Court Opinion

ID: 4566745
Source: CourtListenerOpinion
Date Created: 2020-09-18 13:11:13.932146+00
Date Added: 2024-06-11T12:49:13.934823
License: Public Domain

09/18/2020
                IN THE COURT OF APPEALS OF TENNESSEE
                           AT KNOXVILLE
                                  June 10, 2020 Session

            JUDITH GALILEA ABNER v. STEVEN DALE ABNER

                Appeal from the Chancery Court for Anderson County
                 No. 17CH9034      M. Nichole Cantrell, Chancellor
                      ___________________________________

                           No. E2019-01177-COA-R3-CV
                       ___________________________________

This appeal arises from a divorce action between Judith Galilea Abner (“Wife”) and Steven
Dale Abner (“Husband”). As part of the divorce, the Trial Court entered an order
classifying certain property inherited by Husband during the divorce as his separate
property after finding that this property had not been comingled or transmuted into marital
property. Husband also was awarded as his separate property the value of a log cabin at
the time of marriage. The parties had resided in the log cabin throughout the marriage and
made substantial improvements to the log cabin during the marriage to which Wife had
substantially contributed. The Trial Court, therefore, classified the appreciation of value
of the log cabin as marital property, and Wife was awarded one-half of the increase in value
of the property. The Trial Court classified as marital property an account in Wife’s sole
name, upon its finding that the money in the account had been comingled such that the
money could no longer be traced back to the original deposit. Additionally, the Trial Court
granted an award of attorney’s fees to Husband for four of the five days of trial due to Wife
changing her testimony and the “immense amount of time spent on these issues.” Wife
timely appealed to this Court. We affirm the Trial Court’s findings concerning the
classification of the parties’ property. However, we reverse the Trial Court’s award of
attorney’s fees to Husband.

      Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
               Affirmed in Part, Reversed in Part; Case Remanded

D. MICHAEL SWINEY, C.J., delivered the opinion of the court, in which JOHN W.
MCCLARTY and THOMAS R. FRIERSON, II, JJ., joined.

Thomas M. Leveille, Knoxville, Tennessee, for the appellant, Judith Galilea Abner.

David L. Valone and Cecilia S. Petersen, Knoxville, Tennessee, for the appellee, Steven
Dale Abner.
                                        OPINION

                                       Background

      Wife and Husband met in 1995. At the time, Wife was a citizen of Mexico and was
in Knoxville, Tennessee to visit her sister. While in Mexico, Wife owned and operated a
convenience store. In 1997, Wife sold her business for $32,000 or $34,000 and moved to
Tennessee to marry Husband. Wife later became a citizen of the United States. The
proceeds from the sale of Wife’s business were placed initially in a bank in Mexico in
Wife’s sole name.

       Several years prior to the marriage, Husband’s grandparents had conveyed him a
parcel of land, on which he built a log cabin (“Residence”). Husband lived in the Residence
alone for thirteen years before marrying Wife. Wife and Husband married in July 1997.
The parties lived in the Residence for the entire duration of their marriage. Husband and
Wife separated in November 2016. Wife filed a complaint for divorce in the Anderson
County Chancery Court (“Trial Court”) in June 2017. At the time of trial, Wife worked as
a Sales Manager for BHS Corrugated, which makes and sells machinery in Latin American
countries. During the marriage, Husband worked as a deputy with the Anderson County
Sheriff’s Department.

       After the parties were married, they opened a joint bank account at ORNL Federal
Credit Union. Both parties deposited their respective incomes into this account during the
marriage. The parties spent money from this account to make significant improvements to
the Residence, increasing the value of the property during the marriage by approximately
$65,900. Wife testified that the parties had finished the basement of the Residence, added
a screened-in porch on the back of the home, built a detached two-car garage, replaced the
roof twice, put in new flooring, and made repairs to the Residence. The deed for the
Residence remained in Husband’s sole name. Wife presented copies of checks written
from the parties’ joint checking account to pay property taxes on the Residence for 2010,
2011, 2012, 2013, and 2014. Wife testified that she did not pay rent to live in the Residence
and that they did not have a house payment during the marriage. The monthly utility
payments and insurance premium payments on the Residence were paid from the parties’
joint checking account.

       In addition to the parties’ joint bank account, Wife also opened a separate account
at ORNL in 2005. Wife initially testified that she transferred the funds in March 2009 into
a subaccount of the parties’ joint bank account. Wife further testified that no other money
was placed into or taken out of the account after the deposit. On a subsequent day of trial,
Wife testified that she had been mistaken about which account the money had been
deposited when it was transferred from Mexico. According to Wife, the money was
actually transferred into the separate bank account in her sole name in March 2009. On

                                            -2-
cross-examination, Wife acknowledged that she had testified in a deposition that the money
was transferred from Mexico between 2002 and 2005. Following Wife’s deposition, she
filed as a late-filed exhibit to her deposition a bank statement from the parties’ joint bank
account in response to a question concerning the balance of the account at the time of the
marriage. Wife testified that in 2011 and 2012, she withdrew the money from the account
where it was located and deposited it into the Genworth (formerly Nuveen) account. Wife
did not have the statements from when the account was with Nuveen, but presented the
Genworth statements as an exhibit at trial.

         The Trial Court found Wife’s testimony to not be credible and ultimately found
that in 2004, Wife placed the proceeds from the sale of her business in Mexico into the
money market subaccount of the parties’ joint bank account, relying on the bank statement
Wife had submitted as a late-filed exhibit to her deposition. Following trial, the Trial Court
found that after the deposit, additional money was placed in and taken out of that
subaccount throughout the years.

        Husband’s grandmother passed away, which was followed by Husband’s
grandfather’s decline in health and subsequent passing in 2011. Following litigation
concerning the grandfather’s will, Husband inherited the majority of his grandfather’s
estate, including the farm, a trailer park, and the “Stone House,” where the grandparents
had resided prior to their passing (collectively, “Inherited Property”). The litigation
expenses for the will contest and conservatorship action amounted to approximately
$80,000, which had been paid from the parties’ joint bank account. According to Husband,
he reimbursed the joint bank account for the litigation expenses from income generated
from the Inherited Property. Following the will contest litigation, Husband wrote a check
from the parties’ joint checking account for his mother’s portion of the inheritance in the
will, which amounted to approximately $16,000.

       Husband made some improvements and repairs to the Stone House, which he paid
for from the parties’ joint bank account. He subsequently began renting out the Stone
House. The rent Husband received from the trailer park and from the Stone House was
placed either in the parties’ joint bank account, a bowl containing petty cash located in the
kitchen of the home, his pocket, or an envelope he kept in his “cruiser” for property taxes.
One deed covers the real property where the farm, trailer park, and the Stone House are
located. Husband testified that he paid the property taxes for the real property from either
the envelope in his cruiser or the parties’ joint bank account. Wife testified that the
property taxes were paid by check from their joint checking account. Concerning the
Inherited Property, Wife presented copies of checks from the parties’ joint bank account
for the property taxes for 2011, 2012, 2013, 2014, 2015, and 2016. Husband testified that
he paid the insurance payments for the Inherited Property from the joint checking account.

                                            -3-
        Shortly after receiving title to the Inherited Property, Husband sold timber from the
property, totaling $83,529. This money was placed into the parties’ joint bank account.
Subsequently, Husband sold more timber for $60,075, which also was placed in the joint
checking account. Individuals hired to do work on the farm or the trailer park were paid
by check from the parties’ joint checking account. Husband prepared a summary of
expenses which related to the Inherited Property. Husband conceded that the expenses
were paid from the parties’ joint bank account. Husband’s summary of expenses, his
receipt book, and the income tax returns were admitted as exhibits at trial. Husband
testified that the income he received from the Inherited Property and deposited into the
parties’ joint bank account had exceeded the expenses that he had paid from the joint
account.

       Concerning her contribution as to the Inherited Property, Wife testified that she and
Husband went to the farm and performed whatever work was necessary, including cleaning
the property and mending fences. Wife testified that she had meetings and worked with a
company to set up the website for the trailer park. Additionally, Wife testified that she had
collected rent from the tenants on the Inherited Property on some occasions but that most
of the time, she and Husband went together to collect the rent. Wife testified that when
she collected rent, she typically did not have the receipt book and that Husband would give
the tenants a receipt at a later time. Husband testified that sometimes he had the receipt
book with him but most of the time it was in the parties’ kitchen. According to Husband,
he instructed Wife several times to write the receipts when she took money for rent but she
told him: “I would rather you do it. It’s your deal. You can keep up with it better. You
take care of it.” The Trial Court found that Wife had only provided three receipts with her
signature.

        Wife also presented a business card for Black Oak Trailer Park that listed both
Husband and Wife as “PARK OWNER.” According to Wife, Husband had developed the
business cards, and they were given out to promote the trailer park. Husband
acknowledged developing the business card and passing it out to individuals. However, he
testified that he “wasn’t trying to convey [or] transfer property when [he] put her name on
it.” According to Husband, he was “just trying to appease her” but stated that putting her
name on the business card was not something she had requested.

       The Trial Court conducted a trial over five nonconsecutive days in February, March,
and April of 2019. The witnesses at trial were Wife, Husband, and Harold Anthony Gregg,
a real estate appraiser. The Trial Court subsequently entered a final divorce judgment,
which incorporated its memorandum opinion as the findings of fact and conclusions of law
of the Trial Court. The memorandum opinion and an asset list were both attached to the
Trial Court’s final judgment. In its order and opinion, the Trial Court found that the
Genworth investment account was marital property and subject to division as such. The
Trial Court classified the Inherited Property as Husband’s separate property after finding

                                            -4-
that there had been no comingling with marital property or transmutation. According to
the Trial Court, any appreciation of value concerning the Inherited Property was market-
driven solely. Additionally, the Trial Court found that the value of the log cabin at the time
of the parties’ marriage was Husband’s separate property but that the increase in value
since the marriage was marital property subject to division. The Trial Court also awarded
Husband his attorney’s fees for four of the five days of trial. Wife timely appealed to this
Court.

                                         Discussion

        Although not stated exactly as such, Wife raises the following issues for our review
on appeal: (1) whether the Trial Court erred by classifying the Residence where the parties
resided during the marriage as Husband’s separate property; (2) whether the Trial Court
erred by classifying the Inherited Property, including the farm, the Stone House, and the
trailer park, as Husband’s separate property; (3) whether the Trial Court erred by
classifying the Genworth investment account in Wife’s name as marital property; (4)
whether reclassification of those assets requires modification of the distribution of marital
assets; and (5) whether the Trial Court erred by awarding to Husband his reasonable
attorney’s fees for four of the five days of trial as a sanction against Wife.

       As a threshold issue, we first address Wife’s failure to include a property table in
her appellant’s brief. Tennessee Court of Appeals Rule 7 provides as follows:

       (a) In any domestic relations appeal in which either party takes issue with the
       classification of property or debt or with the manner in which the trial court
       divided or allocated the marital property or debt, the brief of the party raising
       the issue shall contain, in the statement of facts or in an appendix, a table in
       a form substantially similar to the form attached hereto. This table shall list
       all property and debts considered by the trial court, including: (1) all separate
       property, (2) all marital property, and (3) all separate and marital debts.

       (b) Each entry in the table must include a citation to the record where each
       party’s evidence regarding the classification or valuation of the property or
       debt can be found and a citation to the record where the trial court’s decision
       regarding the classification, valuation, division, or allocation of the property
       or debt can be found.

       (c) If counsel disagrees with any entry in the opposing counsel’s table,
       counsel must include in his or her brief, or in a reply brief if the issue was
       raised by opposing counsel after counsel filed his or her initial brief, a similar
       table containing counsel’s version of the facts.

                                             -5-
Rule 7 also includes a sample format for a Rule 7 table.

       However, as Husband points out in footnote 4 of his responsive appellate brief, Wife
has not provided a table with citations to the record concerning the valuation, classification,
and division of property, pursuant to Court of Appeals Rule 7. The only property table
Wife included in her appellant’s brief is a proposed equitable distribution of the marital
property in the event this Court reverses the Trial Court’s classification of property.
Husband, therefore, states that because Wife did not provide a Rule 7 table, he “cannot
submit a counter to it.”

       In her reply brief, Wife attached a table developed by the Trial Court, which did not
include citations to the record or the parties’ respective valuations of the property items.
Wife stated as follows in her reply brief concerning Rule 7:

       [I]t is the position of the Appellant that if the Court of Appeals reverses the
       trial court as to the classification of the real property as argued by the
       Appellant then a remand will be necessary to determine an equitable division
       as to all assets. Because the trial court did not properly include all assets in
       the division of assets it is currently impossible for the Appellant to identify
       any errors as to the equitable division for purposes of Rule 7 table. A copy
       of the table utilized by the trial court is attached to this Brief as Appendix A.
       If this Court does not reverse the classification of separate property interests
       then the Appellant does not contest the division of property set forth in the
       table of the trial court.

Wife then provided a limited table in her reply brief which included only the Residence,
the Genworth account, and Husband’s Inherited Property. For each of those pieces of
property, Wife included the Trial Court’s valuation of the property, to whom the property
was awarded, and citations to the record. This limited table did not include the parties’
respective valuations of the property or citations to the record thereof or any other assets
or debts of the parties.

        Wife appears to make the argument that a full Rule 7 Table was not necessary
because a remand would “be necessary to determine an equitable division as to all assets”
if this Court reversed the Trial Court’s classification of any item. We disagree. Rule 7
specifically requires a property table anytime a party on appeal “takes issue with the
classification of property or debt,” as well as the distribution of marital property or debt.
A litigant may not pick and choose which appellate rules to comply with during an appeal.

      A Rule 7 table is especially important because, in the final analysis, what we are
concerned with as to property division is the overall division of the entire marital estate
and whether that overall division is equitable. Although Wife has claimed no error with

                                             -6-
the classification of the property excluded from her limited table, should this Court reverse
the classification of the separate property at issue, that property necessarily would have to
be redistributed as part of the marital estate. Consequently, Rule 7 requires a party who
wishes to appeal the classification of property to include in his or her table “all property
and debts considered by the trial court, including: (1) all separate property, (2) all marital
property, and (3) all separate and marital debts.” Wife did not do so in this case. Wife’s
decision to ignore the requirement of a Rule 7 table and include in her reply brief a limited
table of only the property at issue is not sufficient to comply with Rule 7.

        This Court has held that an appellant’s failure to comply with Rule 7 can result in
the appellant’s waiver of all issues relating to the rule’s requirements, which include
classification of property and the distribution of marital property. Harden v. Harden, No.
M2009-01302-COA-R3-CV, 2010 WL 2612688, at *8 (Tenn. Ct. App. June 30, 2010).
Nonetheless, despite the deficiencies in Wife’s Rule 7 table, we will attempt to “soldier
on” to address the merits of Wife’s appeal. See Carter v. Browne, No. W2018-00429-
COA-R3-CV, 2019 WL 424201, at *8 (Tenn. Ct. App. Feb. 4, 2019) (exercising its
discretion to consider the merits of the appeal despite an appellant’s failure to comply with
Rule 7 to consider the narrow issue of the classification of property); see also In re Jada
C.H., No. W2011-02542-COA-R3-JV, 2012 WL 4086120, at *6 (Tenn. Ct. App. Sept. 18,
2012) (“This Court has previously held that it may choose to ‘soldier on’ to decide the
merits of a case when either the trial court or parties fail to follow the rules of this Court.”
(internal citations omitted)).

       Wife has raised issues concerning the classification of several items of property.
The classification of property during a divorce proceeding as either marital or separate
property is a question of fact to be determined by the trial court upon consideration of all
relevant circumstances. Snodgrass v. Snodgrass, 295 S.W.3d 240, 245 (Tenn. 2009). We
review questions of fact de novo upon the record, accompanied by a presumption of
correctness of the findings of fact of the trial court, unless the preponderance of the
evidence is otherwise. Tenn. R. App. P. 13(d); Kelly v. Kelly, 445 S.W.3d 685, 692 (Tenn.
2014). A trial court’s conclusions of law are subject to a de novo review with no
presumption of correctness. Kelly, 445 S.W.3d at 692. A trial court has wide discretion
when classifying and dividing the marital estate, and its findings are entitled to great
weight on appeal. Sullivan v. Sullivan, 107 S.W.3d 507, 512 (Tenn. Ct. App. 2002).
Therefore, unless a trial court’s decision concerning the classification or division of
property is contrary to the preponderance of the evidence or is based on an error in law,
we will not interfere with the trial court’s decision on appeal. Id.

       Furthermore, as our Supreme Court has instructed:

       When credibility and weight to be given testimony are involved, considerable
       deference must be afforded to the trial court when the trial judge had the

                                             -7-
       opportunity to observe the witnesses’ demeanor and to hear in-court
       testimony. Estate of Walton v. Young, 950 S.W.2d 956, 959 (Tenn. 1997)
       (quoting Randolph v. Randolph, 937 S.W.2d 815, 819 (Tenn. 1996)).
       Because trial courts are able to observe the witnesses, assess their demeanor,
       and evaluate other indicators of credibility, an assessment of credibility will
       not be overturned on appeal absent clear and convincing evidence to the
       contrary. Wells v. Bd. of Regents, 9 S.W.3d 779, 783 (Tenn. 1999).

Hughes v. Metro. Gov’t of Nashville and Davidson County, 340 S.W.3d 352, 360 (Tenn.
2011).

        The division of the parties’ property begins with the identification and classification
of all property interests. Keyt v. Keyt, 244 S.W.3d 321, 328 (Tenn. 2007). All property
should be classified as either marital or separate property prior to distribution of the marital
estate because the trial court does not have the authority to make an equitable distribution
of separate property. Id. Generally, unless proven otherwise, property acquired by either
spouse during the marriage is presumed to be marital property, while property acquired by
either party prior to the marriage is presumed to be separate property. Trezevant v.
Trezevant, 568 S.W.3d 595, 615 (Tenn. Ct. App. 2018), perm. app. denied (Tenn. Sept. 18,
2018); Owens v. Owens, 241 S.W.3d 478, 485 (Tenn. Ct. App. 2007). If a spouse seeks to
have the other spouse’s separate property classified as marital property, he or she bears the
burden of proving that such property has become marital property as defined in Tennessee
Code Annotated § 36-4-121(b)(1). Keyt, 244 S.W.3d at 328. Similarly, a spouse seeking
to have property acquired during the marriage deemed as separate property has the burden
of proving the asset is separate property, which can be proven by the types of evidence
found in Tennessee Code Annotated § 36-4-121(b)(2)(B)-(F). Owens, 241 S.W.3d at 485-
86.

        Courts must look to Tennessee Code Annotated § 36-4-121 when classifying
property as marital or separate. Tennessee Code Annotated § 36-4-121(b) (2017) provides
in pertinent part as follows:

       (1)(A) “Marital property” means 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. . . .

                                             -8-
(B)(i) “Marital property” includes income from, and any increase in the 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;

(ii) “Marital property” includes the value of vested and unvested pension
benefits, vested and unvested stock option rights, retirement, and other fringe
benefit rights accrued as a result of employment during the marriage;

(iii) The account balance, accrued benefit, or other value of vested and
unvested pension benefits, vested and unvested stock option rights,
retirement, and other fringe benefits accrued as a result of employment prior
to the marriage, together with the appreciation of the value, shall be “separate
property.” In determining appreciation for purposes of this subdivision
(b)(1)(B)(iii), the court shall utilize any reasonable method of accounting to
attribute postmarital appreciation to the value of the premarital benefits, even
though contributions have been made to the account or accounts during the
marriage, and even though the contributions have appreciated in value during
the marriage; provided, however, the contributions made during the
marriage, if made as a result of employment during the marriage and the
appreciation attributable to these contributions, would be “marital property.”
When determining appreciation pursuant to this subdivision (b)(1)(B)(iii),
the concepts of commingling and transmutation shall not apply;

(iv) Any withdrawals from assets described in subdivision (b)(1)(B)(iii) used
to acquire separate assets of the employee spouse shall be deemed to have
come from the separate portion of the account, up to the total of the separate
portion. Any withdrawals from assets described in subdivision (b)(1)(B)(iii)
used to acquire marital assets shall be deemed to have come from the marital
portion of the account, up to the total of the marital portion;

***

(D) As used in this subsection (b), “substantial contribution” may include,
but not be limited to, the direct or indirect contribution of a spouse as
homemaker, wage earner, parent or family financial manager, together with
such other factors as the court having jurisdiction thereof may determine;

***

(2) “Separate property” means:

                                     -9-
      (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 (26
      U.S.C.), as amended;

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

      (C) Income from and appreciation of property owned by a spouse before
      marriage except when characterized as marital property under subdivision
      (b)(1); [and]

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

(Footnote omitted).

       Our Supreme Court discussed the concepts of marital property and separate property
in Langschmidt v. Langschmidt and noted that in addition to the statutory provisions
contained in Tennessee Code Annotated § 36-4-121(b), Tennessee intermediate appellate
courts have recognized two methods by which separate property may be converted into
marital property. Langschmidt v. Langschmidt, 81 S.W.3d 741, 747 (Tenn. 2002). These
two methods are commingling and transmutation, which the Supreme Court noted have
been described by this Court as follows:

      [S]eparate property becomes marital property [by commingling] if
      inextricably mingled with marital property or with the separate property of
      the other spouse. If the separate property continues to be segregated or can
      be traced into its product, commingling does not occur. . . . [Transmutation]
      occurs when separate property is treated in such a way as to give evidence of
      an intention that it become marital property. . . . The rationale underlying
      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 to be marital. The presumption can be
      rebutted by evidence of circumstances or communications clearly indicating
      an intent that the property remain separate.

Langschmidt, 81 S.W.3d at 747 (internal citations omitted).

       The four most common factors courts use to determine whether transmutation of
real property has occurred are as follows: “(1) the use of the property as a marital
residence; (2) the ongoing maintenance and management of the property by both parties;

                                           - 10 -
(3) placing the title to the property in joint ownership; and (4) using the credit of the non-
owner spouse to improve the property.” Luplow v. Luplow, 450 S.W.3d 105, 114 (Tenn.
Ct. App. 2014) (quoting Fox v. Fox, No. M2004-02616-COA-R3-CV, 2006 WL 2535407,
at *5 (Tenn. Ct. App. Sept. 1, 2006)).

        We will address the classification of each piece of property in which Wife is
challenging on appeal in turn. First, we address the Trial Court’s classification of the
Genworth investment account, valued at $41,248.70 at the time of trial, as marital property.
The Trial Court found that Wife’s separate funds in the Genworth account had been
comingled with marital assets to such an extent that the original funds could not be traced
to the original source.

      The original funds in the Genworth account were from the sale of Wife’s business
in Mexico prior to the marriage. When Wife sold her business, the funds were placed into
a bank account in Mexico in Wife’s sole name. Wife’s testimony concerning when the
money was transferred from Mexico to the United States was inconsistent, but the Trial
Court ultimately found that the funds were brought to the United States and placed in the
money market sub-account of the parties’ joint bank account in 2004. Wife did not present
documentary evidence demonstrating the transfer of the money from the Mexican bank to
show either the joint checking account or her separate account as the recipient bank.
Additionally, Wife did not present evidence demonstrating the transfer of funds to the
Genworth account proving from which account the funds originated. Without evidence
proving otherwise and the Trial Court’s finding that Wife’s testimony was not credible, we
cannot conclude that the Trial Court erred by finding that Wife’s funds from the Mexican
bank were deposited into the money market subaccount of the parties’ joint checking
account in 2004.

       As the Trial Court found, Wife’s original deposit into the account was in the amount
of $34,355.65. Although Wife testified during trial that the money remained in the account
untouched, the Trial Court found that money was withdrawn from that subaccount and
deposited into other subaccounts frequently and that money had been added to that account
during the marriage. The Trial Court explained as follows concerning the activity in the
relevant subaccount:

              In January of 2006, for example, a thousand dollars was deposited into
       the money market account, $3,500 was withdrawn from the parties’ money
       market account. In February, another thousand dollars was withdrawn from
       the money market account. In March, $5,082.08 was deposited into the same
       money market sub-account, $1,100 was withdrawn, another $1,585.70 was
       deposited, and then another deposit happened of $4,819.53. In April of that
       year, a total of $6,000 was withdrawn from the account. And this continues
       on. By September of 2006, there had been enough withdrawals from the

                                            - 11 -
      money market account that the balance was down to $8,327.68. By
      December of [2007], enough deposits had been made into that money market
      sub-account that the balance was back up to $22,000. By December of 2008,
      the balance was down to $14,092.91. But by November of 2009, enough
      deposits had been made that now the balance of that money market account
      is up to $41,248.70.

Following its analysis of the bank statements presented during trial, the Trial Court found
that the parties were withdrawing funds from the account and depositing money into that
account throughout the marriage to such an extent that it had become comingled with the
marital estate. According to the Trial Court, the original funds from Wife’s sale of her
business account could no longer be traced in the account. Wife subsequently removed the
funds from the subaccount of the parties’ joint checking account in 2011 and 2012 and
placed the funds into the Genworth investment account, where it was at the time of trial.
The Trial Court found, however, that Wife’s original funds already had been comingled at
that point.

        “Commingling does not occur if the separate property can be traced into its product
or if the separate property continues to be segregated.” Eldridge v. Eldridge, 137 S.W.3d
1, 14 (Tenn. Ct. App. 2002). However, in this case, money was taken out of the account
and marital money was placed into the account throughout the marriage to such an extent
that the money could no longer be traced back to the original funds. The preponderance of
the evidence is not otherwise as to the Trial Court’s finding that the funds in the ORNL
money market subaccount, which were subsequently transferred to the Genworth account,
were comingled. Due to the comingling, we affirm the Trial Court’s classification of the
Genworth account as marital property.

        Wife also challenges the classifications of the Inherited Property, which included
the Stone House, the farm, and the trailer park. Husband had inherited this property during
the marriage. The Trial Court recognized that there was a will contest action that resulted
in Husband’s inheritance of this property. This will contest had resulted in Husband
expending significant marital funds to pursue litigation involving the Inherited Property.
Husband testified that he had paid back into the joint checking account the amount of legal
fees from the will contest. Husband was not asked how or if he would have paid back these
legal fees if he had been unsuccessful in the will contest. The Trial Court found that the
litigation fees for the will contest paid from the marital funds did not affect the
classification of this property because Husband paid reimbursement to the marital account.
As such, the Trial Court found that Husband had met his burden by showing that the
property is inherited property, pursuant to section 36-4-121. The Trial Court found the
Inherited Property to be Husband’s separate property.

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       There is no dispute that Husband inherited the property during the marriage.
Tennessee Code Annotated § 36-4-121(b)(2)(D) defines separate property, inter alia, as
“[p]roperty acquired by a spouse at any time by gift, bequest, devise or descent . . . .”).
However, Wife argues that the property was commingled with marital property or had been
transmuted to marital property, such that the Inherited Property should be classified as
marital property.

       The Trial Court found that Wife had presented no proof to show the property was
inextricably comingled. The Trial Court found that the money from the separate property
going in and out of the joint account can be traced back to the property, such that
comingling as to the Inherited Property did not occur. The Trial Court explained as
follows:

       When you look at them in 2013, there was $21,800 of separate income from
       the rental property. In addition, there was $86,529 worth of timber sold that
       was from this separate piece of property. And the expenses paid out that year
       were only $24,385. That’s what he claimed on his taxes. The next year there
       was $31,562 in income. The next year there was some $93,550 in income,
       which was the rental income plus the second cutting of timber. And again,
       these far exceed the expenses that are being claimed for these years. In total,
       for the years that we’ve mentioned, these six years that this property was in
       their possession, there was $223,247 of income. The expenses that were paid
       out, that the Court acknowledges were paid out of a joint account, $189,920.
       So the income from his separate asset far exceeded the amount that was paid
       out. They are directly traceable back to his source of income as this rental
       income. With the receipts that were provided to the Court, I can directly
       trace them back to the separate asset.

The Trial Court, therefore, found that the Inherited Property had not been comingled with
marital property to such an extent that the money used as expenses for the Inherited
Property could not be traced back to the original separate property. The evidence presented
does not preponderate against this finding by the Trial Court.

       Concerning transmutation, the Trial Court found that the Inherited Property was
never used as a marital residence, that Wife’s name was not added to the deeds on the
property, and that Wife’s credit had not been used to improve the property. In its analysis
of whether transmutation occurred, the Trial Court identified the factor in dispute
concerning transmutation was the contributions made by Wife in the management and
maintenance of the Inherited Property. Wife argued that she had substantially contributed
to the maintenance and upkeep of the properties. However, the Trial Court found that she
did not. Wife testified that she had collected rent and assisted Husband with the upkeep of
the Inherited Property. The Trial Court, however, pointed out that when asked to identify

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her contributions in collecting rents, she was only able to provide three receipts over the
six years that Husband owned the property. The Trial Court found that Wife’s
contributions to the property were not substantial.

        The attorney’s fees required to succeed in the will contest litigation amounted to
approximately $80,000, which Husband testified that he had paid back with the first sale
of timber from the farm. We are left to wonder how or if Husband would have paid back
this $80,000 of marital funds if he had been unsuccessful in the will contest. The Trial
Court found that the taxes, insurance, and other expenses had been paid concerning the
Inherited Property, and it is undisputed that these expenses were paid from the parties’ joint
checking account. However, the Trial Court also found that the Inherited Property had
generated income that had been deposited into the joint checking account and that the
amount of income placed into the joint checking account totaled more than the expenses
that were paid from the account. According to the Trial Court, “[t]he income that was
earned by the rental income far exceeded any of the expenses that were paid to upkeep, pay
the insurance, [and] pay the taxes,” and the money for the expenses could be traced back
to its original source. As such, the Trial Court found that the parties had not treated the
Inherited Property in a way to evidence an intention that it become marital property. The
evidence presented during trial does not preponderate against the Trial Court’s finding in
this regard, and we find no error by the Trial Court classifying the Inherited Property as
Husband’s separate property.

       Wife also challenges on appeal the Trial Court’s classification of the pre-marital
value of the Residence, where the parties lived throughout their marriage, as Husband’s
separate property. The Trial Court found that the appreciation of value of the Residence
was marital property and subject to division. Husband’s family had transferred the land to
him by deed, and Husband built the Residence on the property in 1984. The parties were
not married until 1997. During the marriage, the parties made significant improvements to
the Residence. The improvements made to the Residence were funded with marital funds
from the parties’ joint bank account. Husband never placed Wife’s name on the deed to
the property. An appraisal valued the Residence at $94,800 in 1997 when the parties were
married and at $160,700 in 2018 at the time of the pending divorce litigation. The
appreciation in value during the marriage was $65,900. There was no mortgage on the
Residence during the time of the marriage. The parties paid the utility bills, insurance
premiums, and property taxes from the parties’ joint checking account. The Trial Court
found that Wife had substantially contributed to the appreciation of the value of the
Residence and that, therefore, the appreciation amount was considered marital property.
The Trial Court awarded half the amount of appreciation to Wife. The Trial Court,
however, found that the value of the Residence as shown by the appraisal from 1997
remained Husband’s separate property.

                                            - 14 -
        Wife argues that the Trial Court erred by not classifying the entire Residence as
marital property through the theory of transmutation. However, “[a] residence should not
be classified as marital property simply because the parties have lived in it.” Fox v. Fox,
No. M2004-02616-COA-R3-CV, 2006 WL 2535407, at *5 (Tenn. Ct. App. Sept. 1, 2006).
Because the Residence was obtained by Husband as a gift of the land and his building of
the log house prior to the parties’ marriage, there is a presumption that it is Husband’s
separate property. See id. Wife had contributed to the appreciation of the home, as the
Trial Court found, by the significant improvements to the Residence throughout the
marriage. There was no mortgage on the home during the marriage, and Wife’s name was
never added to the deed on the home. The evidence presented during trial does not
preponderate against the Trial Court’s finding that the Residence is Husband’s separate
property but that the appreciation of the value of the Residence is marital property subject
to division with the marital estate. We, therefore, affirm the Trial Court’s classification of
the Residence.

        We next address Wife’s argument that the Trial Court erred by awarding Husband
his attorney’s fees for four of the five days of trial. The Trial Court provides no specific
authority for its award of attorney’s fees. The Trial Court stated that an award of attorney’s
fees is “solely at the discretion of the Court” then proceeded to express its dissatisfaction
with Wife’s actions before and during trial. Specifically, the Trial Court identified its
“biggest issue” was that Wife had no legal basis to argue that the classification of
Husband’s inherited property changed due to the will contest, which had caused an
unreasonable delay resulting in additional trial days, testimony, and cross-examination on
the issue. While Wife’s position was not accepted by either the Trial Court or this Court,
we cannot say there was no legal basis for her position given the initial expenditure of
marital funds in the will contest along with the loose handling of income and expenses
related to this property. As already noted in this Opinion, the Trial Court found that
Husband paid back from income he received from the inherited property the $80,000 of
marital funds spent in the will contest. The evidence does not preponderate against this
finding. We are left with nothing in the record showing how or if Husband would have
paid back this $80,000 if he had not been successful in the will contest. While it is tempting
to speculate whether Husband could or would have paid back the $80,000 if he had been
unsuccessful in the will contest, such speculation by this Court would be improper. The
Trial Court further stated its problem with Wife changing her testimony after her deposition
concerning when the money previously located in Mexico had been moved to a bank
account in the United States causing additional unnecessary delay. The Trial Court,
therefore, awarded attorney’s fees to Husband for four of the five days of trial that the Trial
Court determined “were as a result of the unreasonable arguments of [Wife].”

       In Cracker Barrel Old Country Store, Inc. v. Epperson, our Supreme Court
explained the American Rule:

                                            - 15 -
               Tennessee, like most jurisdictions, adheres to the “American rule” for
       award of attorney fees. John Kohl & Co. v. Dearborn & Ewing, 977 S.W.2d
528, 534 (Tenn. 1998); Pullman Standard, Inc. v. Abex Corp., 693 S.W.2d
336, 338 (Tenn. 1985). Under the American rule, a party in a civil action
       may recover attorney fees only if: (1) a contractual or statutory provision
       creates a right to recover attorney fees; or (2) some other recognized
       exception to the American rule applies, allowing for recovery of such fees in
       a particular case. Taylor [v. Fezell], 158 S.W.3d [352,] 359 [(Tenn. 2005)];
       John Kohl, 977 S.W.2d at 534.

Cracker Barrel Old Country Store, Inc. v. Epperson, 284 S.W.3d 303, 308 (Tenn. 2009)
(footnote omitted). A trial court’s award or denial of attorney’s fees are reviewed under
an abuse of discretion standard. Hunt-Carden v. Carden, No. E2018-00175-COA-R3-CV,
2020 WL 1026263, at *5 (Tenn. Ct. App. Mar. 3, 2020).

       Although a party can be awarded attorney’s fees as an award of alimony in solido
in a divorce action, the Trial Court stated nothing with regard to an award of alimony to
Husband and did not make findings relevant to such an award to Husband. There also was
no contract in this case providing for an award of attorney’s fees. Furthermore, Tennessee
Rule of Civil Procedure 11 allows an award of attorney’s fees as a sanction when the trial
court finds that a party has presented a pleading, written motion, or other document to the
court for “for any improper purpose, such as to harass or to cause unnecessary delay or
needless increase in the cost of litigation.” See Tenn. R. App. P. 11.02; Fossett v. Gray,
173 S.W.3d 742, 752 (Tenn. Ct. App. 2004). However, in that circumstance, sanctions can
be imposed only after the party or attorney is provided with notice and a reasonable
opportunity to respond. See Tenn. R. Civ. P. 11.03.

        A similar case, Fossett v. Gray, involved an award of attorney’s fees based on
“additional litigation time” for issues already litigated and “unduly delay.” Fossett, 173
S.W.3d at 752. This Court determined in Fossett that the trial court had no authority to
award attorney’s fees as a sanction other than Tennessee Rule of Civil Procedure 11 and
that the trial court had not followed proper procedure for Rule 11 sanctions.

        Similarly, the Trial Court in this case does not specifically refer to Rule 11 as its
authority for imposition of the award of attorney’s fees, only that it was at the Trial Court’s
discretion and that Wife had caused an unreasonable delay due to her unfounded arguments
and contradictory testimony. We note that the Trial Court’s reasoning for its award of
attorney’s fees is similar to the language in Rule 11 allowing sanctions when the parties’
filings are for an improper purpose such as “to cause unnecessary delay or needless increase
in the cost of litigation.” However, the Trial Court did not provide Wife with notice and
an opportunity to respond to any allegation of such by following the procedure set forth in
Rule 11.03 prior to the award of attorney’s fees. Determining that the Trial Court did not

                                            - 16 -
have a legal basis upon which to award attorney’s fees in this matter as they were neither
alimony nor appropriate sanctions under Rule 11, we reverse the Trial Court’s award of
attorney’s fees to Husband.

                                        Conclusion

       For the foregoing reasons, we reverse the award of attorney’s fees to Husband and
affirm the Trial Court’s judgment in all other respects. This cause is remanded to the Trial
Court for collection of costs assessed below. The costs on appeal are assessed one-half
against the appellant, Judith Galilea Abner, and her surety, if any, and one-half against the
appellee, Steven Dale Abner, and his surety, if any.

                                          _________________________________
                                          D. MICHAEL SWINEY, CHIEF JUDGE

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