FILED

November 9, 1998

Cecil W. Crowson

Appellate Court Clerk

IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

CATHY P. McMANAMAY, )

)

Plaintiff/Appellee, ) Montgomery Chancery

) No. 97-01-0151

VS. )

) Appeal No.

CHARLES T. McMANAMAY, ) 01A01-9802-CH-00081

)

Defendant/Appellant. )

CONCURRING OPINION

The presiding judge has determined that this case should be remanded “to hear

further evidence and to adjudge an equitable division of the marital estate.” His

opinion does not explain why the court has been unable to “ascertain from the

evidence in this record what an equitable division of the marital estate should be” and

does not provide directions to either the trial court or the parties regarding the steps

that should be taken on remand. We have prepared this separate opinion to provide

this information.

One of the three issues Colonel McManamay raises on appeal concerns the trial

court’s failure to consider as marital property the increase in the value of three of Ms.

McManamay’s investment accounts, two pieces of real property in Ms.

McManamay’s name, and Ms. McManamay’s civil service retirement. When this

oversight was first brought to the trial court’s attention on December 10, 1997, the

trial court stated that it would not be “equitable” to award Colonel McManamay any

interest in these assets because “Mr. McManamay was quoted in his deposition as

having said, he didn’t care about Ms. McManamay’s property, as I understood it.”

Later, in response to Colonel McManamay’s Tenn. R. Civ. P. 59 motion pointing out

that he had never relinquished his claim against marital property being held by Ms.

McManamay, the trial court entered an order on February 27, 1998, concluding that

it would not consider the appreciation in the value of these assets as marital property
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because the parties had maintained their financial accounts separately during the

marriage.

We ordinarily defer to a trial court’s decisions with regard to the classification

of property and the division of the marital estate unless they are inconsistent with

Tenn. Code Ann. § 36-4-121(b), (c) or are not supported by a preponderance of the

evidence. See Brown v. Brown, 913 S.W.2d 163, 168 (Tenn. Ct. App. 1994);

Mahaffey v. Mahaffey, 775 S.W.2d 618, 622 (Tenn. Ct. App. 1989); Hardin v.

Hardin, 689 S.W.2d 152, 154 (Tenn. Ct. App. 1983). The trial court’s reasoning in

this case reflects a fundamental misunderstanding of the nature of marital property.

As defined in Tenn. Code Ann. § 36-4-121(b)(1)(A) (1996), “marital property”

includes

personal property . . . acquired by either or both spouses

during the course of the marriage up to the date of the final

divorce hearing and owned by either or both spouses as of

the date of filing of a complaint for divorce . . . and valued

as of a date as near as reasonably possible to the final

divorce hearing date.

Based on this broad definition, a spouse’s income earned and received during the

marriage is marital property, no matter whether the spouse receiving it deposits it in

a separate account or in a joint account. Thus, a spouse’s separate financial account

is not, by definition, separate property. It follows that income deposited into a

separate account during the marriage must be treated as marital property subject to

distribution in an equitable fashion. With this rule in mind, we turn to the property

at issue on this appeal.

Ms. McManamay is the record owner of two tracts of real property, one in

Hudson, Kentucky and the other in Sharpsburg, Georgia. Ms. McManamay testified

that her mother had conveyed the Hudson, Kentucky property to her and that she was

holding the property in trust for her mother. She also conceded that the value of this

property had increased $10,000 during the marriage. While the trial court did not

specifically address this property, Ms. McManamay’s testimony is uncontradicted.

Accordingly, we find that the evidence would have supported a decision to exclude

this property from the marital estate because Ms. McManamay was holding it in trust

for her mother. The trial court also declined to treat the appreciation in value of the
1Ms. McManamay apparently used the proceeds of the sale of one of the parties’ pontoon

boats to purchase this property following the parties’ separation. She was awarded the pontoon boat

as personal property.

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Sharpsburg, Georgia property as marital property because of the lack of evidence

concerning the appreciation in the value of this property and because the property

“has no equitable value beyond that which has already been considered in the

distribution of the . . . personal property.”1

 We have no basis to second-guess this

determination.

Ms. McManamay also had three separate financial accounts, a 401(k) account,

a savings account, and an account with Putnum Securities. Ms. McManamay

deposited portions of her income into these accounts during the marriage, and at the

time of the divorce hearing, the 401(k) account had appreciated by $20,332.63; the

Putnum Securities account had increased by $9,451.45; and the savings account had

increased by $26,000. Ms. McManamay testified without contradiction that $20,000

of the deposits to her savings account belonged to her mother and that she was

holding these funds in trust. The appreciation in these accounts, with the exception

of the funds attributed to Ms. McManamay’s mother, came from deposits of salary

Ms. McManamay earned during the marriage, and, therefore, should have been

classified as marital property. Likewise, the increase in the value of Ms.

McManamay’s pension during the marriage should also have been classified as

marital property. See Cohen v. Cohen, 937 S.W.2d 823, 830 (Tenn. 1996). 

While Tenn. R. App. P. 13(d) and 36(a) empower us to classify and distribute

marital property on appeal, we have determined that the present record does not

contain sufficient evidence to enable us to devise an equitable distribution of the

parties’ marital property in this case. Accordingly, we must remand the case with

directions to the trial court to permit the parties to present additional evidence thatwill

enable the trial court to classify the parties’ separate and marital property, to place a

value on the marital property, and to divide the marital property equitably. The

division need not be precisely equal, see Cohen v. Cohen, 937 S.W.2d at 832; Ellis

v. Ellis, 748 S.W.2d 424, 427 (Tenn. 1988), and each party is not necessarily entitled

to receive a share of every piece of marital property. See Brown v. Brown, 913

S.W.2d at 168.
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We concur with the presiding judge’s conclusion that Colonel McManamay

was not prejudiced by the pace in which the trial court conducted the hearing of this

case. We also concur that Ms. McManamay was entitled to the divorce and that the

trial court did not err in the classification and distribution of the appreciation in the

value of the Stratford Way property and the Eddyville, Kentucky property. 

____________________________

WILLIAM C. KOCH, JR., JUDGE

____________________________

WILLIAM B. CAIN, JUDGE