Court Opinion

ID: 1048185
Source: CourtListenerOpinion
Date Created: 2013-10-08 02:53:22.349644+00
Date Added: 2024-06-11T12:30:55.043778
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                            AT NASHVILLE
                                 January 18, 2011 Session

        CYNTHIA LYNN LINER v. ROBERT CLIFFORD LINER, JR.

               Appeal from the Chancery Court for Rutherford County
                     No. 09-0993DR     J. Mark Rogers, Judge

                 No. M2010-00582-COA-R3-CV - Filed April 13, 2011

In a divorce action, Husband appeals the trial court’s classification of the residence he owned
before the parties’ marriage as marital property and its award of one-half of the equity in the
residence to Wife. We affirm.

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

A NDY D. B ENNETT, J., delivered the opinion of the Court, in which P ATRICIA J. C OTTRELL,
P.J., M.S., and F RANK G. C LEMENT, J R., J., joined.

Laurie Y. Young, Murfreesboro, Tennessee, for the appellant, Robert Clifford Liner, Jr.

Gary D. Beasley and John Carson Taylor, Murfreesboro, Tennessee, for the appellee, Cynthia
Lynn Liner.

                                         OPINION

                        F ACTUAL AND P ROCEDURAL B ACKGROUND

         Robert Liner (“Husband”) and Cynthia Liner (“Wife”) were married in 2003. Wife
filed for divorce on July 8, 2009, and Husband filed a counter-complaint on July 22, 2009.
The distribution of most of the assets and debts was stipulated by the parties. The only issue
at trial was the division of the marital residence.

       Both parties owned separate residences prior to the marriage. When the parties
married, Wife and her two children moved into Husband’s residence. A couple of months
before the parties married, Husband took out a line of credit in his name, which was
increased as funds were needed. In August 2003, the balance of the loan was $671.97. In
September 2004, the line of credit had a balance of $34,828.33. The funds were used to
expand the residence to include a bedroom, bathroom, den, and bonus room. The mortgage
on the home was paid out of the parties’ joint account.

        Wife retained her residence until March 2005. The mortgage for her home was paid
out of the parties’ joint account. On March 31, 2005, Wife received $32,178.35 from the sale
of her residence, which she deposited into her separate bank account.

       Husband refinanced the mortgage on the marital home in 2005. At that time, both of
the parties’ names were placed on the note. Wife’s name was not placed on the title to the
home.

       Wife earned the following income during the parties’ marriage: $10,422.00 in 2004,
$816.55 in 2005, no income in 2006, approximately $5,000 in 2007,1 $13,863.16 in 2008,
and $17,862.08 in 2009. Husband testified that he earned gross incomes of $63,405.60 in
2006, $66,116.86 in 2007, $54,945.66 in 2008, and $54,098.45 in 2009.

      In 2004, Wife’s previous husband died, and she received a “substantial amount” of
money as the beneficiary of his 401k.2 She deposited this money into her separate bank
account. Wife received Social Security checks for her two children totaling $2,100 per
month. Wife deposited the majority of these funds into her separate bank account.

        A final hearing was held on January 19, 2010. The court found that the marital
residence was the separate asset of Husband at the time of the parties’ marriage, but that it
had become a marital asset through transmutation. The court found that three of the four
factors relied upon in Hagler v. Hagler, No. E2007-02609-COA-R3-CV, 2009 WL 838163,
at *3 (Tenn. Ct. App. Mar. 31, 2009) (quoting Fox v. Fox, No. M2004-02616-COA-R3-CV,
2006 WL 2535407, at *5 (Tenn. Ct. App. Sept. 1, 2006)), applied in this case—the parties
intended the residence to be the marital residence, both parties contributed to the ongoing
maintenance and management of the property, and the credit of the non-owner spouse was
used to improve the property.

        The value of the residence was found to be $125,000, and the principal was
$67,606.06. The trial court lowered the value of the home by 6% to account for prospective
real estate commission. Thus, proceeds from a sale would bring $117,500. The anticipated

       1
         Wife’s 2007 W-2 reflects wages of $1,042.37. Wife’s brief states that she earned $4,399 from the
Rutherford County Board of Education and $1,042 from Scrapping U.S.A. in 2007.
        2
         It is unclear from the record how much Wife received. The parties agree that, on June 20, 2005,
Wife’s separate bank account had a balance of $52,528.

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proceeds were reduced by the outstanding principal, leaving equity in the amount of
$49,893.94. The court awarded Wife one-half of the equity, or $24,946.97.

                                    S TANDARD OF R EVIEW

        We review a trial court’s findings of fact de novo with a presumption of correctness
unless the preponderance of the evidence is otherwise. Tenn. R. App. P. 13(d). We review
questions of law de novo with no presumption of correctness. Nelson v. Wal-Mart Stores,
Inc., 8 S.W.3d 625, 628 (Tenn. 1999).

                                           A NALYSIS

        Husband appeals the trial court’s classification of the residence owned by Husband
prior to the marriage as marital property and the distribution of the equity in the residence.

                                  Classification of Residence

       The determination as to whether property is marital or separate is “inherently factual.”
McFarland v. McFarland, No. M2005-01260-COA-R3-CV, 2007 WL 2254576, at *4 (Tenn.
Ct. App. Aug. 6, 2007). Thus, we review the trial court’s classification of property “de novo
upon the record of the trial court, accompanied by a presumption of the correctness of the
finding, unless the preponderance of the evidence is otherwise.” Tenn. R. App. P. 13(d).

        In making its division of property, the trial court must first classify the property as
either separate or marital property, pursuant to Tenn. Code Ann. § 36-4-121(b). Kinard v.
Kinard, 986 S.W.2d 220, 230 (Tenn. Ct. App. 1998). This distinction is important because
Tenn. Code Ann. § 36-4-121(a) provides for the distribution of marital property only.

       In this case, before the parties were married, Husband owned what became the marital
residence. Tenn. Code Ann. § 36-4-121(b)(2)(A) provides a definition of separate property,
which includes “[a]ll real and personal property owned by a spouse before marriage.”
Indeed, property acquired by a spouse prior to a marriage is presumed to be separate
property. Fox, 2006 WL 2535407, at *4. “A party seeking to rebut this presumption has the
burden of proving by a preponderance of the evidence that the asset acquired prior to
marriage has become marital.” Id.

        The trial court found that the marital residence was the separate asset of Husband at
the time of the parties’ marriage, but that it had become a marital asset through
transmutation. Separate property can become marital property by virtue of transmutation “if
there is evidence that the parties intended for it to be marital property and treated it as such.”

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Whitley v. Whitley, No. M2003-00045-COA-R3-CV, 2004 WL 1334518, at *6 (Tenn. Ct.
App. June 14, 2004). The trial court relied on Hagler v. Hagler in making its determination:

        Four of the most common factors courts use to determine whether real property
        has been transmuted from separate property to marital property are: (1) the use
        of the property as a marital residence; (2) the ongoing maintenance and
        management of the property by both parties; (3) placing the title to the property
        in joint ownership; and (4) using the credit of the non-owner spouse to
        improve the property.

Hagler, 2009 WL 838163, at *3 (quoting Fox, 2006 WL 2535407, at *5).

       The court found that factors 1, 2, and 4 applied in the instant case. Husband concedes
that the parties used the residence at issue as the marital residence (factor 1), and it is
undisputed that Wife’s name was not placed on the title to the residence (factor 3).
Therefore, we must consider factors 2 and 4.

        With respect to the second factor, the ongoing maintenance and management of the
property, Husband insists that Wife failed to help financially maintain the residence.
Husband points out that the mortgage payment on the residence was paid out of the parties’
joint checking account, to which Wife failed to contribute. Husband claims that Wife’s only
financial contribution was the purchase of a refrigerator and washer and dryer, and she took
the washer and dryer with her when she vacated the residence. It is true that Wife did not
work during much of the parties’ marriage and failed to make significant financial
contributions compared to Husband. However, she did make some financial contributions.
From 2004 to 2009, Wife earned a total of approximately $47,963.79 in income, which went
into the parties’ joint account.3 The mortgage and utilities for the home were paid out of this
joint account. Wife maintained a separate account where she put the $32,178.35 representing
the proceeds from the sale of her home in March 2005. Wife testified that she sometimes
used her separate account to pay for groceries, gas, cleaning supplies, and dining out, all of
which financially benefitted Husband.

       Husband overlooks Wife’s non-financial contributions to the ongoing maintenance
and management of the residence. Wife testified that she made contributions to improving
the home, including laminating the kitchen floors; caulking windows, countertops, and vinyl
flooring; painting the kitchen (twice), living room, bathroom, and hall; hanging curtain rods
and curtains; and landscaping the front and side yard and around the pool.

        3
         Wife testified that the only portion of her income that did not go into the parties’ joint account was
$816.55 in 2005.

                                                     -4-
        With respect to the fourth factor, using the credit of the non-owner spouse to improve
the property, Husband took out a line of credit in his name only just before the parties’
married in order to expand the residence. The property was refinanced in 2005 in order to
obtain a better interest rate. Wife’s name was not placed on the title to the home at that time,
but her name was placed on the note, making her liable. The parties also replaced and
expanded a deck at the residence. It was paid for on a Lowe’s credit card, which Husband
testified was paid off from the parties’ joint account.

       The evidence shows that the residence was intended to be the marital home. Given
Wife’s financial and non-financial contributions to the ongoing maintenance and
management of the property, as well as the use of her credit to improve the property, the
evidence does not preponderate against the trial court’s decision to classify the residence as
marital property.

                                 Distribution of Equity in Residence

        Husband argues that the trial court erred in awarding Wife one-half of the equity in
the residence. Tenn. Code Ann. § 36-4-121 governs the distribution of marital property.
After classifying the property of a divorcing couple, the trial court is charged with equitably
dividing the marital property. “Dividing a marital estate is not a mechanical process but
rather is guided by considering the factors in Tenn. Code Ann. § 36-4-121(c).4 Trial judges

       4
          Tenn. Code Ann. § 36-4-121(c) instructs the court to consider all relevant factors in making an
equitable division of marital property, including the following:

        (1) The duration of the marriage;

        (2) The age, physical and mental health, vocational skills, employability, earning capacity,
        estate, financial liabilities and financial needs of each of the parties;

        (3) The tangible or intangible contribution by one (1) party to the education, training or
        increased earning power of the other party;

        (4) The relative ability of each party for future acquisitions of capital assets and income;

        (5) 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;

        (6) The value of the separate property of each party;

                                                                                                 (continued...)

                                                     -5-
have wide latitude in fashioning an equitable division of marital property, and appellate
courts accord great weight to a trial judge’s division of marital property.” Kinard, 986
S.W.2d at 230-31 (citations omitted). Thus, “we are disinclined to disturb the trial court’s
decision unless the distribution lacks proper evidentiary support or results from some error
of law or misapplication of statutory requirements and procedures.” Herrera v. Herrera, 944
S.W.2d 379, 389 (Tenn. Ct. App. 1996) (citing Wade v. Wade, 897 S.W.2d 702, 715 (Tenn.
Ct. App. 1994)). More specifically, “we will ordinarily defer to the trial judge’s decision
unless it is inconsistent with the factors in Tenn. Code Ann. § 36-4-121(c) or is not supported
by a preponderance of the evidence.” Kinard, 986 S.W.2d at 231.

       Evidence was presented about a number of the Tenn. Code Ann. § 36-4-121(c)
factors. The parties’ six-year marriage was a marriage of relatively short duration. See
Batson v. Batson, 769 S.W.2d 849, 851, 859 (Tenn. Ct. App. 1988) (designating the parties’
seven-year marriage as “relatively short”). Neither party raised any health concerns. Both
parties were employed at the time of divorce and earned their own income. Husband, an
automotive technician, earned significantly more income than Wife. Wife has two years of
college education.

       As discussed previously, Wife made a contribution to the marriage as a homemaker.
She also made some contribution to the appreciation and preservation of the home. Husband
claims Wife dissipated her own separate property. He asserts that Wife squandered the
$32,178.35 that she earned from the sale of her home in 2005 on her scrapbooking hobby and
contributed little to the marriage financially. While there is evidence in the record to suggest
that Wife made frequent visits to scrapbooking stores, there is no evidence about the amount
of money that Wife spent on this hobby. There is also evidence that Wife spent her own
money on items that supported the family, such as groceries, gas, and dining out, but no
evidence of the amount.

       4
        (...continued)
       (7) The estate of each party at the time of the marriage;

       (8) The economic circumstances of each party at the time the division of property is to
       become effective;

       (9) The tax consequences to each party, costs associated with the reasonably foreseeable sale
       of the asset, and other reasonably foreseeable expenses associated with the asset;

       (10) The amount of social security benefits available to each spouse; and

       (11) Such other factors as are necessary to consider the equities between the parties.

                                                   -6-
       We cannot say that the evidence presented preponderates against the trial court’s
decision to divide the equity in the residence equally.

                                       C ONCLUSION

       The decision of the trial court is affirmed. Costs of appeal are assessed against the
appellant, for which execution may issue if necessary.

                                                     ______________________________
                                                          ANDY D. BENNETT, JUDGE

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