Denzil Russ Partin v. Mary Ava Partin ( 2011 )

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
March 9, 2011 Session
DENZIL RUSS PARTIN v. MARY AVA PARTIN, ET AL.
Appeal from the Chancery Court for Campbell County
No. 08-092 Billy Joe White, Chancellor
No. E2010-01662-COA-R3-CV - Filed - April 20, 2011
This lawsuit arose out of two transfers of real property. Denzil Russ Partin (“Husband”) sued
Mary Ava Partin (“Wife”) and Hazel Walden (“Mrs. Walden”), seeking declaratory relief
that the two properties Wife transferred to Mrs. Walden, Wife’s mother, were held in trust
for Husband, Wife, and their son, Courtney Partin. The Trial Court found that title to the real
property at issue was vested in Mrs. Walden, that no resulting trust had been created, and,
that, in any event, the statute of limitations had run on Husband’s action. Husband appeals.
We hold that although the Trial Court erred in stating that the statute of limitations had run
on Husband’s claim, the Trial Court did not err in declining to impose a resulting trust on the
real property at issue. We 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. M ICHAEL S WINEY, J., delivered the opinion of the Court, in which C HARLES D . S USANO,
J R., and J OHN W. M CC LARTY, J.J., joined.
J. Stephen Hurst, LaFollette, Tennessee, for the appellant, Denzil Russ Partin.
Mark R. Orr, LaFollette, Tennessee, for the appellees, Mary Ava Partin and Hazel Walden.
OPINION
Background
Husband and Wife were married in the 1970s. Husband and Wife purchased
a piece of real property (“Lilac”) located on what is now Lilac Road in Campbell County,
Tennessee. In 1990, Husband and Wife divorced. Pursuant to that divorce proceeding, Wife
was awarded ownership of Lilac as her separate property. Although Husband and Wife later
reconciled and remarried, Wife remained the sole owner of record of Lilac until she later
transferred title to Mrs. Walden.
In the 1990s, after Husband and Wife reconciled, Mrs. Walden and her
husband James Walden (“Mr. Walden”) deeded a piece of real property at 7286 Stinking
Creek Road, Pioneer, Tennessee (“Stinking Creek”) to Wife. Wife then deeded an interest
in Stinking Creek by quitclaim deed to Husband and their adult son, Courtney Partin, so that
the three of them were the owners of record. The house on Lilac subsequently burned down,
leaving it bare real estate.
Husband was involved in an armed standoff with law enforcement officers that
led to a number of criminal charges against Husband. Husband sustained injuries during the
incident and was hospitalized. Courtney Partin also was charged with a related criminal
offense. Husband, represented by attorney Tim Irwin, was convicted of multiple felonies as
part of a plea agreement.
While incarcerated, Husband executed a Power of Attorney to Wife. The
parties dispute the purposes that Husband contemplated in creating the Power of Attorney.
Wife, utilizing her Power of Attorney, transferred Stinking Creek to Mrs. Walden and Mr.
Walden 1 on May 23, 2002. Mrs. Walden and Mr. Walden borrowed twenty-six thousand six
hundred sixty dollars and twenty-seven cents ($26,660.27) to fund the purchase of Stinking
Creek, and this money was used to hire attorney Doug Trant to represent Courtney Partin.
On September 22, 2004, Wife transferred Lilac to Mrs. Walden. Wife included Husband’s
name on the quitclaim deed for Lilac to Mrs. Walden.
On July 1, 2008, after Husband was released from prison, Wife filed for
divorce. Husband counterclaimed, averring that Wife had improperly transferred Stinking
Creek and Lilac to Mrs. Walden. On August 1, 2008, Husband filed this suit against Wife
and Mrs. Walden in the Chancery Court for Campbell County, asking the Court to declare
that Stinking Creek and Lilac were held by Mrs. Walden in trust for Husband, Wife, and
1
Mr. Walden subsequently died and his interest in Stinking Creek passed to Mrs. Walden.
-2-
Courtney Partin. Wife and Mrs. Walden, in their Answer, asserted that Husband instructed
Wife to raise money to hire an attorney for their son, Courtney Partin. Wife and Mrs. Walden
contended that, lacking sufficient credit to take out a loan herself, Wife sold Stinking Creek
to Mrs. Walden and Mr. Walden who in turn borrowed money which, in keeping with
Husband’s instructions to Wife, was used to hire counsel for Courtney Partin. Husband
maintained that Wife transferred both Stinking Creek and Lilac in order to keep the
properties out of the marital estate.
On March 16, 2010, the parties appeared in Chancery Court and disputed the
status of the properties at issue. Husband, Wife, and Mrs. Walden testified. Exhibits that
pertained to the disputed issue of Mrs. Walden’s ownership of Stinking Creek were entered,
including: tax receipts on Stinking Creek in Mrs. Walden’s name; receipts for insurance paid
on Stinking Creek in Mrs. Walden’s name; and copies of checks written by Mrs. Walden for
the mortgage on Stinking Creek. In turn, Husband entered documents revealing that, on
April 10, 2008, Wife made a two thousand dollar ($2,000) payment on the Stinking Creek
loan. Wife acknowledged making that one payment, but testified that all other payments
were made by Mrs. Walden. Wife testified that she transferred Stinking Creek to Mrs.
Walden and Mr. Walden without any expectation of getting Stinking Creek back.
The parties contested what Husband wanted Wife to do with the Power of
Attorney. Husband contended that he asked Wife to raise money to hire an attorney for him
and, if any money remained, to hire an attorney for Courtney Partin. Husband stated:
I said to get me a lawyer first and if there is any left to get a
lawyer for my son, and my brother would have to pay Tim Irwin. When she
got the money borrowed she would have to pay my brother back. And that
letter was wrote in March of 2002.
Wife disputed this version of events and claimed that Husband instructed her to raise money
in order to hire an attorney for Courtney Partin, their son.2 Wife produced letters Husband
wrote to Courtney Partin while he was incarcerated. In a letter dated October 2, 2002,
Husband wrote: “I will always help you my son. We may have to sell our place to do that.
But I will do whatever it takes.” In a letter dated October 9, 2002, Husband wrote:
You ask the judge to appoint you an appeals attorney.(If you do
not like him we will try to get another lawyer for you by Jan. 2003. We will
just have to get a lawyer we can afford. But we will get you a lawyer if you
2
Courtney Partin was represented originally by attorney Charles Herman, but Mrs. Walden later paid
Doug Trant to represent Courtney Partin with money raised from Stinking Creek.
-3-
do not like the court appointed one … I know it is a lot to pay for a lawyer but
you needed a good lawyer. Now you can fire Hermon. We do not need that
backstabber.
Husband in turn introduced a letter he wrote to Wife dated March 20, 2002, wherein he asked
for a lawyer but did not mention raising money from the properties at issue.
Regarding Lilac, Wife and Mrs. Walden introduced a copy of the final
judgment of Husband and Wife’s divorce from 1990 wherein Wife was awarded sole
ownership of Lilac. Husband nevertheless testified that he had an interest in Lilac based on
a verbal representation made by Wife.
Wife testified that she was paid eight thousand dollars ($8,000) for Lilac by
Mrs. Walden and that she used the money to hire Herb Moncier to represent Husband and
Wife in a civil suit. Husband denied that Moncier represented him. However, Wife
introduced a letter from prison dated August 16, 2004, in which Husband wrote to Courtney
Partin:
MANSOUR [sic] my lawyer came down on August 12, 2004 to get me to sign
some papers against Campbell County. I ask him about the house lawsuit and
he said he would tell Ava on Monday. He is letting on that he has not took
[sic] the case. It been 8 months sense we give him the papers on the house
fire.
On June 21, 2010, the Trial Court entered an order with a Memorandum
Opinion incorporated, finding and holding, inter alia:
Now, first of all, the statute of limitations would have run on any
claim that Mr. Partin has. Secondly, this case should have been tried in
conjunction with the divorce. It’s a part of the marital property, the marital
estate, allegedly. You can’t bifurcate over into this court and try an issue that
should have been tried over there, except we did. And since we did the
Court’s heard the facts of the case.
Mr. Partin insisted that Ms. Partin, by power of attorney and the
son’s signature, convey the Stinking Creek property to make a loan or anything
to get money on it, to sell it, whatever. With a power of attorney she had the
right to do any of those things.
She conveyed it to her mother for twenty-five thousand dollars
-4-
that was used for Mr. Partin’s attorney’s fees.
The Lilac property, Mr. Partin had absolutely no legal interest in
that property. Any equitable interest that he might have had is used up by an
eight thousand dollar loan that’s not been repaid. It would be terribly
inequitable for Ms. Walden to lose any interest in this property. She has thirty-
two thousand dollars, or thirty-three, minus maybe a two thousand dollar
payment that her daughter made on one occasion, in this property, and I’ve
seen or heard no offer by Mr. Partin or no proof that he has repaid one penny
of this money or is in any position to pay it.
I think the equitable thing in this case is that this property
belongs to Ms. Walden, it was conveyed to her to guarantee these loans and
she made the loans, they got the money, they used the money, it’s not been
paid back, and it’s been eight years now. It’s too late. These parties have no
interest in this property….
Husband filed a Petition to Rehear, which was denied by the Trial Court.
Husband appeals.
Discussion
Although not stated exactly as such, Husband raises two issues on appeal: 1)
Whether the Trial Court committed reversible error in stating that the statute of limitations
had run on Husband’s action; and, 2) Whether the Trial Court erred in holding that the real
property at issue is owned by Mrs. Walden and no resulting trust was created when the
property was transferred to her.
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 address whether the Trial Court committed reversible error by stating
that the statute of limitations had run on Husband’s action. Pursuant to Tenn. R. Civ. P. 8.03,
a defendant asserting a defense based on the statute of limitations has the burden of alleging
the facts upon which the defense rests in short and plain terms. Tenn. R. Civ. P. 8.03. As
Wife and Mrs. Walden neither argued nor affirmatively pled a statute of limitations defense
-5-
at the Trial Court level, the statute of limitations defense is waived. Therefore, the Trial
Court erred in raising the statute of limitations in its Memorandum Opinion.
Rule 36(b) of the Tennessee Rules of Appellate Procedure provides:
A final judgment from which relief is available and otherwise appropriate shall
not be set aside unless, considering the whole record, error involving a
substantial right more probably than not affected the judgment or would result
in prejudice to the judicial process. When necessary to do substantial justice,
an appellate court may consider an error that has affected the substantial rights
of a party at any time, even though the error was not raised in the motion for
a new trial or assigned as error on appeal.
Tenn. R. App. P. 36(b). Here, the Trial Court only briefly mentioned the statute of
limitations in one sentence at the beginning of its opinion. The Trial Court then proceeded
to rule on the merits of the case. The parties agree on appeal that the Trial Court erred in
stating that the statute of limitions had run on Husband’s claim. Insofar as the Trial Court
rendered its judgment based on the statute of limitations, we vacate that portion of the
judgment.
We now turn to the second issue on appeal, whether the Trial Court erred in
holding that the real property at issue is owned by Mrs. Walden and that no resulting trust
was created when the property was transferred to her. As our Supreme Court has instructed:
The imposition of a resulting trust is an equitable remedy;
the doctrine of resulting trust is invoked to prevent unjust
enrichment. Such a trust is implied by law from the acts and
conduct of the parties and the facts and circumstances which at
the time exist and surround the transaction out of which it arises.
Broadly speaking, a resulting trust arises from the nature or
circumstances of consideration involved in a transaction
whereby one person becomes invested with a legal title but is
obligated in equity to hold his legal title for the benefit of
another, the intention of the former to hold in trust for the latter
being implied or presumed as a matter of law, although no
intention to create or hold in trust has been manifested,
expressly or by inference, and there ordinarily being no fraud or
constructive fraud involved.
While resulting trusts generally arise (1) on a failure of
-6-
an express trust or the purpose of such a trust, or (2) on a
conveyance to one person on a consideration from
another—sometimes referred to as a “purchase-money resulting
trust”—they may also be imposed in other circumstances, such
that a court of equity, shaping its judgment in the most efficient
form, will decree a resulting trust—on an inquiry into the
consideration of a transaction—in order to prevent a failure of
justice. However, the particular circumstances under which a
resulting trust may arise varies from jurisdiction to jurisdiction.
In re Estate of Nichols, 856 S.W.2d 397, 401 (Tenn. 1993)(quoting 76 Am.Jur.2d Trusts §
166, pp. 197-98 (1992)).
As this Court has further explained:
The equitable device of a resulting trust is used by courts to prevent
unjust enrichment. In re Estate of Nichols, 856 S.W.2d 397, 401 (Tenn. 1993).
The device allows a court to “reach an interest in property belonging to one
person yet titled in and held by another.” Smalling v. Terrell, 943 S.W.2d 397,
400 (Tenn.Ct.App. 1996)(quoting Wells v. Wells, 556 S.W.2d 769, 771
(Tenn.Ct.App. 1977)). The principle underlying a resulting trust is that “a trust
follows or goes with the real consideration, or results to him from whom the
consideration actually comes; that the owner of the money that pays for the
property should be the owner of the property.” Smalling, 943 S.W.2d at 400
(quoting Livesay v. Keaton, 611 S.W.2d 581, 584 (Tenn.Ct.App. 1980)). A
resulting trust is generally imposed “in accordance with the actual or assumed
intention of the parties.” Burleson v. McCrary, 753 S.W.2d 349, 352-53
(Tenn. 1988).
A resulting trust and its terms must be proven by more than a
preponderance of the evidence: “clear, cogent, and convincing” evidence. St.
Clair v. Evans, 857 S.W.2d 49, 51 (Tenn.Ct.App. 1993). While a resulting
trust is generally proven by parol evidence, “[o]rdinarily, the testimony of a
single, interested witness would not be sufficient to establish a trust by clear,
cogent and convincing evidence.” Id.; see also Story, 166 S.W.3d at 184.
Brewer v. Brewer, No. M2010-00768-COA-R3-CV, 2011 WL 532267, at *6 (Tenn.Ct.App.
-7-
February 14, 2011), no appl. perm. appeal filed.3
It is uncontested by the parties that Wife was awarded Lilac in the 1990
divorce. Neither Husband nor Wife ever recorded any transfer by Wife of any interest in
Lilac to Husband. Wife testified at trial that she transferred Lilac to Mrs. Walden in
exchange for $8,000, which was used to hire attorney Herb Moncier to represent Husband
and Wife in a civil action.
Husband argues that he has an interest in Lilac and that the property should be
held by Mrs. Walden in a resulting trust. Husband denies that he was represented by
Moncier, and argues that Wife’s hiring of Moncier exceeded her authority and that Wife
failed to act in Husband’s best interests when utilizing the Power of Attorney.
The Trial Court weighed the evidence and accepted Wife’s version of events,
as was its prerogative. In Wells v. Tennessee Bd. of Regents, our Supreme Court discussed
witness credibility stating:
Unlike appellate courts, trial courts are able to observe witnesses as
they testify and to assess their demeanor, which best situates trial judges to
evaluate witness credibility. See State v. Pruett, 788 S.W.2d 559, 561 (Tenn.
1990); Bowman v. Bowman, 836 S.W.2d 563, 566 (Tenn. Ct. App. 1991).
Thus, trial courts are in the most favorable position to resolve factual disputes
hinging on credibility determinations. See Tenn-Tex Properties v.
Brownell-Electro, Inc., 778 S.W.2d 423, 425-26 (Tenn. 1989); Mitchell v.
Archibald, 971 S.W.2d 25, 29 (Tenn. Ct. App. 1998). Accordingly, appellate
courts will not re-evaluate a trial judge's assessment of witness credibility
absent clear and convincing evidence to the contrary. See Humphrey v. David
Witherspoon, Inc., 734 S.W.2d 315, 315-16 (Tenn. 1987); Bingham v.
Dyersburg Fabrics Co., Inc., 567 S.W.2d 169, 170 (Tenn. 1978).
Wells v. Tennessee Bd. of Regents, 9 S.W.3d 779, 783 (Tenn. 1999). The Trial Court also
found that Husband had no legal interest in Lilac and if he had any equitable interest it was
“used up by an eight thousand dollar loan that’s not been repaid.” As found by the Trial
3
After we released our opinion in Brewer, we remanded Brewer to the trial court for the purpose of
considering the parties’ proposed settlement agreement. The parties have ten (10) days to notify this Court
following entry of the trial court’s order on the proposed settlement. According to our order, “[i]f the trial
court disapproves the proposed settlement, mandate shall issue in accordance with Tenn. R. App. P. 42. If
the trial court approves the proposed settlement, the court will administratively close the appeal.” Regardless
of the outcome concerning the proposed settlement, we are confident in and rely upon the legal analysis
quoted from this opinion.
-8-
Court, it would be unjust for Mrs. Walden to lose her interest in Lilac after having paid
$8,000 for Lilac and having never recouped the funds. A resulting trust, as an equitable
remedy, may not produce such an inequitable outcome.
The evidence does not preponderate against the Trial Court’s findings relevant
to this issue. Husband failed to prove by clear and convincing evidence that he held any
interest in Lilac at the time Lilac was sold to Mrs. Walden and that a resulting trust was
created in Lilac. We, therefore, affirm the Trial Court’s judgment as to Lilac.
As for Stinking Creek, Husband argues that Mrs. Walden was unjustly
enriched by the transfer of Stinking Creek because the price Mrs. Walden paid for the
property was substantially lower than the property’s actual value. At trial, Husband asserted
that Stinking Creek was worth one hundred fifty thousand dollars ($150,000). In 2004,
Stinking Creek was valued at forty eight thousand nine hundred ($48,900) for property tax
purposes. Tax receipts on Stinking Creek show that from 2005 to 2009 the property was
valued at fifty eight thousand nine hundred dollars ($58,900) for property tax purposes.
We note that Stinking Creek was transferred by Wife to Mrs. Walden and her
now deceased Husband in 2002 while the property tax valuations were for later years. We
also note that property tax valuations certainly are not conclusive as to the value of a parcel
of real estate. Additionally, what is clear from the record is that this family at that time was
in immediate and serious need of money to obtain legal representation. While these values
presented by Husband exceed the amount paid by Mrs. Walden, we cannot say that this
evidence alone preponderates against the Trial Court’s findings and ultimate decision that
Husband did not prove the necessary elements of a resulting trust by clear and convincing
evidence.
In support of his contention that the Stinking Creek transaction was not an
outright sale, Husband also argues that Mrs. Walden was a mere figurehead and that Wife
made payments on the Stinking Creek loan. Husband points to a payment on the Stinking
Creek loan made by wife; payment receipts made to Y12 Federal Credit Union signed by
Wife; and a payment book in Wife’s name. Wife concedes that she made a $2,000 payment
on the Stinking Creek loan. Wife maintains that Mrs. Walden made the rest of the payments
with Mrs. Walden’s money, though Wife physically made the payments when Mrs. Walden
was ill.
The Trial Court found that Mrs. Walden made the majority of payments on the
Stinking Creek loan, and that Husband and Wife “got the money...and used the money....”
The Trial Court weighed the evidence and apparently believed Wife’s and Mrs. Walden’s
accounts. As found by the Trial Court, Mrs. Walden purchased Stinking Creek by obtaining
-9-
a loan and that Mrs. Walden made the large majority of the loan payments. The evidence
does not preponderate against these findings by the Trial Court. As found by the Trial Court,
it would be inequitable for Mrs. Walden to lose her interest in Stinking Creek simply because
Wife paid $2,000 on the Stinking Creek loan while Mrs. Walden paid the rest.
Husband argues that Wife exceeded her authority under the Power of Attorney
and failed to act in his best interests with respect to Stinking Creek. Specifically, Husband
asserts that he instructed Wife to raise money to hire an attorney for Husband first, and then
to hire an attorney for Courtney Partin if there was any remaining money. Wife testified that
Husband instructed her to raise money to hire an attorney for Courtney Partin. The Trial
Court believed Wife. Husband’s prison letters, entered into evidence at trial, also support
Wife’s account. While these letters were written after Wife transferred Stinking Creek to
Mrs. Walden, the letters nevertheless form an additional basis for helping to ascertain
Husband’s goals in executing the Power of Attorney.
Husband testified that legal expenses for Husband and Courtney Partin totaled
forty two thousand dollars ($42,000). Husband, as part of his argument that Wife exceeded
her Power of Attorney authority, contends that the funds raised from Stinking Creek were far
less than total legal expenses for Husband and Courtney Partin, and that the funds were never
used to hire an attorney for Husband. Again, the Trial Court accepted Wife’s contention that
Husband wanted her to raise money to hire first an attorney for Courtney Partin.
Additionally, the Trial Court found that the money received from Mrs. Walden for Stinking
Creek “was used for Mr. Partin’s attorney’s fees.” The evidence in the record does not
preponderate against the Trial Court’s finding that Wife carried out Husband’s instructions
when utilizing the Power of Attorney.
As we have discussed, the Trial Court had sufficient evidence to find that Wife
sold Stinking Creek to Mrs. Walden in accordance with Husband’s desire to raise money to
hire an attorney for Courtney Partin. Husband, while having had an interest in Stinking
Creek at the time of its transfer by Wife, has failed to meet the clear, cogent and convincing
evidentiary standard required to prove a resulting trust. Wife testified that Husband
instructed her to raise money to pay for an attorney for Courtney Partin. Husband disagrees,
but his prison letters suggest that he did, in fact, favor doing whatever was necessary,
including selling his home, to hire an attorney for his son. “Resulting trusts generally are
imposed in accordance with the actual or assumed intention of the parties.” Burleson v.
McCrary, 753 S.W.2d 349, 352-53 (Tenn. 1988).
The Trial Court made credibility determinations, weighed the evidence, and
believed Wife’s version of events. The evidence does not preponderate against the Trial
Court’s findings of fact. We, therefore, affirm the judgment of the Trial Court in declining
-10-
to impose a resulting trust with respect to Stinking Creek.
Conclusion
That portion of the judgment holding that the statute of limitations had run is
vacated, and the judgment is affirmed, as so modified. This cause is remanded to the Trial
Court for collection of the costs below. The costs on appeal are assessed against the
Appellant, Denzil Russ Partin, and his surety, if any.
_________________________________
D. MICHAEL SWINEY, JUDGE
-11-