# FILED
July 2, 1997 Cecil W. Crowson Ap pellate Cou rt Clerk 

## IN THE COURT OF APPEALS OF TENNESSEE MIDDLE SECTION AT NASHVILLE

MARY S. FENDLEY, ) ) Plaintiff/Appellee, ) ) Montgomery Chancery ) No. 94-76 -171 VS. ) ) Appeal N o. ) 01A01-9509- CH-00418 MART G. FENDLEY, ) ) Defenda nt/Appella

nt. )

APPEAL FRO M THE CHAN CERY COURT FOR MONTGOMERY COUNTY AT CLARKSVILLE, TENNESSEE THE HONORABLE THOMAS E. GRAY, CHANCELLOR

For the Plaintiff/Appellee : For the De fendant/ Ap pellant : Jennifer D. Robe rts Roger A. Maness Dickson, Tennessee Marks, Shell, Manes s & Mark s Clarksville, Tennessee



## AFFIRMED AS MODIFIED AND REMANDED

WILLIAM C. KOCH, JR., JUDGE-2- 

## O P I N I O N

This appeal involves the classification of property in a d i vorce ca se. The wife filed for

divorce in

the Chanc ery Court

for Montgo mery Cou nty after seventeen years of marriage. Following a bench trial, the trial court declared the parties divorced and awardedthe wife custody of t

he four mi nor childr

en. In it s divisiono f

the parties’ property, the trial court classified the parties’ home as marital property and awarded it to the wife but classified the household furniture, funds inherited by the wife, and a limit ed partne rship inter

est inan athleti c club
as the wife’s separate

property. The husba

nd takes iss ue on this appe al with the alloca tion of the respons ibility for the debt on t

he home, the classi fication o f separate property , a nd the overa ll distribut

ion of the m arital e state. We have determined that the trial courtshould have a llocated t he debt secured by the home to the wife and that the trial court correctly classified the disputed asset s an d equitably distributed the marital estate.
I. Mary S. Fendley and Mart G. Fe n dley wer e marri ed in Clar

ksville in August 1977. The

y moved to Memphis after the wedding to enable Mr. Fendley to attend law

school. Ms. Fendley worked as a contact lens technician while Mr. Fendley attended l aw school. The par ties retur ned to Clar

ksville in July 1980 after Mr. Fendley graduated f

rom law s chool and co mpleted the bar exam ination.
Ms. Fendley’s grandmother d i ed shortly be fore the parties r eturned to Clarksville, leaving as part of her estate a fully furnished house a t 411 Idaho Springs Road. Ms. Fendley’s parents invited their dau gh ter and son -in-law to move into the hous e when they returne d to Clarks ville. T he partie s moved into the house in August 1980 and lived there rent-fee until December 1982 when they purchased the hous e and prop erty for $4 0,000 from Ms. Fendley ’s parents

.
The house on Ida

ho Springs R oad was bui lt in 1938 and n eeded ext ensive repairs. The parties went to work immediat ely restoring and renovating the house.-3-

Throughout

the marr iage, mu ch of the pa

rties’ disposable income, as well a s Ms. Fendley’s inherited

income, was spent

on improvem

ents to the p roperty.
Ms. Fendley r

eceived t wo inheri tances dur

ing the marriage. On her tw entyfifth birthday in

1982, Ms. Fendley received $26,000 fr om a trust e stablished b y her grandparents. She used these funds to purc hase an automob ile for Mr. Fendley, to pay the parties’ taxes, and to pay for some of the home improvements. In 1990, Ms. Fe ndley received a second inheritance of $69,500. She deposited these funds in a separate acco unt in her own name and withdrew portions of the funds during the marr

iage to pur

chase ce ntral hea

t and air c onditioning f

or the house, to purchase aboat from her father, and to purchase a truck. Ms. Fendley also used $10,00 0 of these funds to purchas e a limite d partner ship intere st in one of her bro ther’s bus iness ventur es called the Clar ksville At hletic Clu b.
Mr. Fendley’s law firm

later me rged with another firm that represented Heritag e Bank. In order toenhance hi s relation ship with th e bank and to obtain otherbanking privileges , Mr. Fen dley requested Ms. Fendley to withdraw her inherited funds from her separate acco unt at the G uaranty F ederal S avings and Loan Association and to deposit them in the Her itage Bank. A cting on the understand

ing that the f

unds would re main her separate property, Ms. Fendley withdrew ap pro ximately $2 9,000 from Guarant y Federa l Savings a

nd Loan and deposited it in a joint account at the Heritage Ban k. No twithstan ding their agreementthat the money remained Ms. Fendley’s separate property, Mr. Fendley later withdrew funds from the ac count, w ithout Ms. Fendley’s knowledge or permission , to pay ta

xes and to f

und individual

retirem ent accou nts.
The parties ha

d four chil dren befor

e they sepa

rated in July 1994. Ms. Fendley filed for divorce in August 199 4. Follow ing a bench trial, the trial court declared the parties divorced pursuant to Tenn. Code Ann. § 36-4-129(b) (1996), awardedMs. Fendley custody of the chil dren, and di rected Mr. F e ndley to pay $2,206 per month i n child support. T

he trial cour

t also awa

rded the pa

rties their personal property and determined thatmost of the anti que furnit ure and furnishing s, the rema

inder of th e funds Ms. Fendley in herited in 1990, and th e $10,000 investment

in the Clarksville Athletic Club were Ms. Fendley’s sepa rate-4-

pr operty. The tria

l court cla ssified the

house on Ida

ho Springs R oad as mar

it a l property and awarded t he house t o Ms. Fendle y.
II.
We need not ta

rry long w ith Mr. Fen dley’ s first iss ue with re gard to the allocatio n of the debt secured by the marital home. He asserts that the trial court shouldhave spec ific ally allocated this debt to Ms. Fendley because she was awardedthe house that secured the debt. The trial court simp ly overlooke d this debt, and Ms. Fendley read ily concede s that she sh ould be res ponsible for it. Accordi ngly, the final divor ce decre e should

be modified on remand to reflect that Ms. Fendley is responsible for the r emainin g indebtedne ss on the house and to require h er to hold Mr. Fendl ey harmle ss for this debt.
III.
Mr. Fendley’s prin ciple arg ument is tha t the tria l court er

roneously classified as persona

l property the rema inder of M s. Fendley’s inherited funds, her investment

in the Cla rksville A thletic Club, and the

antique furniture once owned by Ms. Fendley’s grandmother, great aun t, and othe

r member s of her f

amily. We have dete rmined tha

t the tria l court properly cla ssified thi s property.

A.
Distribut ing the parties’ property is an integral part of every divorce case. This property must be c lassi fied as e ither sepa rate or m arital pr

operty, a nd propertythat does no t fit

the definition of “separate property” must be considered to be “marital property.” Kendrick v. Kendrick, 902 S.W. 2d 918, 924 ( Tenn. C t. App. 1994). Tenn. Code Ann. § 36-4-121(b)(2) defines “separate property” a s : “(A) All rea

l and perso nal proper

ty owned b y a spouse before marriage; (B) Property acquired in exchange for proper ty acquired before the marriage; (C) I ncom e from and a

ppreciat ion of prope

rty owned by a spouse be fore mar riage except when characterized as marital property under sub divisio n (b)(1); an d (D) Property ac quired by a spouse at any time by gift, bequ est, devis e or descent .”1 This property included antique furniture and furnishings valued for insurance purposes

at approximately $47,000. The most expensive i tems in cluded Chippendale dining room furniture worth $25,800. -5- Whilethe statuto ry definit ion of “sep arate pr

operty” f ocuses on the

source of the property, the courts must also consider the way thatthe parties have used the property d

uring the m arriage

because title alone

is not necessar ily control ling. Langford v. Langfo rd, 220 Tenn. 600, 604, 4 21 S.W. 2d 632, 634 (1 967); Mahaffey v. Mahaffey, 775 S.W. 2d 618, 624 ( Tenn. C t. App. 1989); Robinette v. Robinette, 726 S.W.2d 52 4, 52 5 (Tenn. Ct. App. 1986). O therwise separate prop erty can be transmuted into marital property if the parties treat it as marital propertyand if ther

e is no evidence that th e spouse ow ning the property intended thatit remain se parate. McClellan v. McClell an, 873 S.W. 2d 350, 351 ( Tenn. C t. App. 1993) ; Batson v. Batson, 769 S.W.2d 849, 858 (Tenn. Ct. App. 1988). Classifyi ng property as separate o r marital is a questio n of fact. Cutsinger
v. Cutsinger, 917 S.W. 2d 238, 241 (Tenn . Ct. A pp. 1995); Sherrill

v. Sherri ll, 831 S.W.2 d 293, 295 (T enn. Ct. App. 1992) . Thus, a trial c ourt’s cla ssificati o n dec isions are entitle d to great wei ght on ap peal. Wilson v. Moore, 929 S.W. 2d 367, 372 (Tenn. Ct . App. 1996). These de cisions wi ll be presu med to be correct unless the evidence preponde rates othe rwise, Hardin v. Hardi n, 689 S.W. 2d 152, 154 (Tenn. Ct. App. 1983), or unless they are bas ed on an erro r of law. Mahaffey v. Mahaffey, 775 S.W. 2d at 622.
B.

T HE F URNITURE AND H OUSEHOLD I TEMS Many of the furniture and furnis hings in the I daho Springs Road house can be traced back to members o f Ms. Fendley ’s family. M os t of Ms. Fendley’s grandmother’s furniture remained in the house after she d ied in 1980. 1 Even though Ms. Fendley’s fat

her inher ited this pr

operty, he left much of it in the house and permitted his daughter and son-in-law to use it. Later, in 1990, Ms. Fendley’s fa therpermitted Ms. Fendley to select other furniture and furnishings fro m th e2 This property i ncluded antique furnishings valued at approximately $21,300 for

insuranc e purpose s.

3 This property included a love seat, Nippon and Limogues cut glass, and an antique ur n valued a t approximately $9 ,500 for insuranc e purpose s.
4 The par ties valued this prop erty at a pproxima tely $133, 725 for in surance purposes . -6- propertyhe inherit

ed from an aun t who lived

in Illinois. 2 In addition , Ms. Fendley’s motherpassed along several items of personal property that had once been in her

family’s Louisiana

plantation. 3

As so often ha

ppens with family he irlooms, Ms. Fendl ey’s parents did not prepare formal w

ritten doc uments concerni ng their disposition of

this proper

ty or their wishes co ncerning it s ultimate fate. T hey never specific ally informed either Ms. Fendley or

Mr. Fe ndley that t

hey gave them the prope rty as a joint g ift or even that they ha

d given the pr

operty to Ms . Fendley to do with a s sh e pleased

. Ms. Fendley’s mother stated on several occ as ions during th e marri age that sh e reserved the right

to take any

of the fur niture bac k if she eve

r had room

for it. She also inst ructed M s. Fendley to make sure that her children eventually received specificitems of pr

operty. T

he partie s and their

children u sed the pro perty and specific ally made sure

that it wa s covered

by their homeowner’s insurance policy.
After she filed for divorc e, Ms. Fendley asse rted that t his property, as well
as the partie s’ weddin g gifts, gifts she had re ceived fr om her mot

her, and silverware she had obtained prior to the marr iage, should be classified as her separate property. 4 Mr. Fendley counte red by assertingthat all th e furnishi ngs and personal property in the Idaho Springs Road house, re gardless of their origin, were marital property b ecause th e parties had used them during the marriage and because neither M s. Fendley nor her pa rents had expressed a

n intent tha t this propertyremain se

parate. The tria

l cour t classified most of the property once b elon ging to member s of Ms. Fendley’s f amily as M s. Fendley’s separ ate prope rty but included the

parties’ wedding gif

ts, the silverware Ms. Fendley had purchased prior to the marriage, and other furnishings bought during the marriage as marital property.-7- Mr. Fendley now insists that the trial court er red in its c lassifica

tion becaus e the doctrine

of transm utation re quires the

furniture and furnis hings to be classified
as marital property. We disagree. The sole fa ctthat the pa

rties used the proper

ty during their mar

riage doe s not neces sarily me an that Ms. Fendley’ s parents o r Ms. Fendley herself intended to make a gift of this property to the marital estate. Ms. Fendley and her pa

rents stated ca

tegorica lly that the

property w as not given to the parties jointly. F

urthermor

e, the r ecord contains eviden ce inconsis tent with t he conclusion

that Ms. Fendley’s pa

rents gave

them the pr

ope rty outright. Ms

. Fendley made stat

ements thr

oughout the ma

rriage i ndicating th at sh e ha d not relinquishe d her right

to control t

he ultimat

e disposition

of the prop erty. Passing down family heirlooms is a commonplace occurrence. Sometimes itis accomp lished wit

h formali ty and cer

emony, but

more fr equ ently, it is done informal ly and priva

tely betw een fami ly members . Thus, the absence of formal documents involving the

disposition of

this proper

ty is of litt

le consequence to us under the facts of this case. The trial court had the opportunity to obser ve th e parties and their witnesses as they testified and deter mined fro mthis evidence that Ms. Fendley a

nd her fam

ily did not int

end that the

family he irloo ms woul d become marital property simply because Ms. Fendley and her family used them. We have no basis, on these f acts, to conclude th at the tri al court e rred by det erm ining that the e vidence de monstrate d that Ms. Fendley a nd her par

ents intended tha

t this prope

rty would r

emain in th eir fam

ily.
C. T HE R EMAINING I NHERITED F UNDS
Mr. Fendley also asser

ts that the tr

ial court s hould have c lassified the funds Ms. Fendley deposited in their joint account at the Heritage Bank as marital funds. Relying again on t

he doctrin e of tran smutation, he insists th at the fa ct that Ms. Fendley withdrew the se funds fr om her own separate account and deposited them in a joint account can only support the conclusion t hat she intended to rel inquish her contr ol over the se funds. The evidence does not support this argument.-8- Ms. Fendley r

eceived t hese funds b y inheritance. She deposi ted them in a separate account in her own name. She used part of the funds for family purposes but intended toleave eno ugh funds in the accou nt to provide

some assis tance for the children’s college e ducation. Ms. Fend ley mainta

ined complete control over these funds until Mr. Fendley convinced her that depositing them in another account at Heritage Ban k would fu rther his b usiness interests

. Ms. Fend ley complied with Mr. Fendley’s request but only with the understanding that Mr. Fendley would h ave no control o ver these funds even if they we

re in a joi nt account. After Ms. Fendley discovered that Mr. Fe ndley had w ithdrawn aportion of these fund s without

her perm ission, she

deposited t

he funds in anot

her separate account.
The mere fa

ct that the funds were placed for a time in a joint account does not require that they be considered marital property. Ms. Fendley’s account of the
use of these funds is largely undisputed and demonstrates that she never intended to relinquish her contr

ol over the se funds. Accordi ngly, we have no basi s for concluding that th e evidence preponderates agai nst the trial court’s conclusion that these funds were M s. Fendley’s separ ate prope rty.
D. T HE H EALTH C LUB I NVESTMENT
In his final classification issue, Mr. Fe ndley argues that the trial court shouldnot

have clas sified the

$10,000 inve stment in th e Clarksv ille Athle tic Club as Ms. Fendley’s separate property because the parties treated the investm ent as if it were marital property. We concur w ith the trial court’s concl usion that the funds used for th e investment remain ed Ms. Fendley’s sep arate pr operty, eve n though the partie s treate d the income fr om the inves tment as m arital pr operty, a nd the entire family be nefitted f

rom the inv estment. During the marriage, Ms. Fendley’s brother started the Clar

ksville At hletic Club and offe

red Ms. Fendley and h er sister s the opportunityto purchase limited partners hip interests for $10,00 0. The Fend leys decide d that purc hasing a limited partners hip would be a good idea be cause the entire family would receive a-9-

lifetime members hip in theclub. Mr. Fendley intendedto borrow the money f

or the inves tment , but Ms. Fendley de cided to use her inher ited funds i n order to avoidany furthe r indebted ness. The par tnership doc uments list

ed Ms. Fendley as the sole limite d partner ; however , the mem bership ca

rds and clu

b’s repor t of income listed both Ms. Fendley and Mr. Fendley as the “individual” partner.
The parties r

eported the

inc ome from the investment on their joint tax returns, and there is no dispute that they co ns idered the income to be marital property. After the parties separat ed, Ms . Fendley liquidated the limited partners hip intere st when she discovere d that Mr. Fendley ha d withdra wn funds from the account she

was main

taining for

her childr

en’s colle ge educat

ion. She deposited the funds f

rom the inv e stment bac k into her c hildren’s college e ducation account.
Ms. Fendley’ s de cision t o use a portion of her separate funds as an investment

to the benefit of her fami ly is not t antamount t o a decisio n to relinquish

all contro l over the f

unds. Whil e the lifetime mem berships an d the i nvestment

income w ere mar

ital prope

rty, the funds as a m atter of con trac t between the club and Ms. Fendley remained under her control. Ms. Fendley continued to exerci se control over the f unds and eve ntually liqui dated the investment

and returned the funds to a separate account in her own name. Under these fac ts, we h ave deter mined that the trial

court cor rectly cl assified t

he funds from the liquida

ted investm

ent in the health clu

b as Ms. Fendley’s se

parate property.
IV.
As a final m atter, Mr. Fen dley a sser ts that the manner in which the trial
co urtdivided the marital estate was inequitable because the parties’ circumstances
are “rather

equal.” Instead of

awardin g Ms. Fen dley 61% and Mr. Fendley 39% of the marital estate, he insists that a more equal distribution would be appropriate.
Trial courts hav e broad dis cretion in dividing marital estates. Tenn. C ode Ann. § 36-4-121(a

) (1991); Fisher

v. Fish er, 648 S.W.2d 244, 246 (Tenn. 1983).-10-

Accordi ngly, appellate

courts cus tomarily give gre at weight to their de cisions involving the classifica tion and allocatio n of marital property
. Wilson v. Moore, 929 S.W.2d at

372. We w ill ordinar

ily defer to the tria

l court’s decision unle ss it is inconsi stent wi th the factors in Tenn . Code Ann. § 36-4- 121(c) or is unsupported by a preponderance of the evidence. Brown v. Brown, 913 S.W. 2d 163, 168 (Tenn . Ct. A

pp. 19 94); M

ahaffey v. Mahaffey, 775 S.W. 2d at 622; Hardin v. Hardin, 689 S.W. 2d at 154.
The trial court’s goal in every divorce case is todivide the p arties’ marital propertyin a just an d equitable manner. A div is ion of property is not rendered inequitable

simply bec ause it

is not mathematically equal, Cohen v. Coh en, 937 S.W.2 d 823, 832 (Tenn. 1996); Ellis v. Ellis, 748 S.W.2d 424, 427 (Tenn. 1988); Kendrick v. Kendrick, 902 S.W. 2d at 9 29, or bec ause eac h party did n ot receiv e a share of every piece of maritalproperty
. Brown v. Brown, 913 S.W.2 d at 168. In the final analysis, the justnes s of a par ticular di vision of ma

rital prop erty depends on its fi nal re sults conside red in light

of the per

tinent fac tors in Tenn. Code Ann. § 36-4- 121(c). Thompson v. Thompson, 797 S.W. 2d 599, 604 ( Tenn. Ct. App. 1990).
The value of the parties’ entire marital estate is $243,946.26. The trial court’s division of t

he estate awards propertywith a va lue of $148, 569.02 to Ms. Fendley and proper

ty worth $9 5,377.24 to Mr. Fendl e y. Accordingly, the trial courthas awar

ded Ms. F endley 61% andMr. Fe ndley 39 % of the marital estate. We have determined that this division is equitable under the facts of this case. Contrary to Mr. Fe ndley’s ass ertion, w e do not find that the parties’ circumstances
are essential ly the same . Ms. F endley help ed Mr. Fendley com pl ete hi s professional educational while c ur tailing her own. A s a result, Mr. Fe ndley is better equipped to e arn income and acquir

e capital assets th an Ms. Fe ndley. Based on the part ies respect ive ages, e mployability, an d earning capacities , we have determin ed that the trial cour

t’s division of the parties’ marital estate is equitable.
V.-11- We affirm the final divorce decree as modified h erein and remand th e case to the trial court for the amend

ment of the final decree to provide that Ms. Fendley is solely res ponsible for

the payme nt of the r

emaining in debtedness secured b y the Idaho Springs Ro ad proper ty and for a

ny other pr

oceedings t

hat may be

required

. We also tax the costs of this appeal to Mart G. Fendley and his surety for which execution, if necessary, may issue.

______ __ _________________

___ WILLIAM C. KOCH, JR., JUDGE CONCUR:

_________________

_______________ HENRY F. TODD, P.J., M.S.

_________________

_______________ SAMUEL L. LEWIS, JUDGE