IN THE COURT OF APPEALS OF

TENNESSEE AT JACKSON

MARY ) ANN QUINN, ) 

FILED

-2 R.D.

March 25, 1999

00089

Cecil Crowson, Jr.

Plaintiff/Appellant, ) Shelby Chancery No. D27744 ) VS.

) Appeal No. 02A01-9803-CH

)

GREGORY M. QUINN, )

)

Defendant/Appellee. )

APPEAL FROM THE CHANCERY COURT OF SHELBY

COUNTY AT MEMPHIS, TENNESSEE THE HONORABLE

FLOYD PEETE, JR., CHANCELLOR

MITCHELL D.

MOSKOVITZ LISA E.

CIRCEO Memphis,

Tennessee Attorneys for

Appellant

WENDY S.

DABBOUS Memphis,

Tennessee Attorney

for Appellee

AFFIRMED IN PART, REVERSED IN

PART AND REMANDED

ALAN E. HIGHERS, J.

CONCUR:

(. FRANK CRAWFORD, P.J.,

W.S. HOLLY KIRBY LILLARD, J.

MaryAnnQuinn(“Wife” or “Appellant”) appeals thejudgment ofthetrial court which

ordered Gregory M. Quinn (“Husband” or “Appellee”) to pay for the parties’ minor child’s

private school tuition in monthly increments designated as alimony; ordered Husband to

pay a portion of Wife’s attorney fees; and classified the following property of the parties:

1. Amer. Express IDS Flexible Annuity Account ($58,775) 

Husband 2. Charles Schwab Account ($54,190)
Husband

3. Residence at 2368 Circle ($100,000) 40% Husband/60% Marital

I. Factual and Procedural History

Wife and Husband were divorced on February 3, 1998, after fourteen years of

marriage. Most of the issues of the divorce were agreed upon between the parties and

announced to the court prior to trial. 

In classifying the parties’ property as marital or separate, the trial court determined

that the American Express IDS Flexible Annuity Account (“IDS account”), and the Charles

Schwab Account (“Schwab account”) were Husband’s separate property. The trial court

further classified the parties’ residence at 2368 Circle as 60% marital and 40% Husband’s

separate property. The trial court ruled Wife and child should be allowed to reside in the

home until the child reaches the age of majority, with Husband paying 60% and Wife

paying 40% of the mortgage. At that time, Husband must pay to Wife one half of the

equity accrued during the marriage (approximately $6,000.00), and one half of the future

equity which will accrue in the home while Wife and child continue to reside there. 

At the time Husband inherited the Circle Avenue property it was valued at

$100,000.00 and Husband inherited a 25% interest. Husband purchased an additional

15% interest in the property from his siblings with funds he inherited from his father. The

parties then obtained a mortgage to purchase theremaining interest (60%) from

Husband’s siblings.

Husband also inherited an investment account his father had maintained with

Schwab. After his father’s death, Husband was informed that he would have to re-title the

account into his own name. He then put the account in both his and Wife’s name. No

marital funds were ever deposited into this account, nor was any money ever withdrawn. 

Like the Schwab account, the funds used to open the IDS account were also

inherited by Husband from his father. The funds originally came from a First American

savings account which was owned by Husband’s father. The funds were then transferred

into a newly-opened joint account of the parties where they remained for less than one

month before being withdrawn to open the IDS account. The parties met jointly with Vera

Feldman, a financial advisor, to set up certain IDS accounts. Feldman testified that both

Husband and Wife have set up individual funds with money theyhad separately inherited.

Feldman verified that Wife had no control over the IDS account. Husband named Wife

as the beneficiary of the IDS account.

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At trial, both parties agreed their son should remain in private school. Wife stated

that if she did not receive some form of financial assistance she would be unable to afford

private school tuition. Husband was ordered to pay $688.00 per month as child support

in accordancewith thechild support guidelines.Additionally, theCourt ordered that

Husband pay the private school tuition each year to Wife in the form of alimony.

The trial court established a formula for the payment of Wife’s attorney fees. The

court held Husband was to pay one-half Wife’s attorney fees incurred prior to January 31,

1998, or $1,500.00, andone-halfWife’s attorney fees incurred since January31,1998, not

to exceed $2,500.00.

II. Real Property

The home at 2368 Circle Avenue was inherited by Husband and his siblings during

the course of the marriage when Husband’s father died in 1993. At the time Husband

inherited the property, it was valued at OneHundred Thousand Dollars ($100,000.00) and

Husband inherited a twentyfive percent (25%) interest. Husband purchased an additional

fifteen percent (15%) interest in the property from his siblings with funds he inherited from

his father. Husband and Wife then obtained a mortgage to purchase the remaining sixty

percent (60%) interest from Husband’s siblings. Husband,Wife andtheir minor son moved

into the house and the home was jointly titled in the parties’ names.

Evidence at trial established that the Circle Avenue home had been in Husband’s

familyfor more than fifty years. Husband’s grandfather originally purchased the home and

raised his familythere. When he died, Husband’s father inherited the home and raised his

family in it. Husband wished to raise his son in the ancestral home before Wife filed for

divorce. When Wife requested Husband leave the home, Husband returned to theparties’

former residence on Choctaw Avenue which the parties still own. Husband testified he

wanted to minimize the disruption in his son’s life so he consented to Wife and child

remaining in the Circle Avenue home pending the divorce. Husband testified he never

intended to abandon his ancestral home.

The trial court ruled that theforty percent (40%) interest in thehome which Husband

inherited or purchased with inherited funds is Husband’s separate property. The trial court

deemed the remaining sixty percent (60%) interest in the home to be marital property.

The court ruled that Wife and minor child should be allowed to continue to reside in the

home until the child reaches the age of majority. At that time, or if Wife chooses to move

prior to that time, Husband must pay to Wife one half of the equity which accrued during

the marriage and one half of the future equity which will accrue in the home while Wife

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and child continue to reside there. The court ordered Husband to pay sixty percent (60%)

and Wife to pay forty percent (40%) of the mortgage while Wife and minor child reside in

the home.

At the outset of our discussion we note that in accordance with Tenn.R.App.P.

13(d), the role of this Court is to review the record made in the trial court de novo with

the presumption that the trial court's findings of fact are correct unless the

evidence preponderates otherwise. Thus, we will affirm the trial court's decision

unless there is an error of law affecting the result or unless the evidence

preponderates against the trial court's factual determinations. Campanali v.

Campanali, 695 S.W.2d 193, 194 (Tenn. App.1985) (citations omitted).

Wife contends that the trial court erred in finding the Circle Avenue property to be

only sixty percent (60%) marital. Wife argues that the home was inherited by Husband

during the marriage, treated as the “family home,” and jointly titled. Wife asserts that the

home is marital property in its entirety pursuant to the equitable doctrine of transmutation,

and that the property should have been awarded to Wife. 

This Court addressed the doctrine of transmutation in the case of McClellan v.

McClellan, 873 S.W.2d 350 (Tenn. App. 1993).

Transmutation occurs when separate property is treated in

such a way as to give evidence of an intention that it become

marital property. One method of causing transmutation is to

purchase property with separate funds but to take title in joint

tenancy. This may also be done by placing separate property

in thenames of both spouses. The rationale underlying both

of 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 upon the provision in many

marital property statutes that property acquired during the

marriage is presumed marital. The presumption can be 

rebutted by evidence of circumstances or communications 

clearly indicating an intent that the property remain separate.

Id. at 351.

In theMcClellan case,a husband and wife purchased a home using funds inherited

by the husband ($20,000.00) for the down payment. The property was titled in the names

of both parties. The trial court found the property to be marital and awarded the home to

the husband. The wife appealed the judgment asserting that she should have been

awarded at least one half of the marital residence. The husband argued that the trial court

should have found theresidence to be his separate property as he only agreed to have

the property titled in both their names because the wife threatened to sue for divorce if

the property was not also titled in her name. The Court of Appeals focused on the

husband’s testimony that he intended to have the house for the family and affirmed the

trial court’s finding that the property was marital. The Court also affirmed the award of the

property to the husband.

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In the case at hand, Wife argues that the home was titled jointly, financed jointly,

and treated as a “family home.” Husband contends that although there is a rebuttable

presumption that he intended to make a gift to the marriage, McClellan also states that

the presumption can be rebutted by evidence of circumstance or communications clearly

indicating that the property remain separate. Although the McClellan court did not define

what those circumstances might be, Husband contends that the present case presents

an appropriate set of circumstances. Husband argues that a home which has been 

in Husband’s family for over fifty years should be viewed differently than a home without

this designation which parties purchase together using inherited funds for the down

payment, as in McClellan.

The evidence in this case preponderates against the trial court’s finding that the

home is forty percent (40%) separate and sixty percent (60%) marital. Although Husband

used his own funds to purchase 40% of the house on Circle Avenue, the home was jointly

titled in both Husband’s andWife’s names. The presumption that a gift to themarital estate

was intended can be rebutted by evidence clearly indicating an intent that the property

remain separate. There is no indication in the record that Husband ever treated the Circle

Avenue property as if it were his separate property. Based upon the status of the title of

theCircle Avenueproperty, and in theabsence of proofthat Husband clearlyintended that

the home would remain his separate property, we find that the home was marital property.

Our statutes provide that in divorce cases thecourt shall equitablydivide

themarital property of the parties. Tenn. Code Ann. §36-4-121(a). An equitable

division however is 

notnecessarilyan equal one. Barnhill v. Barnhill, 826S.W.2d443, 456(Tenn.App. 1991). 

Trial courts are afforded wide discretionin dividing theinterests

ofparties in jointly owned property. Accordingly, thetrial court’s

distribution will be given great weight on appeal, and will be

presumed to be correct unless we find the preponderance of

the evidence is otherwise.

Id. at 449.

Pursuant to Tenn. Code Ann. §36-4-121(c), trial courts are guided by many factors

in making an equitable division ofmarital property. Oneimportant factor is “the contribution

of each party to the acquisition, preservation, appreciation or dissipation of the marital or

separate property, including the contribution of a party to the marriage as homemaker,

wage earner, or parent.” (Tenn. Code Ann. §36-4-121(c)(5)). Under this factor and the

catchall provision, “Such other factors as are necessary to consider the equities between

the parties” (Tenn. Code Ann. §36-4-121(c)(10)), the trial court was able to factor in

Husband’s use of inherited funds to purchase forty percent (40%) of the home, and the

length of time the home has been in Husband’s family.

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Although the Circle Avenue property became marital property under the doctrine

of transmutation, Husband’s use of inherited funds to purchase the home, and the fact

that the home has been passed down through several generations in Husband’s family,

are relevant to the equitable division of the property. The evidence does not preponderate

against the trial court’s division of the Circle Avenue property. While the property should

properly be classified as marital, the division of the property shall remain the same. Wife

shall be entitled to half of the equity which accrued during the marriage (approximately

$6,000) and half of the future equity which will accrue while Wife and child are residing

in the home, to be paid by Husband at the time Wife and child leave the home. The trial

court’s judgment regarding occupancy of the home, payment of mortgage, and sale of the

home shall also remain the same.

III. IDS and Schwab Accounts

WhenHusband’s fatherdied in 1993, Husband inherited an investment account with

Charles Schwab and a First American savings account. Initially, the Schwab account

remained in Husband’s father’s name until Husband was advised that the account must

be under a living person’s social security number. Husband testified that he retitled the

account into his and Wife’s name in an effort to protect Wife in case of Husband’s

untimely

death. 

Similarly, the IDS account was opened by Husband with funds inherited from his

father’s First American savings account. Like the Schwab account, Husband eventually

had to retitle this account or move the funds out of his father’s name. The parties opened

whatlater becametheFAIR account with First American Bank andHusband depositedthe

funds from his father’s First American account (approximately $50,000.00) into the joint

account in December of 1994. On January 30, 1995, Husband transferred the money out

ofthat account to American Express Financial Advisors to open theIDS account. Husband

opened the IDS account in his name solely and named Wife as beneficiary in the event

of his untimely death.

The trial court found both theIDS andSchwab accounts to be theseparate property

of Husband and awarded them to Husband. Wife contends that the IDS and Schwab

accounts are marital property under the doctrine of transmutation. The Schwab account

was jointly titled, giving rise to thepresumption that Husband intended to make a gift to the

marriage. The IDS account was funded with money from the joint FAIR account. Wife

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contends the commingling of the martial and separate property resulted in transmutation

of the IDS account. 

The Schwab account was jointly titled in the parties’ names. Under the doctrine of

transmutation, this creates a rebuttable presumption of a gift to the marital estate. As

spelled out in McClellan, the presumption can be rebutted by evidence of circumstances

or communications clearlyindicating an intent that theproperty remain separate.McClellan

at 351. Husband testified that he titled the Schwab account in both parties’ names in an

effort to protect Wife in case of Husband’s untimely death, as Husband is a police officer.

Husband testified that having recently been through the probate process with his father’s

estate, Husband felt this was the most reasonable and prudent thing to do.

The jointly-titled Schwab account consists entirely of Husband’s inherited funds.

Wife stated that no funds had been withdrawn by either party since the account was put

in both parties’ names nor have any marital funds been deposited into the account.

Husband offered a plausible explanation for titling the account in both parties’ names. The

evidence does not preponderate against the trial court’s finding that the Schwab account

was the separate property of Husband.

The IDS account was titled in Husband’s name only. The account was funded

entirely with money inherited by Husband. Wife’s only avenue for asserting that this

account be deemed marital property is the fact that the inherited money was transferred

out of Husband’s father’s account and into a joint account of the parties for a period of

one monthbefore it was transferred to theseparately titled IDS account. Wife asserts that

such commingling of marital and separate funds invokes the doctrine of transmutation and

the presumption that Husband intended a gift to the marital estate. The evidence does

not support this argument.

While the inherited funds were briefly in the joint account, no marital funds were

depositedinto thejoint account nor were any funds withdrawn from theaccount. “The mere

fact that the funds were placed for a time in a joint account does not require that they be

consideredmarital property.”Fendley v. Fendley, No. 01A01-9509-CH-00418,1997 LEXIS

469, at *6 (Tenn. Ct. App. July 2, 1997). 

“A presumption arises that when deposits are made into a joint bank account

between spouses, the parties share a joint ownership in the funds on deposit. This

presumption, however, is rebuttable by either spouse wishing to show that the account

consists of his separate property only.” Mosher v. Mosher, No. 2, 1988 LEXIS 212, at *4

(Tenn. Ct. App. March 3, 1988) (citations omitted). While the funds used to open the IDS

7
amount came out of the parties’ joint account, the funds in the account consisted of

Husband’s separate property. The circumstances here indicate Husband’s intent that the

property remain separate. 

Wife argues that the IDS account could not have been titled jointly. However, Vera

Feldman, American Express financial advisor, testified that Husband chose an annuity

which could have only one owner instead of requesting an annuity allowing both parties

to be listed as owners. Additionally, Husband stated to Feldman that thefunds for

theannuity were part of his inheritance.

The brevity of the period in which the funds were placed in the joint account,

coupled with Husband’s titling the IDS account in his name only, evidenced Husband’s

intent that the funds remain his separate property. The evidence does not preponderate

against the trial court’s finding that the IDS account was Husband’s separate property. 

For all theabove stated reasons, thetrial court did noterr in holding that

theCharles Schwab account and the IDS account were the separate property of

Husband.

IV. Private School Tuition

The trial court ruled that Wife would be designated the primary custodial guardian

of the parties’ minor child and Husband would be responsible for the payment of child

support pursuant to the Department of Human Services Guidelines. The parties agreed

that thechild should continueto attend privateschool better to address his AttentionDeficit

Disorder. The trial court ordered Husband to pay for the child’s private school tuition and

designated Husband’s payment of tuition as alimony, deductible to Husband and taxable

to Wife. Wife contends that thetrial court erred in designating thepayment ofchild’s tuition

as alimony as it is exclusively for the benefit of the child and is thus, in the nature of child

support.

As Professor Clark has stated "[t]he purpose of alimony is to care for the wife's

needs after divorce . . .” H. Clark, Law ofDomestic Relations § 14.9(4) (1968). Tennessee

courts have consistently held that need is one of the most important factors in the award

of alimony, with thesole purpose ofalimony being to provide for a disadvantaged spouse's

needs after divorce. Lancaster v. Lancaster, 671 S.W.2d501, 503 (Tenn. Ct. App. 1984); 

Aleshire v. Aleshire, 642 S.W.2d 729, 733 (Tenn. Ct. App.1981). Tennessee Code

Annotated §36-5-101(d), sets out the factors the court must consider in setting alimony,

and the does not mention special education needs of children. 

8
While the child support amounts set forth in the Guidelines do not include private

school tuition, the Guidelines provide for the upward adjustment of child support for

extraordinary educational expenses:

(1) Since these percentage amounts are minimums, the court

shall increase the award calculated in Rule 1240-2-4-.03 for

the following reasons:

(c) Extraordinary educational expenses and extraordinary

medical expenses not covered by insurance shall be added

to the percentage calculated in the above rule.

Tenn. Comp. R. & Regs. tit. 10, ch. 1240-2-4-.04-.04(1)(c) (1994).

In Dwight v. Dwight, 936 S.W.2d 945 (Tenn. App.1996), this Court found that private

school tuition is not to be considered as a portion of child support under the Guideline

percentages and that child support can be adjusted upward for private school tuition. Id.

at 950.

Husband points to the case of Smith v. Smith, No. 01-A-01-9705-CH-00216, 1997

LEXIS 733 (Tenn. App. October 29, 1997) as support for his position that a minor child’s

private school tuition may be properly designated as alimony. In Smith, the Court of

Appeals held that the trial court was within its discretion in ordering a reduction in alimony

when part of thealimony had originally been awarded to help Wife pay for theminor child’s

private school tuition and minor child was later enrolled in public school.

Although the Smith case is certainly one instance of a trial court classifying tuition

as alimony, theissue on appeal was nottheproprietyof that classification, butwhether the

trial court erred in decreasing the alimony award upon the child’s enrollment in public

school. The Court of Appeals found that the trial court did not abuse its discretion in

reducing the alimony award. The issue in Smith was not whether the tuition should have

been classified as child support versus alimony. However, the Court of Appeals did make

mention of this issue:

We believe that both parties would concede that Tenn. Code

Ann. §36-5-101(d), which sets out the factors the court must

consider in setting alimony, does not specifically mention

special education needs of the children, and that such needs

are addressed in the provisions for deviation from the child

support guidelines found in Tenn. Rules & Regs. 12-2-4-

.04(1)(c).

Smith at *5-6.

Ultimately, the Court in Smith did not rule upon the propriety of classifying private

tuition as alimony and is therefore not controlling in the case at hand.

Husband’s payment of tuition is clearly for the benefit of the minor child. While

private school tuition is not to be considered as a portion of child support under the

Guideline percentages, theChild Support Guidelines andTennesseecase lawprovide that

child support can be adjusted upward for private school tuition. Furthermore, the factors

9
to be considered by the court in setting alimony make no mention of special education

needs ofminor children. The privateschool tuitionis clearlychild support andthetrial court

abused its discretionin designating Husband’s payment of the minor child’s privateschool

tuition as alimony.

TennesseeCodeAnnotated§36-5-101(e)(1) requires thetrial court,whendeviating

from the Child Support Guidelines, to make a written finding that the application of the

Guidelines would be unjust or inappropriate. Although the trial court found that the parties’

minor child should continue to attend Catholic High School, the finding was not in the

context ofchild support, andis insufficient to constitutea written finding that theapplication

of the Guidelines is inappropriate in this case. Accordingly, this case is remanded for 1

additional written findings consistent with this opinion.

V. Attorney Fees

The trial court established a formula for the payment of Wife’s attorneys’ fees. The

court held that Husband was to pay one half of Wife’s attorneys’ fees incurred prior to

January 31, 1998, or $1500.00, and one half of Wife’s attorneys’ fees incurred since

January 31, 1998, not to exceed $2500.00. Wife incurred total attorneys’ fees and suit

expenses of $7,522.05 at the time of trial. 

Wife contends that given the comparative needs of the parties and their ability to

pay their attorneys, the trial court should have required Husband to pay all of Wife’s

attorneys’ fees. Husband argues that as Wife received half of the parties marital assets,

alimony, child support andhas considerable amount ofseparate property, Wife clearlyhas

adequate funds from which to pay her attorney’s fees. Husband contends this holding

should be reversed and each party ordered to pay their own attorney’s fees.

The trial court has wide discretion in determining the amount, if any, of attorney's

fees to be awarded. Crouch v. Crouch, 53 Tenn. App. 594, 605; 385 S.W.2d 288, 293

(1964). At the conclusion of a divorce case, if the wife is without sufficient resources 

properly to compensate her attorney, and if the financial provisions made for the wife by

way of alimony, periodic or in solido, do not include the means out of which counsel fees

can reasonably be paid, the court is authorized to grant to the wife additional alimony for

the purpose of enabling her to pay her attorney. Palmer v. Palmer, 562 S.W.2d 833, 839

(Tenn. App. 1977); Ligon v. Ligon, 597 S.W.2d 310 (Tenn. App. 1979); and Ligon v.

1

We note, however, that a written finding that the child had a special disability and that he has

particularly benefitted from private school education in the past, will satisfy the requirement. See Quarry

v. Quarry, No. 02A01-9111-CH-00262, 1992 WL 141796, at *2 (Tenn. App. June 25, 1992).

10
Ligon, 556 S.W.2d 763 (Tenn. App. 1977). Thus, this Court will not disturb the trial court's

decisionregarding attorneys' fees unless thedecisionis notsupportedby a preponderance

of the evidence.

The right to an allowance of legal expenses is not absolute. It is conditioned upon

a lack of resources to prosecute or defend a suit in good faith. This rule is to enable the

wife, when destitute of means of her own, to obtain justice and to prevent its denial. Fox

v. Fox, 657 S.W.2d 747, 749 (Tenn.1983).

In the final decree of divorce, Husband was ordered to pay to Wife the sum of

Fourteen Thousand Nine Hundred Forty-Four Dollars ($14,944.00) to effectuate an equal

division of the parties’ retirement/pension accounts and the sum of One Thousand Five

hundred Dollars ($1,500.00) as Wife’s share of the 1978 Harley motorcycle sold by

Husband during thedivorce proceedings. Wife was awarded onehalfoftheFirst American

Bank FAIR account balance of Seventeen Thousand Ninety-Three Dollars ($17,093.00).

Wife was awarded the exclusive use of the home on Circle Avenue with Husband being

ordered to pay sixty percent (60%) of the mortgage and Wife forty percent (40%).

Additionally, Wife retained separate property totaling in excess of Sixty Thousand Dollars

($60,000.00). 

The trial court assessed costs against Husband andordered Husband to pay a total

sum of Four Thousand Dollars ($4,000.00) to Wife for attorneys’ fees, leaving Wife to pay

thebalance ofThreeThousandFive Hundred Twenty-Two Dollars ($3,522.05). This Court

is of the opinion that Wife has received sufficient resources to compensate her attorneys

for any remaining fees and expenses incurred on her behalf. Taking into account both the

property settlement and the relative income levels of the parties, it does not appear to us

that the evidence preponderates against the decision of the trial court.

Wife also contends that Husband should be required to pay the reasonable

attorneys' fees for Wife on appeal. This Court is of the opinion that this case does not

require an award to Wife for attorneys' fees on appeal. As we have stated in our

discussion of attorneys’ fees above, Wife has adequate financial resources with which

to compensate her attorneys.

VI. Conclusion

The judgment of the trial court is affirmed in part, reversed in part, and remanded

for a written finding required on the child support guideline deviation issue. Costs on

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appeal are taxed to appellant.

HIGHERS, J.

CONCUR:

CRAWFORD, P.J., W.S.

LILLARD, J.

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