Opinion ID: 1638685
Heading Depth: 2
Heading Rank: 1

Heading: Classification of the $17 Million Attorney Fee

Text: We granted appeal to address whether the $17 million attorney fee acquired after Ms. Ball filed the complaint for divorce but before the final divorce hearing is marital property under Tennessee Code Annotated section 36-4-121(b)(1)(A) and therefore subject to equitable division. The construction of a statute and its application to the facts of a case are questions of law, which we review de novo with no presumption of correctness afforded to the lower court's conclusions. Lavin v. Jordon, 16 S.W.3d 362, 364 (Tenn.2000). Our role in construing a statute is to ascertain and give effect to the legislative intent without unduly restricting or expanding the statute's coverage beyond its intended scope. Owens v. State, 908 S.W.2d 923, 926 (Tenn.1995). In fulfilling this role, we presume that every word in the statute has meaning and purpose and should be given full effect if the obvious intent of the General Assembly is not violated by so doing. In re C.K.G., 173 S.W.3d 714, 722 (Tenn.2005). Tennessee Code Annotated section 36-4-121(b)(1)(A) provides the following definition of marital property, in pertinent part: all real and personal property, both tangible and intangible, 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, except in the case of fraudulent conveyance in anticipation of filing, and including any property to which a right was acquired up to the date of the final divorce hearing, and valued as of a date as near as reasonably possible to the final divorce hearing date. (emphasis added). We presume that the General Assembly used each word in the statute deliberately. Bryant v. Genco Stamping & Mfg. Co., 33 S.W.3d 761, 765 (Tenn.2000). Consistent with this presumption, the inclusion of the word and would impose two distinct requirements for an asset to constitute marital property: the asset must have been owned as of the date of filing of a complaint for divorce and acquired up to the date of the final divorce hearing. Applying this interpretation, the $17 million attorney fee would not be marital property because Mr. Ball did not own the fee when the complaint for divorce was filed even though he acquired the fee prior to the final divorce hearing. We observe that interpreting this section to require that an asset be both owned as of the date of filing of a complaint for divorce and acquired up to the date of the final divorce hearing renders the latter-quoted phrase superfluous. Property that is owned on the date of filing was necessarily acquired before the date of the final divorce hearing because the date of filing will always precede the date of the final divorce hearing. Although statutory phrases separated by and are usually interpreted in the conjunctive we have recognized that and can be construed in the disjunctive when such a construction is necessary to further the intent of the legislature. Stewart v. State, 33 S.W.3d 785, 792 (Tenn.2000) (citing City of Knoxville v. Gervin, 169 Tenn. 532, 89 S.W.2d 348, 352 (1936) (The word `and' is frequently construed as meaning `or.')). When we apply the disjunctive in this case, the definition of marital property will be read to include all property owned as of the date of filing of the complaint for divorce or acquired up to the date of the final divorce hearing. At first blush, this construction would appear to render inoperative the language requiring that property be owned ... as of the date of filing of a complaint for divorce. In Flannary v. Flannary we clarified, however, that the purpose of the date of filing in the definition of marital property is to exclude property that was once owned by the parties but is owned by neither party at the time the complaint for divorce is filed. [1] See 121 S.W.3d 647, 650 (Tenn.2003). Such property is not subject to classification or distribution because a court cannot classify or distribute what is not there. See id. at 649-50. Prior to filing the complaint for divorce, Mr. Flannary withdrew cash from a savings account and placed the cash in his bedroom drawer. At trial, he testified that when he went to redeposit the cash, it was gone. Neither party knew what happened to the cash. Significantly, neither party disputed that the cash was missing before Mr. Flannary filed for divorce. Accordingly, we held that the cash was not marital property under section 36-4-121(b)(1)(A). Furthermore, applying the disjunctive permits us to construe section 36-4-121(b)(1)(A) so that its component parts are consistent and reasonable. State v. Odom, 928 S.W.2d 18, 30 (Tenn.1996). The plain meaning of during the course of the marriage, for example, is the time period between marriage and divorce. See Alford v. Alford, 120 S.W.3d 810, 813-14 (Tenn.2003). The inclusion of this language and the multiple references to the final divorce hearing suggest that the General Assembly intended to permit parties to acquire marital property as late as the date of the final divorce hearing. We observe, moreover, that under section 36-4-121(b)(1)(A) marital property includes any property to which a right was acquired up to the date of the final divorce hearing. See Cohen v. Cohen, 937 S.W.2d 823, 828 (Tenn.1996) (holding that unvested retirement benefits accruing during the marriage are marital property). It would be incongruous to hold that a right to property acquired after the date of filing of the complaint for divorce is marital property but that actual property acquired after the date of filing is not marital property. Finally, this interpretation comports with our decision in Alford v. Alford , in which we addressed whether debt incurred during the parties' ten-year separation prior to the filing of the complaint for divorce was marital or separate debt. 120 S.W.3d 810. Although marital debt is not defined by statute, it is subject to equitable division in the same manner as marital property. Id. at 813. We therefore held in Alford that marital debt should be defined to correspond to the definition of marital property provided in section 36-4-121(b)(1)(A). After quoting the definition of marital property, we stated that, consistent with that definition, `marital debts' are all debts incurred by either or both spouses during the course of the marriage up to the date of the final divorce hearing.  Id. (emphasis added). Based on the foregoing analysis, we hold that marital property includes all property owned as of the date of filing of the complaint for divorce or acquired up to the date of the final divorce hearing. In the instant case, Mr. Ball acquired the $17 million attorney fee on August 31, 2006, almost a full year before the final divorce hearing on August 28 and 29, 2007. We therefore affirm the determinations of the trial court and the Court of Appeals that the attorney fee is marital property under Tennessee Code Annotated section 36-4-121(b)(1)(A) and therefore subject to equitable division. We also affirm the determination of the Court of Appeals that the attorney fee is not separate property under Tennessee Code Annotated section 36-4-121(b)(2). [2] This determination provides an additional basis on which to conclude that the fee is marital property. As the Court of Appeals accurately noted, property is either marital or separate  there is no third category of property under Tennessee's domestic relations law.