Dixie Millburn Selby v. Landon Selby - Dissenting

IN THE COURT OF APPEALS OF TENNESSEE
MIDDLE SECTION AT NASHVILLE
DIXIE MILLBURN SELBY, )
)
Plaintiff/Appellee, )
) Rutherford Chancery
) No. 94DR-775
VS. )
) Appeal No.
) 01A01-9604-CH-00159
LANDON SELBY, )
Defendant/Appellant.
)
)
FILED
December 6, 1996
DISSENTING OPINION Cecil W. Crowson
Appellate Court Clerk
I concur with the court’s conclusion that the increase during the marriage
of the equity in Ms. Selby’s six Glaze Court duplexes is marital property.
However, I have prepared this separate opinion to address an issue concerning the
valuation of this marital property that is not addressed in the main opinion. Since
the trial court undervalued this interest, I would remand the case for further
proceedings.
I.
Dixie Selby owned six duplexes on Glaze Court before she married Landon
Selby. According to Ms. Selby, the market value of these duplexes at the time of
the marriage was $208,200. They were encumbered by a $140,000 mortgage, and
accordingly, their net value at the time of the marriage was $68,200. At the time
of the divorce, the fair market value of the duplexes was between $216,6001 and
$276,000.2 The parties refinanced the debt during the marriage, and the debt
applicable to the duplexes was $29,365.91 at the time of the divorce. Thus, the
net value of the duplexes at the time of the divorce was between $187,234 and
$246,634.
1
Ms. Selby testified that the value of the one-bedroom duplexes was $34,900 and that the
value of the two-bedroom duplexes was $37,300.
2
Mr. Selby’s appraiser testified that the value of the one-bedroom duplexes was $45,000
and that the value of the two-bedroom duplexes was $47,000.
The trial court found that the duplexes are Ms. Selby’s separate property
because she owned them prior to the marriage. It also found that the increase in
the value of these duplexes during the marriage was marital property because Mr.
Selby had substantially contributed to the duplexes’ preservation and
appreciation.3 See Tenn. Code Ann. § 36-4-121(b)(1)(B) (1996). The trial court
then determined that the equity in the duplexes had increased by $50,000 during
the marriage.
II.
The trial court did not consider the reduction in the debt on the duplexes
when it calculated the increase in their equity during the marriage. This oversight
appears to have been caused by an ambiguity in the “Joint Stipulation and
Statement in Compliance with Rule 12.02"4 filed prior to the hearing. This
statement requires the parties to list debts separately from property and also
requires the parties to state the “value” of property without stating whether the
value should be market value, net value including associated debts, or some other
value. It does not require the parties to indicate the existence of a correlation
between a particular piece of property and a debt.
The courts should apportion marital debts in much the same way that they
divide marital property. Cutsinger v. Cutsinger, 917 S.W.2d 238, 243 (Tenn. Ct.
App. 1995); Mahaffey v. Mahaffey, 775 S.W.2d 618, 623-24 (Tenn. Ct. App.
1989). They should also, when the facts require, consider the marital debts in
conjunction with associated marital property. Houghland v. Houghland, 844
S.W.2d 619, 624 (Tenn. Ct. App. 1992); Mondelli v. Howard, 780 S.W.2d 769,
773 (Tenn. Ct. App. 1989).
3
Mr. Selby cosigned the note when Ms. Selby refinanced the mortgage on the duplexes
in September 1992. He also worked on a full-time basis from 1990 to 1994 to improve and
maintain the duplexes.
4
The local rules of court for the Sixteenth Judicial District require parties in contested
divorce proceedings to file a statement identifying the disputed issues and the witnesses they
expect to call. It also requires the parties to identify and value all separate and marital property.
The form provided in the local rules greatly assists the trial court in valuing and distributing the
parties’ marital estate.
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The trial court should have considered both the increase in market value and
the decrease in the associated debt when it calculated the increase in the equity of
the six Glaze Court duplexes during the marriage. Mr. Selby brought this
oversight to the trial court’s attention in a timely post-trial motion. Accordingly,
I would remand the case with directions that the trial court recalculate the increase
in the equity of the six Glaze Court duplexes and then determine whether
adjustments should be made in its original distribution of the marital estate.
Placing a higher value on this increase in equity does not necessarily require a
different distribution of marital property since Tenn. Code Ann. § 36-4-121(a)(1)
(1996) requires an equitable division, not necessarily an equal one. Ellis v. Ellis,
748 S.W.2d 424, 427 (Tenn. 1988); Batson v. Batson, 769 S.W.2d 849, 859 (Tenn.
Ct. App. 1988).
____________________________
WILLIAM C. KOCH, JR., JUDGE
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