Marcella E. May v. Donald B. May ( 2011 )

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
August 15, 2011 Session
MARCELLA E. MAY v. DONALD B. MAY, ET AL.
Appeal from the Domestic Relations Court for Meigs County
No. D-760 Jayne Johnston Crowley, Judge
No. E2010-01026-COA-R3-CV-FILED-NOVEMBER 29, 2011
After twenty-five years of marriage, Marcella E. May (“Wife”) sued Donald B. May
(“Husband”) for divorce. Husband’s adult son Donald P. May (“Son”) was added later to
the suit as a defendant concerning a real property transfer. After a trial, the Trial Court
entered its Final Decree of Divorce, inter alia, awarding Wife a divorce, dividing the marital
property, awarding Wife transitional alimony, and awarding Wife judgment for attorney’s
fees against Husband. After further hearing, the Trial Court entered subsequent orders
awarding Wife $63,474.34 in attorney’s fees and $2,965.77 in costs against Husband, and
$4,083.50 in attorney’s fees against Son. Husband and Son appeal to this Court raising
issues regarding the classification and distribution of specific property, and the awards of
alimony and attorney’s fees. We affirm with regard to the classification and distribution of
property, the award of alimony, and the award of attorney’s fees against Husband. We find
and hold that no contractual or statutory basis allowed for an award of attorney’s fees against
Son, and we, therefore, vacate the award to Wife of a judgment for attorney’s fees against
Son.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Domestic Relations Court
Affirmed, in part; Vacated, in part; Case Remanded
D. M ICHAEL S WINEY, J., delivered the opinion of the Court, in which H ERSCHEL P. F RANKS,
P.J., and C HARLES D. S USANO, J R., J., joined.
D. Mitchell Bryant, Athens, Tennessee, for the appellants, Donald B. May and Donald P.
May.
Harold L. North, Jr., Chattanooga, Tennessee, for the appellee, Marcella E. May.
OPINION
Background
Husband and Wife married in 1983. No children were born of the marriage.
Wife sued Husband for divorce in 2008. Wife later alleged that certain marital real property
had been erroneously or fraudulently conveyed to Son, and Wife was granted leave to amend
her complaint to add Son as a defendant to the suit concerning this real property. The case
proceeded to trial without a jury.
At the time of trial, Husband was 75 years old and had no health issues.
Husband holds a degree in poultry science and agriculture from the University of Georgia
with a minor in business law and a minor in economics. He was employed for fifteen years
at Mayo Chemical as a director of sales and as a manager. Husband retired from Mayo and
began employment as a consultant for Dycho in 2002. Husband earns $1,250 per month in
his position with Dycho and works whatever hours he chooses. He also receives
reimbursement for his expenses.
Husband and Wife own a farm in Decatur, Tennessee (“the Farm”), which was
the parties’ marital home. The Farm consists of approximately one hundred and fifty acres.
Husband admitted that during a meeting with an attorney in December of 2005 for estate
planning purposes, Husband told the attorney that the Farm had a value of close to $1
million. Wife testified that Husband told her the Farm was worth over a million dollars. She
stated that during the estate planning meetings with the attorney, Husband told the attorney
that the Farm was worth “anywhere from a million and a half to two.” Husband remained
in the marital home on the Farm during the pendency of the divorce.
Husband and Wife also own a cabin and lot in Gatlinburg. The Gatlinburg
cabin was purchased by Husband approximately two years before the parties were married.
After the marriage, Husband conveyed a one-half undivided interest in the Gatlinburg
property to Wife. At trial, the parties stipulated that the Gatlinburg property was worth
$185,000 for both the cabin and the lot.
During the pendency of the divorce, the Trial Court ordered that the Farm be
listed for sale. When asked, Husband admitted that he was at the hearing where the Trial
Court ordered that the Farm be listed for sale, but that he had not listed the Farm for sale.
When asked why he had not complied with the Trial Court’s order, Husband stated: “I just
didn’t do it.” Husband admitted that he did not want to list the Farm for sale. Husband
admitted that the Trial Court also had ordered that the Gatlinburg property be listed for sale
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and that he had not done that either. When asked why he had not listed the Gatlinburg
property for sale, Husband stated: “Just negligence.… I just didn’t do it.”
During the marriage, Husband’s and Wife’s regular household expenses were
paid from their joint First Tennessee Bank account (“First Tennessee Account”). After Wife
filed for divorce, Husband took Wife’s name off the First Tennessee Account and put Son’s
name on it.
Husband inherited $688,000 during the marriage. This money was deposited
into Husband’s and Wife’s First Tennessee Account. Husband testified that he later moved
the money into an account with the Hartford Fund (“Hartford Account”) in Husband’s name
only. Husband stated:
I had to - - where the people mailed the check, I had to give them an account
number and account bank number so they could deposit it at First Tennessee
Bank. It was only in there just to say that the bank got it. I didn’t write any
checks, nothing off of it. It was immediately put in to investment.
Husband claimed that First Tennessee Bank moved the money into the Hartford Account
“immediately,” but when asked exactly when that was done, Husband stated: “I cannot tell
you. Don’t know.” Husband admitted that the inheritance money was commingled with
marital funds in the First Tennessee Account, and that he did not know how much money
was in the First Tennessee Account at the time of the $688,000 deposit. Husband claimed
there was no way to trace that to find out.
Husband testified that he used some of the money from his inheritance to
purchase two trucks for himself and one for his daughter, a Jaguar for Wife, a camper, and
various farm implements and stated: “I had to transfer some money from Hartford to my bank
account.” The camper cost approximately $32,000. When asked about moving the money
from the First Tennessee Account to the Hartford Account and then back to the First
Tennessee Account, Husband admitted that during his deposition he had stated: “I can’t tell
you how much all I put in at one time. I can’t tell you. I don’t know. I held out some of the
money. I can’t tell you.” Husband did not know how much of the money he had held out,
but Husband also stated that all of the inheritance money went into the Hartford Account.
Husband testified that the money was in the Hartford Account since 2003.
During his deposition, Husband stated: “I turned that money over to First Tennessee and it
took awhile to invest that money.” Husband stated:
I don’t know how quickly the money went out of the [First Tennessee]
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account. I cannot - - I don’t remember. It was 2002, and I don’t know how
much money I had in there. I don’t know how much money I took out and I
don’t know when Hartford took the money out or First Tennessee put it out
into Hartford. They invested that money in stages.
Husband admitted that while the inheritance money was in the First Tennessee
Account, he put his income into that account and paid marital expenses out of that account.
Husband agreed that he thought that it would be financial chaos to try to recreate when the
inheritance money came in to and went out of the First Tennessee Account.
Although he was asked for the First Tennessee Account and Hartford Account
records during discovery, Husband failed to produce either. Husband admitted that he threw
away the First Tennessee Account and Hartford Account records. He stated: “I didn’t need
them.” When asked why he did not spend time trying to recreate the details about the money
that went from the First Tennessee Account to the Hartford Account, Husband stated: “I had
no reason to.… Yeah. You know, I’m lost for words right now.” Husband admitted that he
worked with his attorney to prepare an exhibit documenting his 401(k) contributions going
back to 1977. Husband admitted that he would only have had to go back to 2002 or 2003 to
document the Hartford Account, and that he could have done the same for the Hartford
Account as he did for his 401(k). Husband also admitted that he had been asked during
discovery to produce the Hartford Account records.
Husband admitted that out of the money coming from the First Tennessee
Account he purchased a John Deere Gator for $9,000, a Grasshopper lawnmower for
$16,000, a hay rake for $850, a Grain-O-Vator, a New Holland feed mixer for $3,500, a 12-
foot mower for $2,000, a new barn for $65,000, a new watering system, a gooseneck trailer
for $32,000, a Filson head shoot for $2,400, a herd of cattle for $20,000, two bulls, a
swimming pool for $26,000, and closed in a front porch for $2,600. Husband stated that he
purchased these items over a period of several years.
Husband was unsure how much money was in the Hartford Account at the time
of trial, but he approximated it at $130,000. When asked if there had been $300,000 in the
Hartford Account at the time the divorce was filed, Husband stated: “I don’t remember.”
Husband claimed that the money in the Hartford Account went toward alimony while the
divorce was pending. When questioned further, Husband testified that he also paid some of
Wife’s bills from the Hartford Account.
Husband testified that there was $900 in the First Tennessee Account at the
time of trial. During his deposition Husband had stated that there was $12,000 in the First
Tennessee Account. When asked about the depletion of the First Tennessee Account,
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Husband stated: “I wrote two checks today and there won’t be any money in it.… I wrote
an $85 check for my water bill. I’ve got insurance to pay. I wrote close to $800 worth of
checks this morning I mailed.” When questioned further about the $12,000, Husband stated:
“That’s for alimony.”
Husband also admitted that he has a farm account, but claimed there was only
$100 in that account, and an alimony account, which had $500 in it. When asked why he had
a separate alimony account, Husband stated: “That’s the way I can keep up with it. I had
paid her already 30,000 this year in alimony.”
Husband admitted that he has taken $66,775.93 from the Hartford Account
since the divorce was filed. Husband admitted that the Trial Court had ordered that Wife was
to get $2,500 per month in alimony during the divorce and that Husband had paid through
June for twelve months for a total of $30,000. Husband admitted that the other $37,000 that
he had taken out of the Hartford Account had been for his own benefit. When asked,
Husband admitted that since the divorce was filed he has traveled to Florida twice with his
friends from the Highland Sportsman Club, but claimed that these trips were at no cost to
him.
Husband testified that he receives $1,728 per month in Social Security and
$1,250 per month from Dycho, and that he also takes $1,000 per month from the Hartford
Account. Husband admitted that he had been taking the $1,000 per month from the Hartford
Account prior to the parties separating to “help run the household.” Husband admitted that
his arrangement with Dycho could last forever, but claimed that he had decided to leave
Dycho and retire. Husband admitted that he had made this decision to leave Dycho because
of the divorce.
Wife was 59 years old at the time of trial. Wife went to school through the
eleventh grade and then took her GED test. She has no special training or certifications, no
vocational training, and is not proficient on computers. Wife testified that she worked as an
executive secretary for L.P. Muller & Company from 1975 until 1985. Wife then worked for
Henry Crumbliss Yarns as an executive secretary from 1985 until 1995. After that, Wife
started cleaning houses and working part-time for the Chattanooga Riverboat, which is
seasonal work. During the season, Wife worked for the Chattanooga Riverboat two days or
sixteen hours a week. Wife has had squamous cell cancer and has a sciatic nerve in her hip
that causes her some problems and pain when she works cleaning houses.
At the time of trial, Wife worked cleaning houses. She testified that she cleans
two houses on a regular basis. Wife cleans one of those houses every week for a monthly
income of $160. Wife cleans the other house every other week and makes $100 per month
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cleaning this house. Wife testified that she has passed out fliers in an attempt to gain more
clients for her house cleaning, but has not had any response to the fliers.
Wife also had sold Mary Kay cosmetics and Park Lane Jewelry. Wife
described these activities as a hobby. At the time of trial, Wife was not actively selling Mary
Kay and the Mary Kay company had designated Wife’s status as inactive. Wife testified that
she had not had any sales of Park Lane Jewelry in a couple of months and stated that she had
only had one Park Lane Jewelry party this year. Wife feels that she has exhausted her
sources for selling Park Lane Jewelry.
During the marriage, Wife did the housework, the laundry, the cooking, and
yard work. Wife purchased all of her clothes and also purchased clothes for Husband. Wife
stated: “I paid for my car. Then I paid for my medicine, my doctor bills. I bought everything
for the house, you know, the furniture, accessories. I bought Christmas gifts and, of course,
I bought everybody’s clothes and I bought groceries.” During the marriage, Wife received
$4,000 in an inheritance which she spent on furniture for the marital home.
Wife testified that Husband “was controlling with the finances.” Wife testified
that Husband would allow her to put gas in her car only once a month. Wife would give
plasma twice a week to earn money. When asked how much money she earned by donating
plasma, Wife stated: “Well, it started out $40. Now, it’s down to 30, but it was 20 each - -
20 twice a week.” Wife has been donating plasma for about ten years.
Wife has an account at SunTrust Bank and an account at Regions Bank. Wife
testified that at the time of trial there was $52 in the SunTrust account and $126 in the
Regions account. Wife deposits her alimony and the money she earns from housecleaning
into those accounts. Wife testified that she will be eligible to draw $796 per month in Social
Security when she turns 62. Wife has no retirement account.
After the trial, the Trial Court entered its Final Decree of Divorce on December
10, 2009 finding and holding, inter alia:
2. [Wife] and [Husband] have been married for twenty-six years. No children
were born of their marriage. At the time of trial, [Husband] was 75 years old,
and [Wife] was 59 years old.
3. The Court notes that [Husband’s] testimony lacked significant credibility
in several respects in that his testimony ranged from contradictions with his
earlier deposition testimony to forgetfulness concerning various relevant
matters.
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4. [Husband’s] education and health: [Husband] has a degree from the
University of Georgia. [Husband] is “semi-retired” (sic), but continues to work
as a consultant for Dycho, earning $1,250.00 per month. In addition,
[Husband] is reimbursed for expenses up to $800.00 per month. [Husband]
also receives Social Security benefits in the amount of $1,728.00 per month,
and has routinely withdrawn at least $1,000.00 per month from an account
known as the “Hartford Fund”, discussed hereinafter. Although he indicated
during his depositions that his work with Dycho could last “forever” (sic),
Defendant changed his testimony at trial, claiming it was his intent to retire at
some point after the divorce. [Husband’s] physical condition is not unusual for
a man of his age; he appeared at trial to be in good health, but with some
cognitive difficulties. However, since the court had no evidence of
[Husband’s] everyday demeanor, there was no way to determine whether his
difficulties were due to the nervousness often seen in courtroom proceedings
or to some other problem.
5. [Wife’s] education and health: [Wife] has a high school education. [Wife]
has not maintained regular full-time employment outside the marital home in
many years. At the time of the filing of her divorce complaint, [Wife]
generated limited income to pay for “gas money and spending money” (sic)
from cleaning a few homes in the Chattanooga area, and from selling her blood
plasma on a regular basis. [Wife] has suffered from squamous cell carcinoma,
and has recurrent problems with her sciatic nerve.
6. Standard of living during the marriage: The proof at trial showed that
the parties enjoyed a relatively high standard of living during the marriage.
They owned (1) a home and adjacent farm on 150 acres (the “Farm Property”);
(2) a cabin and adjacent property in Gatlinburg (the “Gatlinburg Property”);
(3) a trailer in Tellico; (4) newer model vehicles; (5) personal property,
including farm equipment and implements, worth approximately two hundred
fifty thousand dollars [see, Master Asset List]; and (6) funds in financial
accounts which totaled, at the time of the divorce filing, approximately
$300,000. The parties’ indebtedness approximates $50,000.00, and is made
up of debt against [Husband’s] truck and the farm equipment, and credit card
debt of about $8,000.00 [see, Master Asset List, Liabilities].
***
8. [Wife’s] attorney fees: [Wife] is entitled to a judgment for attorney fees in
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this cause. This is supported by [Husband’s] behavior during the pendency of
this matter including: (1) his continued harassment of [Wife], which led to him
being held in contempt at the hearing on September 30, 2008; (2) his refusal
to comply with the prior order of the Court, of July 31, 2008, directing the
listing of the Farm Property for sale, because he “just didn’t want to” (sic); (3)
his refusal to acknowledge in the months prior to trial that the deed from
[Wife] to his son, Donald P. May, was erroneous and should be set aside; (4)
his assertion at his original deposition that [Wife] was not guilty of
inappropriate marital conduct, only to amend his answer the next day to assert
that [Wife] was guilty of such conduct, which he attempted to substantiate by
claiming that [Wife] is a lesbian; (5) his refusal to comply with the order of the
Court, of October 28, 2008, requiring him to account for his disposition of the
Hartford Fund; (6) his taking [Wife’s] name off of their joint checking account
following the divorce filing; and (7) his destruction of various records
concerning the Hartford Fund and First Tennessee accounts following the
divorce filing. The Court determines that [Wife] should be awarded her
attorneys’ fees from [Husband], in that she otherwise lacks sufficient funds to
pay such fees, and her ability to pay the fees is solely dependent upon her use
of the assets awarded her in the divorce. [Wife] has no independent assets
within which to satisfy such fees. Such determination is all the more
appropriate in this case, as [Husband’s] conduct necessitated the incurring of
significant and substantial attorneys’ fees which [Wife] should not have had
to bear, but for the harassing and contemptuous conduct by [Husband].
9. [Wife’s] claim for alimony: In considering [Wife’s] claim for alimony, the
Court finds that, primarily because of [Wife’s] age, minimal education, and
lack of significant employment for the last several years, [Wife] is entitled to
nonmodifiable transitional alimony. Upon consideration of the factors set out
under Tenn. Code Ann. § 36-5-121(h)(3)(i), the Court determines that [Wife]
is entitled to transitional alimony from [Husband], in the amount of $1,500.00
per month, until both the Farm and Gatlinburg properties are sold. It is the
Court’s hope that [Husband’s] continued alimony obligation to [Wife], until
both properties are sold, will not only provide [Wife] with necessary support
pending the sale of those assets, but also effectively motivate [Husband] and
his relatives to cooperate in the expeditious listing and sale of those assets. In
determining [Wife’s] need for alimony, the Court has considered, among other
factors, the primary considerations of [Wife’s] need and [Husband’s] ability
to pay. As discussed above, [Wife] has previously suffered from cancer and
has recurrent sciatic nerve problems.
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***
11. Commingling of financial assets: While [Husband] argues vigorously for
the proposition that most of the other assets involved in this proceeding are
separate property, [Wife’s] argument for commingling of assets is granted
significant weight by the Court. It became clear during the several days of
hearing in this matter that neither party, whether intentionally or not,
maintained a particularly firm grasp of the family finances. [Wife] testified at
trial that she had little to do with the finances of the parties because [Husband]
refused to allow her to do so. [Husband] testified that, after the petition for
divorce was filed, he did not keep banking or investment records and that the
parties’ finances were not subject to a clear division as separate and marital.
12. First Tennessee Bank account: Testimony from both parties at trial was
that [Wife] maintained a checking account in her own name, which she used
for household expenses as well as her personal needs and [Husband]
maintained a checking account in both parties’ names (the First Tennessee
Bank account), which the parties agreed [Wife] did not use. [Wife] testified
that she was not allowed to make use of the joint account. [Husband] did not
dispute this claim. The joint account was used for major purchases, household
expenses, family holidays and personal needs. It did not appear from
testimony or documentary evidence that there was any particular distinction
made between funds deposited in the joint account from employment income,
inheritance income, investment income, or, indeed, any other source of
income. Despite discovery requests and direction from the Court to provide
banking records from the First Tennessee Bank Account, [Husband] failed to
do so.
Following the inheritance by [Husband] and his sister of certain
property in Hamilton County that property was sold and [Husband’s] share of
the proceeds was deposited in the parties’ joint checking account at First
Tennessee Bank. At the time the proceeds were deposited into the joint
checking account, that account had on deposit marital funds from various
sources. Despite numerous requests from [Wife], [Husband] was unable to
produce relevant documents showing the amount and source of funds used to
establish the Hartford Fund. [Husband] indicated that he does not know how
much was in the First Tennessee joint account at the time of the deposit of the
proceeds from the sale of the inherited property, and stated in his depositions
and at trial that there was “no way” (sic) to find that out.
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Following the deposit of the inherited funds in the joint First Tennessee
account, the parties purchased, from that account, various vehicles and farm
equipment for themselves and their relatives. [Husband] indicated that such
purchases occurred over several years, and that the inherited money “stayed in
that [joint] account for awhile.” (sic) During that time, there were other funds
going in and out of the account on a routine basis, such as [Husband’s] income
and payment of the parties’ various expenses.
[Husband] testified that he did not maintain the statements from First
Tennessee Bank, and proceeded to throw away the statements for this account
following the divorce filing, because he “didn’t need them” (sic). He admitted
that he threw away “a bunch of records” (sic) after [Wife] filed for divorce,
because he “cleaned out his desk” (sic). Because the funds passing through the
First Tennessee Bank account are determined by the Court to be marital
property, on the theory that they have been so commingled that, by
[Husband’s] own admission, it would be “financial chaos” (sic) to attempt to
untangle them, any assets purchased with funds from the First Tennessee Bank
account are marital assets as well.
13. Establishment of the Hartford Fund account: At some point, [Husband]
removed a portion of the funds from the jointly-owned First Tennessee Bank
account to establish the Hartford Fund, but was unable to state how much
money was initially used to set up the Fund, only that he held out “some of the
money” (sic) from the joint account. [Husband] reiterated that he has no idea
what money he took out of the joint First Tennessee account to open the
Hartford Fund, and acknowledged that he left “quite a bit” (sic) of money in
the First Tennessee account to pay for, among other things, various items of
personal property. [Husband] further indicated that it “took a while” (sic) to
open the Hartford account. He also stated that it was impossible to trace the
money that came in and out of the First Tennessee account, in that it would be
“absolute financial chaos” (sic). In addition to the apparent lack of any effort
by [Husband] to specifically trace the funds that came into the First Tennessee
account and Hartford Fund, there was no credible testimony at trial that the
Hartford Fund was to be [Husband’s] separate property. Both parties testified
that the monthly withdrawals made from the Hartford Fund were used to pay
their routine expenses. Taking all of this together, the Court finds that the
Hartford Fund account is a marital asset.
(notations ‘(sic)’ appear in original). In the Final Decree of Divorce, the Trial Court also
found and held that Son’s claim to an interest in the Farm was based upon an erroneous deed,
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which the Trial Court set aside and held for naught.
Husband filed a motion to alter or amend or for a new trial. After a hearing,
the Trial Court entered its order on March 25, 2010 denying Husband’s motion, in part, and
granting it, in part. Specifically, and as relevant to this appeal, the March 25, 2010 order
awarded Wife a judgment for $25,000 in attorney’s fees against Husband, and a judgment
of $4,083.50 for attorney’s fees against Son.
Wife filed a motion to alter or amend the March 25, 2010 order. After a
hearing, the Trial Court granted Wife’s motion to alter or amend, in part, and reserved the
issue of attorney’s fees. Wife subsequently filed an Emergency Petition for Contempt
alleging, in part, that Husband was failing to comply with the Trial Court’s orders. The Trial
Court held a hearing on Wife’s Emergency Petition for Contempt and entered its order
September 16, 2010 nunc pro tunc to September 3, 2010 finding and holding, inter alia, that
Wife should be and was awarded a judgment against Husband “for all attorneys fees and
related expenses incurred by her in the divorce proceeding, through December 21, 2009, in
the total amount of $63,474.34, and that [Wife] shall have and recover judgment against
[Husband] for her discretionary costs in the divorce proceeding, in the total amount of
$2,965.77.” Husband and Son appeal to this Court.
Discussion
Although not stated exactly as such, Husband and Son raise five issues on
appeal: 1) whether the Trial Court erred in classifying certain property as marital property;
2) whether the Trial Court erred in dividing the marital property; 3) whether the Trial Court
erred in awarding Wife alimony; 4) whether the Trial Court erred in awarding Wife a
judgment for attorney’s fees against Husband; and, 5) whether the Trial Court erred in
awarding Wife a judgment for attorney’s fees against Son. Wife requests an award of
attorney’s fees on appeal.
Our review is de novo upon the record, accompanied by a presumption of
correctness of the findings of fact of the trial court, unless the preponderance of the evidence
is otherwise. Tenn. R. App. P. 13(d); Bogan v. Bogan, 60 S.W.3d 721, 727 (Tenn. 2001).
A trial court’s conclusions of law are subject to a de novo review with no presumption of
correctness. S. Constructors, Inc. v. Loudon County Bd. of Educ., 58 S.W.3d 706, 710 (Tenn.
2001).
We first consider whether the Trial Court erred in classifying certain property
as marital property. Specifically, Husband contests the Trial Court’s classification and
division as marital property of the money in the Hartford Account, which is what remains of
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the $688,000 that Husband inherited during the marriage.1 As our Supreme Court has
explained:
Tennessee is a “dual property” state because its domestic relations law
recognizes both “marital property” and “separate property.” See generally
Tenn. Code Ann. § 36-4-121; Eldridge v. Eldridge, 137 S.W.3d 1, 12 (Tenn.
Ct. App. 2002). When a married couple seeks a divorce, the “marital
property” must be divided equitably between them, without regard to fault on
the part of either party. Tenn. Code Ann. § 36-4-121(a)(1). “Separate
property” is not part of the marital estate and is therefore not subject to
division. See Cutsinger [v. Cutsinger], 917 S.W.2d [238, 241 (Tenn. Ct. App.
1995)]. Thus, it is imperative that the parties, the trial court, or both identify
all of the assets possessed by the divorcing parties as either marital or separate
so that a proper division can be accomplished.
Snodgrass v. Snodgrass, 295 S.W.3d 240, 246 (Tenn. 2009).
As pertinent to the issue now before us, Tenn. Code Ann. § 36-4-121 provides
that by definition “separate property” includes: “Property acquired by a spouse at any time
by gift, bequest, devise or descent; ….” Tenn. Code Ann. § 36-4-121 (b)(2)(D) (2010).
The inquiry does not end here, however, as separate property may in certain circumstances
become marital. As our Supreme Court explained in Snodgrass:
[S]eparate property may be deemed marital by operation of law under theories
of commingling or transmutation. Langschmidt v. Langschmidt, 81 S.W.3d
741, 747 (Tenn. 2002).
***
This Court addressed the related doctrines of commingling and
transmutation for the first time in Langschmidt and adopted the following
explanation:
1
Husband also asserts in his brief on appeal that the Trial Court erred in classifying some of the farm
equipment purchased with the $688,000 as marital property. As discussed above, however, the evidence
shows that the $688,000 became marital property through commingling with marital funds, which would
result in the items purchased with this money also being classified as marital property. Furthermore,
Husband never points to any specific items of farm equipment that he contests were improperly classified,
but rather simply requests that this Court “give consideration to some or all of the farm equipment, which
was purchased with those funds, being declared his separate property ….”
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[S]eparate property becomes marital property [by commingling]
if inextricably mingled with marital property or with the separate
property of the other spouse. If the separate property continues
to be segregated or can be traced into its product, commingling
does not occur . . . . [Transmutation] occurs when separate
property is treated in such a way as to give evidence of an
intention that it become marital property . . . . The rationale
underlying these doctrines is that dealing with property in these
ways creates a rebuttable presumption of a gift to the marital
estate. This presumption is based also upon the provision in
many marital property statutes that property acquired during the
marriage is presumed to be marital. The presumption can be
rebutted by evidence of circumstances or communications
clearly indicating an intent that the property remain separate.
81 S.W.3d at 747 (quoting 2 Homer H. Clark, The Law of Domestic Relations
in the United States § 16.2 at 185 (2d ed. 1987)).
Snodgrass, 295 S.W.3d at 247, 256.
With regard to this issue, the Trial Court specifically found and held that: “the
funds passing through the First Tennessee Bank account are determined by the Court to be
marital property, on the theory that they have been so commingled that, by [Husband’s] own
admission, it would be “financial chaos” (sic) to attempt to untangle them ….” The evidence
in the record on appeal does not preponderate against the Trial Court’s findings relative to
this issue.
The evidence shows that Husband’s inheritance was put into the parties’ joint
First Tennessee Account where it was commingled with marital funds. The evidence further
shows that although some of this money was moved into the Hartford Account, there was no
clear evidence of how much of the money was moved, or when it was moved. Furthermore,
as the Trial Court found, there was no clear evidence showing that the Hartford Account was
intended to remain as Husband’s separate property. The evidence shows that Husband’s
inheritance was unable to be segregated or traced to its product after it was deposited into the
First Tennessee Account. Husband himself testified that the money could not be traced, and
he agreed that it would be financial chaos to attempt to do so. A rebuttable presumption of
a gift to the marital estate was created. Husband failed to rebut the presumption. We find
no error in the Trial Court’s classification of the Hartford Account as marital property.
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We next consider whether the Trial Court erred in dividing the marital
property. As our Supreme Court has explained:
This Court gives great weight to the decisions of the trial court in
dividing marital assets and “we are disinclined to disturb the trial court’s
decision unless the distribution lacks proper evidentiary support or results in
some error of law or misapplication of statutory requirements and procedures.”
Herrera v. Herrera, 944 S.W.2d 379, 389 (Tenn. Ct. App. 1996). As such,
when dealing with the trial court’s findings of fact, we review the record de
novo with a presumption of correctness, and we must honor those findings
unless there is evidence which preponderates to the contrary. Tenn R. App. P.
13(d); Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993).
Because trial courts are in a far better position than this Court to observe the
demeanor of the witnesses, the weight, faith, and credit to be given witnesses’
testimony lies in the first instance with the trial court. Roberts v. Roberts, 827
S.W.2d 788, 795 (Tenn. Ct. App. 1991). Consequently, where issues of
credibility and weight of testimony are involved, this Court will accord
considerable deference to the trial court’s factual findings. In re M.L.P., 228
S.W.3d 139, 143 (Tenn. Ct. App. 2007) (citing Seals v. England/Corsair
Upholstery Mfg. Co., 984 S.W.2d 912, 915 (Tenn. 1999)). The trial court’s
conclusions of law, however, are accorded no presumption of correctness.
Langschmidt v. Langschmidt, 81 S.W.3d 741, 744-45 (Tenn. 2002).
***
In a proceeding for divorce or legal separation, the trial court is authorized,
prior to determining the support and maintenance of one party by the other, to
“equitably divide, distribute or assign the marital property between the parties
without regard to marital fault in proportions as the court deems just.” Tenn.
Code Ann. § 36-4-121(a)(1) (2005). The trial court is empowered to do what
is reasonable under the circumstances and has broad discretion in the equitable
division of the marital estate. See Flannary v. Flannary, 121 S.W.3d 647, 650
(Tenn. 2003). The division of assets is not a mechanical process and trial
courts are afforded considerable discretion. Manis v. Manis, 49 S.W.3d 295,
306 (Tenn. Ct. App. 2001).
Keyt v. Keyt, 244 S.W3d 321, 327-28 (Tenn. 2007) (footnote omitted).
Further, our Supreme Court has instructed:
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[M]arital property must be divided equitably between the parties based on the
relevant factors enumerated in Tennessee Code Annotated section 36-4-121(c)
without regard to fault on the part of either party. Tenn. Code Ann. §
36-4-121(a)(1). Section 36-4-121(a)(1) requires an equitable division of
marital property, not an equal division. Robertson v. Robertson, 76 S.W.3d
337, 341 (Tenn. 2002).
Larsen-Ball v. Ball, 301 S.W.3d 228, 231 (Tenn. 2010).
Tennessee Code Annotated § 36-4-121 (c) provides:
(c) In making equitable division of marital property, the court shall consider
all relevant factors including:
(1) The duration of the marriage;
(2) The age, physical and mental health, vocational skills,
employability, earning capacity, estate, financial liabilities and financial needs
of each of the parties;
(3) The tangible or intangible contribution by one (1) party to the
education, training or increased earning power of the other party;
(4) The relative ability of each party for future acquisitions of capital
assets and income;
(5) The contribution of each party to the acquisition, preservation,
appreciation, depreciation or dissipation of the marital or separate property,
including the contribution of a party to the marriage as homemaker, wage
earner or parent, with the contribution of a party as homemaker or wage earner
to be given the same weight if each party has fulfilled its role;
(6) The value of the separate property of each party;
(7) The estate of each party at the time of the marriage;
(8) The economic circumstances of each party at the time the division
of property is to become effective;
(9) The tax consequences to each party, costs associated with the
reasonably foreseeable sale of the asset, and other reasonably foreseeable
expenses associated with the asset;
(10) The amount of social security benefits available to each spouse;
and
(11) Such other factors as are necessary to consider the equities between
the parties.
Tenn. Code Ann. § 36-4-121 (c) (2010).
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Husband argues in his brief on appeal that the fifth factor contained in Tenn.
Code Ann. § 36-4-121 (c) “weighs heavily in favor of [Husband].” Husband states that “but
for a $688,000 inheritance received by Husband, and, except for the fact Husband had a
substantial 401(k) retirement account, at the time the parties married, the parties would in no
way have anywhere near the amount of assets which were divided by the court.”
We disagree with Husband’s assertion that factor five should be relied upon
any more heavily than the other relevant factors. All relevant factors must be considered
when making an equitable division of marital property. The record reveals that the Trial
Court did consider all relevant factors. Furthermore, the evidence in the record on appeal
does not support Husband’s assertion that the fifth factor weighs heavily in his favor. Rather,
the evidence shows that Wife fulfilled her role as a homemaker and her contribution shall be
given the same weight as Husband’s contribution.
Husband asserts that the evidence shows that “while both parties worked at
different times during the marriage, that Wife’s funds were always kept as her separate funds,
in her own bank accounts.” We disagree. Although Husband made this assertion at trial, the
evidence shows that Wife used her own money, including her inheritance received during the
marriage and the money she received from selling her blood plasma, to purchase, among
other things, gas, items for the marital home, and gifts for Husband. Furthermore, the Trial
Court specifically found Husband’s testimony “lacked significant credibility in several
respects …,” and, we give great deference to the Trial Court’s findings with regard to
credibility.
In his brief on appeal, Husband also argues:
if the court finds that all the property found by the trial court is marital
property, then [Husband] would urge this court to grant him 65% of the
monies received on the sale of the above-listed property, and grant Wife 35%
of the same. Such a ruling would more fairly adjust the equities in this matter.
In essence, Husband is requesting that this Court tweak the Trial Court’s distribution of
marital property. We decline to do so. We find no error in the Trial Court’s distribution of
the marital property, and we affirm on this issue.
Next, we consider whether the Trial Court erred in awarding Wife alimony.
As pertinent to this issue, our Supreme Court has explained:
For well over a century, Tennessee law has recognized that trial courts
should be accorded wide discretion in determining matters of spousal support.
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See Robinson v. Robinson, 26 Tenn. (7 Hum.) 440, 443 (1846) (“Upon a
divorce . . . the wife is entitled to a fair portion of her husband’s estate for her
support, and the amount thus to be appropriated is a matter within the legal
discretion of the chancellor . . . .”). This well-established principle still holds
true today, with this Court repeatedly and recently observing that trial courts
have broad discretion to determine whether spousal support is needed and, if
so, the nature, amount, and duration of the award. See, e.g., Bratton v.
Bratton, 136 S.W.3d 595, 605 (Tenn. 2004); Burlew v. Burlew, 40 S.W.3d
465, 470 (Tenn. 2001); Crabtree v. Crabtree, 16 S.W.3d 356, 360 (Tenn.
2000).
Equally well-established is the proposition that a trial court’s decision
regarding spousal support is factually driven and involves the careful
balancing of many factors. Kinard v. Kinard, 986 S.W.2d 220, 235 (Tenn. Ct.
App. 1998); see also Burlew, 40 S.W.3d at 470; Robertson v. Robertson, 76
S.W.3d 337, 340-41 (Tenn. 2002). As a result, “[a]ppellate courts are
generally disinclined to second-guess a trial judge’s spousal support decision.”
Kinard, 986 S.W.2d at 234. Rather, “[t]he role of an appellate court in
reviewing an award of spousal support is to determine whether the trial court
applied the correct legal standard and reached a decision that is not clearly
unreasonable.” Broadbent v. Broadbent, 211 S.W.3d 216, 220 (Tenn. 2006).
Appellate courts decline to second-guess a trial court’s decision absent an
abuse of discretion. Robertson, 76 S.W.3d at 343. An abuse of discretion
occurs when the trial court causes an injustice by applying an incorrect legal
standard, reaches an illogical result, resolves the case on a clearly erroneous
assessment of the evidence, or relies on reasoning that causes an injustice.
Wright ex rel. Wright v. Wright, 337 S.W.3d 166, 176 (Tenn. 2011);
Henderson v. SAIA, Inc., 318 S.W.3d 328, 335 (Tenn. 2010). This standard
does not permit an appellate court to substitute its judgment for that of the trial
court, but “‘reflects an awareness that the decision being reviewed involved
a choice among several acceptable alternatives,’ and thus ‘envisions a less
rigorous review of the lower court’s decision and a decreased likelihood that
the decision will be reversed on appeal.’” Henderson, 318 S.W.3d at 335
(quoting Lee Medical, Inc. v. Beecher, 312 S.W.3d 515, 524 (Tenn. 2010)).
Consequently, when reviewing a discretionary decision by the trial court, such
as an alimony determination, the appellate court should presume that the
decision is correct and should review the evidence in the light most favorable
to the decision. Wright, 337 S.W.3d at 176; Henderson, 318 S.W.3d at 335.
***
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[T]ransitional alimony, is appropriate when a court finds that rehabilitation is
not required but that the economically disadvantaged spouse needs financial
assistance in adjusting to the economic consequences of the divorce. Tenn.
Code Ann. § 36-5-121(d)(4), (g)(1); Riggs, 250 S.W.3d at 456 n.5. Simply
put, this type of alimony “aid[s] the person in the transition to the status of a
single person.” Mills v. Mills, No. M2009-02474-COA-R3-CV, 2010 Tenn.
App. LEXIS 501, 2010 WL 3059170, at *5 (Tenn. Ct. App. Aug. 4, 2010); see
also Montgomery v. Silberman, No. M2009-00853-COA-R3-CV, 2009 Tenn.
App. LEXIS 787, 2009 WL 4113669, at *2 (Tenn. Ct. App. Nov. 24, 2009)
(affirming trial court’s award of transitional alimony to wife “to bridge the
gap, so to speak, between her married life and single life”); Engesser v.
Engesser, 42 So. 3d 249, 251 (Fl. Dist. Ct. App. 2010) (en banc) (describing
transitional alimony as “[b]ridge-the-gap alimony” designed to “smooth the
transition of a spouse from married to single life”).
Gonsewski v. Gonsewski, ___ S.W.3d ____, No. M2009-00894-SC-R11-CV, 2011 Tenn.
LEXIS 872, at **7-10, *19 (Tenn. 2011).
The Trial Court awarded Wife transitional alimony in the amount of $1,500.00
per month “until both the Farm and Gatlinburg properties are sold.” The Trial Court
considered the relevant factors contained in Tenn. Code Ann. § 36-5-121 and made specific
factual findings. Without again reiterating all of these findings, we note that the evidence
in the record does not preponderate against the Trial Court’s findings, particularly the
findings that Wife has shown a need and that Husband has the ability to pay.
Furthermore, we note that the Trial Court specifically tied the end date of this
alimony to the sale of the Farm and Gatlinburg properties, when Wife would receive her
share of these marital assets. As the evidence in the record clearly shows that Husband had
previously been ordered to list these properties for sale and had deliberately refused to
comply with the Trial Court’s orders, it is clear that Husband has some measure of control
over the duration of the alimony award. If Husband continues to refuse to list the properties
for sale, then Husband will continue to be required to pay this alimony. We find no error in
the award of alimony, and we affirm on this issue.
We next consider whether the Trial Court erred in awarding Wife a judgment
for attorney’s fees against Husband. In Gonsewski, our Supreme Court also instructed:
It is well-settled that an award of attorney’s fees in a divorce case
constitutes alimony in solido. See Tenn. Code Ann. § 36-5-121 (h)(1)
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(“alimony in solido may include attorney fees, where appropriate”); Herrera
v. Herrera, 944 S.W.2d 379, 390 (Tenn. Ct. App. 1996). The decision whether
to award attorney’s fees is within the sound discretion of the trial court.
Crabtree, 16 S.W.3d at 361; Kincaid v. Kincaid, 912 S.W.2d 140, 144 (Tenn.
Ct. App. 1995). As with any alimony award, in deciding whether to award
attorney’s fees as alimony in solido, the trial court should consider the factors
enumerated in Tennessee Code Annotated section 36-5-121 (i). A spouse with
adequate property and income is not entitled to an award of alimony to pay
attorney’s fees and expenses. Umstot v. Umstot, 968 S.W.2d 819, 824 (Tenn.
Ct. App. 1997). Such awards are appropriate only when the spouse seeking
them lacks sufficient funds to pay his or her own legal expenses, see
Houghland v. Houghland, 844 S.W.2d 619, 623 (Tenn. Ct. App. 1992), or the
spouse would be required to deplete his or her resources in order to pay them,
see Harwell v. Harwell, 612 S.W.2d 182, 185 (Tenn. Ct. App. 1980). Thus,
where the spouse seeking such an award has demonstrated that he or she is
financially unable to procure counsel, and where the other spouse has the
ability to pay, the court may properly grant an award of attorney’s fees as
alimony. See id. at 185.
Gonsewski, ____ S.W.3d at ____, 2011 Tenn. LEXIS 872, at **32-33.
The Trial Court made specific findings with regard to the award of attorney’s
fees against Husband. Specifically, the Trial Court found that Wife: “otherwise lacks
sufficient funds to pay such fees, and her ability to pay the fees is solely dependant upon her
use of the assets awarded her in the divorce. [Wife] has no independent assets within which
to satisfy such fees.” The evidence does not preponderate against these findings.
Furthermore, the Trial Court found that: “[Husband’s] conduct necessitate the incurring of
significant and substantial attorneys’ fees which [Wife] should not have had to bear, but for
the harassing and contemptuous conduct by [Husband].” The record contains much support
for this particular finding. We find no abuse of discretion in the award to Wife of attorney’s
fees from Husband in the amount of $63,474.34 and costs in the amount of $2,965.77.
Next, we consider the issue of whether the Trial Court erred in awarding Wife
a judgment for attorney’s fees against Son. In Cracker Barrel Old Country Store, Inc. v.
Epperson, our Supreme Court explained:
Tennessee, like most jurisdictions, adheres to the “American rule” for
award of attorney fees. John Kohl & Co. v. Dearborn & Ewing, 977 S.W.2d
528, 534 (Tenn. 1998); Pullman Standard, Inc. v. Abex Corp., 693 S.W.2d
336, 338 (Tenn. 1985). Under the American rule, a party in a civil action may
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recover attorney fees only if: (1) a contractual or statutory provision creates a
right to recover attorney fees; or (2) some other recognized exception to the
American rule applies, allowing for recovery of such fees in a particular case.
Taylor, 158 S.W.3d at 359; John Kohl, 977 S.W.2d at 534.
Cracker Barrel Old Country Store, Inc. v. Epperson, 284 S.W.3d 303, 308 (Tenn. 2009)
(footnote omitted).
In the case now before us, no contractual or statutory provision exists which
would allow Wife to recover an award of attorney’s fees against Son, nor is there a
recognized exception applicable to this situation. The fact that Son may have been extremely
and unnecessarily uncooperative during the pendency of this suit, and the fact that Wife
ultimately prevailed against Son simply are insufficient bases for awarding Wife attorney’s
fees against Son. As such, we vacate the award to Wife of a judgment against Son in the
amount of $4,083.50 for attorney’s fees.
Finally, we address Wife’s request for an award of attorney’s fees on appeal.
In the exercise of our discretion in light of all relevant factors, we award Wife her attorney’s
fees on appeal. We remand this case to the Trial Court for a determination of the appropriate
amount of such fees.
Conclusion
The judgment of the Trial Court is vacated as to the award to Wife of attorney’s
fees against Son. The remainder of the Trial Court’s judgment is affirmed. This cause is
remanded to the Trial Court for further proceedings consistent with this Opinion, and for
collection of the costs below. The costs on appeal are assessed against the Appellant, Donald
B. May, and his surety.
_________________________________
D. MICHAEL SWINEY, JUDGE
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