Court Opinion

ID: 9954245
Source: CourtListenerOpinion
Date Created: 2024-03-25 20:12:05.084574+00
Date Added: 2024-06-11T08:11:58.140171
License: Public Domain

03/25/2024
                IN THE COURT OF APPEALS OF TENNESSEE
                            AT NASHVILLE
                         Assigned on Briefs November 7, 2023

                      DAVID E. TATE v. FELICIA M. TATE

               Appeal from the Chancery Court for Rutherford County
                     No. 22CV-546      Darrell Scarlett, Judge
                      ___________________________________

                           No. M2022-01438-COA-R3-CV
                       ___________________________________

This appeal arises from a divorce action following a short-term marriage. There were no
children born of the marriage, and the only issue on appeal pertains to the classification of
real property. At issue is the Wade Springs property, which the husband purchased using
his separate property. He closed on the purchase of the Wade Springs property the day after
the parties married, and the property was deeded in the husband’s name only. Because the
property was used as the marital residence during the two-year marriage and marital assets
were used to maintain the property, the wife contended that the property became marital
property by transmutation, commingling, or Tennessee Code Annotated § 36-4-121. The
trial court found that the Wade Springs property was the husband’s separate property at the
time of purchase and it remained his separate property. The court further found that the
wife’s contributions to the property could easily be extracted and awarded her, inter alia, a
cash judgment in the amount of her contributions to the home. Determining that the
evidence does not preponderate against these findings, we affirm.

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

FRANK G. CLEMENT, JR., J., delivered the opinion of the court, in which ANDY D. BENNETT
and W. NEAL MCBRAYER, JJ., joined.

Brock East, Murfreesboro, Tennessee, for the appellant, Felicia Tate.

Daryl M. South and David O. Haley, Murfreesboro, Tennessee, for the appellee, David
Tate.

                                        OPINION

                           FACTS AND PROCEDURAL HISTORY

      David Tate (“Husband”) and Felicia Tate (“Wife”) were married on May 21, 2020.
The next day, May 22, 2020, Husband closed on the purchase of 6438 Wade Springs Road
(“the Wade Springs property”), where the parties lived for the duration of their marriage.
To make the down payment on that property, Husband had obtained a bridge loan with his
separate Central Valley Road property as collateral. Both the sales contract and warranty
deed for the Wade Springs property were in Husband’s name only. Moreover, Wife did not
sign the promissory note for the property, nor did she have any obligations concerning
Husband’s loan.

        After purchasing that home, Husband sold his Central Valley Road property, paid
off the bridge loan, and received a balance of approximately $53,243, which he deposited
in his separate personal account. Wife’s name was never on this account.

      Before the marriage, Wife owned a home on Greenway Drive, which she sold after
the marriage and deposited the proceeds of approximately $186,000 into her separate
account. Husband’s name was never on this account.

        On March 30, 2022, being less than two years into the marriage, Husband filed for
divorce. In his petition, he averred that the marriage was of “very short duration” and that
the parties had “maintained separate title and interest in both real property and financial
accounts.” He also alleged that Wife had “failed and refused to contribute to the acquisition,
preservation, maintenance, or payment of the living expenses of the parties” and had
“remained unemployed throughout the short term of the marriage.” Husband also argued
that it was “proper for the Court to find that this is a marriage of short duration and place
each of the parties back in the financial position they maintained at the time of the parties’
marriage.”

       Wife filed an answer and counter-petition, denying that the parties had completely
maintained separate title and interest in real property and financial accounts. Wife also
denied the allegation that she failed and refused to contribute to the maintenance of the
property and that she had been unemployed throughout the marriage.

       In Husband’s Local Rule of Court 12.021 statement of issues and valuation of assets,
he classified the Wade Springs property as his separate property, but in Wife’s amended
Rule 12.02 statement, she claimed “an equitable interest in the equity held in real estate
purchased during the marriage and for marital home.” She noted that the home was
purchased for $450,000 on May 22, 2020, with Husband’s down payment of $260,415.62
from the bridge loan. However, she argued that the home had “become marital property
via the doctrines of comingling and transmutation, and all mortgage payments since have
been made with marital funds by Husband and Wife.”

       At trial, Husband testified that he and Wife began the process of finding a home
shortly after they were engaged, a year before they were married. He further testified that

        1
         Rule 12.02 is a local rule of court for the Sixteenth Judicial District that includes Rutherford
County, which applies to divorce proceedings.
                                                  -2-
they had selected the Wade Springs home together and intended to sell their homes and
live there together.

        Wife testified that throughout the marriage, Husband continually refused to put her
name on the property and refused to open other joint accounts for the parties. Husband
testified in agreement that it was never his intention to put Wife on the deed of the Wade
Springs property, specifically that the decision not to make her a joint owner was
intentional.

        As to the value of the property, Wife testified that she had helped with building a
shop on the property and other various maintenance items, but Wife concedes that the
increase in the value of the home was because of market forces. A real estate appraiser later
testified that the property’s appraisal value at the time of trial was $646,390.

       After the hearing, the court took the matter under advisement, delivered an oral
ruling from the bench on September 2, and issued its written order on September 14. In its
ruling, the trial court found that both parties had acted inappropriately and granted the
divorce pursuant to Tennessee Code Annotated § 36-4-129(b).

        The court further found that the Wade Springs property was Husband’s separate
property at the time of purchase and that it had not become marital property by
transmutation, comingling, or Tennessee Code Annotated § 36-4-121(b)(2)(A)–(B). The
court found that Wife’s contributions could be easily extracted and were calculated at
$13,780.60. Noting that Wife “acknowledged that the appreciation in the value of the home
is a result of market forces,” the court found, relying on Harrison v. Harrison, 912 S.W.2d
124 (Tenn. 1995), that “the increase in value in this cause of action is due solely to market
forces and not anything that either party did subsequent to the marriage.”

       Each party was awarded his and her separate accounts, and Husband was found to
be solely responsible for the debt of his BestBuy account. The court found to be separate
property Wife’s Camaro automobile that Husband gave to her as a wedding gift and
Husband’s Chevrolet truck that Wife gave to Husband as a Christmas gift, along with other
household items that were found to be gifts.

       Relying on Batson v. Batson, 769 S.W.2d 849 (Tenn. Ct. App. 1988), the trial court
found that because this was a marriage of relatively short duration, it was appropriate to
“divide the property in a way that as nearly as possible places the parties in the same
position they would have been in had the marriage never taken place.” The court then
defined the parties’ marital property as “an increase in husband’s retirement accounts in
the sum of $10,103.57” and various lawn tools and household items. The court also found,
“in the marital portion of the retirement accounts, that husband should receive the sum of
$2,000 and the wife shall receive the sum of $8,103.57,” with a greater amount going to
Wife to compensate for damage to her vehicle caused by Husband. Wife was also awarded

                                            -3-
a judgment against Husband in the amount of $13,780.60 for the financial contribution she
made to the house.

       Considering the statutory factors, the court declined to award Wife alimony,
reasoning that Wife is “actually in a little better position than she was before the marriage
because she has recovered her health and she has gotten a job.”

       This appeal followed.

                                             ISSUES

      Wife only raises one issue on appeal: “Whether the trial court erred in its
determination that the Wade Springs Road property was [Husband’s] separate property.”

       While Husband has not raised any issue on appeal, he contends that Wife has waived
her sole issue due to her failure to comply with Rule 7 of the Rules of the Court of Appeals
of Tennessee.

                                   STANDARD OF REVIEW

        “Questions regarding the classification of property as either marital or separate . . .
are inherently factual.” Owens v. Owens, 241 S.W.3d 478, 485 (Tenn. Ct. App. 2007)
(citations omitted). Therefore, we review the trial court’s findings “de novo upon the record
. . . accompanied by a presumption of the correctness of the finding, unless the
preponderance of the evidence is otherwise.” Tenn. R. App. P. 13. “After classifying the
divorcing parties’ assets as either separate or marital, the trial court must divide the marital
estate equitably by weighing the relevant factors enumerated in Tennessee Code Annotated
section 36-4-121(c).” Larsen-Ball v. Ball, 301 S.W.3d 228, 234 (Tenn. 2010). As such, this
court “customarily gives great weight to decisions of the trial court in dividing marital
estates and 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) (citations omitted).

                                           ANALYSIS

                  I. WAIVER OF ISSUE UNDER COURT OF APPEALS RULE 7

        As a preliminary matter, we address Husband’s argument that Wife has waived her
sole issue on appeal because she failed to comply with Rule 7 of this court.

        Rule 7 requires, “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,

                                              -4-
in the statement of facts or in an appendix, a table in a form substantially similar to the
form attached hereto.” Tenn. R. App. Ct. R. 7. The table is to list all property and debts
considered by the trial court, including: “(a) all separate property, (2) all marital property,
and (3) all separate and marital debts.” Id.

       Husband correctly states in his brief that Wife failed to file the Rule 7 table with her
appellant’s brief. Husband also correctly conveys the importance of this requirement, in
quoting the Kanski court: “a table, in full compliance with Rule 7, is vital as this Court
must consider the entire distribution of property in order to determine whether the trial
court erred.” Kanski v. Kanski, No. M2017-01913-COA-R3-CV, 2018 WL 5435402, at *6
(Tenn. Ct. App. Oct. 29, 2018) (citations omitted).

        In filing his brief, however, Husband attached the required Rule 7 table, and Wife,
in her reply brief, adopted the table as provided by Husband. In so doing, the parties have
provided to this court the necessary information to consider the “entire distribution of
property in order to determine whether the trial court erred.” Kanski, 2018 WL 54354002,
at *6.

       Moreover, Wife is correct in asserting that, under Rule 1(b), this court “[f]or good
cause . . . may suspend the requirements or provisions of any of these rules in a particular
case on motion of a party, or on its own motion, and may order proceedings in accordance
with its discretion.” Tenn. R. App. Ct. R. 1(b). Wife respectfully requests that we suspend
the requirement as stated in Rule 7. Under these particular circumstances, we agree with
Wife. Thus, we find that Wife has not waived the issue she raised regarding the Wade
Springs property.

                             II. THE WADE SPRINGS PROPERTY

       The sole issue presented for our review is whether the trial court erred in classifying
the Wade Springs property as Husband’s separate property. Wife specifically argues on
appeal that “[t]he trial court erred in its determination that the Wade Springs Road property
was not the subject of transmutation.”

       The division of a marital estate begins with classifying the parties’ property as either
separate or marital property. See Larsen-Ball v. Ball, 301 S.W.3d 228, 231 (Tenn. 2010).
This is necessary because “separate property is not part of the marital estate and therefore
not subject to division.” Id. “Thus, before equitably dividing the marital estate, the trial
court must identify all of the assets possessed by the divorcing parties as either separate or
marital.” Id.

       “Marital property” is defined by statute as, generally, “all real and personal property,
both tangible and intangible, acquired by either or both spouses during the course of the
marriage.” Tenn. Code Ann. § 36-4-121(b)(2)(A). “Separate property” is defined as “[a]ll

                                             -5-
real and personal property owned by a spouse before marriage.” Tenn. Code Ann. § 36-4-
121(b)(4)(A). Simply stated, separate property is property that is not “marital property.”
See Jacobsen v. Jacobsen, No. M2012-01845-COA-R3-CV, 2013 WL 1400618, at *9
(Tenn. Ct. App. Apr. 5, 2013).

        Two rebuttable presumptions provide a starting point for classifying property as
separate or marital. Watt v. Watt, No. M2014-02565-COA-R3-CV, 2016 WL 1730659, at
*6 (Tenn. Ct. App. April 27, 2016). First, there is a presumption that assets acquired by
either spouse before the marriage are separate property. Id. (citing Fox v. Fox, No. M2004-
02616-COA-R3-CV, 2006 WL 2535407, at *4 (Tenn. Ct. App. Sept. 1, 2006); Tenn. Code
Ann. § 36-4-121(b)(2)(A)). That said, property that began as separate property can be
converted into marital property by commingling or transmutation. See Smith v. Smith, 93
S.W.3d 871, 878 (Tenn. Ct. App. 2002).2

        Second, “assets acquired by either spouse during the marriage are presumed to be
marital property.” Watt, 2016 WL 1730659, at *6 (citations omitted). “This presumption
may be rebutted by presenting evidence [that] the property falls into one of the categories
listed in Tenn. Code Ann. § 36-4-121(b)(2)(B)–(F)3.” Id. (citing Fox, 2006 WL 2535407,
at *4). “A party asserting that an asset acquired during the marriage is separate property
has the burden of proving by a preponderance of the evidence that the asset is separate
property.” Owens v. Owens, 241 S.W.3d 478, 485–86 (Tenn. Ct. App. 2007) (citations
omitted).

       Here, the trial court found that the Wade Springs property was Husband’s separate
property at the time of marriage, reasoning:

               The Court finds that the husband owned a home on Central Valley
        Road prior to the marriage. The Court finds that the Central Valley Road
        property was not sold at the same time the Wade Springs Road property was
        acquired, so the husband acquired a bridge loan, or HELOC, using the
        Central Valley Road property as collateral. The Court then finds that a
        portion of said HELOC, or bridge loan, was used to pay[ ]off his preexisting
        debt, and the majority was used as a down payment on the purchase of the
        Wade Springs Road property, which is titled solely in husband’s name.

        2
         Under the theory of commingling, separate property becomes marital property if it is “inextricably
mingled with marital property or with the separate property of the other spouse.” Smith, 93 S.W.3d at 878
(quoting 2 Homer H. Clark, The Law of Domestic Relations in the United States § 16.2 at 185 (1987)).
Transmutation occurs when separate property is treated in a way that gives evidence “of an intention that it
become marital property.” Id.

        3
            Separate property is now defined under Tennessee Code Annotated § 36-4-121(b)(4)(A)–(F).
                                                   -6-
            The Court finds that it is clear that the Wade Springs Road property
      was in consideration of the terms of the statute, property acquired in
      exchange for property acquired before the marriage, and at that point was
      Mr. Tate’s separate property.

       Husband closed on the Wade Springs property one day after the date of marriage,
using funds from a loan with his separate property as collateral. Separate property is
statutorily defined as: “[p]roperty acquired in exchange for property acquired before the
marriage.” Tenn. Code Ann. § 36-4-121(b)(4)(B). Accordingly, the Wade Springs property
was acquired in exchange for the Central Valley Road property that Husband owned prior
to the marriage. Moreover, the Wade Springs property was separately titled in Husband’s
name only. Thus, we affirm the trial court’s finding that the Wade Springs property was
Husband’s separate property when it was acquired on the day following the parties’
marriage.

       Wife argues, however, that even if the Wade Springs property was Husband’s
separate property at the outset of the marriage, the property became marital property
through the doctrine of transmutation.

      Our Supreme Court has adopted the following explanation of the two doctrines by
which separate property becomes marital property, transmutation and commingling:

      [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.

Snodgrass v. Snodgrass, 295 S.W.3d 240, 256 (Tenn. 2009) (quoting Langschmidt v.
Langschmidt, 81 S.W.3d 741, 747 (Tenn. 2002) (quoting 2 Homer H. Clark, The Law of
Domestic Relations in the United States § 16.2 at 185 (2d ed. 1987)) (alterations in
original).

       While Wife testified that she intended to combine accounts and assets, it is
undisputed that the parties retained separate assets and financial accounts throughout the
course of the marriage. For example, upon selling her home that she owned prior to the

                                           -7-
marriage, Wife kept the net proceeds of $186,000 in an account separate from Husband
throughout the course of the marriage. Likewise, Husband kept his bank accounts and
earnings separate from Wife throughout the course of the marriage.

       While being questioned by Husband’s counsel at trial, Wife testified as follows:

       Q. Those two accounts -- all of Sally’s money here and all of Tommy’s
       money here, those two accounts have never touched each other, have they?

       A. And that’s been one of our biggest faults in our marriage, sir, because
       we’ve not been one.

       Q. That’s right.

       A. And I complained and complained.

       Q. Y’all never put those -- commingled those together as a married couple?

       A. No, sir. He’s a very controlling man.

       Q. If you’ll -- I appreciate that. If you’ll try to answer my questions. Neither
       you or Mr. Tate ever commingled those monies in any way, have you?

       A. No, sir. Just in the house he had and I added to it by doing things I done.

       Wife testified specifically as to the contributions she had made to the improvement
of the Wade Springs property—painting, flooring, ceiling fans, and landscaping—but
conceded that the increase of the home’s value was likely due to market forces. She also
noted that her name was on the utilities, but Husband paid them. Husband paid for the
construction of a shop on the property but testified that Wife had paid for electricity to be
run to it, offering into evidence checks and invoices with exact totals of those and other
contributions.

       Wife further testified that she wanted her name on the deed for the Wade Springs
property, but Husband continually refused to add her. It is undisputed that Wife’s name has
never been on the deed to the Wade Springs property, and Husband testified that he never
intended to put her name on the deed.

       The trial court found that

       [W]ife did contribute financially to the house and to the later construction of
       the shop; however, her financial contributions are determinable as evidenced
       by the checks received as evidence, and they are not, as required, inextricably

                                            -8-
        intertwined with the separate property. . . . The Court finds that said
        contributions can be easily extracted, and . . . therefore the property did not
        become marital property as a result of comingling.4

       As for transmutation, as stated above, there is a rebuttable presumption of marital
property created “when separate property is treated in such a way as to give evidence of an
intention that it become marital property.” Snodgrass, 295 S.W.3d at 256. Wife clearly
expressed her intent for the Wade Springs property to become marital. However, the
presumption here is “rebutted by evidence of circumstances or communications clearly
indicating an intent that the property remain separate.” Snodgrass, 295 S.W.3d at 256.

        The trial court found that “not only did husband not evidence any intention to make
a gift of this separate property to the marriage, he acted in such a way by refusing to put
her name on the title despite requests, to evidence his intention that the property remained
his separate property.”

        Finding that the evidence preponderates in favor of the trial court’s determination
that the Wade Springs property did not become marital property due to commingling or
transmutation and remained separate property at the time of divorce, we affirm the decision
of the trial court.

                                            IN CONCLUSION

        The decision of the trial court is hereby affirmed, and this matter is remanded to the
trial court for further proceedings consistent with this opinion. Costs of appeal are assessed
against Wife, Felicia Tate, for which execution may issue.

                                                             ________________________________
                                                             FRANK G. CLEMENT JR., P.J., M.S.

        4
           The trial court also made the determination that the marital property consisted of “an increase in
husband’s retirement accounts in the sum of $10,103.57, the Milwaukee hedge trimmer, Milwaukee weed
eater, steel brush cutter, 75inch Samsung TV, surround sound system, humidifier, two air purifiers, the desk
and bookshelf, three TV wall mounts, washer and dryer, refrigerator, dishwasher, and microwave.” As such,
the trial court awarded the humidifier, air purifier, and office furniture to Wife. For the $10,103.57 marital
portion of Husband’s retirement account, Husband was to receive $2,000 and Wife $8,103.57, to
compensate Wife for damage to her vehicle determined to be caused by Husband. Wife was further awarded
“a judgment against [Husband] in the sum of $13,780.60 representing the financial contribution she made
to the house and shop that the Court has found to be his separate property.” Neither party challenges any of
these rulings in their Statement of the Issues. “The appellate court may treat issues that are not raised on
appeal as being waived.” Watson v. Watson, 309 S.W.3d 483, 497 (Tenn. Ct. App. 2009) (citing Tenn. R.
App. P. 13(b)). Thus, we do not discuss these rulings in this opinion.
                                                    -9-