Teresa Lynn (Hurst) Fugate v. William Kendred Fugate, III

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
August 12, 2004 Session
TERESA LYNN (HURST) FUGATE v. WILLIAM KENDRED FUGATE, III
Appeal from the Family Court for Rhea County
No. 21253 James W. McKenzie, Judge
No. E2004-00546-COA-R3-CV Filed September 20, 2004
In this divorce case, Teresa Lynn (Hurst) Fugate (“Wife”) appeals the trial court’s decision
to set aside the parties’ marital dissolution agreement (MDA) and a quitclaim deed to the marital
residence executed by the Husband shortly after the parties separated. The trial court found the
residence to be marital property and equally divided the equity in the property between the parties.
Wife argues that the trial court should have found the residence to be a gift from husband, and thus
separate property, and that the trial court erred by not enforcing the quitclaim deed. Wife also
appeals the trial court’s award of $187.00 in attorney fees to Husband. We affirm the trial court’s
judgment in all respects.
Tenn.R.App.P. 3 Appeal as of Right; Judgment of the Family Court Affirmed; Cause
Remanded
SHARON G. LEE, J., delivered the opinion of the court, in which HERSCHEL P. FRANKS, P.J. and D.
MICHAEL SWINEY , J., joined.
J. Arnold Fitzgerald, Dayton, for the Appellant, Teresa Lynn (Hurst) Fugate.
Marsha G. Smith, Chattanooga, for the Appellee, William Kendred Fugate, III.
OPINION
I. Factual Background
The parties were married on June 19, 1982. Two children were born of the marriage, age
eight years and three years, at the time of the divorce complaint. Wife filed a complaint for divorce
on October 18, 2000. Wife filed a MDA, signed by the parties on October 17, 2000, along with the
complaint. The MDA provided that the Husband “shall execute a quitclaim deed to the [Wife],
conveying his interest in said real estate.”
On November 17, 2000, Husband filed an answer in which he alleged that the MDA “should
be set aside, and that th[e] Court should equitably divide the properties of the parties upon a hearing
of this cause.” Husband also filed a counter-complaint for divorce.
Following a failed attempt at reconciliation, a hearing was held before the trial court on
August 11, 2003. At the hearing, Wife entered into evidence a quitclaim deed executed by Husband
on October 17, 2000, which conveyed his interest in the marital residence to Wife. Husband argued
that both the MDA and the quitclaim deed should be set aside. The trial court agreed, found the
residence to be marital property, and divided it equally between the parties. The trial court also
awarded Husband $187.00 in attorney fees, apparently the expense to Husband in fees for traveling
to and attending a hearing at which Wife did not appear in court. Wife appeals the trial court’s
ruling regarding the division of the residence and the award of attorney fees.
II. Issues Presented for Review
Wife raises the following issues for our review in this case:
1. Whether the trial court erred in setting aside the quitclaim deed and MDA, and finding the
parties’ residence to be marital property.
2. Whether the trial court erred in awarding Husband $187.00 in attorney fees.
III. Standard of Review
In this non-jury case, our review is de novo upon the record of the proceedings below; but
the record comes to us with a presumption of correctness as to the trial court's factual determinations
which we must honor unless the evidence preponderates against those findings. Tenn. R.App. P.
13(d); Wright v. City of Knoxville, 898 S.W.2d 177, 181 (Tenn.1995); Union Carbide Corp. v.
Huddleston, 854 S.W.2d 87, 91 (Tenn.1993). The trial court's conclusions of law are accorded no
such presumption. Campbell v. Florida Steel Corp., 919 S.W.2d 26, 35 (Tenn.1996); Presley v.
Bennett, 860 S.W.2d 857, 859 (Tenn.1993). The trial court in a divorce case is vested with wide
discretion in classifying the parties’ property as either marital or separate, and its decision is entitled
to great weight on appeal. Dunlap v. Dunlap, 996 S.W.2d 803, 814 (Tenn.App.1998).
IV. The MDA and Quitclaim Deed
Husband does not deny signing the quitclaim deed and the MDA. He asserts that these
documents were presented to him the day after the parties separated, at Wife’s attorney’s office, at
a time when he was unrepresented by counsel and stunned by the unraveling of his marriage.
Husband testified as follows:
Q: And what about a quitclaim deed, did you sign a quitclaim deed
when you were there that day?
-2-
A: Yes.
* * *
Q: And you signed this the same day you signed the marital
dissolution agreement, correct?
A: Yes.
Q: And why did you sign a quitclaim deed for the property?
A: I had a bombshell dropped on me the day before, and I was in shock.
Q: Were you represented by an attorney at that point in time?
A: No. I wasn’t represented.
Q: Did you consult with an attorney before you signed the quitclaim
deed or the marital dissolution agreement?
A: No.
Q: How shortly after you signed the quitclaim deed did you go consult with an
attorney?
A: It was somewhere within two weeks.
* * *
Q: And why did you change your mind?
A: I had time to think about what had happened. Like I said, the bombshell had been
dropped on me on the 16th, and I was in shock. It took a week or so for me to, I
guess, come to my senses.
As above noted, Wife filed the MDA at the same time as her complaint, but the trial court
took no action regarding the MDA until its final order in which the trial court found it should be “set
aside and vacated.” In Harbour v. Brown for Ulrich, 732 S.W.2d 598, 599 (Tenn.1987), the
Supreme Court held that “a valid consent judgment can not be entered by a court when one party
withdraws his consent and this fact is communicated to the court prior to entry of the judgment.”
This court has applied the Harbour rule in a divorce case involving an MDA on several occasions.
See Denbow v. Denbow, 1996 WL 243894, 1996 Tenn.App. LEXIS 278, C/A No. 02A01-9410-CH-
00238 (Tenn.App.W.S. filed May 9, 1996); Elrod v. Elrod, 1991 WL 238263, 1991 Tenn.App.
LEXIS 894, C/A No. 03A01-9108-GS-260 (Tenn.App.E.S. filed Nov. 18, 1991).
-3-
In the present case, it was made clear to the trial court that Husband had repudiated and
withdrawn his consent to the MDA before any judicial action had been taken on it. Under the above-
cited cases, the trial court was therefore correct in refusing to enter a consent judgment on the MDA
and in setting it aside instead.
As the trial court noted, the MDA made specific reference to the quitclaim deed, and
husband’s execution of the deed was a required term of the MDA. It is therefore clear that because
the trial court set aside and vacated the MDA, there was no consideration supporting the quitclaim
deed. Although the quitclaim deed recites that Husband “for One ($1.00) dollar, and other valuable
considerations paid” released and quitclaimed all interest in the marital residence, both parties
testified at the hearing that Husband received no consideration in return for executing the deed.
Perhaps recognizing this deficiency, Wife’s sole argument and position on appeal is that the
quitclaim deed should be construed as a gift to Wife. At the trial level, although Wife argued that
the deed should be enforced, she never presented the argument that it was a gift. To be valid, a gift
requires the following elements: (1) an intention to make the gift on the part of the donor, (2)
delivery of the gift, and (3) its acceptance by the donee. Myers v. Farmers & Merchants Bank Corp.,
Inc., 2003 WL 22037527 at *3, 2003 Tenn.App. LEXIS 612, C/A No. M2002-00888-COA-R3-CV
(Tenn.App.M.S. filed Aug. 29, 2003). The burden of proving a gift is upon the donee. Pamplin v.
Satterfield, 265 S.W.2d 886, 888 (Tenn.1954); Dunlap v. Dunlap, 996 S.W.2d 803, 814
(Tenn.App.1998).
We find there is no evidence that Husband had the requisite intent to make a gift of the
marital residence to Wife. Husband executed the deed, it appears, the day after he discovered that
Wife wanted a divorce, and in any event, very shortly after the parties separated.1 The deed was
executed at the same time the parties signed the MDA. Neither Husband nor Wife testified that the
quitclaim deed was intended to be a gift.
Further, the record contains a sworn and notarized statement, signed by Wife and dated
August 11, 2003, and filed by Wife with the trial court, which is styled “Asset Stipulation.” It lists
the parties’ property and is divided into three parts, headed, respectively, “Marital Property,”
“Separate Property,” and “Other Property (Disputed as to Whether Marital or Separate).” The
marital residence, which is the primary asset of this marriage of over 20 years, is listed by Wife as
“marital property” on this document. We find that Wife did not carry her burden of proving a gift,
and the trial court did not err in setting aside the quitclaim deed.
1
Husband was not asked at trial to explain his comment, “I had a bombshell dropped on me the day before, and
I was in shock.”
-4-
V. Attorney Fees
The trial court awarded Husband $187.00 in attorney fees, which was the cost or a portion
of the cost to Husband for travel and appearance in court for a hearing at which Wife did not appear.
Wife’s counsel argued that he did not receive notice of the hearing because it was sent to the wrong
address, and the trial court therefore erred in awarding attorney fees. In response, the trial court noted
a fact borne out by the record–that several other motions and orders had been previously mailed to
this admittedly incorrect address, and had reached Wife’s attorney without apparent problem or
complaint. The decision whether to award attorney fees is within the sound discretion of the trial
court and will not be disturbed upon appeal unless the evidence preponderates against such a
decision. Kincaid v. Kincaid, 912 S.W.2d 140, 144 (Tenn. Ct. App. 1995). We find the trial court
acted within its discretion in awarding Husband $187.00 in attorney fees.
Husband argues that he should be awarded his attorney fees for this appeal. We find that
each party should be responsible for his or her own attorney fees on appeal in this case.
VI. Conclusion
For the foregoing reasons, we affirm the judgment of the trial court in its entirety, and
remand this case for collection of costs below. Costs on appeal are assessed against the Appellant,
Teresa Lynn (Hurst) Fugate.
___________________________________
SHARON G. LEE, JUDGE
-5-