### IN THE COURT OF APPEALS OF TENNESSEE AT KNOXVILLE Submi tted on Bri efs Febr uary 1 2, 2003 HERBERT ARTHUR HEINZE v. PATRICIA CHRISTI NE SEVERT (HEINZE) Appeal from the Chancery Court for Greene County

No. 97000131 Thomas R. Frierson, II, Chancellor FILED APRIL 10, 2003 No. E2002-01184-COA-R3-CV

In this appeal from the Chancery Cour t for Greene County the Appellant, Herbert Arthur Heinze, contends that the Trial Court er red in finding

that a va lid acco rd and sa tisfacti on was en

tered in to betweenhim and the Appellee, Patricia Christine Severt (Heinze), with respect to the distribution of proceeds realized from the sale of the part ies' marital r

esidenc e pursua

nt to a divo

rce judg ment. We affirm the judgment of the Trial Court and remand f or collection of

costs and enforcement

of the judgment. Tenn. R. App.P. 3 Appeal as of Right ; Judgme nt of the Cha

ncery Court Affirm

ed; Cause Remande

d
H OUSTON M. G ODDARD , P.J., delivered the opinion of the court, in which H ERSCHEL P. F RANKS and C HARLES D. S USANO , J R ., JJ., joined. J. Ronnie Greer, Greeneville, Tennessee, for the Appellant, Herbert Arthur Heinze David L. L

eonard, Greeneville, Tennessee, f or the Appellee, Patricia Christine Severt (Heinze) OPINION
Mr. and Ms. Heinze were divorced pursuant to an agreed judgment of

divorce entered by

the Chancery Court of G

reene C ounty

on March 9, 1998. Among other things, the judgment provides that the part ies’ res idential p

roperty shall be s o ld. The judgment also specifies how the proceeds rea lized from the sale are to be distributed and, to that end, includes the following lang uage at sect ion si x: 6. Real Estate . T he di sp os it io n o f t he re si de nc e p ro pe rt y, described in Exhibit “A to this Judg ment shall

be as follows:-2-

... b. When the property is sold, the g ross proceeds shall be applied as follows:

... vii. $18,000.00 to WIFE representing her agreed upon s hare in HUSBAN D'S retirement account, otherwise, Husband is awar ded the IRA at

J.C. Bradford and Compa ny repre senting the proceeds of HUSBAND' S Badger Pat ter n retirem ent acc ount.

... x. the balan ce to the par ties equa lly with HUSBA

ND rece iving fi fty percen t and WI FE rec eiving f

ifty percen t. The parties do not dispute that the divorce judgment decrees that the $18,0 00.00 pay

ment to Ms. Heinze is to be deducte d from the gross sale proceeds before the fifty /fifty division of the net proceeds.
In the course of closing the sale of the prope rty in May of 1999 a dispute arose as to the proper means of distributing the $ 18,0000.0 0 noted at sub-sec tion (b)( vii)of the divorce judgmen t. Wi ll ia m N un na ll y, the attorney ha ndling the closing and counsel for the purchaser, became a ware of the f act t hat a fift y/ fift y d ivisi on of sale proc eeds afte r the $18,0 00.00

was p aid to

Ms. He inze would re sult

in Ms. Heinze, in effect, pay ing back $9,000.00 of that amount to Mr. Heinze. After discussing this matter with both Mr. and Ms. Heinze, Mr. Nunnally draf ted a settlement agreement which provided

that the $ 18,000.00

would be d

isbursed to Ms. Heinze from Mr. Heinze’s net proce eds after th

e fifty /fifty division. M

r. Heinze conced es that he acquies ced to thi s m anner o f distribution and that he approved the settlement agreement whic h bears his signature.
At or about the same time the parties signed the set tlem ent agr eement they a lso signed a docu ment entitled “Full Mutual Release” and an escrow a greement which provided that approxima

tely $4,000.00 of the proceeds would be held in an escrow account pending re solution of a dispute regarding

the payment of c ertain taxes andcredits asserted by Ms. Hienze in connection with the refinancing of an automobile debt. There after, sale of the property was closed.
On September 6, 2001, Mr. Heinze filed a petition in the Greene Count y Ch ancery

Court in which he asserted that, although the divorce judgment provided that Ms. Heinze was to receive the $18,000.00 from the sales proceeds before the ba lance was split betwee n the parties, “the closing at to rn ey, based upon the insistence of the De fendant /Wife, ded

ucted the $18,000.0 0 intere st pay able to wife p ursua nt to paragr aph 6(B )(viii ) of the judgment from the proceeds pay able to the Plaintiff/Husband rather than from the proceeds of the sale of the house resulting in an overpayme

nt to Defendant/Wife of $9,000.00 and an underpay ment to Plaint if

f/Husband in the amount of $9,000.0 0.” The petition further asserts that as a result of this “mistake made by the closing attorney” Mr . Heinze should receive a reimbursement of $9,000.00.-3-

After a non-jury

trial of the case on February 11, 2002, the Trial Court entered an order and memorandum

opinion in f

avor of M s. Heinze u

pon its det

erminati on that “a

vali d a ccord and satisfaction was accomplished between the parties with reg ard to the award o f $18,000 .00 to [Ms. Heinze].”Therea

fter, Mr . Heinze f

iled notic e of appe al. The sing le issue a

ddresse d by

this Court isrestate d as follo ws: Did the Tria l Court er r infinding that therewas accord and satisfaction between the parties withrespec t to the dist

ributi on of th e $18,000.00 representing Ms. Heinze share of Mr . Heinze’s retirem ent acc ount? Our standar d of revi ew in a no n-jury case is de novo upon the record of the procee dings below. There is no presumption of correctness with reg ards to a trial cou rt's conclusions of law. Campbell v. Florida Steel Corp. , 919 S.W.2d 26 (Tenn. 1996). There is, however, a presumption that fi nd in gs of

fa ct by a tr ia l c ou rt ar e c or re ct an d, ab se nt ev id en ce pr ep on de ra ti ng to th e c on tr ar y, we must honor that presumption. Union Carbide Corp. v. Huddleston, 854 S.W.2d 87 (Tenn.1993). The question of whether there has been an ac cord and satisfaction is a question of fact. Lindsey v. Lindsey , 930 S.W.2d 553 (Tenn. Ct. App. 1996).
We also note that, as a general rule, this Court does not pass on the credibi lity

of witnes ses. A trial court, having seen and heard the witnesses tes tify , is in the best position to determine the witnesses' credibility

. Bowman v. Bowman , 836 S.W.2d 563 (Tenn. Ct. App. 1991). The Trial Court andboth parties correctly cite Lindsey v. Lindsey , supra , for elucidation of the contr olling pr inciples o f law with

respec t to acco

rd and sa tisfacti on. I

n that ca se we reiterated these principles as follows at pages 556 and 557:
An ac co rd is an ag re em en t w he re by: [O]ne of the p arties undertake s to give or perf orm, and t

he other to acce pt in satisfaction of a claim, liquidated or in disput e, and arising either from contract or from tort, something other than or different from wha t he is or c onsi ders himself e ntitled to; and a sat

isfactio n is the exe cution of such ag reemen t.

... To constitute a valid accord and satisfaction it is also essential that what is given or agreed to be

performed shall be offered as a satisfaction and extinction of the original dema

nd; that the

debtor sh all intend

it as a sa tis faction of such obligation, andthat suc h intention shall be ma

de known t

o the creditor in som

e unmistaka

ble manner. It is equally

essential that the creditor shall have accepted it with the intention that it should operate as a satisfaction .... The intention of the-4-

parties, which is of cours e controlling must be determined from all the circumstances attending the transaction.
R.J. Betterton Mgmt. Serv. v. Whitt emore , 733 S.W2d 880, 882 (Tenn. App. 1987)
We have hitherto recognized the applicability of these ru les with respect to accord and satisfaction of a

judgment. Stinnett v . Stinnett, an unreported opinion of this Court filed in Knoxville on September 7, 2000.
Mr. Hein ze contends that the evidence preponderates ag ainst the Trial Court’s determination that there was an accord and satisfa ction in the present case. First, Mr . Heinze ma

intains tha

t there isno testimony in the record f rom which it could be found that there was a meeting of the minds betwee n the parties to the effect that the approval of the settlement

would operate as a final resolution of their dispute ov er the $18,0 00.00 . Mr. Hein ze contends that “[t]his i s especially true since they we

re never present together at the c losing or during any of the discussions with the closing attorney.”
We disagr

ee with Mr. Hienze’s assertion that there was no testimony from which the Court could have found that there was a meeting of minds between the parties regarding distribution of the $18,000.00. Mr. Nunna

lly t e s tified that he had lengthy discussions with both parties with respect to that matte

r. He fu rther te stified th at althou gh the p arties ha d not resolved i s sues regarding the payment of cert ain taxes a

nd the ca r debt which necessitated the establishment of the escrow accoun t, he “was under the impression that ... the $ 1 8,000.00 issue had been resolved.” Mr. Nunnally described Mr. Heinze as “rational” and “c alm” during discussions they h ad about the $18,000.00. And when

Mr. Nunna

lly e xplained th at distributing the $18,000.0 0 to Ms. Hein ze from the proceeds before the equal division of the net proceeds between them would result in her receiving only $9,000.00 from the retirement funds Mr. Heinze “understood. ” Mr. Nunnally also testified as follow s: I

can tell you that neither

party indicated

any thing to me during our lengthy discussions about another option or attempted to ex plain why that l anguage would have made mor

e sense t han it made tome being cold to it and, and try ing to make some sense out of it.
In addition to this testimony of Mr. Nunn ally , we n ote th

e fol lowin g te stimo ny

of Ms. Hein ze when asked if she felt she should have consulted an attorney to modify the divorce judgment after Mr. He in ze ag re ed to th e d is tr ib ut io n a s p ro po se d b y Mr . N un na ll y:

Q. Di d yo u see any nee d to go to an attorney to ask that this Judgment be modified in light of the fact that he agreed to the distribution?-5-

A. He agreed to it. I

didn’t see why would I

do t hat . It was an a greed to thin g. It was obviously a mistake. He r ecognized it as such and we agreed to change it, and what we didn’t agree to we nt into escrow. In the context of Mr. Heinze ha ving signed the se

ttlement a greem ent, all of the se statem

ents from Mr. Nunna

lly and Ms. Heinze contradict Mr. Hienze’s assertion that there was no testimony from which the

Court could have found that there was a meeting of minds as to the disbursement of th e $18,000.00 from Mr. Heinze’s portion of the net proceeds. The fa ct that the pa

rties were no t present at closing at

the same time or together when Mr. Nunnally discussed the distribution does notnegate the conclusion that they were agreeing

to the same thing and that there wa s a

meeting of the minds.
Mr. Heinze next references that porti on of the “ FullMutual Release” which was signed by Mr. and Ms. Heinze and which includes the following provision: Alth ough mutually releasing the lien of the judgment, by the execution of this release, the part

ies do not r

ele ase the other from claims arising from how the proceeds o f sale should be distributed between the parties which shall be submitted to the Chancery Court for Greene County , Tennessee even though the li en s o f t he ju dg me nt ar e f ul ly r el ea se d h er eb y. Mr Heinze co ntends tha

t, by this provis io n, the part ies “expressly rese rved a resolution of their dispute for later legal proceedings.” However, Ms. Heinze testified that this provision of the releas e pertained solely to the$4,000.00 held in escrow and that it had nothing to do with the $18,000.00 because Mr. Heinze had agreed to the distribution of the $18,000.00. We do not find that the evidence i n this case preponderates aga inst Ms. Heinze’s assertions in this regard and Mr. Heinze’scontenti ons to the c ontrary are without merit.
It is our determination that the Trial Courtcorrectly concluded that an accord and satisfaction was accomplished in this matter.
In addition to

the above recognized testimony , we also note the fact that the parties entered into an escrow agreeme

nt which acknowledges the parties’ disputes regarding distribution of a portion of the sa

les proc eeds related to c ertain ta xes and als o rega

rding c redits as serted b y Ms

. Hein ze with respect to an automobile debt. The escrow agreement provides that the $4,313.27 of the proceeds related

to these disputes “shall be placed into an escrow acc ount, until such time as the parties have ag

reed on how same sh all be distributed or until such time as a court has declared the rights of the parties in relation to said funds placed into escrow.” I f M r. Heinze t ruly disputed distribution of the $18,000.00 from his net proceeds he could have insisted that that dispute also be subject to the termsof the es crow ag reemen t and that the $18,0 00.00 be h

eld in the escrow account pending resolution by the Court. The fa ct that he did not do this persuad es us that at the time of closing he did not dispute the distribution of the $18,000.00 as it occurred.-6-

Fi na ll y, we note the language of the judgment of divorce at subsection (b) (vii) of section s ix cited above wherein the $18,000.00 is designated as re presenting Ms. Heinze’s “agreed upon share of [Mr. Heinze’s] retirement account.” The clear meaning of this language is that the parties had agreed that $18,000.00 of Mr. Heinze’s retirem ent acc ount belongs to Ms. Heinze - $18,000.00, not $9 ,000.00. H ad the distribution at closing resulted in Ms. Heinze’s receipt of only $9,000.00 she would have had a claim against Mr. Heinze for the re maining $9,000.00 due her under the divorce judgmen t. Fo r the foregoing rea sons we affirm the judgment of the Trial Court and rema nd fo r enforcement

of the judgment and

for collection of costs below. Costs of appeal a re adjud ged ag ainst He rb er t A . H ei nz e a nd hi s s ur et y.

_________________________________________ HOUSTON M. GODDARD, PRESIDI NG JUDGE