# FILED Oct. 14, 1995 Cecil Crowson, Jr . Appellate Court Clerk IN THE COURT OF AP PEALS OF

TENNESSEE, WESTE RN SECTION AT NASHVILL E

_______________________________________________________ ) LAURA PATRICIA CUTSINGER, ) Robertson County Circuit Court ) No. 6515 Plaintiff/Appellee. ) ) VS. ) C.A. NO. 01A01-9504-CV-00148 ) CHARLES EDWARD CUTSINGER, ) ) Defend ant/Appe

llant. ) )

______________________________________________________________________________ From the Circuit Court of Robertson County at Spring field. Honorable Robert W. Wedemeyer, Judge

W. A. Moody , Nashville, Tennessee Attorney for Def endant/A ppellant
.
Fred C. Dance , DANCE, DANCE & LANE , Nashville, Tennessee Attorney for Plaintiff/Appe llee.

OPINI ON FIL

ED: AFFI RMED IN P

ART, REVERSED IN PA RT AND REM ANDED

FARMER, J.
CRAWFORD, J. : (Concur s) KOCH, J. : (Concur s)In this divorce case, Charles Edward Cutsinger (Husband) has appealed the trial

court 's judgment which awarded Laura Patricia Cutsinger (Wife) a thirty percent (30%) interest as
a seller in the contract of sale of Husband's c hiropractic practice. Husband also has appe aledthe trial court 's ruling whichordere d Husband to indemnif

y Wif e for an y ju dgment t

hat migh t arise a s a resul

t of an indebtedness for a pleasure boat purc hased during the marriage
.

The parties w ere mar

ried on Ma

y 3, 1985. Prio

r to the marriage, Husband had practiced chiropractic medicine in I owa for tenyears . In 1983, Husband moved to Tennessee and starteda chirop

ractic p ractice as a sole proprie to rshi p. Approximately three day s after the parties
were married

in 1985, Wife, a licensed practical nurse, beg an working at the practice. Wife worked in Hu sb an d' s p ra ct ic e t hr ou gh ou t t he ma rr ia ge , a nd Hu sb an d p ai d W if e a sa la ry.

In Au gust of 1 990, Husba nd beca me seriou sly

ill due to a

sys temic ca

rcinoma . His illness forced

him to leav e his practice until September of 1991. During this time, Wife helped keep the practic e running

by d oing the bookkee ping an d obtainin g other

chiropr actors to treat p atients
.

On July 26, 1992, the

parties s eparat

ed. On Ap

ril 20, 199 3, Husband sold his chiropr actic p r actice to Terry

D. Totty (Mr. Totty

) pursuant to a sale of assets agree ment (sales agreement). The total purchase price was $130,000. Among other provisions, the sales agreement containeda "Coven ant Not To Compete" as well as a "Consultation Fee" for Husband's future service s. The tota

l purcha se price

of $130, 0 00 was ap

portione d as follo ws: Equipment 62,000 Trade N ame & Go od Will 13,000 Covenant Not To Compe

te 13,000 Account s Receiva

ble 18,000 Consultation Fee 24,000 TOT AL: $130,000

On June 10, 1993, Wife filed a complaint seeking a divorce upon the g rounds of cruel and inhu man tr eatme nt and irreco ncila ble di fferen ces. Hu sband answer ed, de nying Wif e's
a llegat ions, and filed a countersuit alleging aba ndonment and inappropriate marital condu ct. At trial , the parties s tipulated

that the tr ial cour t should g rant a di vorce to

both part ies. The parties presented1 T.C.A. § 36-4-129(b) allows a court to grant a divorc e upon both parties' stipulations as

to the gr ounds of th

e divorc e. The c ourt may award s uch a divo

rce without asses sing fa

ult to either party . T.C.A. § 36-4-129(b). two issues for the trial court's consideration: (1) the equit able divi sion of the

Husband' s chiropr

actic practice; and (2) the distribution of a potential debt arising from the forfeiture of a pleasure boat that had been purchased by

the parties during their marriag e.

At trial, Wife testified that she hadcontribu ted her s ervice s to Husba

nd's ch iropractic practice throughout the marriage. Wife further contended that she had helped maintain the practice when Husband' s illness f

orced him to quit

working for

approximately a y

ear. Wife argued that her various contributions to Husband's practice entitled her to an int erest in the purchase price of Husband's practice.

As additional evidence of her interest in Husband's practice, Wife presente d a list of equipmen t, which she alleged

had been bought for

Husband's practice during the parties' marriage. She argued that the equipment was marital proper ty and was ther

efore subject to

equitabl e division pursuant to T.C.A. § 36-4-121. Wife's testimony showed that the value of the equipment in question comprised48.73% of the total value of the equipment present in Husband's pr actice at the time that the practice was sold.

Wife also asserted that she should be held harmless for any future deficiency judgment that might arise due to the parties' forfe iture of a $120,000 pleasure boat. I t was undisputed that the boat had been purchased during the marriage. Due to Husba nd's illn ess, the parties had been unable to pay the necessary

installments on the boat. Consequently, a creditor had repossessed

the boat. At the time of trial, the repossessor of the boat had not taken any action for a d ef ic ie nc y.

The trial court granted a divorce to the pa rties pursuant to T.C.A. § 36-4-1 29 1 and awarded Wife a 30% interest

in the purchase price of Husband's pr actice. The court found that the purchas e price of the chiropractic practice was $104,000. In arriving at the $1 04,000 figur e, the court excluded the amounts paid by Mr. Totty for "Trade Name and Good Will" and the "CovenantNot

To Compete" from the total purchase price of $130,000. Thus, the trial court found that the value of Wife' s interes t in the purchase pri ce of Hu sband' s practic e was $31 ,200 ($10 4,000 (pu rchase price of Husba nd's practice) x 30% (percentage of Wife's interest in Husband's practice ) = $31,200). The tri al courtalso ordered that Husband indemnify Wife for any de

ficiency judg

ment that might arise as a result of the forfeiture of the boat purchased during the parties' marriage.
Husband presents the following issues for review:

1. Did the trial court err in awarding the plaintiff a 30 percent interest in the sale pri ce o f the defendant's chiropractic practice, ho ld in g i t t o b e m ar it al pr op er ty? 2. D id the trial court err in decreeing tha t the defen dan t indemnify

the plaintiff

for any deficie ncy judgmen t again st them for the purchase and

reposse ssion of a

pleasur e boat? 3. Did the trial court err in awarding the plaintiff a 3 0% interest in th e $24,000 consultation fee paid by the purchaser of the chiropr actic pr actice to the def

endant?

In regard t o Husb and's first issue, the trial court found that the chiropractic practice
was the separate property of Husband because he h ad owned the practice prior to the marriage. Assets owned by

a spouse prior to marriage are to be considered

the separate property

of that spouse. T.C.A. § 36-4-121(b)(2)(A).

However, the trial court also found that Wife was entitled to a share of the purchas e price because she had performed ser vices during Husband's illness that were essential to preserving Husba nd's practice. The cour t reasoned that, without Wife 's serv ices, the value of the practice woul d have been sub stantiall

y le ss at the time of

sale. Additionally, the trial court f ound that the equipment from Husband's practice, which Wife had spec ified as having been purchased dur ing the course of the parties' marriage, qual if ie d a s m ar it al pr op er ty u nd er T. C. A. § 3 6- 4- 12 1( b) (1 )( A) . C on se qu en tl y, the trial court held that Wife was entitled to 30% of the purchase price of the practice, excluding the monetary amounts in the s ales agreement attributable to "T rade Name and Good Will" and the "Covenant Not To Compete."

Husband argues that

the trial court er red in as sessing

Wife's in terest in the pur

chaseprice because Wife fail ed to show

that the p ractice had appr eciate d during

the part ies' marriage. He argues that the burden was onWife to prove the value of the practice prior to the marriag e. Husband fu rther argue s that sinc e no evide nce waspresent

ed as to the value o f the pra ctice pr ior to thei

r marriage, Wife did not meet her burden in proving that the value of Husband' s practice had appreciated

during the marriag e. Withou t proof of an appreciation in the value of the pra ctice, Husband contends that there is no evidence in the recor d to support the trial court's award.

We agree with Husban d and hold t hat th e tria l cour t erred in ass essin g Wife's equitabl e interest

in the val

ue of the assets o f Husband' s practice. The determination of what propert y is jointly owned and the value of a party' s interest in that property is a q ue stion of fa

ct. Hardin v. Hardin , 689 S.W.2d 152, 153 (Tenn. App. 198 3). Our revi ew of t he low er cour t's decision is de novo with a presumption of the correctness unless the evidence pr eponderates otherwise. T.R.A.P. 13 (d); Farrar v. Farrar , 553 S.W.2d 74 1, 743 (Te nn. 1977) ; Kelly v. Kelly , 679. S.W.2d 458, 460 (Tenn. App. 1984).

The evi dence o ffere d at trial was suff icient to s how that Wif

e did make

a valu abl e contribution to Husband's practice throughout the e ntire course of the p arti es' mar riage and, most
es pe ci al ly, during his illness. Moreover, T.C.A. § 36-4-121(a)(1) gives the trial court great latitude in equita bly dividing marital p roperty betwee n divorcing par

ties. However, as a threshold matter, propert y must first qualify as marital pr

operty under

T.C.A. § 36-4-121(b)(1)(A) or T.C.A. § 36-4- 121(b)(1)(B) before it can be subject to the court's powe rs of equitable division under T.C.A. § 36-4- 121(a)(1). If the

nonowner spouse cannot prove that a piece of property is marital prope

rty, the trial court has no authority to make a n equitable division o f the pr operty. T.C.A. § 36-4-121( a)(1). T.C.A. § 36-4-121(b )(1)(B) defines "marit al property" inter alia to include "income from, and any increa se in value during the marriage, of property de

termined to be separa

te prope rty . . . if each pa rty substantia lly contributed to its preservation and appreciation." T.C.A. § 36 -4-121( b)(1)( B). Thus , if a nonowner spouse can show that he contributed to the preservation and apprecia tion of a piece of se pa ra te pr op er ty, the trial court may g rant the nonowner spouse an equitable share of the incr ease in value of that property . T.C.A. § 36-4-121.

In order to prove such an increase in the va lue of sep arate prope rty, a nonownerspouse

must present evidence that proves the value of the sepa rate asset prior to the marriage. See Bryson v. Bryson , App. No. 88-94-II , 1988 WL 87685 at **3 (Tenn. App. Aug. 26, 1988). I f there is no proof of the v alue of a separate asset before the pa rties' marriage, the trial c ourt has no legitima te basis todetermine that an asset has appreciated. Id. Thus, a trial court properly

cannot make an equitable distribution of the alleged appreciated value of that particular asset. Id
.

Wife offered no proof as to the value of Husband' s businessprior to th e partie s' marriage. "One who claims an interest in the increase in va lue of the sepa rate pr operty of his spouse has the burden of showing the amount of such increa se. " Bry son , 1988 WL 87685 at ***3. The only evidence Wife offered at trial to prove that Husband's c hiropractic practice had

appreciated over the course of the parties' marriag e was her testimony tha t the pr actice had inc reased from 4 to 5 patients when the parties were married to 35 to 40 patients at the time of the divorce. Wife argues that this testimony proves that the value of Husba nd's practice increased ove r the course of the marriage. However, as noted supra , Wife failed to present evidence that the actual monetary value of Husba nd's practice had risen to correspond with the increase in the number of patients. I t cannot be conclusively infer

redthat a bus iness is ap

precia ting in va lue just because it

begins to service more clients.

Without such fund amental informati on, Wif e's inte rest in the purchas e price

could notbe made without

speculation as to the exact amount of app reciati on of the p

ractice attributa ble to her se rvices. Accordingly , we find that the trial court erred in awarding Wife a 30% inter

est in the purchase price of Husband' s practice.

Wife relies on Wilder v. Wilder , 863 S.W.2d 707 (Tenn. App. 1992), to support her
a rgument that T.C.A . § 36-4-1 21 does no t require the nonow ner spous e to prove an actu a l appreciationin the value of a separate asset in order f or that asset

to be classifiedas ma ri ta l p ro pe rt y. Wife argue s that Wilder stands for the propositio n that a no nowner s pouse need only show that she contributed to the preservation of a marital asset in order to be entitled to a portion of the value of that asset. Th us, her c ontributio ns to the pr eserva tion of Hus band'spractic e during the cour se of the parties' marriag e is enough to transmute a portion of the purchas e price

of Husba nd's pr actice into
ma ri ta l p ro pe rt y.Wife's reliance on Wilderis misplac ed. Firs t, in th e instant case, Wife did not

present conclusive evidence that

the value of Husband's practice ha d been preserved

throughout the parties' marriage because she

failed to pr ove the va

lu e of Husband's practice prior to the pa rties marriage. Second, Wilderwas an atypic al case that must b e rea

d in the con

text of its specific facts. In Wilder , the husband was an attorney , who had worked with several other attor neys to obtain a $10 million settlement for his clients and other plaintiffs in a class action lawsuit. Id . at 710. The actual trial of the lawsuit took place prior to the parties' marriag e. Id . However, the husband and wife were married before the final judgment was entered by the trial court. Id . When the trial court awarded the plaintiffs a $21 million judgment, the defendants appe aled. Id
.

During the course of the p arties' marriage, the wife contributed her ser vices to her husba nd's law practice while he worked on the appe al. Id . The Sixth Cir cuit Court of Ap peals reduced the judgment to $11 million. Id . After the appeal w as decid ed, the w ife cont

inued to contribu te her services to the husband's practice until the parties eventually settled the litig ation for $10 million. Id
.

Ms. Wilder argued that she was entitled to a portion of her husband's attorney 's fees from the lawsu

it becau se she ha

d worked with him on it during the marriage. Id . at 714. The husband argue d that, be cause the value of the lawsuit had decreased during the mar riage, the value of his interest in the lawsuit had also decreased. Id . Thus, he asserted that his wife could not have contributedto an appr

eciation in the value of his interest in the lawsuit as required by T.C.A. § 36-4- 121(b)(1)(B). Id . Therefore, he reasoned tha t she was not entitled to an equitable share.

The husband in Wildercited a s tring of Tenness ee deci sions which held tha t a spouse who does not materially contribute to a n increase in the value of a separate asset is not entitled to any portion of that asset

under the equitabl e division of property. Id.; see Mahaffey v. Mahaffey , 775 S.W.2d 618, 623 (Tenn. A pp. 1989) ; Crews v. Cre ws , 743 S.W.2d 182, 189 (Tenn. App. 1987). However, this Court held that Wilderwas dist inguisha ble from the prior decisions in two distinct respec ts. First, th

is Court recognize d that pote ntial atto rney 's fee s arising

from an o ngoing

lawsuit
are not a conventional asset. Id . A lawsuit is neither an appreciable nor a depr eciable as set. Id
.Ac co rd in gl y, contingency fees ari sing fr

om a lawsuit are neither appreciable or depreciable. Id
. Instea d an attor

ney 's contingenc y f

ee is "n othing mo

re than a potentia l which mig

ht or might no t materializ e into a large su m of money. " Id
.

T.C.A. § 36-4-121(b)(1)(B) clear ly requires that the nonowner s pouse sh ow a
con tribution to both the

apprec iation an d preser

vation of a separ ate asse t during the cour se of th e parties' marriag e in orde

r for the increa se in valu e of that asset to b e treated as marital prop er ty. T.C.A. § 36-4-12 1(b)(1) (B). B ecause of the unique nature of a lawsuit, it was impossible for the wife in Wilderto prove an app reciation of the value of the husband's intere st in the lawsuit as required by T.C.A. § 36-4-121(b) (1 )(B). Howeve r, the ev idence c learly

showed th at the wif

e in Wilderhad contributed her services to husba nd's practic e throug

hout the c ourse of

the part ies' marri age and that

she had received no contemporaneous pa y for her contributions. Id . This Court determinedthat it would be ineq uitable to deny wife a

portion of her

husband' s interes t in the law suit when the wife

had labor

ed for he r husband 's practi ce througho ut the marriage without any compensation for her services. Id . Th us, this Court determined that under the specific facts of Wilder , the wife was entitled to an equitable interest in the husband's fees beca use it was clear that she had helped

preserve her husband's intere st in the lawsuit. Id . Conseque ntly , this Court found that the wife was entitled to a 5% share of her husba nd's interest in the lawsuit. Id
.

In the instant case, neither of the distinguishing factor s of Wilderare present. Unlike the potential attorney' s fee from an o ngoing lawsuit, t he Husba nd's ch iropractic prac tice wasa

going concern with a value that was ascer tainable at any

given time. However, Wife presented no proof of the value of Husband's practice prior to the parties' marriage. Consequently, this Court cannot determine whether

there wa s a n actual

a ppreciation and preservation of the separa te property tha

t would t ransmute the increase in value to marital property and entitle Wife to an equitable portion of the Husband's practice under T.C.A. § 36-4-121(a)(1)(A). Additionally , unlike Wilder , the trial court found that Wife was fairly compensated

for her work

in Husband's practice. Here, w here Wife has failed to pr ov e an appreciation in the Husband's pra ctice and where Wife has been contempo raneous ly compensated for her contributions, we donot believe that she is entitled to any
more than her equitable share of the marital assets that comprise d part of the purc hase price of Husband's practice.The trial court found that roughly one-half of the equipment in Hu sband's practice
was purchased jointly by the parties during the marriage . Such property is marital prope r ty an d thereforesubject

to the court's power of equitable division. T.C.A. § 36-4-121(a) (1) and (b)(1)(A). Wife provedat

trial that items purchased during the marriag e accounted for 48.73% of the total value of all the equipment of Husband's practice. When Husba nd sold his practice to Mr. Totty , the value of all of the practice's equipment was listed as$62,000. Thus, the total valu e of the marital a ssets from the sale of the practice would be $30,212.60 ($62,000 (value of equipment purchased by Mr. To tt y) x 48.73% (percent of total value of assets purchased during marri age) = $30,212.60 (value paid for marital assets by

Mr. Totty)). Owne

rs hip of marital property should be presumed to be equal until proven otherwise. Harrington v. Harrington , 798 S.W.2d 244, 245 (Tenn. App. 1990); Kelly v. Kelly , 679 S .W.2 d 458, 462 (T enn. A pp. 19 84). A ccordi ngl y, we believe that Wife i s entitled to one-half of this amount. Thus, Wife should receive $15, 106.30 fr om the sale of Husband's practice.

In rega rd to the Husband's second issue, the trial court found that the pleasure boat was marital property

under T.C.A. § 36-4-121(b)(1)(A). All evidence pre sented at trial indicated that the boat w as purch ased dur ing the marriag e. Thus, t

here is no reason to qu estio n the t rial c ourt's factual finding. Trial courts have the autho rity to apportion marital debts in the same way that they divide marital assets. Mahaffey , 775 S.W.2d at 623-24 . Trial c ourts ar e entitle d to broad discretion in adjudicating the rights of parties in a divorce case. Fisher v. Fisher , 648 S.W.2d 244, 246 (Tenn. 1983); Harrington , 798 S.W.2d at 245. Decisions based upon this discretion are entitled to great weight
. Kelly , 679 S.W.2d a t 460; Edwards v. Edwards , 501 S.W.2d 283, 288 (Tenn. App. 1973). There is no indication that the trial cou rt abuse d its discreti on in rulin g that H usband sh ould be lia

ble for any defic iency ar

i sing from the forfeiture of the pleasure boa t. Therefore, we affirm the trial court 's order th at Husba

nd is to indemnify Wife if a def ault judgment should arise from the forfeiture of the boat purchased during the parties' marriage. Our

disposition

of Husba nd's fir st issue makes it unnecessary

for us to address Husband's third issue.

The judgmen

t of the c ourt belo w is aff irmed in pa

rt and re versed in part, a

nd this
cause is remanded to the trial court. Costs incurred on appeal are taxedone-half to Husba nd and one -halfto Wi fe fo r w hi ch ex ec ut io n m ay i ss ue if ne ce ss ar y.

________________________________

FAR MER , J.

______________________________ CRAWFORD, J. (Concurs )

______________________________ KOCH, J. (Co ncurs)