Schwager v. Messer - 2019 - Father's True Income for Support; Personal Expenses Run Through Business

ANDREA (MESSER) SCHWAGER v. TIMOTHY SCOTT MESSER
Appeal from the Circuit Court for Shelby County
No. CT-004762-08, Jerry Stokes, Judge
IN THE COURT OF APPEALS OF TENNESSEE AT JACKSON
June 18, 2019 Session
Appeal No. W2018-01820-COA-R3-CV
Filed 9/27/2019

Robert Vance testified as a forensic CPA in this bench trial.

This case was post-divorce action concerning modification of the Father’s child support obligation with the major issue being his true income for support. The Messers were Divorced in 2009 and the Permanent Parenting Plan (“PPP”) provided that Father was to pay to Mother $1,000.00 per month in child support, beginning on February 1, 2009. The parties agreed that this amount was a downward deviation to allow Father two years to pay a greater share of his income toward the marital debt.

The PPP went to state that upon the conclusion of two years from the date of entry of the Final Decree of Divorce, the parties shall exchange their financial information and proof of income, and the child support shall be recalculated. Mother filed a petition to modify child support in 2015 asking the trial court to modify the child support award from February 2011 forward (i.e., a retroactive C.S. award). Father claimed in his discovery responses that his income was approximately $10,000 per month, but personal expenses were over $22,000.

We reviewed detailed general ledger, bank statements, credit card statements & tax returns and found over $1.9m of personal expenses run through the books which were claimed as business expenses. Items listed in the appellate decision included private school tuition, vacations, payment to his then wife [E.M.], attorney fees incurred in the divorce, child psychologist expenses, student loans, personal medical bills, country club, fitness club, judo lessons, massages, jewelry, and house furnishings. The trial court stated: “The number of entries misclassified became quite contentious to the point that the case turned into the ‘battle of the experts.”

Father argued that the Trial Court erred by declining to strike Vance’s testimony concerning the “advertising” expenses related to Father’s truck-pulling business that was truly his hobby and Vance was not qualified in this area. Most of the truck-pulling events were held in other states. Vance added approximately $500,000 to Father’s income for the years 2009-2016 from the “advertising” spent on this hobby and expensed as if a legitimate business expense. The Trial Court found that from February, 2009 through February, 2011, Father’s monthly income for modification purposes was approximately $40,000 per month and May, 2015 to present, Father’s income was approximately $45,000 per month.

Concerning the expert testimony of Vance, the decision cites the TN Supreme Court: “the admissibility of expert opinion testimony is a matter which largely rests within the sound discretion of the trial court.” “Generally, questions regarding the admissibility, qualifications, relevancy and competency of an expert’s testimony are left to the discretion of the trial court. McDaniel v. CSX Transportation, Inc., 955 S.W.2d 257, 263 (Tenn. 1997). Pursuant to Tenn. R. Evid. 703, a trial court must disallow testimony in the form of opinion or inference when the underlying facts or data indicate a lack of trustworthiness. Seffernick v. Saint Thomas Hosp., 969 S.W.2d 391, 393 (Tenn. 1998).

The Appellate Court determined that the Trial Court did not abuse its discretion in finding Vance’s testimony concerning Father’s income and expenses and “appropriate business expenses” to be credible. “Mr. Vance’s specialized knowledge “substantially assist[ed] the trier of fact to understand the evidence or to determine a fact in issue.”

“Mr. Vance’s testimony was based upon facts and data “made known to the expert at or before the hearing” and were “of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject.” See Tenn. R. Evid. 703.

“We conclude that Mr. Vance’s opinion was not based on underlying facts or data that indicated a lack of trustworthiness. See id. The Appellate Court affirmed the trial court’s reliance on Vance’s testimony in reaching its determination concerning Father’s true income for child support purposes.”