1 M atters p ertaining to the ch ild are n ot at issue on ap pea l. 

### IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE August 19, 2005 Session TROY A. CLARK v. JENNIFER DAWN CLARK Appeal from the Circuit Court for Davidson County No. 03D-2344 Carol L. Soloman, Judge

No. M2004-01824-COA-R3-CV- Filed Septem ber 13, 2005

This is an appeal from a divorce action in which the husband arg ues that the trial court

failed to make an equitable division of the marital estate. Spec ifical ly, the husband challenges the trial court’s treatment of certain real property as the wife’s separate proper ty, and he c hallenges the valuationplaced on their

vehicles. Finding the appeal meritorious, we re verse and remand for

a new division of the marital estate.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court

Reversed and Remanded
F RANK G. C LEMENT , J R ., J., delivered the opinion of the court, in which W IL LI AM B. C AIN , J., and J ERRY S MITH , S P .J., joined. Andrew M. Cate, Nashville, Tennessee, for the a ppellant, Troy Allen Clark. Alfred H. Knight, Mary

Arline Evans, and Alan D. Johnson, Nashville, Tennessee, for the appellee, Jennifer Dawn Clark. O PINI ON Troy AllenClark, Husband, and Jennifer Dawn Clark, Wife, married in November of 1991. They have one minor chil d, who wa s born in 1999. 1 After 13 ye ars of marriage, Husband filed for divorce on October 2, 2003. Wife counterclaimed for divorc e on October 27, 2003. Both spouses worked during most of the marriage . During the early years, Husba

nd’s income exceeded that of Wife. Husband had been working as a c ontract painter for Oak well Fa rms, earning approxima

tely $30,000, when he lost the contract with Oakwell in 1 997. The reafter, Husband worked as a self-em ployed painte

r on a par t-time ba sis with little economic success. Prior to 1996,2 It may hav e been 1997; the recor d is not e nti rel y cl ear as to t he dat e she was l icen sed. 3 Husband and W ife resi ded in the Ridgemere Court residence until t hey separated during t he div orce pro ceed ings in 20 04.

4 Some of t

he net proceeds were divi ded equal ly and di str ibut ed pri or to the fi nal de cree. Only $1 0,000 remained and wa s on deposit with the cl erk at

the t ime of t

he divorce. -2- Wife worked as a bookkeeper for an apartment complex earning somewhat less than Husband. Wife obtained a real estate license in 1996. 2 She enjoyed immediate succ ess as a real estate age nt. The par ties’ only chil d was b orn in 1999. At th is ti me, W ife’s earnin gs were su bstantial ly greater than Husb and’s. Thus, they ag reed Husband would stop working and stay home to care for their child while Wife continued to wo rk as a real estate age nt to support the family. She earne d between $58,000 to $65,000 annually during the three years H

usband cared for the child. Husband returned to the workplace in 2003. The parties acquired a number of a ssets d uring the marriage, including real estate and vehicle s, and they

built equit

y in bank and

retirement ac counts . The first residence the parties acquired during t he marr iage w as on Ridg emere Co urt in N ashville. 3 They additionally acquired rental property on Dut

chman Drive. T

hey did not re side in the

Dutchman

propert y; they rented i t out for which they r

eceived rental income.
In2003, while Husband was working in Lebanon, he located a vacant lot in Leba non upon whichthe parties planned to construct their new residence (here inafter the “Ridge Crest property ”). Husband and Wife purchased the lot; however, for reasons not fully explained in the record, the lot was titled in Husband’s name only. Neve rtheless, the cont

ract f or the construction of their new re sidence and the c onstruct ion loan f

or the Ridge Crest pr

operty were in b oth spouse s’ names

. Construction of the new

residence comme

nced in 20 03, prior

to the fili ng of divorce pr

oceedin gs. Construction was completed shortly bef ore the divorce proceedings were final. The parties’ former residence on Ridgeme re Court i nNashville was sold during the divorce proceedings. By

agreed order, the net proceeds from the sale of that house were held by

the court clerk pending division of the marital estate. 4 At the time of the divorce, the parties owned additional assets, v ehicles

and reti rement a nd bank a ccounts, that wer

e subject to division

as marita l assets. Following an evidentiary

hearing, the trial court declare d the parties divorced and designated Wife as the primary r

esidential parent of the minor child. Each party was awarded their respective IRA and bank accounts. The parties’ new residence on Ridge Crest Drive, valued at $99,000, was cl assif ied by t he trial c ourt as Wif

e’s sepa rate pr operty and awa rded to Wif

e. The r ental pr operty onDutchman Drive, valued a t $30,000, was clas sified as marital property

and awarded to Husband. The remaining assets were classified as marital property , of which the funds on deposit in the clerk’s offi ce and Wife’s 401k were divided equally . Wife was awarded the 2004 Nissan Murano, an d-3-

Husband was awarded the to-be-restore d 1967 Porsche, which was inoperable, a nd t he 1993 Mitsubishi pickup truck. Onappea l, Husbandcontends the trial court’s division of the marital property was inequitable. He contends the marital estate had a total value of $215,725, y et he was awarde d assets worth only $64,518, w

hile Wife r

eceive d asse ts w orth $151, 207. He c ontends the inequit able division was the resul t of thr ee erroneous findings. One, the trial c ourt erred by classifying

the parties’ new Ridge Crest property , with a net value of $99,000, as Wife’s separate proper ty. Two, it erred by assessing too low a net value to the brand new Nissan Mura no awarded

to Wife. Three, it erred by a ssessing too high a value to the Porsche awar ded to Husband. S TAND ARD O F R EVIEW The division of

the part ies’ mar ital e state begins with the classification of the property as separa te or marital property. Miller v. Miller , 81 S.W.3d 771, 775 (Tenn. Ct. App. 2001). Tennessee is a "dual property " state, Smith v. S mith , 93 S.W.3d 871 , 875- 76 (Tenn . Ct. App. 2 002), thus , it cannot be included inthe marit

al estate unless it is "marital property ." The definition of that term is found in Tenn. Cod

e Ann. § 36 -4-121(

b)(1)( A). “Sep arate property

," as tha t term is de fined in Tenn. Code Ann. § 36-4-121(b)(2), is not marital property. Ther efore, separate property

should not be included in the marital estate. Woods v. W oods , No. M2002 -017 36-COA-R3 -CV, 2005 W L 1651787, at *3 (Tenn. Ct. App. July 12, 2005). Property classification is a question of fact. Mitts v. Mitts , 39 S.W.3d 142, 144-45 (T enn. Ct. Ap p. 200 0). Th us, we review the tr ial co urt's classification using the familiar standard of revie w in Tenn. R. App. P. 13(d). Once property ha s been classified as marital property, the court should plac e a re asonable value on prope

rty th at is subject to divisio n. Edmisten v. Edmisten , No. M2001-00081-COA-R3-CV, 2003 WL 21077990, at *11 (Te

nn. Ct. App. May 13, 2003). The parties have the burden to provide competent

valuation evidence. Kinard v. Ki nard , 986 S.W.2d 220, 231 (T en n. Ct. App. 1998). When valuation evidence is conflicting, thecourt may place a value on t

he prope rty that is with

in the range of the values presente d. Watte rs v. W atters , 959 S.W.2d 585, 589 (Tenn. Ct. App. 1997). Decisions regarding the value of marital property a

re questions of fact, Kinard , 986 S.W.2d at 231; thus, they are not second-guessed on appe al unless they are not supported by

a preponderance of the evidence. Smith , 93 S.W.3d at 875. Once the marital property has been valued, the trial court is to divide the marita

l proper ty in anequitable manner. Tenn. Code Ann. § 36-4-121(a)( 1); Miller , 81 S.W.3d at 775. A division of marital property in an e quitable manner does not require that the property be divided equa lly

. Robertson v. Robertson , 76 S.W.3d 337, 341 (Tenn . 2002). D iv iding a marital e state is not a mechanical process

but rather is guided by c onsidering the factors in Tenn. Code Ann. § 36-4-121(c ). Kinard , 986 S.W.2d at 230. Trial courts have wide latitude in fashioning an equitable division of marital pr op er ty, Fisher v. Fisher , 648 S.W.2d 244, 246 (Tenn. 1983) and this court accords great weight to th e tria l cour t's division of marital property. Wilson v. Moore , 929 S.W.2d 367, 372 (Tenn. Ct. App. 1 996). Th us, we de fer to the trial cou rt's division of the

marital e state unle ss it is5 W hile Husband was on the witness sta nd, his counsel was d irecting a line of questions to H usband to establish

the degree of Hus band’ s par ti cipation in t he pur chas e of t

he Ridg e Cres t l ot, the const ruct ion loan, and the design and const ruct ion of t

he par ti es’ res idenc e, at whi ch t ime t

he t ria l cou rt s tat ed, “What does that have to do wi th t

he price of eggs? I mea n, it’s marital p rop erty.” Following a reply by Husband’s counsel, the tri al court added, “Well, they were marri ed. As long as he contr ibuted s ome effort to th e marria ge, t

hen he’ ll g et a share . I mean , if he did stay home and stay in be d, then that migh t be an other ques tion.” -4- inconsistentwith the factors in Tenn. Code Ann. § 36-4-121(c) or is not supp or te d b y a preponderance of the evidence

. Brown v. Brown , 913 S.W.2d 163, 168 (Tenn. Ct. App. 1994). C LASSIFICATION OF A SSETS The most econo mi ca ll y s ignificant issue Husband raises on appeal is the trial cour t’s classification

of the Ridge Crest property , with anet value of $99,000, as Wi fe ’s se pa ra te pr op er ty. He contends

it was mar

ital prope rty . Tenn. Co de Ann. § 3 6-4-121( b) defines “mar

ital prope rty ” as: all real and personalproperty, both tang ible and intangible, acquired by either or both spouses durin g the co urse o f the m arriage up to the date of the final divorcehearing and owned by either

or both spouses as of the da te of filing of a complaint for divorce, except in the case of fraudulent convey ance in anticipation of filing, and including any proper

ty to which a rig

ht was acquired up to the date of the final divorce hearing date. “Separa te prope rty ” is defined as: (A) All real and personal property owned by a spouse

before marriage . . .; (B) Property

acquired in exchange for proper ty acquired be fore the marriage; (C) Inc ome from a

nd appre ciation o f proper ty owned by

a spouse before marri age except when characterized as marital proper ty under subdivision (b)(1); (D) Property

acquired by

a spouse at any

time by gift, devise

or descent. . . . Tenn. Code Ann. § 36-4-121(b). Early in the hearing, the trial court classified the Ridge Crest property as marital property a

nd further stated that “he’ll get a share.” 5 However, later in the same hearing the trial court classified the Ridge Crest pro

perty as Wife’s

separa te property. I

n finding that the Ridge Crest property was Wife’s separate property , the trial cou rt seeme d to place great emphasis on the stag e of the house at the time the parties filed for divorce in October of 2003, by emphasizing that the house wa s only

in the framing

stages , and the degree of Husband’ s participation, or lack thereof, in the construction of the couple’s new residence. We believe the trial c ourt’s conclusion is erroneous for four reasons . First, the Ridge Crest

pr op er ty d oe s n ot fa ll wi th in th e s ta tu to ry c ri te ri a o f “ se pa ra te pr op er ty” as defined in Tenn. Code Ann. § 36-4-121(b). Wife did not own the Ridge Crest property prior to-5-

the marriage. She did not a cquire t he Ridge Crest pro perty inexchange for property

she owned prior to the marriage. And, she did not acquire the Ridg e Crest property by “gift, devise, or descent.” Second, Te nn . C od e. An n. § 3 6- 4- 12 1( b) do es no t r eq ui re a m in im um co nt ri bu ti on by a spousefor an asset to be deemed marital property . The trial cou rt stressed the fact that Wife supervised

the compl etion of the house w ithout any help from Husband, that Husband had nothing to do with this home, and it was as if the parties treated the Ridge Crest prope rty as Wife’s

separa te pr op er ty. Such action or inaction by a spouse is i

nsuffic ient to de

prive a s pouse of a marital asset or to justify a finding that an as se t a cq ui re d d ur in g t he ma rr ia ge is se pa ra te pr op er ty. To th e c on tr ar y, Tenn. Code. Ann. § 36-4-121(b) “does not require any contribution by the spouse, mere ly that the propert y be acquired during the marriage.” Powell v. Powell , 124 S.W.3d 100, 106 (Tenn. Ct. App. 2003). Third, the evidence preponderates against the trial cour t’s finding Husband had nothing to do with the construction of the Ridge Crest residence. The record reveals the parties pur chased the loton Ridge Crest while married, they commenced constru c tion of the house while married, they titledthe lot in

Husband’s name, and obtai ned the c onstruct

ion loan in

both name s. The re cord als o shows that the parties jointly selected improve ments to the residence, such as paint colors and light fixtures, and Husband worked to clear the lot and vac uum rain water from the house after torrential rains flooded the property . Thus, t h e evidence preponderates against the trial court’s finding that Husband had little to do with the Ridge Crest property

. Fourth, the trial court’s emphasis on the stage of the construction of the Ridge Cr est prope rty when the divorce petitions were filed is misplaced. Though the natur e, extent and value o f assets at the filing of the divorce petitions is relevant for other reasons, the condition of the property on that date, without mor

e, is inad equate t o conver t a marita l asset toseparate property . Moreover, Tenn. Code. Ann. § 36-4-121(b), which defines marital pr op er ty, refers to the “date of the final divorce hearing”, not the date the parties filed f or divorce.
We therefore rever se the tri al court’s finding that the Ridge Crest Property was Wife’s separa te property. The

refore, on rema

nd the Ridge Crest property shall be classified as marital propert y and the equity of that

property, va

lued at $99,000, shall be added to the marital estate and taken into consideration for the equitable division of the marital estate.
V ALUA TION OF M ARITAL P ROPERTY Husband also challenges the values the trial court assig ned to two vehicles; the 2004 Nissan Murano, awarded to Wife, and the 1967 Porsche, awa rded to Husband. The values the trial c ourt assi gned to marital property are findings of fact. Kinard , 986 S.W.2d at 231. We will not disturb these findings unless the evidence at trial preponderates against the findings of the trial court. Smith , 93 S.W.3d at 875.-6-

The trial court stated

“[i]t looks like the cars are about the same. He has about $9,200 worth of car, and she has a little bit more, that she took out a loan to pay - - really , she has about $10,000 inthe car of profit. So it’s just about the same.” We have determined the evidence preponderates against both findings. The trial cou

rt assig ned a va lue of $8, 000 to the i

noperab le, to-be -restor

ed 1967 Po rsche

. The only evidence

in the rec ord supporting a value of $8,000 came from Wife who attributed the value to a statement made by H usband. He previously told her the Porsche would be worth $8,000 once it was re stored; however , the vehi cle had not been restored, and it was not operable. The only evidence in the record regarding the value of the Porsche in its condition at the time of trial was that it was worth $4,200. Thus, the evidence in the record preponde rates against the finding that the Porsche was worth $8,000. The other vehicle at issue is the 2004 Nissa n Murano. It wa s purcha sed by Wife one month prior to the divor

ce hear ing to replac e a 1999 M azda Mille nnia whic h was tota

led in a wr

eck. I t is undisputed

the 1999 Ma

zda Millenn

ia was marital propert

y. T he purchase pric e of the new vehic le was $31,500, of

which Wife paid $18,000 down and borrowed the rest. However, determining the equity in the new vehicle was more complicated than first appe ars. Th is is due to the multiple sources of the funds Wife used to make the down pay ment. A portion of the funds, $8,000 of the $18,000 down payment, ca me from an account that

was marital property . The balance of the down payment came from a $10,000 temporary loan, drawn down on the home equity line of cr edit. The trial court relied upon the foregoing evidence to determine the net equity in the new vehi cle was substantia lly less thanthe $18,000 down payment. As the tr ial court sta

ted, “she took out a l oan to pa y” for it so “she has about $10,000 in the car of profit.” The difference would actually be $8,000, instead of $10,000, if the credit line loan of $10,000 was considered. Nevertheless, it is apparent the trial court estimated the value to be about $10,000 because it considered the funds drawn down on the cr edit line a s a n encumbr ance on the value of the ve hicle. The trial c ourt, how ever, f ailed to reco gniz e that a $10,000 check from the automobile insurance company was in the pipe line, pay

able to Wife for t

he value of the wr

ecked 1 999 Mazda M illennia. The $10,0 00 in surance cla im represented

mar it al p rop ert y. It was to be paid dire ctly to Wife who , as she explained, p lanned to use it to pay off the tempora ry $10,000 credit line loan. Thus, the evidencepreponderates in favor of a finding the net equity of the 2004 Nissan Murano awarded to Wife was $18,000.

In C ONCLUSI ON For the foregoing reasons, we reverse the trial court’s finding that the Ridge Cr est Prope rty was Wife’s se

parate propert y, f inding it to be marita

l proper ty. We also modify the values attributed to the 1967 Porsche and the 1999 Mazda Millennia, both of which are ma rital property, a s stated above. Though we would prefer to modify the division of the marital estate without remanding the issue, to save the trial court and the parties the time and expense of another hea ring, we have concluded

that the complexities of the marital estate make it necessary that we remand the issue of the division of the marital estate to the trial court.-7-

We therefore remand this matter to thetrial court for further proceeding s consistentwith this opinion. Costs of appeal are assessed aga inst Appellee, Jennifer Dawn Clark.

___________________________________ FRANK G. CLEMENT, JR., JUDGE