state may exempt the right to receive alimony to the extent the payment becomes due more than thirty days after the claim of exemption is asserted in any judicial proceeding. The ambiguity is not explained by the legislative history of the amendment. The opinion concluded that the legislative intent is accomplished only if the provision is read to require that the exemption be claimed in each judicial proceeding where protection is sought, otherwise it would exempt claims without notice to creditors.
When an alimony recipient files a Bankruptcy Petition under Chapter Seven, the alimony arrearages will belong to the Trustee. An exemption claim should be filed with the petition to avoid the loss of further payments on alimony arrearages.
TENNESSEE FAMILY LAW LETTER (ISSN 0890-5355) is published monthly for $80 per year plus sales tax by M. Lee Smith Publishers & Printers LLC, 162 4th Avenue, North, P.O. Box 198867, Nashville, TN 37219-8867, 615/248-5902. Copyright 1996 W. Walton Garrett.
Note: If you have inquiries or comments concerning Tennessee Family Law Letter, you may contact: W. Walton Garrett, P.O. Box 911, Lake Junaluska, N.C. 28745 (704) 452-0230.
TENNESSEE FAMILY LAW LETTER provides full copies of court opinions, General Assembly acts, and other materials for 70¢ per page. Call (615) 248-5902 for information or to order.
We send copies by first-class mail or overnight courier the day we receive your order. We also send copies by fax transmission within the hour when you need them right away. Local fax transmission is available at no additional charge. The long distance fax transmission fee is $3.00 per case in addition to the 70¢ per page charge.