FILED

July 2, 1997

Cecil W. Crowson

Appellate Court 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 No.

) 01A01-9509-CH-00418

MART G. FENDLEY, )

)

Defendant/Appellant. )

APPEAL FROM THE CHANCERY COURT

FOR MONTGOMERY COUNTY

AT CLARKSVILLE, TENNESSEE

THE HONORABLE THOMAS E. GRAY, CHANCELLOR

For the Plaintiff/Appellee: For the Defendant/Appellant:

Jennifer D. Roberts Roger A. Maness

Dickson, Tennessee Marks,Shell,Maness& Marks

Clarksville, Tennessee

AFFIRMED AS MODIFIED

AND REMANDED

WILLIAM C. KOCH, JR., JUDGE
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O P I N I O N

This appeal involves the classification of property in a divorce case. The

wife filed for divorce in the Chancery Court for Montgomery County after

seventeen years of marriage. Following a bench trial, the trial court declared the

parties divorced and awarded the wife custody of the four minor children. In its

division of 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 limited partnership interest in an athletic club

as the wife’s separate property. The husband takes issue on this appeal with the

allocation of the responsibility for the debt on the home, the classification of

separate property, and the overall distribution of the marital estate. We have

determined that the trial court should have allocated the debt secured by the home

to the wife and that the trial court correctly classified the disputed assets and

equitably distributed the marital estate.

I.

Mary S. Fendley and Mart G. Fendley were married in Clarksville in

August 1977. They 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 law school. The parties returned to Clarksville in July 1980

after Mr. Fendley graduated from law school and completed the bar examination.

Ms. Fendley’s grandmother died shortly before the parties returned to

Clarksville, leaving as part of her estate a fully furnished house at 411 Idaho

Springs Road. Ms. Fendley’s parents invited their daughter and son-in-law to

move into the house when they returned to Clarksville. The parties moved into

the house in August 1980 and lived there rent-fee until December 1982 when they

purchased the house and property for $40,000 from Ms. Fendley’s parents. 

The house on Idaho Springs Road was built in 1938 and needed extensive

repairs. The parties went to work immediately restoring and renovating the house.
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Throughout the marriage, much of the parties’ disposable income, as well as Ms.

Fendley’s inherited income, was spent on improvements to the property.

Ms. Fendley received two inheritances during the marriage. On her twentyfifth birthday in 1982, Ms. Fendley received $26,000 from a trust established by

her grandparents. She used these funds to purchase an automobile for Mr.

Fendley, to pay the parties’ taxes, and to pay for some of the home improvements.

In 1990, Ms. Fendley received a second inheritance of $69,500. She deposited

these funds in a separate account in her own name and withdrew portions of the

funds during the marriage to purchase central heat and air conditioning for the

house, to purchase a boat from her father, and to purchase a truck. Ms. Fendley

also used $10,000 of these funds to purchase a limited partnership interest in one

of her brother’s business ventures called the Clarksville Athletic Club.

Mr. Fendley’s law firm later merged with another firm that represented

Heritage Bank. In order to enhance his relationship with the bank and to obtain

other banking privileges, Mr. Fendley requested Ms. Fendley to withdraw her

inherited funds from her separate account at the Guaranty Federal Savings and

Loan Association and to deposit them in the Heritage Bank. Acting on the

understanding that the funds would remain her separate property, Ms. Fendley

withdrew approximately $29,000 from Guaranty Federal Savings and Loan and

deposited it in a joint account at the Heritage Bank. Notwithstanding their

agreement that the money remained Ms. Fendley’s separate property, Mr. Fendley

later withdrew funds from the account, without Ms. Fendley’s knowledge or

permission, to pay taxes and to fund individual retirement accounts.

The parties had four children before they separated in July 1994. Ms.

Fendley filed for divorce in August 1994. Following a bench trial, the trial court

declared the parties divorced pursuant to Tenn. Code Ann. § 36-4-129(b) (1996),

awarded Ms. Fendley custody of the children, and directed Mr. Fendley to pay

$2,206 per month in child support. The trial court also awarded the parties their

personal property and determined that most of the antique furniture and

furnishings, the remainder of the funds Ms. Fendley inherited in 1990, and the

$10,000 investment in the Clarksville Athletic Club were Ms. Fendley’s separate
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property. The trial court classified the house on Idaho Springs Road as marital

property and awarded the house to Ms. Fendley. 

II.

We need not tarry long with Mr. Fendley’s first issue with regard to the

allocation of the debt secured by the marital home. He asserts that the trial court

should have specifically allocated this debt to Ms. Fendley because she was

awarded the house that secured the debt. The trial court simply overlooked this

debt, and Ms. Fendley readily concedes that she should be responsible for it.

Accordingly, the final divorce decree should be modified on remand to reflect that

Ms. Fendley is responsible for the remaining indebtedness on the house and to

require her to hold Mr. Fendley harmless for this debt.

III.

Mr. Fendley’s principle argument is that the trial court erroneously

classified as personal property the remainder of Ms. Fendley’s inherited funds, her

investment in the Clarksville Athletic Club, and the antique furniture once owned

by Ms. Fendley’s grandmother, great aunt, and other members of her family. We

have determined that the trial court properly classified this property.

A.

Distributing the parties’ property is an integral part of every divorce case.

This property must be classified as either separate or marital property, and

property that does not fit the definition of “separate property” must be considered

to be “marital property.” Kendrick v. Kendrick, 902 S.W.2d 918, 924 (Tenn. Ct.

App. 1994). Tenn. Code Ann. § 36-4-121(b)(2) defines “separate property” as:

“(A) All real and personal property owned by a spouse before marriage; (B)

Property acquired in exchange for property acquired before the marriage; (C)

Income from and appreciation of property owned by a spouse before marriage

except when characterized as marital property under subdivision (b)(1); and (D)

Property acquired by a spouse at any time by gift, bequest, devise or descent.”
1This property included antique furniture and furnishings valued for insurance purposes

at approximately $47,000. The most expensive items included Chippendale dining room

furniture worth $25,800.

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While the statutory definition of “separate property” focuses on the source

of the property, the courts must also consider the way that the parties have used

the property during the marriage because title alone is not necessarily controlling.

Langford v. Langford, 220 Tenn. 600, 604, 421 S.W.2d 632, 634 (1967);

Mahaffey v. Mahaffey, 775 S.W.2d 618, 624 (Tenn. Ct. App. 1989); Robinette v.

Robinette, 726 S.W.2d 524, 525 (Tenn. Ct. App. 1986). Otherwise separate

property can be transmuted into marital property if the parties treat it as marital

property and if there is no evidence that the spouse owning the property intended

that it remain separate. McClellan v. McClellan, 873 S.W.2d 350, 351 (Tenn. Ct.

App. 1993); Batson v. Batson, 769 S.W.2d 849, 858 (Tenn. Ct. App. 1988).

Classifying property as separate or marital is a question of fact. Cutsinger

v. Cutsinger, 917 S.W.2d 238, 241 (Tenn. Ct. App. 1995); Sherrill v. Sherrill, 831

S.W.2d 293, 295 (Tenn. Ct. App. 1992). Thus, a trial court’s classification

decisions are entitled to great weight on appeal. Wilson v. Moore, 929 S.W.2d

367, 372 (Tenn. Ct. App. 1996). These decisions will be presumed to be correct

unless the evidence preponderates otherwise, Hardin v. Hardin, 689 S.W.2d 152,

154 (Tenn. Ct. App. 1983), or unless they are based on an error of law. Mahaffey

v. Mahaffey, 775 S.W.2d at 622.

B.

THE FURNITURE AND HOUSEHOLD ITEMS

Many of the furniture and furnishings in the Idaho Springs Road house can

be traced back to members of Ms. Fendley’s family. Most of Ms. Fendley’s

grandmother’s furniture remained in the house after she died in 1980.1

 Even

though Ms. Fendley’s father inherited this property, 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

father permitted Ms. Fendley to select other furniture and furnishings from the
2This property included antique furnishings valued at approximately $21,300 for

insurance purposes.

3This property included a love seat, Nippon and Limogues cut glass, and an antique urn

valued at approximately $9,500 for insurance purposes.

4The parties valued this property at approximately $133,725 for insurance purposes.

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property he inherited from an aunt who lived in Illinois.2

 In addition, Ms.

Fendley’s mother passed along several items of personal property that had once

been in her family’s Louisiana plantation.3

As so often happens with family heirlooms, Ms. Fendley’s parents did not

prepare formal written documents concerning their disposition of this property or

their wishes concerning its ultimate fate. They never specifically informed either

Ms. Fendley or Mr. Fendley that they gave them the property as a joint gift or

even that they had given the property to Ms. Fendley to do with as she pleased.

Ms. Fendley’s mother stated on several occasions during the marriage that she

reserved the right to take any of the furniture back if she ever had room for it. She

also instructed Ms. Fendley to make sure that her children eventually received

specific items of property. The parties and their children used the property and

specifically made sure that it was covered by their homeowner’s insurance policy.

After she filed for divorce, Ms. Fendley asserted that this property, as well

as the parties’ wedding gifts, gifts she had received from her mother, and

silverware she had obtained prior to the marriage, should be classified as her

separate property.4

 Mr. Fendley countered by asserting that all the furnishings and

personal property in the Idaho Springs Road house, regardless of their origin, were

marital property because the parties had used them during the marriage and

because neither Ms. Fendley nor her parents had expressed an intent that this

property remain separate. The trial court classified most of the property once

belonging to members of Ms. Fendley’s family as Ms. Fendley’s separate property

but included the parties’ wedding gifts, the silverware Ms. Fendley had purchased

prior to the marriage, and other furnishings bought during the marriage as marital

property.
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Mr. Fendley now insists that the trial court erred in its classification because

the doctrine of transmutation requires the furniture and furnishings to be classified

as marital property. We disagree. The sole fact that the parties used the property

during their marriage does not necessarily mean that Ms. Fendley’s parents or Ms.

Fendley herself intended to make a gift of this property to the marital estate. Ms.

Fendley and her parents stated categorically that the property was not given to the

parties jointly. Furthermore, the record contains evidence inconsistent with the

conclusion that Ms. Fendley’s parents gave them the property outright. Ms.

Fendley made statements throughout the marriage indicating that she had not

relinquished her right to control the ultimate disposition of the property.

Passing down family heirlooms is a commonplace occurrence. Sometimes

it is accomplished with formality and ceremony, but more frequently, it is done

informally and privately between family members. Thus, the absence of formal

documents involving the disposition of this property is of little consequence to us

under the facts of this case. The trial court had the opportunity to observe the

parties and their witnesses as they testified and determined from this evidence that

Ms. Fendley and her family did not intend that the family heirlooms would

become marital property simply because Ms. Fendley and her family used them.

We have no basis, on these facts, to conclude that the trial court erred by

determining that the evidence demonstrated that Ms. Fendley and her parents

intended that this property would remain in their family.

C.

THE REMAINING INHERITED FUNDS

Mr. Fendley also asserts that the trial court should have classified the funds

Ms. Fendley deposited in their joint account at the Heritage Bank as marital funds.

Relying again on the doctrine of transmutation, he insists that the fact that Ms.

Fendley withdrew these funds from her own separate account and deposited them

in a joint account can only support the conclusion that she intended to relinquish

her control over these funds. The evidence does not support this argument.
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Ms. Fendley received these funds by inheritance. She deposited them in a

separate account in her own name. She used part of the funds for family purposes

but intended to leave enough funds in the account to provide some assistance for

the children’s college education. Ms. Fendley maintained complete control over

these funds until Mr. Fendley convinced her that depositing them in another

account at Heritage Bank would further his business interests. Ms. Fendley

complied with Mr. Fendley’s request but only with the understanding that Mr.

Fendley would have no control over these funds even if they were in a joint

account. After Ms. Fendley discovered that Mr. Fendley had withdrawn a portion

of these funds without her permission, she deposited the funds in another separate

account.

The mere fact 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 control over these funds. Accordingly, we have no basis for

concluding that the evidence preponderates against the trial court’s conclusion that

these funds were Ms. Fendley’s separate property.

D.

THE HEALTH CLUB INVESTMENT

In his final classification issue, Mr. Fendley argues that the trial court

should not have classified the $10,000 investment in the Clarksville Athletic Club

as Ms. Fendley’s separate property because the parties treated the investment as

if it were marital property. We concur with the trial court’s conclusion that the

funds used for the investment remained Ms. Fendley’s separate property, even

though the parties treated the income from the investment as marital property, and

the entire family benefitted from the investment.

During the marriage, Ms. Fendley’s brother started the Clarksville Athletic

Club and offered Ms. Fendley and her sisters the opportunity to purchase limited

partnership interests for $10,000. The Fendleys decided that purchasing a limited

partnership would be a good idea because the entire family would receive a
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lifetime membership in the club. Mr. Fendley intended to borrow the money for

the investment, but Ms. Fendley decided to use her inherited funds in order to

avoid any further indebtedness. The partnership documents listed Ms. Fendley as

the sole limited partner; however, the membership cards and club’s report of

income listed both Ms. Fendley and Mr. Fendley as the “individual” partner.

The parties reported the income from the investment on their joint tax

returns, and there is no dispute that they considered the income to be marital

property. After the parties separated, Ms. Fendley liquidated the limited

partnership interest when she discovered that Mr. Fendley had withdrawn funds

from the account she was maintaining for her children’s college education. She

deposited the funds from the investmentback into her children’s college education

account.

Ms. Fendley’s decision to use a portion of her separate funds as an

investment to the benefit of her family is not tantamount to a decision to

relinquish all control over the funds. While the lifetime memberships and the

investment income were marital property, the funds as a matter of contract

between the club and Ms. Fendley remained under her control. Ms. Fendley

continued to exercise control over the funds and eventually liquidated the

investment and returned the funds to a separate account in her own name. Under

these facts, we have determined that the trial court correctly classified the funds

from the liquidated investment in the health club as Ms. Fendley’s separate

property.

IV.

As a final matter, Mr. Fendley asserts that the manner in which the trial

court divided the marital estate was inequitable because the parties’ circumstances

are “rather equal.” Instead of awarding Ms. Fendley 61% and Mr. Fendley 39%

of the marital estate, he insists that a more equal distribution would be appropriate.

Trial courts have broad discretion in dividing marital estates. Tenn. Code

Ann. § 36-4-121(a) (1991); Fisher v. Fisher, 648 S.W.2d 244, 246 (Tenn. 1983).
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Accordingly, appellate courts customarily give great weight to their decisions

involving the classification and allocation of marital property. Wilson v. Moore,

929 S.W.2d at 372. We will ordinarily defer to the trial court’s decision unless it

is inconsistent with 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. App. 1994); Mahaffey 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 to divide the parties’ marital

property in a just and equitable manner. A division of property is not rendered

inequitable simply because it is not mathematically equal, Cohen v. Cohen, 937

S.W.2d 823, 832 (Tenn. 1996); Ellis v. Ellis, 748 S.W.2d 424, 427 (Tenn. 1988);

Kendrick v. Kendrick, 902 S.W.2d at 929, or because each party did not receive

a share of every piece of marital property. Brown v. Brown, 913 S.W.2d at 168.

In the final analysis, the justness of a particular division of marital property

depends on its final results considered in light of the pertinent factors 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 the estate awards property with a value of $148,569.02 to Ms.

Fendley and property worth $95,377.24 to Mr. Fendley. Accordingly, the trial

court has awarded Ms. Fendley 61% and Mr. Fendley 39 % of the marital estate.

We have determined that this division is equitable under the facts of this case.

Contrary to Mr. Fendley’s assertion, we do not find that the parties’ circumstances

are essentially the same. Ms. Fendley helped Mr. Fendley complete his

professional educational while curtailing her own. As a result, Mr. Fendley is

better equipped to earn income and acquire capital assets than Ms. Fendley.

Based on the parties respective ages, employability, and earning capacities, we

have determined that the trial court’s division of the parties’ marital estate is

equitable.

V.
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We affirm the final divorce decree as modified herein and remand the case

to the trial court for the amendment of the final decree to provide that Ms. Fendley

is solely responsible for the payment of the remaining indebtedness secured by the

Idaho Springs Road property and for any other proceedings that 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