### IN THE COURT OF APP EALS OF TENNESS EE AT NAS HVILLE A ssi gne d on Br ie fs , A ugus t 20 04 S es sio n
A M ES D A V IS , A dm in ist ra to r of t he Es ta te of

M ar y R ee ve s D avi s v. W. TE R R Y D A V IS
An Appeal f

romthe P robate C ourt of Davids on Coun ty No. 99P -1955 The Honorable Fr ank G. Clem ent, Jr., Judge

________________________ No. M2003- 02447-COA-R 3-CV - F iled Dece m ber 17, 2004

________________________

This case involves a claim for reimburse ment ag ainst an estate. A trust w as established during the de c e de nt’ s lif

e tim e to pa y fo r he r ne e ds

. B e fo re the de c e de nt die d, he r h us ba ndpa id f or he r n e e ds , in p art to p re se rv e trus t pr op e rt y . A ft e r he r de a th, the hu sb a nd fi le d a c la im a g a ins t th e wi fe ’s e state seeking reimburse ment for his payments for the healthca re and support of the wife. The trial court found that the pa y ments were made to prote ct the wife ’s t rust property , as well as for the ca re a nd support of the wife , and would h av e bee n paid by the trustee but f

or lac k of asse ts, and the wife ’s estate w as the succe ssor-in-intere st to the rema ining a ssets of the trust. Consequently , the trial court
su sta ine d th e hu sb a nd ’s c la im ag a ins t the wi fe ’s e state

. Th e wi fe ’s e state no w ap pe a ls. We a ff ir m, finding the expenses paid by husband constitute a va lid claim ag ainst the wife’ s estate. Tenn. R. App . P . 3; Appeal as a Right; Judgme nt of th e P robate C ourt Aff irm ed

H O LL Y M

. K I R B Y , J. , d e l i v e r e d t h e o p i n i o n o f t h e c o u r t , i n w h i c h W

. F R A N K C R A W F O R D , J. and ALAN E. HI GHERS, J ., joined.

Ames Da vis and Sally

B. B untin of Nashville for A ppellant, Ames Da v i s , Administrator of the Es ta te of Ma ry Re e ve s D a vis

Gr e g ory H. Oa kle y a ndDa nie l Sma ll o f N a sh vil le fo r A pp e lle e , W. Te rry Da vis

OP IN ION
Mary Reeve s Davis (“ Wife”) wa s the widow of the late country music perf

ormer “Ge ntleman” Jim Reeve s. Upon Reeve s’ death, Wi fe ha d inherited s u b s t an t ial rea l and per sonal property . After

Reeve s’ death, Wi fe ma

rried W. Terry Davis (“Husband” ). Husband, as holder of power of attorne y

for Wife, sold Wife’s re al p ro p er t y related to J im Reeves Enter prises for

$3.8 milli on as we ll as Wi fe’ s personal p ro p er ty rela ted to J im Reeves Enter prises for $3.5 milli on. There afte r, Husband e ntere d i n t o an agr eement with W . D. White, W ife’s br other, to establish anT h e fac ts su rr o u n d ing the sa le o f W ife’s p ro p e rty a n d the T ru st a re se t f o rth in m o re d e ta il in th is C o u rt’s 1

o p inio n , A rn o ld v . D a v is , N o. M 2003- 00620- CO A- R3- CV , 2004 W L 1372831 ( T en n

. Ct

. App. J u n e 17, 2004) (perm

. t o ap p

. de ni ed , de si gnat ed not f o r ci t at i o n))

.

B ecause o f

t he l egal chal l enges, t he t rans fer of pro p ert y t o f

und t he T rus t was hel d i n ab eyance. A l t ho ugh 2
t he rec o rd i s so m ew ha t unc l ea r, ap p are ntl y Y o un g c o uld no t m ak e the p aym en t s o ut o f W i fe’s ba nk ac co un t b ec au se H usb an d ha d wit hd raw n the fund s.
-2- ir re vo c able trus t to pr ov ide fo r Wi fe ’s imm e diate a nd lif e -l on g pe rs on a l a nd he a lth c are ne e ds

. Th is trust was to rec eive f

ifty perc ent (50%) of the funds from the sale of the J im Reeves prope rty . Wife signe d the Trust I ndenture Mary Reeve s Davis I nter Vivos Trust (the “Trust” ) on Jul y 11, 1996.

Wife had a ba nk acc ount h eld solely in her na me at SunTrust Bank. I n May 1996, the balanc e of the SunTrust acc ount was $134,211. I n J une 1996, Husband, as holder of Wife’s pow er of attorn ey , chang ed the SunTrust ac count into a joint bank acc ount in the name of both Husba nd and Wife. Soon after war d, Husband withdre w the entire balanc e of the joint account.
On Aug us t 2 8 , 1 9 9 6, rela tives of Wife’s first husband, Jim R eeve s, filed a Petition for Appointment of Conservator and Or der to Show Cause ( “Petition”). I n the Pet i t i o n, the re latives
a lle g e d th a t Wif

e wa s in c omp e te nt a ndso ug ht t o e njo in t he sa le of Wif e ’s a sse ts. F ro m A ug us t 1996, until November 1997, the sa le of W ife’s assets, as well as the validity of the Tr ust, were the
su bje c t of on goin g l e g a l pr oc e e din g s, wh ic h u lti ma te ly c ulm inate d in a n a

pp e a l to thi s Co urt. 1 Duri n g t h is fifteen- month period, the Trustee , Charles Young (“Y oung ”), de clined to close on
c on tr a c ts f

or the sa le of

Wif e ’s pr op e rt y , th e pr oc e e ds of wh ic h w e re to f

un d th e Tr

us t.

Pr ior to the pr op os e d s a le of Wif e ’s a sse ts a nd the e sta

bli sh me nt of the Tr

us t, Y ou ng , in his
c apa c ity a s Wif e ’s a c c ou nta nt, ma de p ay me nts ou t of Wif e ’s pe rs on a l a c c ou nt f

or the mortg a g e s, property taxes a nd insurance costs related to the J im Reeves Enter prises prope rty

owned by

Wife,
a s w e ll a s f

or Wif e ’s pe rs on a l a nd me dic a l e xpe ns e s. Th e re sp on sib ili ty fo r the pa y me nt o f the se 2 expenses, property -re lated, per sonal and medic al, passed to the T rust per the trust document. Afte r the c ha lle ng e s to the sa le of Wif e ’s pro pert ya ndva lid ity

of the Tr us t, H us ba ndma de pa y me nts
re la tin g to Wi fe ’s re a l pr op e rt y , a ndfo r h e r p e rs on a l c are . In to ta l, H us ba ndpa id $ 75 ,0 77.7 8 in
e xpe ns e s f

ro m A ug us t 19 96 thr ou g h D e c emb er 19 97 fr om H us ba nd ’s bu sin e ss a c c ou nt. Th e se pay ments included mortg ag e, insurance and tax costs associate d with the rea l property of Wife, as well as Wife’s medic al and pe rsonal expenses.

I n an orde r date d Nov. 4, 1997, the Prob at e C ourt of Da vidson Countyappointed a
c on se rv a tor

fo r Wi fe , a ndapp ro ve d th e sa le of Wif e ’s re a l a nd pers on a l pr op e rt y re la te d to Jim Re e ve s E n t e rp r i s e s

. T h e T ru s tw a s t h e n f u n d e d w i t h p r o c e e d s f

r o mt h i s s a l e

. A s a

r e s u l t , in Decem b er 1 9 9 7, Young , the Trustee , resumed pay ments of Wife’s expenses re lated to her rea l pr op e rt y a ndhe r p e rs on a l a ndme dic a l c are , f ro m T ru st a sse ts.

Wife died on Novembe r 11, 19 9 9

. The disposition of the corpus of the Trust af

ter Wife’s death be cam e t h e s u b

j ect of the ong oing le g al proc eeding s. I n these leg al proc eeding s, Husband-3-

c on te nd e d th a t a

po rt ion of

the Tr us t a sse ts w ou ld p a ss t o h im d ir e c tly , inst e a d of to the Wif e ’s e state (“ Wif e ’s Es ta te ” ). Th e tr ia l cou rt ru le d tha t the a sse ts o f the Tr us t pa sse d to Wif

e ’s Es ta te , a nddid not pa ss directly

to Husband. This dec ision was appea led and wa s aff irmed by this Court on J une 17, 2004. See n.1 above.
On Aug ust 21, 2000, Husband filed a cl aim ag ainst Wi fe’ s Estate for $75,077.78. The amount of the c laim repre sented:
Pay ments made by

Terry Davis for

Mar y R ee v es Davis during period in 1996 and 19 97 wh e n sh e wa s r e c e ivi ng no inc ome fr om the sa le of he r r e a l e state . T he inc ome from the sa le of Ji m Reeves memor abilia and r elated items wa s being paid into the Trust and wa s not available to pa y these e x penses. During that period p ri o r t o the court’s a pproval of the rea l estate sale, [ Wife’s] income was seve rely limit ed and w as insufficient to mee t the nece ssary rea l estate a nd persona l expenses.

Hu sb a nda tta c he d to his c la im a n it e mize d li st o f the e xpe ns e s paid f ro m H us ba nd ’s bu sin e ss a c c ou nt, a s w e ll a s c op ie s of c a nc e lle d c he c ks a ndc he c k s tub s. Hu sb a nda sse rt e d th a t he pa id the se expenses out of his own persona l funds in order to pr otect Wife’s a sset s an d p ro v i d e for Wife’s persona l and medica l needs. He noted that the Trust wa s obliga ted to p ay t hese e x penses, a nd the re fo re that th e Tr

us t be ne fi tte d f

ro m hi s p a y me nt o f the e xpe ns e s. Hu sb a ndc on ten ded that it
wo uldbe un

jus t f or the Tr us t, a ndult imate ly

Wif e ’s Estat e as the re c ipi e nt o f the Tr us t a sse ts, to
re ta in the be ne fi t of

Hu sb a nd ’s pa y me nt o f the e xpe ns e s w ith ou t r e imb ur sin g him

. Wife’s Estate filed a n exception to Husband’s cla im. W ife’s Esta te noted first that, unde r settled law, ne ither spouse c an re co v er re i m b u rsement from the estate of the other spouse for
vo lun tary pa y me nts fo r the be ne fi t of the de c e a se d spo us e

. Wif e ’s Es ta te arg ue d tha t the pa y me nts for the r eal pr operty

wer e not the oblig ation of the Trust, since neither the property nor the proc eeds from the sa le of the pr operty had bee n transfe rre d to the Trust. The pa y ments for Wife’s pe rsonal and medica l expenses, Wi fe’ s Estate ar gu ed , we re Hus band’s oblig ation, and the e x istence of the Tr us t di d n ot c ha ng e that. Wi fe ’s Es ta te arg ue d that Hu sb a nd wa s him se lf a be ne fi c iary

of the Tr us t, and ther efor e it was not inequitable to a llow the Trust, and ther efor e Wife’s Estate , t o reta in the benef its of Husband’s pa y ments. Moreove r, W ife’s Estate contende d, Husband’s pay ments were likely made f rom the proce eds of Wife’s bank acc ount, w hich wer e withdrawn shortly afte r Husband ha d h is n a me a dd e d to the a c c ou nt. F ina lly , Wif e ’s Es ta te arg ue d that Hu sb a nd ’s c la im w a s in va lid beca use it was not asserted ag ainst the Trust during Wife’s lifetime.

Th e he ari ng on Hu sb a nd ’s c la im a g a ins t Wif e ’s e state wa s h e ld o n A ug us t 6, 20 03 . A t tria l, Yo u n g t e s t i f

i e d a s W i f

e ’ s a c c o u n t a n t a n d a s T ru s t e e f o r t h e T ru s t

. Y o u n g a c k n o w le dg e d in his testimonythat the expenses paid by Hu sband fr om Aug ust 1996 through D ece mber 1997 we re expenses that woul d h av e been paid by the Trust but for the leg al cha lleng e to the validity of the Trust. Young testified that he discusse d with Husband the ne ed for pay ment of the expenses to be paid, but, as Trustee , he did not ag ree to reimburse H usband for the payments.-4-

I n it s rul ing , the Pr ob a te Cou rt fo un d tha t the pa y me nts ma de by Hu sb a ndon Wif

e ’s be ha lf
we re e xpe ns e s th a t th e Tr us te e wo uldha ve pa id, bu t f or t he on g oin g le g a l c ha lle ng e to the Tr us t. I t a c kn ow le dg e d th a t, u nd e r s e ttl e d Te nn e sse e la w, e xpe ns e s vo lun tari ly pa id by a sp ou se on be ha lf of the other

spouse ar e paid without expectation or right of reimburse ment from the spouse’s estate. The P robate Court found, however, that the creation of the Trust as a separ ate lega l entity with the purpose a nd direc tive to pay expenses rela ted to Wife’s separat e p roperty and hea lthcare chang ed the cha rac ter of Husband’s pay ments from those of support by a spouse to pay ments made to protec t Trust prop er t y

. I t noted that Husband should have filed a c laim ag ainst the Trust during Wife’s lif e tim e be c a us e the Tr

us t had the du ty to pa y Wif e ’s e xpe ns e s, bu t Hus ba nd wa s not m oti va te d to do so beca

use he believed that he was a 50% benef iciary of the assets of the Trust upon Wife’s death. Sin c e the Tr

us t a sse ts w e re dis tr ibu te d to Wif e ’s Es ta te , Wif

e ’s Es ta te wa s th e su c c e sso r- in- int e re st to the rema ining a ssets of t he Trust. As a re sult, the assets of Wife’s Estate w ould have be en smaller had the Tr ust, rather than Husband, pa id the $75,077.78 in expenses. The Probate Court f ound there
wa s in su ff

ic ie nt e vid e nc e to e sta

bli sh that, t hro ug h th e us e of the po we r o f atto rn e y

g rante d to Husband by

Wife, Husband paid thes e ex penses f rom Wife’s assets, that is, from the pr ocee ds of Wif e ’s ba nk a c c ou nt. Th e re fo re , th e Pr ob a te Cou rt a llo we d Hus ba nd ’s c la im a g a ins t Wif e ’s Es ta te in the a mou nt o f $ 75 ,0 77 .7 8. F ro m th is o rd e r, Wif e ’s Es ta te no w a

pp e a ls.
On appe al, Wife’s Estate a rg ues that the Probate Court should have disallowed Husba nd’s
c la im b e c a us e the mon e y

us e d b y Hu sb a ndto p a y

Wif e ’s e xpe ns e s w a s n ot f

ro m H us ba nd ’s se pa

rate property , but rather

from the a ccount held solely in Wi fe’ s name that Husba nd converted by use of the power of attorne y

g rante d to him byWife. Wi fe’ s Estate also conte nds that the Est at e is not liable for pay ments made by Husband to p rot ect Wife’s r eal pr operty when the pr ocee ds from the
s a l e o f t h e r e a l p r o p e r t y w o u l d g o t o t h e T ru s t , o f w h i c h th e H u s b a n d w a s t o b e a b e n e f i c i ar y. Final ly , Wi f

e ’ s E s tate ar g u e s th a t th e E s tate is n o t l ia b le f o r p a y me n ts ma d e b y

H u s b a n d f

o r the healthca re a nd support of Wife bec ause, unde r Tenne ssee law , a spouse c annot re cover for voluntary pa y me nts ma de fo r the be ne fi t of the oth e r spo us e

. I n r e sp on se , H us ba ndc on te nd s th a t th e pa y me nts
ma de by Hu sb a ndpr ote c te d a ndinc re a se d th e va lue of the Tr us t p rope rt y , a ndthat c on se qu e ntl y Wif e ’ s E s t a t e , a s s u c c e s s o r

- i n

- i n t e r e s t o f t h e T ru s t , b e n e f i t t e d f r o m t h e p a y m e n t s

. U nd e r t he se circ umstances, Husba nd arg ues, t he P robate Court corr ectly found t hat i t would be inequitable a nd unjust for the Wife’s Estate to r etain the be nefit without reimbursing Husband.
Ap pe llate re vie w i s de novo upon the re cord of the trial court, acc ompanied by a pre sumption of cor rec tness of the findings of f act, unless the pr eponder ance of the e vidence is otherwise. Te nn. R. App. P. 13 (d). The r evi ew i n g co u rt is require d to conduct an inde pendent e x amination of the
rec ord to determine wher e the pr eponder ance of the e viden ce l i es. Wingert v. Governm ent of Sumner Coun ty , 9 0 8 S. W. 2 d 9 2 1 , 9 2 2 ( T e n n

. 2 0 0 1 )

. Co n c lu s io n s o f la w ar e s u b

je c t t o d e n o vo revie w on appea l without any presumption of cor rec tness. Atk ins v . Cl

ar k , 59 S.W .3d 124, 126-27 (Tenn. Ct. App. 2001). Wher e the tria l judge has see n and hea rd the witnesse s, espec ially if issues of cr edibilityand weig ht to be g iven oral testimony are involved, on appea l, c onsiderable defe renc e must be acc orded the trial court’s determinations of credibility , beca use i t is the t rial court which had the opportunity

to observe the witnesses’ demea nor and to hear the in-court testimony

. Lo ng v . TriCon I nd. , Ltd ., 99 6 S .W .2 d 17 3, 17 7 ( Te nn . 1 99 9) . T he tr ia l c ou rt ’s fi nd ing s w ith re sp e c t to-5-

cre dibilit y

and we ight of

the evidenc e may

g ener ally be infe rre d from the manne r in which the tria l court re solves conflicts in the testimony and dec ides the ca se. Tobitt v. Bridgestone/Fir estone, Inc. , 59 S.W .3d 57, 61 (Tenn. 2001)

. On app e a l, the Wif

e ’s Es ta te a sse rt s th a t H us ba nd ’s c la im ag a ins t the Wif e ’s Es ta te sh ou ld ha ve be e n d isa llo we d be c a us e the mon e y us e d by Hu sb a nd to pa y the e xpe ns e s in c lud e d in the c la im was not money

from Husba nd’s sepa

rate funds. Wife ’s Estate ar g ues that the funds use d to pay Wif e ’s e xpe ns e s o ri g inate d f

ro m th e a c c ou nt h e ld s ole ly in Wif e ’s na me a t Su nT ru st B a nk . A t tria l, the Estate pr esente d bank st atements for a S unTrust acc ount for the months of March, April, May and Jun e o f 1996. The March, A pril and May statements indicate that the acc ount was in Wife’s name only . The e nding ba lance of the a ccount on the May statement was $134,211. The June 1996, state me nt fo r the Sun Tr

us t ac c ou nt sho ws that the a c c ou nt ha d be e n ch a ng e d to a jo int a c c ou nt i n the na me of

bo th H us ba nda ndWif

e , a ndsh ow s a n e nd ing ba la nc e of zer o d oll ars

. Th e bu rd e n o f p ro of

fo r an affi rm a tiv e de fe ns e is p la c e d u po n th e pa rt y wh o r a ise s it

. Association of Owner

s of Regency Park Condo., 878 S.W .2d 560, 566 (Tenn. Ct. App. 1994) (quoting Tenn. Jur. Evidenc e § 50 (1984). Thus, Wife’s Esta te bore the burde n of demonstrating that H u s b a n d p a id Wi f

e ’ s e xp e n s e s w ith Wi f

e ’ s o w n f u n d s

. T h e tria l c o u r t f

o u n d th a t the evidenc e prese nte d b y

Wi f e ’ s E s tate a t t

r ia l w a s in s u f

f ic ie n t t o c o n c lu d e th a t H u s b a n d u s e d h is p o w e r of attorney to take W ife’s money

and then use d her ow n money to pay her bills. Fr om our revie w of the evid en ce , we must conclude that the evidenc e does not pre ponderate ag ainst the trial court’s finding on this iss ue.
Wife’s E s t at e ar g ues that the Estate is not li able f or payments made by

Husband for

the healthca re a nd support of Wife bec ause, unde r Tenne ssee law , a spouse cannot r ecove r for voluntary pay ments made for

the bene fit of the other spouse. It is undisput ed that whe n a close rela tive of a de c e de nt, su c h a s a

sp ou se , pro vid e s a be ne fi t to that de c e de nt d uring his or he r l if e tim e , th e re is a presumption that the bene fit was provide d g ratuitously , motivated by aff ection or duty towards the d e c e d e n t. I

n re Cons ervatorship of Grove s , 109 S.W .3d 317, 356 (Tenn. Ct. App. 2003). N o obligation on the part of the r ecipient to re imbursement payment for t h e bene fit arises. Id. Consequently , family

members a

re of ten pre cluded f

rom rec overing benef

its provided to a dece dent beca use the law presumes suc h benef its we re g ratuitous. Estate of Cleveland v. Gorde n , 837 S.W .2d 68, 71 (Tenn. Ct. App. 1992). The P robate Court rec og nized this principle, but found that Hu sb a nd ’s pa y me nts ha d to be vie we d in lig ht of the e xiste nc e of the Tr us t, wh ic h wa s o bli g a te d to provide for

Wife’s immediate and life -long p er s o n al and hea lthcareneeds. Y oung , the Trustee , testified that, if not for the leg al cha lleng e to the validity of the T ru s t , the hea lthcare and support pay ments made by Husband on behalf of Wife, as well as the expenses of the r eal pr operty rela ted to J im Reeve s Enterprises, would have been paid from Trust assets. The P robate Court held t hat the pay ments for whic h Husband soug ht reimburseme nt should be char acte rized as costs and expenses paid on beha lf of a le g al entity separ ate f

rom Wife, that leg al entity being t h e T ru st. Thus the Pr ob a te Co urt f

ou ndthat th e Hu sb a ndha d o ve rc ome the pr e su mpt ion that be ne fi ts v olu nta ri ly provided by

a spouse to a de cede nt are g ratuitous. After our re view of the rec ord, we must conclude that the evidenc e does not pre ponderate ag ainst the Probate Court’s f inding on this issue.-6-

Finally , Wife’s Estate a

rg ues that Husband’ s claim s h o u l d be disallowed be cause it is not inequitable for

the Trust, and c onsequently Wife’s Estate, to re tain the bene fit of Husband’ s p ay m en t s b ec au s e Hu s b an d i s a b en ef i ci ar y o f t h e T ru s t

. I n d ee d , i n th e p ar al l el l ega l p ro ce ed i n gs re g ard ing dis tr ibu tio n of the c or pu s o f the Tr

us t, H us ba ndarg ue d th a t a po rt ion of

the c or pu s sh ou ld g o d i re ct l y t o h i m, and not to Wi fe’ s Estate. I f so, then, Wife’s Estate could validly arg ue that Husband’s pay ments for the be nefit of the T rust wer e in essence t o b enef it him. However, at the conclusion of the other leg al proce eding s, the Probate Court f ound that the Trust instrument stated Wife’s intention to “provide for the welf are of her self and he r husband while she was living and upon her death t o pass her assets, inclusive of the Trust assets, to her probate estate.” There fore , the Pr ob a te Cou rt he ld that the c or pu s of the Tr

us t pas se d to Wife ’s Es ta te , an d not to Hus ba nd . T his decision wa s upheld on appe al. Arno ld v . D av is , N o

. M 2 0 0 3

- 0 0 6 2 0

- CO A-R3-CV , 2 0 0 4 WL 1 3 72831 at *12 (Te nn. Ct. App. J une 17, 2004) ( perm. a pp. denied, de signated not for c itation)). There fore , the ar g ument of Wife’s Estate on this issue is no longe r valid.

Acc ording ly , we c onclude that the Probate Court did not err in a llowing Husband’s c laim of $75,077.78 ag ainst the Wife’s Estate.

Th e de c isi on of

the tr ia l cou rt is a ff

ir me d. Cos ts o n a

pp e a l are to b e ta xedto A pp e lla nt, Am e s D a vis , a s A dmi nis tr a tor of the Es ta te of

Ma ry Re e ve s D a vis

.

__________________________________________ HOLL Y M. KI RBY, JUDGE