Eddie Fritz v. Wanda Fritz ( 2002 )

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
April 16, 2002 Session
EDDIE LaMARTIN FRITZ v.
WANDA LORRAINE WILLIAMS FRITZ
Appeal from the Chancery Court for Sullivan County
No. 30725(M) John McLellan, Judge
FILED MAY 13, 2002
No. E2001-00145-COA-R3-CV
Eddie LaMartin Fritz (“Husband”) filed for divorce alleging inappropriate marital conduct or, in the
alternative, irreconcilable differences. Wanda Lorraine Williams Fritz (“Wife”) counter-claimed
seeking a divorce on the same grounds. The parties eventually agreed how to divide most of their
personal property and stipulated to grounds for the divorce. Wife had opened two savings accounts
into which she claims she placed funds for the college education of her two daughters from a
previous marriage. The Trial Court concluded the funds in these accounts were not marital property,
and Husband challenges this conclusion on appeal. Husband also challenges the Trial Court’s
holding that he be responsible for all of the credit card debt accumulated during the marriage. We
modify the division of property, and affirm the judgment as modified.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the
Chancery Court Affirmed as Modified; Case Remanded
D. MICHAEL SWINEY , J., delivered the opinion of the court, in which HERSCHEL P. FRANKS, J., and
CHARLES D. SUSANO, JR., J., joined.
Keith A. Hopson and Timothy R. Wilkerson, Kingsport, Tennessee, for the Appellant Eddie
LaMartin Fritz.
Gregory W. Francisco, Kingsport, Tennessee, for the Appellee Wanda Lorraine Williams Fritz.
OPINION
Background
Husband filed a complaint and Wife filed a counter-complaint wherein each sought
a divorce on the basis of inappropriate marital conduct or, alternatively, irreconcilable differences.
The parties have no minor children from this marriage. Wife has two daughters from a previous
marriage. The parties were married in October of 1993. This was Husband’s first marriage and
Wife’s second. Husband is 37 years old and Wife is 40 years old. Husband filed an affidavit of
income and expenses showing net monthly income of $1,078.99 and net monthly expenses of
$2,495.60. Wife filed an affidavit of income and expenses showing net monthly income of
$2,400.00 and net monthly expenses of $2,252.00. Husband’s gross annual income was $27,538.29
in 1996; $31,501.25 in 1997; and $17,456.54 in 1998. Wife’s gross annual income was $61,691.81
in 1996; $66,289.97 in 1997; and $71,060.17 in 1998.
Prior to trial, the parties stipulated grounds for divorce and each was awarded a
divorce from the other. The parties also agreed on how to divide most of their personal property.
There was approximately $48,271.53 of equity in the marital residence, which the Trial Court
ordered to be sold with the proceeds divided equally between Husband and Wife. The Trial Court
further ordered the parties to divide equally the value of their retirement benefits accumulated during
the course of the marriage.
We restate the dispositive issues on appeal as: (1) whether the two bank accounts
which Wife claims were for the college education of her daughters from a previous marriage are
marital property; and (2) who should be responsible for the credit card debt accumulated during the
marriage.
One of the savings accounts in question was in the name of Summer Williams or
Wanda Fritz and had a balance of $16,902.55 as of December 10, 1999. The other account was in
the name of Chelsey Williams c/o Wanda Fritz and had a balance of $16,498.00 as of December 10,
1999. Husband testified he first learned of the existence of these accounts during discovery. Wife
testified she told Husband of the accounts when they were opened, but did not inform him of any
additional deposits to the accounts. The initial deposit into each account was $50.00. Wife also
claimed an employee at the credit union where the accounts were located called and spoke with
Husband about additional information needed for the accounts. Wife testified the accounts were
created to help her daughters pursue a college education. Although the children’s grandparents
contributed an unspecified amount of money to the accounts, Wife admitted she deposited the
majority of the funds into the accounts with money she earned while married to Husband. In 2000,
Wife withdrew approximately $3,800.00 from the accounts to send one of her daughters to dance
school and to enable both of them to produce a music CD. Wife also loaned her father a total of
$14,000.00 from the two accounts, with her father signing two promissory notes in return.
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The total amount of the credit card debt was $37,265.97. Husband brought
approximately $11,330.00 of credit card debt with him into the marriage. Husband claimed a
majority of the debt was for home improvements, necessities, and traveling expenses for both
Husband and Wife. Husband later acknowledged a large portion of the credit card debt actually was
for his computer equipment. Husband claimed Wife knew of this debt and that the credit cards were
being used for their travel, etc. Husband also paid $4,629.07 to American Express on Wife’s
corporate account. Wife was reimbursed these funds by her employer, but Husband claims he was
not reimbursed by Wife. Wife claims she reimbursed Husband, and that she paid Husband additional
amounts to cover other expenses. The parties acknowledged Husband was responsible for making
sure the bills were paid. Husband would tell Wife how much money he needed in order to do this.
Wife testified that prior to the marriage, the parties orally agreed not to incur any further credit card
debt. Wife claimed to have paid Husband “large amounts of money that she considered to have been
her contribution to the payment of her share of marital debt,” but denied having any knowledge of
the credit card debt. Wife admitted a portion of the credit card debt was incurred while remodeling
the parties’ home. Vesta Fritz, Husband’s mother, testified the credit card bills were mailed to her
home. She also testified both Husband and Wife frequently picked up these credit card bills at her
house.
The Trial Court concluded the savings accounts were established for the benefit of
Wife’s two daughters and were “the property of the children and are not marital property to be
divided by this Court . . . .” The Trial Court also concluded the “parties had an express agreement
that they would not continue to incur debt as had been the practice of the Plaintiff prior to the
marriage” and Husband should be solely responsible for same. Husband appeals these two
conclusions.
Discussion
A review of findings of fact by a trial court is de novo upon the record of the trial
court, accompanied by a presumption of correctness, unless the preponderance of the evidence is
otherwise. Tenn. R. App. P. 13(d); Brooks v. Brooks, 992 S.W.2d 403, 404 (Tenn. 1999). Review
of questions of law is de novo, without a presumption of correctness. See Nelson v. Wal-Mart
Stores, Inc., 8 S.W.3d 625, 628 (Tenn. 1999).
With regard to the Trial Court’s division of the marital assets, the many factors to be
considered by a court in making an equitable distribution of property are set forth in Tenn. Code
Ann. § 36-4-121(c), and include, among other things, age, physical and mental health, employability,
earning capacity, financial liabilities and needs of the parties, etc. A trial court has wide discretion
in dividing the interest of the parties in marital property. Barnhill v. Barnhill, 826 S.W.2d 443, 449
(Tenn. Ct. App. 1991). As noted by this Court in King v. King, 986 S.W.2d 216, 219 (Tenn. Ct.
App. 1998), when dividing marital property:
The trial court’s goal in every divorce case is to divide the parties’
marital estate in a just and equitable manner. The division of the
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estate is not rendered inequitable simply because it is not
mathematically equal, Cohen v. Cohen, 937 S.W.2d 823, 832 (Tenn.
1996); Ellis v. Ellis, 748 S.W.2d 424, 427 (Tenn. 1988), or because
each party did not receive a share of every item of marital property.
Brown v. Brown, 913 S.W.2d [163] at 168. . . . In the final analysis,
the justness of a particular division of the marital property and
allocation of marital debt depends on its final results. See Thompson
v. Thompson, 797 S.W.2d 599, 604 (Tenn. App. 1990).
The statute defines marital property as “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. . . .” Tenn. Code Ann. §36-4-121(b)(1)(A). A trial court has the authority
to apportion marital debt in the same manner it apportions marital assets. Cutsinger v. Cutsinger,
917 S.W.2d 238, 243 (Tenn. Ct. App. 1995).
On appeal, Wife argues she deposited the funds into the accounts to create a trust fund
for the college education of her two daughters. Husband argues the prerequisites for creating a gift
have not been satisfied. Based on the Statement of the Evidence approved by the Trial Court as well
as its final Judgment, it is altogether unclear whether the Trial Court concluded that a college
education trust had been created, or whether the money was a gift to Wife’s two daughters. To the
extent the Trial Court concluded a college education trust was created, we believe this conclusion
was in error. The undisputed facts demonstrate Wife utilized a portion of the accounts to pay for a
dance class for one daughter, and to fund the creation of a musical CD for both daughters. These
actions, while beneficial to the daughters, are inconsistent with Wife’s claim that a college education
trust had been created. In short, Wife withdrew $3,800.00 from these accounts for non-college
related activities. The facts preponderate against the conclusion Wife established a trust for the
college education of her daughters.
Likewise, we do not believe the funds were gifts toWife’s daughters. The formal
requirements of a gift are “the intention by the donor to make a present gift coupled with the delivery
of the subject of the gift by which complete dominion and control of the property is surrendered by
the donor.” Hansel v. Hansel, 939 S.W.2d 110, 112 (Tenn. Ct. App. 1996). It is clear from the
record Wife maintained complete dominion and control over the funds and, as a result, no gift was
established.
The evidence in the record before us preponderates in favor of a finding that the
money in both accounts was acquired by Wife during the course of the marriage and was completely
under her control as of the date of the filing of the Complaint for Divorce. We conclude the funds
in the savings accounts are marital property of the parties, and the Trial Court erred in concluding
these funds were the separate property of Wife’s two daughters. Having so concluded, we hereby
modify the Trial Court’s judgment and award to Husband the total sum of $11,283.51 from these
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accounts, representing one-third (1/3) of the amount in the accounts as of December 10, 1999. We
find this to be an equitable division of these marital assets.
With regard to the credit card debt, Husband testified some of the debt was used for
the parties’ travel expenses, home remodeling, etc. While Wife does not have knowledge of what
a majority of the charges actually were for, this does not negate Husband’s testimony that at least
some of the debt was incurred for the benefit of both parties. As mentioned above, Wife
acknowledges a portion of the debt was incurred while remodeling their home. Wife claims no
knowledge of these debts. We do not believe the claimed oral agreement between Husband and
Wife prior to the marriage changes the fact that the credit card debt was incurred during the course
of the marriage and at least part of the debt was incurred with Wife’s knowledge. We hold the credit
card debt was a marital debt subject to equitable division between the parties, and the Trial Court’s
judgment that Husband should be solely responsible for this debt was in error. It is undisputed that
approximately $11,333.00 of credit card debt was brought by Husband into the marriage. After
considering all relevant factors so as to arrive at an equitable division of this marital debt, including
the overall financial liabilities of the parties, we conclude Wife should be responsible for $8,318.98
of the credit card debt, with Husband being responsible for the remainder of this debt. The judgment
of the Trial Court, as modified, is affirmed in all other respects.
Conclusion
The decision of the Trial Court is affirmed as modified. This case is remanded to the
Trial Court for further proceedings as necessary, if any, consistent with this opinion. Costs of appeal
are taxed equally to the Appellant, Eddie LaMartin Fritz, and his surety, and to the Appellee, Wanda
Lorraine Williams Fritz.
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D. MICHAEL SWINEY
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