### IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE October 8, 2001 Se ssion JASON C. GOULET v. JENNIFER H EEDE Appeal from the Circuit Court for Sevier County No. 96-1011-III Norma McGee Ogle, Judge FILED JANUARY 31, 2002 No. E2000-02535-COA-R3-CV

This appeal concerns a divorce action in which the court classified a home purchased by Wife during the marriage as her separate property and a second mortgage taken out by Husband on the couple’s marital home as hi s separate debt. Husband appeals both of these de cisions and also questions the trial court’s decision to find Wife’s testimony credible, since she had previous ly given tes timony in another matter that was inconsistent with her testimony at the divorce hearing. We determine that the trial court should be affirmed on all issues presented. Tenn. R. App.P. 3 Appeal as of Right ; Judgment

of the Cir

cuit Cour

t Affir med
W ILLI AM B. C AIN , J., delivered the opinion of the court, in whichB EN H. C ANTRELL , P.J., M.S., and J OHN A. T URNBULL , S P . J., joined. Rebecc a C. McCoy, Seviervi lle, Tenn essee, f or the ap pellant, Jason C. Go

ulet. Martha Meares and Gretchen S. Johnson, Maryville, Te nnessee, for the appellee, Jennifer Heede. OPINION This case inv olves a di vorce be tween tw o part ies who have both shown a propensity for dishonest y and poo r judgment. T he parties met when they were both living in Florida. Plaintiff/ Appellan t, Jason Goulet, owned

a neon sign business, which he later relocated to Tennessee . Prior to the part ies’ marriage, Goulet lived in an apartment and owned no assets outside the business other than his automobile. Jennifer Heede, Defendant/Appellee in this matter, had a run of good fortun e p rior to meeting Goulet. Between the ages of 18 and 30, s he had been the recipient of life insurance pr oceeds and an inheritance together totaling more than $200,000.00, which was kept in a separate Dean Witter accoun t. The bulk of this money she received in 1994 upon her 30th birthday. In addition t o her inheritance, Heede also had the privilege of being a contestant on The Price is Right television show and had won approximately $13,000.00 worth of merchandise.-2-

Prior to their ma

rriage in August

1994, the parties lived together in a townhouse owned by Heede. They shared l

iving expe

nses while

living in Heede’s townhouse, and continued to live there after their marriage until November of 1994, at whic h time the parties moved to Tennessee.
In January

1995, the

y purcha sed a home

in Sevier

ville, Te nnessee . Ms. Hee de paid $26,000.00 outof her inheritance plus another $6,000.00, apparently left from the sale of the Florida townhouse, toward th

e down pa

yment and

closing c osts on this ho me in Tennessee. Goulet, thereafter, paid most, if not all, of the mortgage payments on the Tenne ssee home. Things broke down fairly quickly for these parties, as Goulet testified t hat his wife spent most of her time back in Florida from January 1995 through March 1995, and Heede testified that they agreed to separate in January or Febr uary of 1995. Some time that year, Heede decided to move back to Florida. She closed on a house in Florida on November 2, 1995, paying $34,492.06 out of her Dean Witter acc ount at the closing. Sh

e has con tinued to pay all m ortgage

payments on this property. On Decem

ber 21 , 1995, Goulet took out a second mortgage on the Tennessee home for $11,125.00 and then paid $11,500.00 to Heede. Heede testified that this money was to purchase her separate prop erty tha

t had bee n left in T ennesse e. Goule t testifie d that this m

oney wasgiven to Heede for a down payment on their h ousein Florida, as he intended to join her in Florida. He further testified that, over the next few months, the parties talked on the p hone frequently but never discussed divorce , as it con tinued to be their plan for Goulet to join Heede in Florida. This move never happened.
In March 1996 the parties took a vacation together. According to Heede, this vacation was taken jus t as friends and had been planned prior to their sepa ration. According to Goulet, thi s vacation was take

n as a cou ple and as a prelude to his moving to Florida. He testified that, following the vacation, the parties scouted for a location in Florida where he could relocate his business and that he assisted Heede in making some minor repairs to “their” house. Goulet insisted th at, as of this vacation, there still had been no discussion of divorce; yet, he stated that the p artie s only sp oke once after th eir vac ation and

had no fu

rther c onversa

tion until Heede’s deposition in 1998. On June 14, 1996, Heede’s attorney forward ed a letter t o Goulet memorializing a property settlement. In spite of living in different states for eight months and not talking to Heede for

three mo nths, Goulet testified that this letter came as a complete shock, as he had no idea that Heede was considering a divorce

. He subse quently f iled a pe tition for divorce in Tennessee on September 13, 1996. The circuit court heard the divorce in August 1999, granting a di vorce to t he parti es, determining their mar

ital and p ersonal

propert y, and dividing the ma

rital pro perty an d debts

. Pertinen t portions o f the cou

rt’s find ings rela tive to this appeal a

re as fo llows: Shortlyafter the parties s eparat ed, the W ife purc hased a c ondominium

in Well ington, Fl orida (St

ag Harb or). The

Stag Har bor prope rty was pu

rchase d in-3-

N ovember

1995 with assets from the Wife’s trust fund. The Wife has made al l mortgage paymentson the pro perty an d paid all

maintena nce exp enses, pr

ima ril y from the trust fund. The Husband made no contributions toward the purchase of the property, nor has he made a ny mortga

ge payme nts. While

the Husband, as spouse, signed the note and dee d of trust, t he title to the property is solely in the name of Wife. Based upon the proof presented, the Court finds that the Stag H arbor pr

operty is the Wife’ separate property and is aw arded to her. The court also found that Heede’s Dean W itter account, containing approximately $138,000.00 at the time of the hearing, was her separate property and that Goulet’s business was his separa t e property. With regard to the home in Tennessee, the cour t found it to

be marita

l proper ty encumbered

by a firs t mortgage , with a ba lance of around $ 59,000.00 , and a se cond mort gage, with a balance of approximately $8,000.00. The court order ed that the home be sold, with costs of the saleand first mortgage to be paid from the proceeds, and the net split between Goulet and Heede. Goulet was to be re spo nsible fo r the bal ance of

the seco nd mortga

ge from h

is share of the sa le procee ds. With r

egard to the seco nd mortga

ge, the c ourt foun d that:
At the time of the marriage, the Wife was the owner of certain household furnishings which she won on the television sho w, “The Price Is Right”. Subsequent to the separation, the Husband obtained a second mortgage on the Sna

pwood Prop erty in the amount of $11,125.00. The Husband used theproce eds from the second mortgage to pay the

Wife fo r her inte rest in the household furnishings and personal propert y which we

re left in the Sevie

rville re sidence

when th e Wi fe retu

rned to Florida. The court fu

rther a warded each pa rty the house

hold furn ishings an d persona

l proper ty in his or her possession. Goulet presents, basically, three issues for review: (1) whether or not the trial court co uld find Heede’s testimony credible due to past perjurous testimony and inconsistent statements made by Heede; (2) whether or not the cour t erred in finding

that Hee de’s Flor

ida prope rty was se parate property; and (3) whether or not the cour t erred in finding the second mortgage on the Tennessee property to be Goulet’s sole responsibility.

WITNESS CREDIBILITY AND INCONSISTENT STATEMENTS
A notable amount of time was devoted at trial by bo th par ties in an attempt to show each other’s lack of c

redibilit y and past dishonesty. Particularly, with regard to Heede, Goulet attempted to argue that Heede’s prior instances of lying, aswell as sp ecific inconsistent statements made by her in this proceeding, invalidated much of her testimony. Heede admitted t

o lying in a proceeding regarding another matter whe rein she stated that

she and Goulet intended to reconcile. At the hearing of this cause, Heede testified that they agreed to separa te in January or February of 1995 and that she never had a ny intent or desire for reconciliation-4-

withGoulet. H eede al so testifi ed in the p rior matt er that sh e had tak en all he r person al prope

rty when she left Tennessee and moved back to Florida. At the di vorce hearing she testified that she left some $13,000 of personal property, as well as marital proper ty, in Tennessee. While Tennessee does recognize the rule of cancellation

wherein contrad ictory sta tements by witness regarding the same fact may canc el each other out, In Re Estate

of Ross , 969 S.W.2d 398, 400 (Tenn. Ct. App. 1997); Price v. Becker , 812 S.W.2d 597 , 598 (Te nn. Ct. App . 1991); State v. Caldwell , 997 S.W.2d

110, 118 ( Tenn. Crim. App. 199 7), this ru le of cancellation “applies when the inconsistency in testimony is unexplained and when neither version of the testimony is corrborated by other evidence.” Ross , 969 S.W.2d at 400. Up o n review of the testimony and evidence, Heede presented a plausible explanation for these inconsistencies, which was found credible by the judge. Heede stated that Goulet had staged an automobile accident in order to file a fraudulent claim fo r damages and injur

ies. It wa s in Goulet’s fraudulent suit for damages that she was asked, by Goulet, to testify falsely. As she was still married

to Goulet at the time, Heede stated that she was afraid not to go along with his scheme. She also introduced documents showing a suit for f raud filed against

Goulet asa result o f his claim, and Goulet admitted dropping his claim after being sued for fraud without obtainingany money from the defe ndants to s ettle the

claim. Heede’s testimony regarding her inte nt to reconcile is corroborated by her actions. She moved to Florida alone, purchased a separate home titled in her na me and wen t more than four months without seeing Goulet. Heede’s testimony regarding personalpropert y left in T ennesse e is corroborated

by Goulet

himself, as he admittedthat she le ft some ite

ms of per sonal pro

perty, a s well as marital property, when she moved to Florida (although there is s ome disag reemen t on what those items were).
Go u let points out ma

ny other “inconsiste

nt stateme

nts” made

by Heede

throughou

t this divorce action. However, a review of those stateme nts show s them to be an attempt to nit pick a lay man’s terminology or twist her words. The court had ample opportunity to view both t hes e witnesses and listen

to their testimony. With reg ard to the home purchased by Heede in Florida and the $11,500.00 paid by Goulet to Heede, the court found her version of a ll the “he said, she said” testimony more credible.

The findings of t he trial court which are dependent upon determining the credibi lity of witnes ses are entitled t o great weight on appeal. The rea son for th is is that the trial judge alone has the opportunity to observe the manner and demeanor

of the witne sses while

testifying. Indeed, the trial judge, on an issue which hinges on witness credibility, will not be reversed unless there is found in the record

concre te and co nvincing evidence, other than the oral testimony of the witnesses, w hic h contrad icts the tr ial cour t’s findin gs. Bowman v. Bowman , 836 S.W.2 d 563, 566 (Tenn. Ct. App. 1991) (citations omitted). “Where the trial judge has seen and heard the witnesses, especially if issues of c redibility and weight to be given-5-

oral testimony are involved, considerable deferenc e must be accorded those circumstances on review.” McCaleb v. Saturn Corp. , 910 S.W.2d 412, 415 (Tenn. 1995). Heede’s contradictory statements were explained and her divorce testimony was corroborated. Thus, the trial judge was notrequire d to discou

nt her te stimony an d was free to use hi s judgment , as the lo ne obser ver of a ll t estimony given in th

is cause , to make f

actual d etermina tions base d on his opin

ion of wit

nes s credibility.
THE FLORIDA PROPERTY
It is Goulet’s assertion that he paid Heede $11,500.00 in December 1995 for a down payment on the h ome in Flor

ida and th at he pla

nned to mov e with her

at a late r date. H e testifi e d that, i n March1996, foll o wing a vaca tion taken by the parties, he assisted with some minor repairs like fixing the toilet and installing a ceiling fan. He further alleged that the propert

y was pur chased with the intent of being a marital home for the parties and that he had no notice or belief that a divorce was eminent until he received a property settlement

proposal from Heede’s attorney in June 1996. However, based on Heede’s testimony and treatment of the property, the trial court determined that this Florida property was Heede’s separate pr operty. Trial courts are accorded wide discreti on in clas sifying a nd dividing

propert y in a divorce case, and their decisions are ent itled to great weight on appeal. In accordan ce with Rule 13(d) T.R.A.P., the trial court’s decision regarding the classification and division of marital property will be presumed cor rect unl ess the evidence preponderates otherwise. Corley v. C o rley , No. 01-A-01-9011-CH00415, 1991 WL 66447, at *5 (Tenn. Ct. App. May 1, 1991) (citation omitted); see also Dunlap v. Dunlap , 996 S.W.2 d 803, 814 (Tenn. Ct. App. 1998 ). Unless the evidence prepondera tes against the trial court’s determination, we must affirm the judge’s decision to classify Heede’s Florida property as separa te property, and wefind that the evidence does not prepo nderate

against th

e finding s of the tr

ial cour t. Tennessee is a dual property jurisdiction dividing a ll propert y into two classif

ications, marital and separate. Batson v. Batson , 769 S.W.2d 849, 856 (Tenn. Ct. App. 1988). These classifications are containe d in Tenne ssee Code Annotate d section

36-4-121 (b). Sepa

rate pr operty is therein definedas: “(A) All real and persona l proper ty owned b y a spouse

before marriag e; (B) Pro

perty ac quired in excha

nge for p roperty acquire d before

the marr iage; . . . (D) Prop erty ac quir ed by a spouse at any time by gift, beques t, devise, or dissent; . . . ” Tenn. Code Ann. § 36-4- 121(b)(2)(1996). T he Code also definesmarital p

roperty as, “all real an d persona

l proper ty, both tangible and intangible, acquired by either or both spouses during the course of the marriage.” Tenn. Code Ann . § 36- 4-121(b)(1)(A)(1996). “Despite the f act that certain property may have bee n acquired during the marriage, a part y may rebut any presumption that the property is marital.” Dun lap , 996 S.W.2d at 814. This rebuttal may be shown by demonstrating that the proper ty i s “separate property” under the section 36-4-121 (b)(2). Id .; see also Batson , 769 S.W.2d at 858.-6-

The trial court found that Heede’s inherited money kept in her Dean Witter account was her separa te property. This determination was not appealed. It is undisputed that Heede purchased the Florida property on November 2, 1995 using money from this Dean Witter ac count forthe down payment. It is further undispu ted that Goulet has not lived in this property, has not made any mortgage paymen t s on this property, and was unaware of even whe n the property was purchased. Goulet admitted that the only contact that he had with the Florida property was more than four months after it s purcha se follow ing a vac ation he t ook with Heede. At th at time, H eede sho wed him the home, and he performed some minor repairs to the prope rty while he was there. Other than the post-vacation visit to the Florida property by Goulet over four months after Heede left Tennessee and his signature on the m ortga ge, Goulet presented no evidence that the parties intended this property to be marital. Furthermor e, there i s overwhelming evidence that Heede intended this property to be her separate proper ty and treated it as such. She purchased this property using her separate funds; it was thus “a cquired in exchange for propert y acquire d before

the marr iage.” Sh e moved to Florida alone and lived in the property for more than four

months bef

ore Goul et even v

isited, and even a

fter this visit, Goulet admits that the parties only spoke once and did notspeak ag ain for a

pproxima tely thre e years . Further , the prop erty was titled in he

r name a lone, and , although

Goulet did

sign the mo

rtgage, it is undispu ted that Flo rida law requ

ires a wi fe purchasing pr operty to obtain the

signatur e of her husband o n these document s. The judge saw both part ies tes tify and determined Heede’s testimony to be more credible. When we review her testimony in connection with the other evidence presented, wefind that the evidence does not

prepond erate against the judge’s determination, and we must uphold the judge’s decision to classify this property as separate proper ty. ALLOCATION OF THE BALANCE OF THE SECOND MORTGAGE
In December 1995 Goulet took out a second mortgage on the Te nnessee home in the amount of $11,125.00 and paid a total of $11,500.00 over to Heede. The trial judge found the balance of this loan to be Goulet’s personal debt, determining that the money was given to Heede in exchange for household

f urnishi ngs and pe

rsonal pr operty le ft at the Tennesse e reside nce aft er she mo ved to Florida.
In Tennessee, a distinct

ion is made between marital and separate de bts, just as a distinction is made between marital and separate property. See McCaffey v. McCaffey , 775 S.W.2d 618, 623 (Tenn. Ct. App. 19 89). “Ma rital deb ts are tho se debts incurred during the marriage for the joint benef it of the parties, or those directly traceable to the a cquisition of marital property.” Mandell i v. Howard , 780 S.W.2d 769, 773 (Tenn. Ct. App. 1989) (citations omitted). Further, “[t]rial courts have th e author

it y to apportion marital debts in the same way they divide the marital estate.” McCaffey , 775 S.W.2d at 625.
Once again, we have a “he said, she said” situation whe re i n the court determined that Heede’s testimony w as more c redible , and the e

vid ence d oes not pr

eponder ate aga inst this determination. Goulet cl aim s t hat $11,500.00 was paid to Heede as part of the down payme nt on-7-

the Floridaresidence and that most of that money came from the sec ond mortgage on the Tennessee residence. Howeve

r, the fa cts do notsupport th

is assert ion as He ede purc

hased the propert y a month and a half prior to being given this mone y by Goule t. Further, Heede never signed the second mortgage. Goulet signed these documents as her attorney in fact, but no evidence or

testimony was presented showing that she gave him permission or authority to act as her attorney in fact. Although $11,500.00, an amount close to the amount of the second mortgage, was paid to Heede in Dece mber 1995, Heede t

estified that she le

ft over $ 15,000.00

worth of m arital and separate property at the homein Tennessee when she moved out in November of 1995, which remains the property of Mr. Goulet, taking with her

on ly a few items of personal property and $1,200.00 worth of mar ital property. As such, t

he evide nce doe s not prep onderat e against the judge’s d

etermina tion that th

is secondmortgage is Goulet’s debt alone taken ou t for h is benefit in order to purchase Heede’s personal property left at the Tennessee home. The judgme

nt of the tr

ial cour t is in all re spects a

ffirmed withcosts assesse d to Appel lant. The case is remanded to the trial court for such f urther proceedings as may be necessa ry.

___________________________________ WILLIAM B. CAIN, JUDGE