### IN THE COURT OF APPEALS OF TENNESSEE AT KNOXVILLE June 2000 Session JACKIE MCGREGOR v. GREGOR SCOTT MCGREGOR Appeal from the Circuit Court for Hamilton County No. 97DR-0428 L. Marie Williams, Judge FILED SEPTEMBER 26, 2000 No. E1999-00877-COA-R3-CV

This is a divorce case. Following a bench trial, the court below (1) granted the parties a divorce

on stipulated grounds; (2) divided the marital property; and (3) found that wife was not entitled to an award of alimony, b

ut that funds withdr

awn by her f

rom a joint a

ccount immedi ately prior to her filing for divorce constituted necessary temporary support for her and the parties’ daughter. Wife appealsthe trial court’s characterization of certain real property as marital property and the tria l court’s division of th

e marital property. Both wife and husband take issue with the trial court’s treatment of the funds withdrawn by wife from the joint account. We affirm the judgment of the trial court, as modified.

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

Affirmed as Modified; Case Remanded C HARLES D. S USANO , J R ., J., delivered the opinion of the court, in which H ERSCHEL P. F RANKS and D. M ICHAEL S WINEY , JJ., joined. Thomas Crutchfield, Chattanooga, Tennessee, for the appellant, Jackie McGregor. Grace E. Daniell, Chattanooga, Tennessee, for the appellee, Greg or Scott McGregor. OPINION
I.
In this divorce case, the trial court dissolved the marriage of Jackie McGregor (“Wife”) a nd1 The complaint and answe r indi cate th at Ke ely’s date of birth i s February 4, 1981. The statement of the evidence i

ndicates that Keel

y’s dat e of birt h is Apri l 2, 1981. -2- Gregor Scott McGregor (“Husband”). The parties had beenmarried sin ce 1975, and their marri age produced one child, Keely (DOB: April 2, 1981). 1
Wife has a bachelor o

f science deg

ree and worked

as a real estate

agent from 1983

to 1989 andfrom 1992 to 1996. She allowed her real estate license to laps e in October, 1996, after an unsuccessful lawsuit regard ing real estate

she had attempted

to purchase. Wife su

bsequently

worked as a waitress and as a social worker. According to Wife’s income and expense st atement, her monthly income was $1,390 w hile her e xpenses were $1,515. She testified, however, that her expenses were g

reater than re

presented on her

income and expense

statement. Husbandworked as a contractor remodeling homes until he allowed his contractor’s lic

ense to lapse in 1997. At the time of trial, he was working full-time as a painter earning $13.00 per hour. He testified that inclement weather sometimes affe cted h is ability to work a full 40-hour week. According to Husband’s income and expense statement, Husband’s monthly income was $1,125.80, and his monthly expenses were $1,474. In March, 1996, the

parties formulat

ed what is refer

red toin the record as “the plan.” The purpose of “the plan” was to get

the parties out of debt. “The plan” involved remodeling the marital re sidence and selling it. The parties then proposed to utilize the proceeds, along with Wife ’ s inheritance of $50,000 from her mother’s estate, to pay off debts and to purchase a lot(“the Brady Point property”) on which they planned to build a new ma rital residence. On March 20, 1996, the parties e ntered into a rea

l estate sales agreement for the purchase of the Brady Point property for $25,000. This a greement contains the following language: Purchasers assign the amount of twenty-five thousand dollars and 00/100 cents from the estate of [Wife’s mother] to sellers as of tod ays [sic] date verified by phone call with [the i r attorneys]. Purchasers will sign necessa

ry papers t

o effect this.
In the meantime, the p

arties appli

ed for a loan t o remodel the marital residence. On their loan application, the parties listed Wife’s inheritance as a joint asset. The parties closed on the Brady Point property in Augus t, 1996. Manyfees and expenses relating to this property, including the down payment, an a rchitec t fee, an appra

isal fee, a cre

dit report fee, and

taxes were paid fr

om a joint account o

f the parties. The parties remodeled the marital residence and sold it in January, 19 97. Mos t of the proceeds from this sale were used to pay off debts; the remaining funds, b eing $18,0 00, were deposited into the joint account. In late January, 1997, Husband withdrew $500 from this account2 Wife denies atta cking the co- worker, a femal e, but admits

that she re

ferred to the

co-worker as “trailer trash” and told her that she should have her teeth fixed. Wife admits biting Husband and hitting his t ruck with a two-by-four in 1993. W ife alleges that H usband ha d at one time hit her in the head with a frying pan and had pulled her by her hair. Husband d enies these allegations. -3- to reimburse him fo

r certain remod

eling expenses pa

id by him out of

his business accou

nt. When Wife learned of Husband’s withdrawal, she became upset, and on February 3, 1997,she withdrew the remaining $17,500 from the account. According

to Husband’s testimony, Wife attacked a coworker o f Hu sba nd’ s on the sam e day, 2 and Husband spent the night away

from the ma

rita l residence. He returned to stay the nights of February 4 and February

5, 1997, and was “d

riven out” on the night of

February 6, 1997. When he returned the next morning, Wife called the police. Wife filed this divorce action on February 11, 1997. On May 15, 1997, the trial court (1) ordered Wife to pay into court the balance of any funds held by Wife that were withdrawn from the parties’ joint account; and (2) ordered Husband to pay $81 per week in child

support. Wife subse

quently paid

approximately

$3,700 into

court, the balance of approximately

$13,800 having be

en spent on, among

other things, $2,200 in atto r ney’s fee

s, $6,000 for a year’s worth of rent, and $5,600 for moving and living expenses for her and Keely. On June 4, 1997, the trial court ordered that th e $3,700 paid into court “be paid for the minor child’s education and for temporary alimony pendente lite.” The trial court

awarded the parties a divorce on stipulated grounds on October 17, 1997, but referred to m edi ati on i ssu es r ela tin g to t he d ivi sio n of the pro pert y, child custody, child support, and alimony. Mediation failed, and the court heard testimony on the reserved issues in 1999. On June 2, 1999, the tr

ial court, among

other things: (1 ) found that the Brady Point property wa s marital property, “it s character having been transmuted from separate to mari t al property by the treatment of the property” ; (2) ordered tha

t t he Brady Point property be sold for a minimum purchase price of $50,000, the proceeds to “be utilized first to pay any unpaid portion o f the guardian ad litem’s fee, second to pay any u npaid therapy fees for the benefit of the child, third to pay any ta x indebtedness which arose during the marriage or

which is related t

o the Brady Point lot, fourth to p ay any unsecured debt o f the parties, andnext to pay any secured debt of the par ties. Any proceeds remaining will be divided equally between the parties.”; (3) divided several items of personal property; and (4) found that no alimony should be awarded.-4-

Upon Husband’s motion to alter or amend asserting that he is entitled to half of the $17,500 sumthat Wife withdrew from the joint account prior to separation, the court denied the motion, fin din g tha t th ose fun ds w ere n eces sar y sup por t fo r Wi fe an d Ke ely. Wife now appeal s, raising as issues the trial court’s characterization of the Brady Point property as marital property and the trial court’s division of the marital property. Wife and Husband bothtake issue with the trial court’s treatment of the $17,500 Wife withdrew from the joint account.
II. Since this is a non-jury c

ase, our review

is de novo upon the record of the proceedings below. That record comes to us with a presumption of correctness as to the trial court’s factual findings, a presumption that we must honor u nless the evidenc

e preponderate

s against those fi ndings. Tenn. R. App. P. 13(d). We review the trial court’s conclusions of law de novo with no presumption of correctness. Adams v. Dean Roofing Co. , 715 S.W.2d 341, 343 (Tenn. Ct. App. 1986).
III.
A.
In divorce cases, Tennessee reco gnize s two distinct classes of property: (1) “marital property”, as defined in T.C.A. § 36-4-121(b)(1) (1996); and (2)“separate property”, as defined in T.C.A. § 36-4-121(b)(2) (1996). The distinction is important becaus

e, in an action for

divorce, only marital property is

divided, distribute

d, or assigned be

tween the partie

s. See T.C.A. § 36-4-121(a)(1) (1996). Implicit in thestatute is the understanding that separate property is not divided between the parties. Brock v. Brock , 941 S.W.2d 896, 900 (Tenn. Ct. App. 1996). Gen eral ly, property th

at is acquired dur

ing the marriag

e by either

or both spouses and

still ownedby either or

both spouses when th

e divorce compla

int is filed is classified as mar ital property andis thus subject to

equitable division. T.C.A. § 36-4-121(b)(1). However, property acquired by a spouse by gift, bequest, devise or descent, even if acquired during the

marriage, is se

parate propert

y and not subject to division. T.C.A. § 36-4-121(b)(2)(D). Under certain circumstances, however, property generally deemed separa

te may be fo

und to hav e “t rans mut ed” i nto mar ita l pr ope rty:

[Transmutation] occurs when sep arate property

is t reated i n such a way as to give evide

nce of an intentio

n that it become

m arital pro pert y. One method of caus i ng t ransmutation is to purc hase property with separate funds b

ut to take title in joint tenancy. This mayalso be done by

placing separ

ate property

in the names of both spouses. The rationale un derlying b oth these doctrine

s is that dealing-5- withproperty in

the se w ays creates a rebuttable presumption of a gift to the marital estate....Thepresumption can be rebutted by evidence of circumstances or

communications clearly indicating an intent that the property remain separate.
Batson v. Batson , 769 S.W.2d 849, 858 (T enn. Ct. App. 1988)

(emphasis added)

(brackets in original).
A court’s division of

marita l property must be accomplished upon consideration of the statutory factors found in T.C.A. § 36-4-121(c) (1996). Marital fault cannot be considered. T.C.A. § 36-4-121(a)(1). Appellate courts are to defer to a trial court’s division of marital property un less the trial court’s dec

ision is inconsistent

with the st

atu tor y f actors or is unsupported by the preponderance of the evidence. Brown v. Brown , 913 S.W.2d 163, 168 (Tenn. Ct. App. 1994).
In the ins tan t ca se, the tri al c our t ch arac ter ize d th e Bra dy Po int pro pert y as m ari tal pro pert y, “its character having bee n transmuted from separate to marital property by the treatment of the property.”Wife argues that the finding of transmutation is erroneous. More specifically, she arg ues that even though the p

roperty was titled jointly, any intent on her part for the proper ty to be treated as a marital asset was (1) thwarted by the breakup of the marria ge; and (2) based upon Husband’s fraud, i.e. , Husband’ s feigned compliance with “the plan” as a scheme to enable him to obtain a greater allotment of property after he a bandoned the marriage.
We find that the evi dence d oes not preponderate against the trial court’s finding that the Brady Point property had transmuted into marital property. Even though the property was purchased withWife’s inheritanc

e, the property

was titled jointly. There is insufficient proof in the record to rebut the resulting presumption of a gift to the marital estate. On the contrary, the evidence indicates that the parties treated the property as a marital asset. The inheritance was listed as a joint asset of the parties on the parties’ loan application when they sought funding for the addition to the marital residence. In accordance with “the plan,” the inheritance was used to pay the parties’ legal bills and the down payment, tax bills, and construction loan on the Bra dy Point prop erty, whic

h closed in August, 1996. The events leading to the filing of the divorce action did not occur until the first week of February, 1997. We are concerned with the intent of the partiesat the time they implemented “the plan,” not at the time the di vorce was imminen

t, and the evidenc

e does not prepond

erate against the trial court’s fin

ding that the par

ties treated the B

rady Point pr

operty as a

marital asset. Nor can we say that the evidence preponderates against the trial court’s finding that “there was no fraudulent

conveyance in anticipation of the filing of the petition for divorce by either party .” The evidence instead suggests that Husband did not want to divorce Wife. He did not leave the marriage voluntarily, but

rather was “driven out” by Wife. Wife, on the other hand,

had previously spoken to a

friend about divorcing Husband, had previously prepared divorce papers, and was the party who filed for divorce. Therefore, we find and hold that the trial co urt did not err in char act eri zin g the Brad y Poi nt p rop ert y as m ari tal pro pert y.-6- B. Wife next argues that, even if the trial court was correct in characterizing the Br a dy P oint property as marital proper

ty, it erred

in its disposition of th

e property . More sp ecifical ly, Wife argues that the trial cour

t erred (1) in

approving the sale of the

Brady Point property for $50,000; (2) in ordering that

certain indebtedness be paid from the proceeds of the sale of the property before any proceeds are divided and d istributed be tween the parties; and (3) in ordering that any proce eds remaining after certain d

ebts are paid ar

e to be divided equally between the parties. We will examine each of these contentions in turn. According to the statement of the evidence that was presented at the hearings in 1997, Wife valuedthe Brady Point property at $25,000 while Husba nd testified that the property had been appraised at $50,000. In

it s order of June 2, 1999, the trial court ordered that “[t]he Brady Point property will be placed for sale at

a minimum purchase price of $50,000.00.” Husband subseque ntly filedtwo motions, the first seeking an order requiring Wife to list the property for sale at a price of $50,000, and the second se eking an order

allowing Husban

d to accept a thir

d party’s of

fer to purchase the property

for $48,000 without

incurring a re

altor’s fee. Wife

, in response to one

or both of these motions, appa

rently prof

fered a written

appraisal of the

property valuing it at

$80,000. The trial court granted

Husband’s motions o

n August 3, 1999. Wif

e now argues th

at t he trial court’s order approving the sale of the Brady Point property for $50,000 is erroneous in light of the appraisal indicating the value of the property to be $80,000.
The value to be give

n a marital asset i

s a quest ion of fact. K

inard v. Kinard

, 986 S.W.2d 220, 231 (Tenn. Ct. App. 1998). In maki

ng this determina

tion, the trial cour

t is to consider all relevant evidence, and, if the evidence is conflicting, the court “may assi gn a value that is within the range of values supported by the evidence.” Id . An appellate court is to presume a trial court’s factual determinations are correct unless the evidence preponderates ag ainst them. Id

. We find that the evidence does not preponderate against the trial court’s order approving the sale of the Brady Point property for $50,000 or to a

third party for

$48,000 without a realtor’s fee. The court had before it the oral testimony

of Wife and Husband valuing the property at $25,000 and $50,000 respectively

and, in addition, Wif

e’s proffered

appraisal valuin

g th e property at $80,000. The trial court’s order

assigned a value to the property that is within the range of va lues supported by the evidence, and, theref o re, we cannot sa

y that the ev

idence preponde

rates against t

his determination. Thus, we find this issue adverse to Wife. Wife next takes issue with the trial court’s determination that the monies realized from the saleof the Brady

Point property

are to be applied

to “any tax ind

ebtedness which a

rose during the marriage or

which is related to the Brady Point lot” and to pay “any

unsecured debt o

f the parties” before any proceeds

of the sale are divided between the parties. She asserts that she should not be required to pay

any portion o

f Husband’s “sep

arate” debts.-7-

The evidence does no

t preponderate

a gainst the trial court’s determination in this regard. Husband statedthat he incurred a tax liability b

ecause Wife ref

used to file a joint r

eturn with him andthat they would have been entitled to a refund had they filed jointly. We find that the trial court didnot err in finding these debts to be marital debts, and therefore, we find no error in ordering that they be paid

out of martial prop

erty befor e any distri

bution to the partie

s. Wife also argues that even if the Brady Point property is properly characterized as marital pro pert y, the trial court’s

decision to equall

y divide the proceeds remaining after payment of d

ebts is erroneous. On this point, we agree.
Once pro pert y is c las sif ied as m ari tal pro pert y, co urt s mu st e qui tab ly di vide the marital property in accordance with the statutory factors found in T.C.A. § 36-4-121(c). One of these factors is “[t]he contribution of each party to the acquisition...of the marital...property .” T.C.A. § 36-4

- 121(c)(5). We are of the opinionthat the trial court erred in failing to give sufficient consideration to t his fact or i n di vid ing t he Br ady P oin t pr ope rty. As previously indicated, the Brady Point sales agreement contains the following language: Purchasers assign the amount of twenty-five thousand dollars and 00/100 cents from the estate of [Wife’s mother] to

sel ler s as of t oda ys [sic] date verified by

phone call with [the

ir attorneys]. Purchasers will sign necessa

ry papers t

o effect this. The agreement provides that the purchase price of

the property is $25,000. The evidence indicates to us that the full purc

hase price of the

Brady Point

property w

as paid with funds f

rom Wi fe’s inheritance. Thus, Wife contributed the full amount of the purchase price for property that closed approximately

six months before Wife filed for divorce. In light of this fact, and in light of T.C.A. § 36-4-121(c)(5), we find that the trial court erred in dividing equally betweenthe parties any net pro ceed s fr om t he s ale of t he Br ady P oin t pr ope rty. We modify the trial court’s judg

ment so as to order that the proceeds remaining, if any, afte r the property has

been sold and the debts have been paid, be awarded to Wife.
In addition to

bei ng di ssa tis fie d wi th t he t ria l co urt ’s t reat men t of the Brad y Poi nt p rop ert y, Wife argues that the

trial court erred with respect to several smaller items: (1) an antique cupboard; (2) an antique ar

moire; and (3) Hus

band’s business a

ssets. Wife argues that the antiques are her separate property. We find that the evidence does not preponderate

against the trial court’s treatment of the antiq ues. The testimony of the parties concerning these items confli cted, and thus, the

trial court’s determination as t o these items is grounded in its assessment of the cred ibility of the parties. This being the case, the trial court’s determination is entitled to great weight on appeal, see Massengale v. Masse ngale , 915 S.W.2d 818, 819 (Tenn. Ct. App. 1995), and we find and hold that the evidencedoes not preponderate against the trial court’s decision.-8-

With respect to the as sets of Husband’s business, Wife’s argument is that the trial court failed to account for them. We find this assertion to be incorrect. In its June 2, 1999 order, the trial court statedthat “[t]he remaining property in dispute are those items highlighted in Exhibit 33 which have notbeen marked through. The Cou rt fi nds these items are marital property.” An examination of Exhibit 33 reveals that there are several items of Husband’s business property that are marked through. Thus, the trial cou rt found these

assets not to be in dispute, thereby accounting for

them. We cannot say

that the evidence

preponderates

against the tria

l c ourt’s treatment of them, and we therefore find this issue adverse to Wife.
IV. The second major disagreement between the parties concerns the proceeds from the sale of the marital residence, i.e. , the $17,500 that Wife withdrew from theparties’ joint account. Husband assertsthat he is entitled t

o half of these funds, and Wife seeks reimbursement from Husband of “the portion of child support paid to her with her share of the joint savings account.” Wife withdrew approximately $17,500 from the joint account on February 3, 1997. On May 15, 1997, the trial court ordered Wife to pay the ba lance of any funds held by Wife that we re withdrawn from the parties’ joint account into court. Wifesubsequently paid approximately

$3,700 into court, the balance of approximately $13,800 having been spent on, among other

things, $2,200 in attorney’s fees, $6,000 for a y ear’s worth of rent, and $5,600 for moving and living expenses for her and the parties’ daughter. On June 4, 1997, the trial court ordered that

the $3,700 paid into court “be pai d fo r th e mi nor chi ld’ s ed ucat ion and for tem por ary al imo ny p endente lite.” In its June 2, 1999 order, the trial co urt found t he followi ng:

The Court has reviewed th e statutory factors for the setting of alimony in light of the proof in

this case and determines no alimony should be awarded. A lthough it is a marriage of lengthy duration, the relative earning capacities of the part i es are comparable as is the education a nd training of ea ch which qualifie

s them for their employment

potential. The Court

finds no other fac

tor which would be perti nent to an a ward of alimony to [Wife]. The Court does not find any fault of [Husband] which, when compared with the fault of [Wife], would result in this Court finding it appropriate to consider relative fault. Subsequent

to this order, Husband filed a motion to alter or amend asserting that he is entitled to half of the $17,500 that Wife withdrew from the joint account. In response to this motion, the trial court stated the following:

The Court denies [Husband’s] claim for reimb ursem ent.... It

was the testimonyof [Wife] payme nts were ma

de on m arital debt, on car insurance six months in advance, and to pay off the line of credit

on-9- the car. Part of

the money was used for

money for a

Notre Dame trip for [the ch ild] and to establish [Wife and child] in a new residence. The Court finds the monies were used for necessary support of [Wife] andthe minor child prior to the entry of an order for ali

mony or child support pendente lite . Accordingly , the motion to alter

or amend...is denied. Husbandnow asserts that the award of temporary support is excessive. Wife seeks reimbursement

of “the portion of child support paid to her with her share of the joi nt savings account,” arguing that th

e trial court’s or

der permits H

usb and to “satisfy half of his child support obligation with [Wife’s] own money.” The amount

and duration of alimony, including ali mon y pendente lite , are issues with respect to which the trial co

urt exercises wide

disc retion

. Garfinkel v. Garfinkel , 945 S.W.2d 744, 748 ( Tenn. Ct. App . 1996). After careful review of the record in this case, we cannot say that the evidencepreponderates against the trial court’s treatment of the funds Wife withdrew from the joint account. As stated previously , such an alimony

determination is e

ntitled to great weight

on appeal, andwe find no abuse of discretion on the part of the trial court on this issue. Accordingly, w e find no error as to the trial court’s decrees with respect to the funds under discussion.
V. The judgment

of the trial court, as modified, is affirmed. The case is remanded to the trial court for the entry

of an appropria

te order in acco

rdance with this op

in io n and for such further proceedings,

if any, as may be

required. Exercising our discretion, we tax each of the par

ties with half of the costs o

n appeal.

___________________________________ CHARLES D. SUSANO, JR., JUDGE