IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

March 7, 2012 Session

ANN CLAUDIA SHORT BOWERS V. FREDERICK ALLEN BOWERS

Appeal from the Chancery Court for Knox County

No. 175929-2 Hon. Michael W. Moyers, Chancellor

No. E2011-00978-COA-R3-CV-FILED-MAY 17, 2012

This post-divorce appeal concernsthe classification and division of property, namely a house

Wife owned prior to the marriage and a house purchased during the marriage. Following the

grant of Wife’s request for divorce, the trial court classified the pre-marital house as Wife’s

separate property and the house purchased during the marriage as marital property. The court

ruled that Husband had dissipated the proceeds from the sale of the pre-marital house and

ordered Husband to reimburse Wife. The court awarded Wife two-thirds of the equity in the

marital house, leaving one-third of the equity to Husband. Husband appeals. We affirm the

decision of the trial court.

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

Affirmed; Case Remanded

JOHN W. MCCLARTY, J., delivered the opinion of the court, in which HERSCHEL P. FRANKS,

P.J., and D. KELLY THOMAS, JR., Judge on the Court of Criminal Appeals sitting by special

designation, joined.

Joshua H. Jenne, Cleveland, Tennessee, for the appellant, Frederick Allen Bowers.

L. Caesar Stair, III, Knoxville, Tennessee, for the appellee, Ann Claudia Short Bowers.

OPINION

I. BACKGROUND

Ann Claudia Short Bowers (“Wife”) married Frederick Allen Bowers (“Husband”)

on April 7, 2001. This was Wife’s second marriage and Husband’s third. Husband had been
divorced twice, while Wife was widowed by her first husband, Robert R. Simpson. Wife

entered the marriage to Husband with a daughter (“Katherine”) and significant financial

assets, including the home (“Loma Drive”) that she shared with Mr. Simpson and Katherine.

Likewise, Husband entered the marriage to Wife with a daughter (“Chelsea”) and significant

financial assets, including a Sea Ray yacht (the “Sea Ray”) and property in Oklahoma. There

were no children born of the marriage between Husband and Wife.

Husband, who had been residing in Oklahoma, brought Chelsea with him when he

moved into Loma Drive with Wife and Katherine. At the time of the marriage, Wife was an

attorney in Knoxville, Tennessee. Husband was retired and disabled but had been awarded

a significant financial settlement in the amount of $900,000 from disability litigation. He

used the settlement proceeds and proceeds from the sale of his Oklahoma property to trade

stocks and currency on a daily basis.

Except for a joint account that was rarely used, the parties kept their financesseparate.

Each party had their own checking account and credit cards. Wife paid the mortgage and

expenses relating to Loma Drive, while Husband made the payments for the Sea Ray. While

the parties kept their finances separate, Husband funded a renovation of the basement of

Loma Drive shortly after the marriage. In 2002, Husband suggested that they refinance

Loma Drive in order to take advantage of lower interest rates. Wife agreed, and Husband

contacted an acquaintance in Oklahoma that was able to secure the lowest rate. Wife

continued to be the only party obligated on the loan, but Husband’s name was added to the

deed. Following the refinancing, Husband asked Wife to reimburse him for the amount he

spent renovating the basement. Wife agreed.

In April 2005, Wife purchased a house (“Navigator Pointe”). Wife paid $125,552.14

as a down payment and financed $350,000 for the property. Again, Husband was not liable

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for the mortgage but was added to the deed. Four months later, the parties sold Loma Drive

and received a check for $172,114.96 as proceeds from the sale. The check was made

payable to both parties. Wife instructed Husband to deposit the check. Husband deposited

the check in his private checking account and never gave Wife any of the money.

The parties separated on August 16, 2009. Approximately two weeks later, Wife filed

a complaint for divorce, alleging irreconcilable differences and inappropriate marital

conduct. Husband denied that he had been guilty of inappropriate marital conduct and filed

a counter-claim, alleging that the marriage wasirretrievably broken because of irreconcilable

The down payment was obtained from the proceeds of the sale of a condominium willed to her by Mr.

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Simpson’s mother. 

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differences and that Wife was guilty of inappropriate marital conduct. Wife denied the

allegation of inappropriate marital conduct.

At trial, Wife confirmed thatshe and Husband kept their finances completely separate.

She explained that they never discussed finances because everything had always been

separate. She recalled that Husband sold a house and an adjoining lot in Oklahoma while

they were married. She was not involved in the Oklahoma transaction, and Husband placed

the money in his investment account that he used for day trading. She was never given any

of the money from that sale. She said that Husband moved into Loma Drive after they were

married but that she continued to pay the mortgage and all of the expenses related to the

property. When they refinanced the property,she paid off the first and second mortgages and

established a new note. Husband was not obligated on the note but was added to the deed.

She could not recall whether she objected to the addition of Husband’s name on the deed.

She said that two days after the closing Husband “demanded” that she wire the money

obtained from the refinancing to Key Bank, which carried the debt on the Sea Ray. She

explained that the money was “to cover what he had put into the house.”

Wife stated that in 2005, Husband was unhappy and constantly complaining about

Loma Drive, the railroad tracks near Loma Drive, and Knoxville in general. She “wanted

to buy a little peace” and decided to purchase Navigator Pointe from her friend, Gay Stewart.

She believed that Navigator Pointe would “be a good place” for her and Katherine. She also

hoped that the breeze from the adjoining lake would help Husband’s allergies, and she

thought that the absence of railroad tracks would be “helpful” in general. She admitted that

Chelsea would also live there and stated,

I anticipated that this was my house that my daughter would be living in, that

Chelsea would be staying in, which really didn’t happen much, and that

[Husband] would come and go from his boat or wherever it is he wanted to go.

She said that she negotiated the sale with Mrs. Stewart and that they understood the house

was to belong to her and Katherine. She recalled that she made all of the mortgage payments

and paid the taxes, insurance, and utilities for Navigator Pointe. She did not know why

Navigator Pointe was jointly titled. She stated that she was not even sure that she saw the

warranty deed at the closing.

Wife sold Loma Drive shortly after they moved into Navigator Pointe. She recalled

that she and Husband were both present for the closing but that she had to leave quickly.

When she received the check made payable to her and Husband, she endorsed it, handed it

to Husband, and directed him to deposit the check. Later, she told Husband that she needed

her money from the sale of Loma Drive. Husband told her not to bother him and that he

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would “take care of it later.” She had several other conversations about the money in which

Husband told her that he would give her the money at a later time. She asserted that if she

had intended to use the money for marital purposes, she “would have been in charge of

keeping up with the records and doing it.” She admitted that Husband had written her checks

throughout the marriage but asserted that the checks were meant to reimburse her for

medicine she sent to Husband when he was out of town.

Wife opined that she simply believed that the money from the sale of Loma Drive was

sitting in his bank account. She admitted that his bank statements came to the house but said

that she did not open his mail. She later found out that Husband spent all of the money in his

account, including the proceeds from the sale of Loma Drive. She recalled that $56,748.42

of the money was spent on the boat and related expenses, $50,338.03 of the money was used

to pay his credit cards, $57,153.07 of the money “went to some unknown creditor,” and

Husband wrote several checks to cash that totaled $10,800. His account was also used to pay

other personal expenses but was never used to support her or Katherine.

Wife testified that the status of the marriage in 2005 was “very bad.” She said that

Husband left for Hawaii in September 2005 and spent very little time at Navigator Pointe

after that. She claimed that after Christmas 2008, she “started planning to file for divorce”

and that Husband moved out in August 2009 shortly before she finally filed for divorce.

Husband testified that when he moved to Loma Drive with Chelsea, the house was

referred to as “our home.” He said that Wife “wanted Chelsea and [him] to feel at home, and

it was treated, regarded that way, and dealt with that way.” He related that when they were

first married, they decided that she would make the mortgage payments and that he would

make the boat payments. He explained that “[i]t didn’t make sense to either one of [them]

for one of [them] to write the other one a check for a thousand dollars a month back and

forth.” He believed that the payments were always treated equally and said that they never

fought about the finances. He recalled that he renovated the basement because he wanted

to design a family space for Katherine and Chelsea.

Husband testified that they decided to refinance Loma Drive in order to take

advantage of the lower interest rates. He explained that they used a broker in Oklahoma

because that broker “came up with a lower interest rate than the folks that [they] talked to”

in Tennessee. He stated that they both applied for a loan and that Wife “wanted the home

deeded the way it was.” He could not remember “much about” why Wife wired $38,000 to

Key Bank following the refinancing of Loma Drive.

Husband admitted that he placed the proceeds from the sale of Loma Drive in his

Bank of America account that was listed as his separate property following Wife’s complaint

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for divorce. He explained that the account had “been used for marital expenses for things

that [they] had done throughout the marriage.” He submitted five checks out of that account

evidencing his payments for marital expenses. These checks reflected a payment of $85.05

for a veterinarian visit, $600 for tax preparation, $560.21 for Comcast cable, $2,779.00 for

tax return changes, and $125 for cremating the family dog. He submitted four checks out of

that account evidencing his payments for expenses relating to Navigator Pointe. These

checksreflected a payment of $200 for Homeowner’s Association dues, $195.00 for cleaning

the carpet, a payment of $323.38 for refilling the propane tank, and a payment of $84 for

servicing the air conditioner at Navigator Pointe. Husband stipulated that the account had

a balance of $1,849 remaining prior to trial. He presented his transaction history for that

account which reflected recurring deposits from his investment accounts and other sources.

The history also reflected corresponding withdrawals for his use, the payment of car

insurance for he and Wife, and two $1,000 checks to Wife.

Relative to Navigator Pointe, Husband recalled that he and Wife had told Mrs. Stewart

and her husband, Bob, that they would like to buy the property if it ever went up for sale. He

testified that he negotiated the price with the Stewarts and executed the sales contract. He

recalled that he and Wife talked about buying Navigator Pointe as a home for their family.

He related that they both applied for financing but that he did not sign the note because it was

“less expensive to do it that way.” He explained that they discussed the down payment and

that Wife volunteered to make the down payment. He asserted that they even added each

other to their respective life insurance policies because they wanted to ensure that the spouse

that survived the other would be able to afford Navigator Pointe.

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Husband believed that when they purchased Navigator Pointe in 2005, he and Wife

were “getting along well” and having fun together. He said that the problems with the

marriage were “episodic.” He admitted that he was absent from the home on several

occasions. He recalled that he went to Hawaii on at least two separate occasions and that he

lived in Las Vegas for several months. The first visit to Hawaii occurred in late 2005 when

he spent “three or four months” there with his mom, who had a house in Hawaii. He recalled

that Wife and Katherine visited him for Christmas and that he returned in January 2006. He

went to Las Vegas for a week in July 2007 for a training seminar and returned for a job

opportunity in October 2007. He remained in Las Vegas until April 2008. He returned to

Hawaii at some point in 2008 and spent the summer there with Katherine.

Mrs. Stewart testified that she met Wife in 1985 and that they had a very close

relationship throughout the years. She met Husband in 1994 or 1995. She stated that once

Wife asserted that she added Husband to her policy because she wanted to forestall him from seeking an

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elective share of her estate if she were to die during the marriage. 

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Wife and Husband married, she saw them fairly frequently and also did some work for them

at Loma Drive. She recalled that Husband complained about Loma Drive, asserting that the

house smelled like it had mold or mildew and that he did not like being near the railroad

tracks. Husband contracted her and Mr. Stewart to renovate the basement. As a result of that

contract, she worked with Husband “on a day-to-day basis” renovating Loma Drive. She

related that Husband told her that he wanted his mother to move into the basement and help

with Chelsea. She said that Husband was upset when his mother got married and moved to

Hawaii. She stated that Husband asked whether refinancing Loma Drive would allow him

to recoup the money that he had spent renovating the basement.

Mrs. Stewart testified that she moved into Navigator Pointe in 2003. She said that

when she decided to move to Crossville, Tennessee she thought Wife might be interested in

Navigator Pointe. She explained that she thought Wife’s marriage was in jeopardy and that

her sister lived near Navigator Pointe and could be a source of support for Wife and

Katherine. She also believed that if Wife and Husband were to stay together, Navigator

Pointe could alleviate “some of those pressures” that Husband put on Wife because of his

unhappiness with Loma Drive. She negotiated the sale with Wife, but Wife told her to meet

with Husband to complete the paperwork. She admitted that Wife’s name did not appear on

the sales contract and that Husband’s name was listed as the purchaser of Navigator Pointe.

She explained that Wife was attending a function the day that she completed the contract

with Husband. She recalled that once Wife and Husband moved into Navigator Pointe,

Husband was “gone fairly often.”

Following the presentation of the above evidence, the trial court granted the joint

request for divorce based upon the stipulated ground of irreconcilable differences. As

relevant to this case, the court declared that Loma Drive was Wife’s separate property and

that Husband had dissipated the proceeds from the sale of Loma Drive. The court awarded

Wife a judgment against Husband in the amount of $88,289, reflecting the proceeds from the

sale of Loma Drive less the credit that he was due from the division of the marital assets.

The court further declared that Navigator Pointe was marital property, that Wife was entitled

to two-thirds of the net equity value of the property, and that Husband was entitled to onethird of the net equity value of the property.

Relative to the finding that Loma Drive was Wife’s separate property, the court

acknowledged that “[Loma Drive] belonged to [Wife] when she came into the marriage” and

that “when the house was refinanced it was, for reasons unknown, titled in [Husband’s] name

as well as [Wife’s] name.” The court held that the addition of Husband’s name to the title

raised “a rebuttable presumption in Tennessee that the house became marital property.” The

court found that the presumption was rebutted by

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the fact that [Wife] continued to make all of the payments; she disclaimed any

desire at any time for that to become a marital property; and the fact that when

[Husband] invested some money into some renovations or improvementsin the

house, he demanded his investment be returned to him as part of the

refinancing process.

The court concluded that the fact that the parties “scrupulously kept their finances separate”

evidenced an “intent on both of the parties with regard to [Loma Drive], that [the] property

would remain the separate asset of [Wife].” The court further found that the $172,114.96

from the sale of Loma Drive was also Wife’s separate property and that the money had not

been spent for marital purposes but had been “dissipated in some way.” The court held that

the money should be taken out of Husband’s share of the marital estate and that Husband

should repay the amount remaining.

Relative to the finding that Navigator Pointe was marital property, the court

acknowledged that unlike Loma Drive, the property was acquired during the marriage and

was jointly titled when it was purchased. The court said that “it was clear from the testimony

that [Wife] saw [Navigator Pointe] as the families’ home” and that Husband even signed the

contract for purchase. The court held that based upon the totality of the circumstances, it was

“not convinced” that the presumption that Navigator Pointe was marital property had been

overcome even though Wife made the down payment using her separate property. In

dividing the property, the court found that Wife had “shouldered the burden of acquiring,

maintaining, and preserving the asset” and that an “equitable distribution of the marital equity

would be two-thirds to [Wife] and one-third to [Husband].”

II. ISSUES

We consolidate and restate the issues raised by the parties on appeal as follows:

A. Whether the court erred in classifying Loma Drive as separate property and

Navigator Pointe as marital property and dividing the equity in Navigator

Pointe.

B. Whether the court erred in imposing a judgment upon Husband for the

proceeds from the sale of Loma Drive.

C. Whether Wife is entitled to attorney fees and costs on appeal.

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III. STANDARD OF REVIEW

On appeal, the factual findings of the trial court are accorded a presumption of

correctness and will not be overturned unless the evidence preponderates against them. See

Tenn. R. App. P. 13(d). The trial court’s conclusions of law are subject to a de novo review

with no presumption of correctness. Blackburn v. Blackburn, 270 S.W.3d 42, 47 (Tenn.

2008); Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993). Mixed

questions of law and fact are reviewed de novo with no presumption of correctness; however,

appellate courts have “great latitude to determine whether findings as to mixed questions of

fact and law made by the trial court are sustained by probative evidence on appeal.” Aaron

v. Aaron, 909 S.W.2d 408, 410 (Tenn. 1995).

The trial court’s classification and division of property is reviewed de novo with a

presumption that the trial court’s factual findings are correct. See Watters v. Watters, 959

S.W.2d 585, 588 (Tenn. Ct. App. 1997). Absent an error of law, the court’s classification

and subsequent division of property will be reversed or modified only if the evidence

preponderates against the court’s decision. Id. The trial court has wide discretion in

classifying and dividing property. Dunlap v. Dunlap, 996 S.W.2d 803, 814 (Tenn. Ct. App.

1998). This court must give great weight to the trial court’s decisions in dividing marital

assets, and “‘we are disinclined to disturb the trial court’s decision unless the distribution

lacks proper evidentiary support or results in some error of law or misapplication of statutory

requirements and procedures.’” Keyt v. Keyt, 244 S.W.3d 321, 327 (Tenn. 2007) (quoting

Herrera v. Herrera, 944 S.W.2d 379, 389 (Tenn. Ct. App. 1996)).

IV. DISCUSSION

A.

1. Loma Drive

Husband contends that the trial court improperly classified Loma Drive as separate

property when Loma Drive was transmuted into marital property. He asserts that he invested

in the property, that they decided to refinance to secure lower payments for the family, that

he also applied for a loan when they sought to refinance, and that Wife even added him to

her life insurance policy to ensure that he could pay off the mortgage if she were to die. Wife

responds that Loma Drive was properly classified as separate property.

Because Tennessee is a “dual property” state, a trial court must identify all of the

assets possessed by the divorcing parties as either separate or marital property before

dividing the marital estate. See generally Tenn. Code Ann. § 36-4-121(a)(1); see Snodgrass

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v. Snodgrass, 295 S.W.3d 240, 246 (Tenn. 2009). Separate property is not part of the marital

estate and is therefore not subject to division. See Cutsinger v. Cutsinger, 917 S.W.2d 238,

241 (Tenn. Ct. App. 1995). Separate property is defined as,

(A) All real and personal property owned by a spouse before marriage,

including, but not limited to, assets held in individual retirement accounts

(IRAs) as that term is defined in the Internal Revenue Code of 1986 as

amended;

(B) Property acquired in exchange for property acquired before marriage

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

(C) Income from and appreciation of property owned by a spouse before

marriage except when characterized as marital property under subdivision

(b)(1);

(D) Property acquired by a spouse at any time by gift, bequest, devise or

descent;

(E) Pain and suffering awards, victim of crime compensation awards, future

medical expenses, and future lost wages; and

(F) Property acquired by a spouse after an order of legal separation where the

court has made a final disposition of property.

Tenn. Code Ann. § 36-4-121(b)(2). In contrast, “marital property includes all property

owned as of the date of the filing of the complaint for divorce or acquired up to the date of

the final divorce hearing.” Larsen-Ball v. Ball, 301 S.W.3d 228, 233 (Tenn. 2010);see Tenn.

Code Ann. § 36-4-121(b)(1). Marital property also

includes income from, and any increase in value during the marriage of,

property determined to be separate property in accordance with subdivision

(b)(2) if each party substantially contributed to its preservation and

appreciation, and the value of vested and unvested pension, vested and

unvested stock option rights, retirement or other fringe benefit rights relating

to employment that accrued during the period of the marriage.

Tenn. Code Ann. § 36-4-121(b)(1)(B). The classification of property as either marital or

separate property is a question of fact for the trial court. Mitts v. Mitts, 39 S.W.3d 142, 144-

45 (Tenn. Ct. App. 2000).

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“[S]eparate property can become part of the marital estate due to the parties’ treatment

of the separate property.” Eldridge v. Eldridge, 137 S.W.3d 1, 13 (Tenn. Ct. App. 2002).

“The doctrines of transmutation and commingling provide an avenue where separate property

can become marital property.” Id. This court has stated that

[transmutation] occurs when separate property is treated in such a way as to

give evidence of an intention that it become marital property. One method of

causing transmutation is to purchase property with separate funds but to take

title in joint tenancy. This may also be done by placing separate property in

the names of both spouses. The rationale underlying both these doctrines is

that dealing with property in these ways creates a rebuttable presumption of a

gift to the marital estate. This presumption is based also upon the provision

in many marital property statutes that property acquired during the marriage

is presumed marital. The presumption 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 (Tenn. Ct. App. 1988) (internal citations and

quotations omitted). Likewise, “[t]he related doctrine of commingling concerns instances

where separate property becomes marital property when the separate property is inextricably

mingled with marital property or the other spouse’s separate property.” Eldridge, 137

S.W.3d at 14 (citation omitted).

Loma Drive was owned by Wife prior to the marriage and was her separate property.

We agree with the trial court that the addition of Husband’s name to the deed created a

rebuttable presumption that Wife gifted her separate property to the marital estate. However,

we, like the trial court, cannot ignore the way in which these parties treated the obligations

arising out of the care and maintenance of Loma Drive. Wife was the only party obligated

on the mortgage and was the only party that paid the mortgage and other expenses related to

the property. Additionally, Husband demanded to be reimbursed for his one-time investment

in the property when he renovated the basement. In short, the parties evidenced a clear intent

to keep Loma Drive as Wife’s separate property. Accordingly, we conclude that the trial

court did not err in classifying Loma Drive as Wife’s separate property.

2. Navigator Pointe

Wife asserts that Navigator Pointe was improperly characterized as marital property.

She argues that she acquired the property using her separate property and that she evidenced

a clear intent that Navigator Pointe remain her separate property. In the alternative, she

asserts that there was no basis for the trial court to award Husband any portion of the equity

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in the property. Husband responds that the court properly characterized Navigator Pointe as

marital property.

The parties bought Navigator Pointe while they were married, creating a rebuttable

presumption that the property was marital property. While Wife paid the down payment with

her separate property, Husband signed the sales contract as purchaser and was added to the

deed. Husband also submitted some documentation evidencing his payment of expenses

relating to the home, namely cleaning the carpets, refilling the propane tank, and paying one

month of Homeowner’s Association dues. We acknowledge that Husband’s monetary

contributions to the care and maintenance of Navigator Pointe were minor. However, the

testimony presented at trial evidenced an intent that the property was to be jointly owned in

hope of appeasing Husband’s dislike with Loma Drive and Knoxville in general.

Accordingly, we conclude that the trial court did not err in classifying Navigator Pointe as

marital property.

Having determined that the property was properly classified as marital property, we

must determine whether the court properly divided the equity in the property. Wife maintains

that Husband was not entitled to any of the equity because he did not substantially contribute

to the care and maintenance of the property. The Tennessee Code outlines the relevant

factors that a court must consider when equitably dividing marital property without regard

to fault on the part of either party. Tenn. Code Ann. § 36-4-121(a)(1), (c). An equitable

division of marital property is not necessarily an equal division, and section 36-4-121(a)(1)

only requires an equitable division. See Robertson v. Robertson, 76 S.W.3d 337, 341 (Tenn.

2002). Taking into consideration Husband’s participation in the purchase of Navigator

Pointe, his limited contributions to the marriage in general, and his care and maintenance of

Navigator Pointe, we conclude that the trial court did not err in dividing the equity in

Navigator Pointe.

B.

Husband asserts that Wife was not entitled to a judgment against him for the Loma

Drive proceeds because the money became marital property when it was commingled with

the money in his bank account. He also contends that the trial court erred in awarding Wife

a judgment for money that no longer existed. Wife responds that the evidence presented

demonstrated that Husband unlawfully dissipated the proceeds.

We reject Husband’s assertion that the money became marital property because it was

placed in his bank account and commingled with his money that he used for his enjoyment

and various marital expenses. The testimony at trial reflected that the parties kept their

finances separate and that each party had their own checking account. The fact that Husband

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had been reimbursed for his contribution to Loma Drive is also of particular importance. The

testimony evidenced a clear intent that Wife viewed the property as hers and that Husband

wanted nothing to do with expenses related to Loma Drive. We do not believe that the

money obtained from the sale of the property should be viewed any differently. Moreover,

Wife repeatedly asked Husband to return the money, evidencing her intent that the money

remain her separate property and that the money not be used for the marriage or for

Husband’s enjoyment. Accordingly, we conclude that the trial court did not err in

determining that the money remained Wife’s separate property even after it was placed in

Husband’s checking account.

We also reject Husband’s assertion that he need not return the money because he spent

it. In support of his position, Husband cites Brock v. Brock, 941 S.W.2d 896 (Tenn. Ct. App.

1996) and Flannary v. Flannary, 121 S.W.3d 647 (Tenn. 2003). In Brock, this court stated,

[P]roperty once owned by a spouse, either as separate property or marital

property, but not owned by either spouse at the time of the divorce, is not

subject to classification and division or distribution when the divorce is

pronounced. This is because, generally speaking, a court cannot divide and/or

distribute what is “not there” – property no longer owned by the parties,

individually or jointly, at the time of the divorce.

941 S.W.2d at 900 (footnote omitted). The court held that the property assets sought by

husband had been “merged into the ‘wealth’ of the marriage” and no longer existed in their

original form. Id. at 901. The court found that his contribution could be considered in the

equitable division of the overall estate but that he was not entitled to a “dollar-for-dollar

credit” for the value of his separate property that had been immersed into the wealth of the

marriage. Id. In Flannary, husband placed $48,000 in his dresser drawer. 121 S.W.2d at

649. When he went to retrieve the money, he discovered that it was missing. Id. The trial

court awarded wife a judgment against husband for $24,000, representing half of the money

that he misplaced. Id. Following this court’s reversal of the judgment, the Tennessee

Supreme Court stated,

Under the definition found at Tennessee Code Annotated section 36-4-

121(b)(1)(A), the missing funds are not “marital property” that is subject to

division. It is undisputed that the money was missing before [h]usband filed

for divorce, and both parties testified that the money was not in their

possession. Furthermore, the trial court concluded that anything could have

happened to the money and stated that “neither one of [the parties] knows what

happened to it.” Thus, it appears from the record that the property was not

owned by either of the parties as of the date the complaint for divorce was

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filed. Accordingly, this property does not fit within the definition of “marital

property” and should not have been divided as part of the marital estate.

Id. at 650 (citations omitted). The Court ultimately held that while the funds were not marital

property, it could consider husband’s mishandling of the funds in distributing the remaining

property that constituted marital property. Id. at 651.

Following our review, we conclude that this case is factually distinct from the

circumstances presented in Brock and Flannary. Here, Husband presented documentation

of his limited contributions to the marriage following his deposit of the proceeds from the

sale of Loma Drive. The testimony presented reflected that Husband carried a continually

revolving balance in that account and that the account had dwindled down to less than $2,000

prior to trial. These proceeds were not immersed into the wealth of the marriage but were

unlawfully retained and eventually spent by Husband over Wife’s objection. Additionally,

these proceeds were never considered marital property. Given the circumstances presented

in this case, the money remained Wife’s separate property and was not subject to division.

Husband should be held accountable for the unlawful expenditure of money that did not

belong to him.

Furthermore, we believe that his expenditure of the money despite Wife’s continued

request for its return amounted to a dissipation of Wife’s separate property. See Altman v.

Altman, 181 S.W.3d 676, 681-82 (Tenn. Ct. App. 2005) (“The concept of dissipation is based

on waste.”). The Tennessee Code providesthat when equitably distributing marital property,

the court shall consider

(5)(A) The contribution of each party to the acquisition, preservation,

appreciation, depreciation or dissipation of the marital or separate property,

including the contribution of a party to the marriage as homemaker, wage

earner or parent, with the contribution of a party as homemaker or wage earner

to be given the same weight if each party has fulfilled its role;

(B) For purposes of this subdivision (c)(5), dissipation of assets

means wasteful expenditures which reduce the marital property

available for equitable distributions and which are made for a

purpose contrary to the marriage either before or after a

complaint for divorce or legal separation has been filed.

Tenn. Code Ann. § 36-4-121(c)(5)(A), (B). The court is tasked with adjusting the division

of the marital property when attempting to remedy a party’s unlawful dissipation of marital

property. However, the remedy is less clear when a party has dissipated a spouse’s separate

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property. Here, the proceeds were not marital property but were Wife’s separate property

that was not subject to division. Following our review, we conclude that the trial court did

not err in imposing a judgment upon Husband for the money, less the amount that he was

entitled from the division of the actual marital estate.

C.

Wife asserts that Husband’s appeal was frivolous and that she is entitled to damages

in the form of attorney fees and costs for having to defend against the appeal. Tennessee

Code Annotated section 27-1-122 providesfor an award of damages, including attorney fees,

when an appeal is determined to be frivolous. To find an appeal frivolous, the appeal must

be wholly without merit and lacking in justiciable issues. See Davis v. Gulf Ins. Group, 546

S.W.2d 583, 586 (Tenn. 1977); Indus. Dev. Bd. of Tullahoma v. Hancock, 901 S.W.2d 382,

385 (Tenn. Ct. App. 1995). An appellate court’s decision on this issue is discretionary, and

this court is generally reluctant to award such damages because we do not want to discourage

legitimate appeals. Whalum v. Marshall, 224 S.W.3d 169, 180-81 (Tenn. Ct. App. 2006).

Following our review, we respectfully deny Wife’s request for attorney fees on appeal

because we do not believe the appeal was wholly without merit and lacking in justiciable

issues.

V. CONCLUSION

The judgment of the trial court is affirmed, and the case is remanded for such further

proceedings as may be necessary. Costs of the appeal are taxed to the appellant, Frederick

Allen Bowers.

______________________________________

JOHN W. McCLARTY, JUDGE

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