Teresa Lee Walker v. Larry Alan Walker

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
February 4, 2014 Session
TERESA LEE WALKER v. LARRY ALAN WALKER
Appeal from the Family Court for Rhea County
No. 26279 Hon. James W. McKenzie, Judge
No. E2013-01698-COA-R3-CV-FILED-APRIL 16, 2014
This post-divorce appeal concerns the equitable division of property between the Parties.
Following the grant of the request for divorce, the trial court credited Husband for separate
property he contributed to the marital residence to equalize the overall division of the
property. Wife appeals. We affirm the decision of the trial court.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Family Court
Affirmed; Case Remanded
J OHN W. M CC LARTY, J., delivered the opinion of the Court, in which C HARLES D. S USANO,
J R., C.J., and T HOMAS R. F RIERSON, II, J., joined.
Samuel A. Byrd and Clancy J. Covert, Chattanooga, Tennessee, for the appellant, Teresa Lee
Walker.
James S. Smith, Jr., Rockwood, Tennessee, for the appellee, Larry Alan Walker.
OPINION
I. BACKGROUND
Teresa Lee Walker (“Wife”) married Larry Alan Walker (“Husband”) in 1992. The
parties were married later in life and each had their own children prior to the marriage. There
were no children born of the marriage between Husband and Wife (collectively “the
Parties”). Husband worked throughout the marriage, with the exception of a one-year period
from 1994 to 1995 when he was unemployed. Husband eventually retired in 2006. Wife also
worked throughout the marriage until her health deteriorated in 2008.
The issues in this appeal pertain to Husband’s premarital purchase of a house (“the
Lake House”) in Spring City, Tennessee in 1988. Husband made a $36,000 down payment
and financed the remainder of the Lake House. Approximately one year after the marriage,
Husband fulfilled the mortgage obligation on the Lake House with $23,000 he received as
a lump-sum retirement payment from his employment at the University of Missouri. The
Parties initiated a second mortgage on the Lake House, and payments were made on the
second mortgage throughout the marriage. Husband subsequently applied approximately
$22,150 he received as inheritance from his mother to fulfill the second mortgage obligation.
In 2004, the parties initiated a third mortgage on the Lake House to fund the purchase and
renovation of a second home (“the Wolf Creek House”). The parties sold the Lake House,
used half of the proceeds to fulfill the mortgage obligation on the Wolf Creek House, and
transferred the remaining proceeds to Husband’s retirement account. At some point, the third
mortgage on the Lake House was fulfilled.
On July 24, 2008, Wife filed a complaint for legal separation, alleging inappropriate
marital conduct. The parties attempted to reconcile but were unsuccessful, causing Wife to
file a motion to reinstate the divorce proceedings. The court revoked the reconciliation order,
and the parties stipulated the grounds supporting the request for divorce. The case proceeded
to trial on the issue of the classification and division of property.
Wife testified that she first met Husband in Baton Rouge, Louisiana. Husband was
working at a nuclear plant, while she was working for Ethyl Corporation. She eventually
obtained employment at Husband’s nuclear plant and established a residence with Husband
in late 1986, approximately six years before they were legally married. She claimed that her
relationship with Husband began to deteriorate when he reached retirement age and “started
trying to run [her] off” because she needed financial assistance. She stated that she was
unable to maintain her work schedule because her health had declined. She asserted that
Husband impeded her access to marital funds and that he refused to pay her hospital bills,
totaling approximately $75,000. She stated that he refused to provide her with health
insurance even though he always maintained coverage for himself. She asserted that
Husband began draining his annuities, investment accounts, and an insurance policy when
she filed for separation. She conceded that she had applied for a credit card using Husband’s
social security number and that she pawned several of their belongings to pay for necessities.
Wife acknowledged that she did not have property or significant assets when she
married Husband and that he purchased the Lake House prior to the marriage. She conceded
that she and Husband maintained separate checking accounts, that she generally provided for
her needs, and that Husband paid the mortgage. She noted that she was living with Husband
when the Lake House was purchased. She recalled that the Lake House was mortgaged
several times throughout the marriage and that she was listed on the trust deed for the second
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mortgage. She recalled that she and Husband purchased the Wolf Creek House in 2004 with
funds from the Lake House. She also testified extensively concerning Husband’s various
collectible items that were valued and divided pursuant to the court’s order.
Husband testified extensively concerning his educational history and employment.
He recalled a long career with the Navy that allowed him to gain a valuable technical
education in the Navy’s nuclear power program. In 1965, he left the Navy and began
working for the University of Missouri. After approximately fourteen years, he then
completed a series of contract positions before he began a printer repair company that was
successful for approximately 12 years. He acknowledged that he attempted to start another
business venture, which was not as successful as his printer repair company.
Relative to Wife, Husband claimed that Wife never showed him her hospital bills and
that he had diligently paid the bills he was provided. He testified that he purchased the Lake
House in 1988 and ultimately fulfilled the first mortgage obligation in 1993. He related that
he contributed $81,150 of what he considered separate property to the Lake House. He stated
that his contribution consisted of his initial $36,000 down payment, a $23,000 lump-sum
payment from one of his retirement accounts, and a $22,150 payment that he received as
inheritance from his mother. He stated that he netted approximately $300,000 from the sale
of the Lake House. He asserted that he used $150,000 to pay the mortgage on the Wolf
Creek House and that he transferred the remaining $150,000 to one of his retirement
accounts.
Following the presentation of the above evidence, the trial court granted the request
for divorce. As relevant to this case, the court adopted the Parties’ valuations of the property
at issue and divided the marital property, allocating an additional $81,150 in marital property
to Husband in recognition of his contribution of separate property to the marriage. Wife filed
a motion to alter or amend the court’s judgment, arguing, in pertinent part, that the court
erred in allocating an additional $81,150 in marital property to Husband because his
contribution of allegedly separate property had been transmuted into marital property. Wife
also specifically asserted that the trial court erred in crediting Husband for the $22,150
inheritance he received from his mother. She claimed that $7,000 of the inheritance was
marital property because it was payment for services rendered during the marriage and that
the remainder was transmuted into marital property as evidenced by Husband’s use of the
funds to fulfill a marital debt. This timely appeal followed the trial court’s denial of Wife’s
post-trial motion.
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II. ISSUE
We consolidate and restate the issues raised on appeal by Wife as follows:
Whether the trial court erred in dividing the property between the Parties.
III. STANDARD OF REVIEW
On appeal, the factual findings of the trial court are accorded a presumption of
correctness and will not be overturned unless the evidence preponderates against them. See
Tenn. R. App. P. 13(d). The trial court’s conclusions of law are subject to a de novo review
with no presumption of correctness. Blackburn v. Blackburn, 270 S.W.3d 42, 47 (Tenn.
2008); Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993). Mixed
questions of law and fact are reviewed de novo with no presumption of correctness; however,
appellate courts have “great latitude to determine whether findings as to mixed questions of
fact and law made by the trial court are sustained by probative evidence on appeal.” Aaron
v. Aaron, 909 S.W.2d 408, 410 (Tenn. 1995).
The trial court’s division of property is reviewed de novo with a presumption that the
trial court’s factual findings are correct. See Watters v. Watters, 959 S.W.2d 585, 588 (Tenn.
Ct. App. 1997). Absent an error of law, the court’s division of property will be reversed or
modified only if the evidence preponderates against the court’s decision. Id. The trial court
has wide discretion in dividing property. Dunlap v. Dunlap, 996 S.W.2d 803, 814 (Tenn. Ct.
App. 1998). This court must give great weight to the trial court’s decisions 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.’” Keyt v. Keyt, 244 S.W.3d 321, 327 (Tenn. 2007)
(quoting Herrera v. Herrera, 944 S.W.2d 379, 389 (Tenn. Ct. App. 1996)).
IV. DISCUSSION
Wife argues that the trial court erred in crediting Husband for the alleged $36,000
down payment on the Lake House when the record clearly reflects that the down payment
was only $30,200. She also claims that the trial court erred in crediting Husband for $22,150
in separate property when the funds were used to pay a marital debt. Husband responds that
he provided a $36,000 down payment but that the record simply fails to account for the
money he contributed to closing costs. He argues that if this issue had been raised at trial,
he would have submitted documentation to prove that fact. He asserts that the money he
contributed to the marital residence was not transmuted into marital property because he and
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Wife clearly kept their finances and assets separate. He claims that if any error occurred, the
trial court was simply too conservative in setting the amount of his separate property.
Relative to the alleged clerical error in calculating Husband’s initial down payment
on the Lake House, Wife failed to raise this issue at trial. Indeed, the record reflects that at
trial, the Parties agreed that Husband made a $36,000 down payment on the Lake House. A
party may not offer a new issue for the first time on appeal. See Lane v. Becker, 334 S.W.3d
756, 764 (Tenn. Ct. App. 2010) (citing Campbell Cnty. Bd. of Educ. v. Brownlee-Kesterson,
Inc., 677 S.W.2d 457, 466-67 (Tenn. Ct. App. 1984)). “The jurisprudential restriction
against permitting parties to raise issues on appeal that were not first raised in the trial court
is premised on the doctrine of waiver.” Fayne v. Vincent, 301 S.W.3d 162, 171 (Tenn. 2009)
(citations omitted). If Wife had raised the issue, the trial court could have addressed the issue
and provided a record for this court’s review. Accordingly, this issue is waived.
Relative to the inheritance Husband received from his mother, separate property is
defined, in pertinent part, as “[p]roperty acquired by a spouse at any time by gift, bequest,
devise or descent.” Tenn. Code Ann. § 36-4-121(b)(2). However, “[t]he doctrines of
transmutation and commingling provide an avenue where separate property can become
marital property” based upon “the parties’ treatment of the separate property.” Eldridge v.
Eldridge, 137 S.W.3d 1, 13 (Tenn. Ct. App. 2002). Despite this fact,
[P]roperty once owned by a spouse, either as separate property or marital
property, but not owned by either spouse at the time of the divorce, is not
subject to classification and division or distribution when the divorce is
pronounced. This is because, generally speaking, a court cannot divide and/or
distribute what is “not there” – property no longer owned by the parties,
individually or jointly, at the time of the divorce.
Brock v. Brock, 941 S.W.2d 896, 900 (Tenn. Ct. App 1996) (footnote omitted).
In this case, the inheritance Husband received from his mother was no longer in
existence at the time of the divorce. In such cases, the trial court may consider the use of
separate property for the benefit of the marriage when equitably dividing the present marital
property. Id. The Tennessee Code outlines the relevant factors that a court must consider
when equitably dividing marital property without regard to fault on the part of either party.
Tenn. Code Ann. § 36-4-121(a)(1), (c). An equitable division of marital property is not
necessarily an equal division, and section 36-4-121(a)(1) only requires an equitable division.
See Robertson v. Robertson, 76 S.W.3d 337, 341 (Tenn. 2002). In consideration of the
relevant factors and the trial court’s discretion in such matters, we conclude that the division
of the marital property was equitable and affirm the court’s decision.
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V. CONCLUSION
The judgment of the trial court is affirmed, and the case is remanded for such further
proceedings as may be necessary. Costs of the appeal are taxed to the appellant, Teresa Lee
Walker.
______________________________________
JOHN W. McCLARTY, JUDGE
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