Patsy Oakley v. James Oakley ( 2001 )

IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
June 19, 2001 Session
PATSY HILL OAKLEY v. JAMES SPENCER OAKLEY
Direct Appeal from the Circuit Court for Shelby County
No. 157480 R.D. George H. Brown, Jr., Judge
No. W2000-02033-COA-R3-CV - Filed August 10, 2001
This appeal arises from a divorce action. Husband and Wife divorced after 22 years of marriage.
Both had received property by bequest during the marriage. Husband had received stocks and
securities, real property, and Company, which he owned and operated. Wife received property which
she subsequently sold. The proceeds of these sales were deposited in a separate investment account
after first passing through a marital checking account and were later used to buy Condo. The trial
court specifically found that Wife had not substantially contributed to appreciation of stocks and
securities, but awarded her 25% of their appreciation. The appreciation of Husband’s real property
was found to be marital property, as well as the entire value of Company. Wife’s Condo was found
to be separate property. We affirm in part, reverse in part, modify and remand.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court is Affirmed in part;
Reversed in part; Modified; and Remanded
DAVID R. FARMER , J., delivered the opinion of the court, in which W. FRANK CRAWFORD , P.J., W.S.,
and HOLLY K. LILLARD, J., joined.
David E. Caywood and Cynthia L. McLendon, Memphis, Tennessee, for the appellant, James
Spencer Oakley.
James O. Parker and Sam Blaiss, Memphis, Tennessee, for the appellee, Patsy Hill Oakley.
OPINION
In 1997, Patsy Oakley filed a Complaint for Divorce against James Oakley, her husband
of twenty-two years. Ms. Oakley had been a homemaker for the duration of the marriage, though
she was involved in the buying and selling of antiques on an irregular basis. Mr. Oakley was the
owner and operator of Oakley Frames, a framing business. The couple had two children, one
being a minor at the time of the divorce.
At the time the Complaint for Divorce was filed, the couple owned various assets. In
addition to Oakley Frames, Mr. Oakley owned a substantial stock portfolio and two residential
properties. Mr. Oakley had inherited most of these assets in 1986 upon the death of his mother.1
Ms. Oakley owned a condominium in Florida. This property had been purchased in July, 1997,
with money from a Merrill Lynch account. This account contained funds Ms. Oakley had
inherited from her mother and aunt. However, Ms. Oakley had made a down payment for her
condo from Merrill Lynch funds which she initially placed into a joint marital checking account.
The trial court found that the appreciation of Mr. Oakley’s two residential properties and
Oakley Framers were marital property. In addition, the court found Ms. Oakley was entitled to
25% of the appreciation of her husband’s stock portfolio. Ms. Oakley was awarded her Florida
condominium as separate property. In addition, Ms. Oakley was awarded $375 per month in
alimony in futuro, $1000 per month for 48 months as rehabilitative alimony, and $65,000 in
alimony in solido. This appeal followed.
The issues, as we perceive them, are as follows:
I. Did the trial court err in awarding Ms. Oakley both alimony in futuro,
rehabilitative alimony and alimony in solido of $65,000?
II. Did the trial court err in its division of marital property through its award
to Ms. Oakley of 25% of Mr. Oakley’s stocks and securities, its
classification of the appreciation of several real properties in Memphis and
Oakley Framers in its entirety as marital property, and its finding that a
Florida condominium recently purchased by Ms. Oakley was separate
property?
To the extent that these issues involve questions of fact, our review of the trial court’s
ruling is de novo with a presumption of correctness. See Tenn. R. App. P. 13(d). Accordingly,
we may not reverse the court’s factual findings unless they are contrary to the preponderance of
the evidence. See, e.g., Randolph v. Randolph, 937 S.W.2d 815, 819 (Tenn. 1996); Tenn. R.
App. P. 13(d). With respect to the court’s legal conclusions, however, our review is de novo
with no presumption of correctness. See, e.g., Bell ex rel. Snyder v. Icard, Merrill, Cullis,
Timm, Furen and Ginsburg, P.A., 986 S.W.2d 550, 554 (Tenn. 1999); Tenn. R. App. P. 13(d).
Alimony Award
If an award of rehabilitative alimony is justified by the parties'
circumstances, a trial court initially should award rehabilitative alimony only. An
award of rehabilitative alimony pursuant to Tenn. Code Ann. § 36-5-101 must be
1
Mr. Oakley’s mother gifted Oakley Frames to him six months before her death.
-2-
predicated upon a finding that the recipient can be economically rehabilitated.
Once awarded, rehabilitative alimony may be modified if the recipient's prospects
for economic rehabilitation materially change. If rehabilitation is not feasible, the
trial court may then make an award of alimony in futuro. Accordingly, a
concurrent award of both types of alimony is inconsistent. At the time of the
decree, a trial court must necessarily find that the recipient of alimony either can
be or cannot be rehabilitated although that determination is subject to later
modification. Allowing concurrent awards of alimony in futuro and rehabilitative
alimony would require a trial court to engage in an act of clairvoyance. The trial
court would not only be required to anticipate the duration necessary for
rehabilitation but would also be required to anticipate the future needs of a spouse
who, it has been determined, can be rehabilitated.
Crabtree v. Crabtree, 16 S.W.3d 356, 360 (Tenn. 2000).
In this case, Ms. Oakley was awarded both alimony in futuro and rehabilitative alimony.
Clearly, as stated in Crabtree, these awards are inconsistent with each other. As the trial court
found that Ms. Oakley could be rehabilitated, the court erred when it awarded Ms. Oakley
alimony in futuro. However, it is clear from our review of the record that Ms. Oakley lacks any
health insurance under the divorce decree. Ms. Oakley has suggested that the trial court’s award
of alimony in futuro was most likely intended to provide such health insurance as Ms. Oakley
testified during the trial that $375 was the cost “[f]or health insurance.”2
Upon our review of the record, we agree. An award for health insurance is specifically
allowed under section 36-5-101(f)(1) of the Tennessee Code which states: “[t]he court may also
direct a party to pay the premiums for insurance insuring the health care costs of the other party.”
Tenn. Code Ann. § 36-5-101(f)(1) (Supp. 2000). Taking this statute and the situation of the
parties into account, we hereby reverse the trial court’s award of alimony in futuro. Instead, we
modify the trial court’s award of rehabilitative alimony upward by the amount of $375 per month
to reflect the costs of Ms. Oakley’s health insurance. This portion of the rehabilitative alimony
award will continue until Ms. Oakley becomes eligible for Medicare or until such time as Ms.
Oakley is able to obtain health insurance through her employment.
Mr. Oakley has also argued that the trial court erred in awarding Ms. Oakley alimony in
solido. However, “[b]oth in terms of logic and the purposes of alimony, we think it clear that
alimony in solido is not inconsistent with a concurrent award of rehabilitative alimony.” Burlew
v. Burlew, 40 S.W.3d 465, 472 (Tenn. 2001). In addition, “[p]rovided that the trial court
considers the purposes of alimony . . . and the specific factors listed in the statute, Tenn. Code
Ann. § 36- 5-101(d), it has wide discretion in determining the appropriate award.” Id. (citing
Crabtree, 16 S.W.3d at 360). Upon our review of the record, we cannot state that the trial court
2
Mr. Oa kley did n ot dispute th is amou nt.
-3-
has abused its wide discretion in this matter. As a result, the trial court’s award of alimony in
solido in the amount of $65,000 to Ms. Oakley is hereby affirmed.
Marital Property
Section 36-4-121(b)(1) of the Tennessee Code states:
(A)"Marital property" means all real and personal property, both tangible
and intangible, acquired by either or both spouses during the course of the
marriage up to the date of the final divorce hearing and owned by either or both
spouses as of the date of filing of a complaint for divorce, except in the case of
fraudulent conveyance in anticipation of filing, and including any property to
which a right was acquired up to the date of the final divorce hearing, and valued
as of a date as near as reasonably possible to the final divorce hearing date. In the
case of a complaint for legal separation, the court may make a final disposition of
the marital property either at the time of entering a order of legal separation or at
the time of entering a final divorce decree, if any. If the marital property is divided
as part of the order of legal separation, any property acquired by a spouse
thereafter is deemed separate property of that spouse. All marital property shall be
valued as of a date as near as possible to the date of entry of the order finally
dividing the marital property.
(B) "Marital property" includes income from, and any increase in value
during the marriage of, property determined to be separate property in accordance
with subdivision (b)(2) if each party substantially contributed to its preservation
and appreciation, and the value of vested and unvested pension, vested and
unvested stock option rights, retirement or other fringe benefit rights relating to
employment that accrued during the period of the marriage.
(C) "Marital property" includes recovery in personal injury, workers'
compensation, social security disability actions, and other similar actions for the
following: wages lost during the marriage, reimbursement for medical bills
incurred and paid with marital property, and property damage to marital property.
(D) As used in this subsection, "substantial contribution" may include, but
not be limited to, the direct or indirect contribution of a spouse as homemaker,
wage earner, parent or family financial manager, together with such other factors
as the court having jurisdiction thereof may determine.
Tenn Code Ann. § 36-4-121(b)(1)(Supp. 2000), as amended by 2001 Tenn. Pub. Acts 274.
-4-
A. Award of Stocks and Securities
It is undisputed by the parties that the stocks and securities under dispute in this case were
Mr. Oakley’s separate property.3 In addition, the parties agree that neither party directly
contributed to the increase in value of these securities. The trial court agreed, specifically finding
that these stocks and securities had appreciated due to market forces “not from any appreciable
contribution by Ms. Oakley,” and were “separate property that [had] appreciated in value.” Even
after making these findings however, the trial court still awarded Ms. Oakley twenty-five percent
of the securities’ appreciation. This award was in error. The trial court found that these
securities were separate property in which Ms. Oakley had made no appreciable contribution.
Thus, under section 36-4-121(b)(1) of the Tennessee Code, Ms. Oakley was not entitled to any
portion of their appreciation. As a result, we hereby reverse the trial court’s award to Ms. Oakley
of twenty-five percent of Mr. Oakley’s separate stocks and securities.
B. Real Properties in Memphis
Whether a spouse has made a substantial contribution to the preservation
and appreciation of the other spouse's separate property is a question of fact.
Substantial contributions are not limited to direct contributions but also include
indirect contributions such as "homemaker, wage earner, parent or family
financial manager." Tenn. Code Ann. § 36-4-121(b)(1)(C). A spouse's
contributions must be real and significant in order to be substantial. However,
they need not be monetarily commensurate to the appreciation in the separate
property's value, nor must they relate directly to the separate property at issue.
Brown v. Brown, 913 S.W.2d 163, 167 (Tenn. Ct. App. 1994).
Wright-Miller v. Miller, 984 S.W.2d 936, 943-44 (Tenn. Ct. App. 1998).
Unlike its findings about Mr. Oakley’s securities, the trial court made no specific
determination that Ms. Oakley did not contribute to the preservation and appreciation of Mr.
Oakley’s real property in Memphis. Through its ruling that the appreciation of these properties
was marital property, the trial court, by necessity, found that Ms. Oakley did contribute to their
preservation and appreciation. As the trial court’s ruling that the appreciation is marital property
is a finding of fact, it may only be reversed by this court if it is contrary to the preponderance of
the evidence. Upon our review of the record, we cannot say that this finding is contrary to the
preponderance of the evidence, and thus we affirm the trial court’s determination that the
appreciation of Mr. Oakley’s real property in Memphis was marital property.
3
Mr. Oakley inherited these stocks after his mother’s death.
-5-
C. Oakley Framers
The trial court found that Oakley Framers was separate property of Mr. Oakley.
However, the trial court awarded Mr. Oakley only seventy-five percent of the total value of
Oakley Framers, finding that Ms. Oakley had made a substantial contribution to its preservation
and appreciation. Mr. Oakley argues that Ms. Oakley did not make such contributions either
through working at the business or as a homemaker and parent. As such, he asks this court to
reverse the trial court’s decision in this matter. As stated above, “[w]hether a spouse has made a
substantial contribution to the preservation and appreciation of the other spouse's separate
property is a question of fact.” Id. Thus, we may not reverse the trial court’s decision on this
matter unless it is contrary to the preponderance of the evidence. Upon our review, we cannot
say that the trial court’s finding that Ms. Oakley made a substantial contribution to the
preservation and appreciation of Oakley Framers is contrary to the preponderance of the
evidence.4
However, “any increase in value during the marriage of, property determined to be
separate property . . . [can be considered marital property only] if each party substantially
contributed to its preservation and appreciation.” Tenn Code Ann. § 36-4-121(b)(1)(B) (Supp.
2000) (emphasis added). Thus, it is clear that Ms. Oakley is entitled only to the increase in
value of Oakley Framers from the time Mr. Oakley received the business. The trial court was in
error through its determination that the entire value of Oakley Framers was marital property.
Only the appreciation of Oakley Framers during the marriage was marital property that could be
properly divided by the court.
Upon reviewing the record before us, we cannot determine the initial value of Oakley
Framers at the time it became Mr. Oakley’s property.5 As such, we are unable to determine the
exact amount which Oakley Framers appreciated during the marriage. As a result, we hereby
reverse the trial court’s finding that the entire value of Oakley Framers was marital property and
remand to the trial court for determination of the amount of the appreciation during the marriage.
This appreciation is the only part of the total value of Oakley Framers that should be used in the
division of marital property.
4
W e also note that Mr. Oakley has questioned Ms. Oakley’s abilities as a homemaker, finding such abilities
to be somewhat lacking. However, a substantial contribution can also be made while acting as a parent. Ms. Oakley
helped to raise the couple’s two children during the marriage. As Mr. Oakley agreed to joint custody of his minor
children, with M s. Oakley having physical c ustody a nd final d ecision m aking au thority, we feel that he must not
question Ms. Oakley’s parenting abilities. Under Tennessee law, parenting contributions alone can be considered a
substantial c ontributio n to the pre servation and app reciation o f separate p roperty.
5
It is clear from the record that Oakley Framers had some value at the time Mr. Oakley received it, including
inventory an d machin es.
-6-
D. Florida Condominium
Upon our review of the record, we note that the trial court specifically found that Ms.
Oakley’s Florida condominium was separate property. For the reasons already discussed above,
this court may not reverse the court’s factual findings unless they are contrary to the
preponderance of the evidence. Upon our review of the record, we cannot state that the trial
court’s determination in this matter is contrary to the preponderance of the evidence. As a result,
we hereby affirm the trial court’s finding that Ms. Oakley’s Florida condominium is separate
property.
Conclusion
In summary, we reverse the award of alimony in futuro, modify the rehabilitative
alimony, affirm the alimony in solido, reverse the trial court’s decision to award Wife a portion
of Husband’s separate property consisting of stocks and securities, affirm the decision that the
increase in the real property is marital property, affirm the determination that the Florida condo is
Wife’s separate property and affirm the decision that Wife made a substantial contribution to any
increase in the value of the business. On remand, a determination must be made as to the value
of the business at the time Husband acquired it. This cause is remanded to the trial court for a
division of marital property in accordance with this opinion.
Costs on appeal are taxed equally to appellant, James Spencer Oakley, and appellee, Patsy
Hill Oakley, and their sureties, for which execution may issue if necessary.
___________________________________
DAVID R. FARMER, JUDGE
-7-