Court Opinion

ID: 4547915
Source: CourtListenerOpinion
Date Created: 2020-07-13 20:11:08.537466+00
Date Added: 2024-06-11T12:55:29.446257
License: Public Domain

07/13/2020
               IN THE COURT OF APPEALS OF TENNESSEE
                          AT KNOXVILLE
                                  June 9, 2020 Session

                 DOUGLAS D. DAILEY v. VIOLET L. DAILEY

                  Appeal from the Circuit Court for Blount County
                   No. E-26797 Tammy M. Harrington, Judge
                     ___________________________________

                           No. E2019-00928-COA-R3-CV
                       ___________________________________

This appeal arises from a divorce action. During the trial court proceedings, the parties
agreed on a distribution of a majority of the marital property. However, a hearing was
necessary concerning missing gold and silver that had been purchased during the marriage.
The Trial Court found Husband not to be a credible witness. The Trial Court further found
that the gold existed, that Husband had control of the safe room where the gold was located,
and that Husband was responsible for the gold being missing. Husband appeals the Trial
Court’s judgment to this Court. Discerning no error, we affirm.

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

Melanie E. Davis and Ashley Bentley, Maryville, Tennessee, for the appellant, Douglas D.
Dailey.

Craig L. Garrett, Maryville, Tennessee, for the appellee, Violet L. Dailey.

                                        OPINION

                                       Background

       Douglas D. Dailey (“Husband”) and Violet L. Dailey (“Wife”) had been married for
approximately forty years. They had divorced once before in 1978 but had gotten back
together and remarried. It is undisputed that Husband purchased gold coins during the
marriage. Husband testified at trial that he had purchased approximately 400 ounces of
gold during a ten-year span. During his deposition, Husband testified that he had spent
approximately “half a million dollars” on silver and gold, but he testified at trial that he did
not think it was that much.1 Wife testified that Husband told her the value of the gold was
$750,000 on one occasion and $750,000 to $1,000,000 on another occasion. Husband
testified that he purchased gold throughout the course of the marriage from 1997 or 1998
through 2008 or 2009. Husband kept no records of the gold he purchased during the
marriage.

       At first, Husband kept the gold coins in a gun safe. When the parties’ son, Brent,
was between fourteen and sixteen years old, he was angry with Husband for destroying his
collectible cards and took some gold coins from the gun safe to replace his cards.
According to Brent, Husband had left open the gun safe. Brent testified that he took only
two gold coins.2 Husband, however, stated that Brent took a little less than fifty ounces of
gold. Wife stated in her testimony that Brent had taken only two or three coins. According
to Brent, they took money from his bank account to replace the gold coins he had taken.
Brent testified that he never took any other gold from his parents. Brent was thirty-two
years old at the time of trial.

       Husband testified that Brent also had taken money from his wallet, guns, and “just
any kind of stuff like that he could get his hands on.” Wife was asked on cross-examination
whether Brent had stolen a Rolex watch. According to Wife, Husband said the watch was
gone, but she saw him wearing it later. She also stated that Husband had accused Brent of
stealing jewelry and had “tormented Brent” over it. Wife testified that Husband had placed
the jewelry in a briefcase and later found it. Brent acknowledged taking money from his
Father’s wallet about three times when he was “young” and stealing from Walmart and, on
one occasion, from his grandmother. Brent, however, denied taking any gold from
Husband around the time the divorce was filed. Brent testified that only Husband had
access to the safe room “because he’s the only one that had the key.”

       After Brent took the gold coins as a teenager, Husband began keeping the gold coins
in the bedroom. Husband alleged that Wife took approximately 100 ounces of gold in
2004. However, Wife admitted to taking only three to five gold coins when the parties
previously divorced in 1978 to pay legal fees.

     Husband subsequently began keeping the gold he purchased in a safe deposit box at
CBBC Bank where he stored approximately 100 ounces of gold. In November 2009 when
Husband sold his company, Underground Technology, he bought a large amount of gold

1
  During cross-examination, Wife’s counsel pointed out inconsistencies between Husband’s deposition
testimony and his testimony at trial. According to Husband’s counsel, Husband had cancer in the past that
had affected his memory.
2
 During opening statements, Wife’s counsel stated that according to Husband, all the gold bought by
Husband came in one-ounce coins.
                                                  -2-
but is unsure of the amount. This gold was stored in a safe deposit box at Peoples Bank.
He had not bought gold since that time. He estimated that there was over 200 ounces of
gold in the safe deposit box at Peoples Bank.

       Husband testified that he subsequently moved the gold from Peoples Bank back to
the marital home shortly before “Trump’s election” in 2016 upon Wife’s request after their
church “had a prophecy that President Obama would never come out of office” and Wife
feared that they “wouldn’t be able to get in the bank to get it.” Wife confirmed that a
prophesy existed about “the signs of the times” but stated that she was only referring to
removing the money they had in the bank and that she did not know the gold was being
kept in the bank. After Husband removed the gold from the bank, the gold was stored in
the safe room in the downstairs of the home.

       While both parties were living at the home prior to the divorce, Wife was living in
the upstairs portion of the home and Husband lived in the downstairs portion of the home.
The downstairs portion of the home was connected to the upstairs portion only by an
elevator. There was also an outside door to access the downstairs of the home. It is
undisputed that Husband often would leave the elevator door open downstairs so that the
individuals upstairs could not access the downstairs portion of the home where Husband
resided. Only Husband and his mother, who lived “across the field,” had keys to the outside
door accessing the downstairs of the home.

       Wife admitted that she had access to the downstairs of the home when Husband was
not home on a few occasions to get meat out of the freezer in the basement. She testified
that on those occasions, she went to Husband’s mother’s home and borrowed the key to
the outside door in order to access the downstairs portion of the home. The lock on the
safe room required a separate key. According to Wife, Husband’s mother never gave her
a key to the safe room. Wife testified that she never had a key to the safe room and had
been inside the safe room only when Husband opened the door. Husband testified that he
sometimes left his keys in the door to the safe room because a dehumidifier had to be
emptied often. Wife, however, testified that she never observed Husband’s key in the safe
room door. Wife further testified that Husband’s key ring was a “huge thing of keys” the
size of a “dinner plate” with approximately three hundred keys on it. Husband
acknowledged that the key ring had several keys on it and that it would not fit comfortably
in your pocket.

       Husband and Wife were both living in the marital home until Husband filed a
petition for an order of protection in May 2016, and Wife was required to leave the home.
According to Wife, the petition for an order of protection alleged in part that Wife had
taken money from the parties’ joint bank account but did not mention the gold being
missing. Wife admitted that she had taken $93,000 from the parties’ joint bank account
because she was afraid Husband would make her leave the home and she would be left

                                           -3-
with no money. Husband further testified that about the same time, Wife had taken $15,000
hidden in a cinder block in the basement.

       Husband testified that he learned the gold was missing around the time he filed for
divorce but that he did not contact law enforcement because he was waiting to retrieve the
video footage from the hard drive of the video surveillance equipment that recorded the
entrance to the safe room. According to Husband, he planned to contact law enforcement
about the missing gold after he had the video. However, Husband testified that the
company and individual he had hired to retrieve the video footage were unable to retrieve
it.

       Shortly after he filed the petition for an order of protection, Husband also filed a
complaint for divorce from Wife in May 2016 in the Blount County Circuit Court (“Trial
Court”), alleging grounds of irreconcilable differences or, alternatively, that other grounds
for divorce existed. Wife filed an answer and counter-complaint, alleging irreconcilable
differences and that Husband was guilty of inappropriate marital conduct. Husband filed
an answer to Wife’s counter-complaint denying that he had committed inappropriate
marital conduct.

       The parties conducted discovery, which resulted in multiple motions to compel and
for contempt. The Trial Court ultimately entered a decree of divorce in July 2018,
awarding the parties a divorce on stipulated grounds pursuant to Tennessee Code
Annotated § 36-4-129. The decree reflected the parties’ agreement to auction several items
of property. All remaining issues were reserved for further hearing.

       In October 2018, the parties informed the court that they had reached an agreement
on the pending motions before the court and a partial distribution of the marital property,
which they stipulated was a fair and equitable distribution of the property. This agreement
was memorialized in a court order entered November 2018. The partial distribution of
property disposed of all property except for the missing gold and silver. Following a
motion to alter or amend filed by Wife, the Trial Court subsequently modified the property
distribution slightly due to the unavailability of an item of property to be awarded to Wife.

       The Trial Court heard evidence on two nonconsecutive days in February 2019
concerning the missing silver and gold. During the second day of trial, Husband called
Jackie Keck as a rebuttal witness. Ms. Keck testified that she was good friends to both
Wife and Husband for approximately thirty years. She testified that she had been in the
safe room with both of them. Ms. Keck testified at trial that when she first went to the
parties’ home, Wife had showed her around the home while Husband was not present.
According to Ms. Keck, Wife showed her the downstairs and Ms. Keck recalled the safe
being open. Wife also testified as a rebuttal witness. During her rebuttal testimony, Wife
acknowledged that she showed Ms. Keck around the home but denied that she ever showed
Ms. Keck the safe room without Husband being present.
                                           -4-
        Ms. Keck further testified that she recalled Husband and Wife arguing about Brent
stealing guns, gift cards, and a Rolex watch. Additionally, Ms. Keck testified that she
recalled an argument between Wife and Husband that had occurred ten years prior about
one of Wife’s friends. According to Ms. Keck, Husband stated during the argument that
this friend helped Wife take some gold. She stated that this friend had come into the
parties’ lives after the 1970s and was associated with Wife’s church. Wife denied in her
rebuttal testimony that this argument occurred and that her friend had helped her steal gold.
On cross-examination, Ms. Keck testified that Husband had given their granddaughter a
Mercedes automobile.

       Following the second day of trial, Wife filed a motion to reopen the proof after Ms.
Keck allegedly stated to Wife while leaving court that Wife had “missed it by about Ten
Million Dollars.” Following the Trial Court’s grant of Wife’s motion, the Trial Court heard
additional evidence in May 2019 from Wife and Ms. Keck. Ms. Keck denied that the
conversation occurred.

        The Trial Court subsequently heard closing arguments from the parties and issued
its ruling. In its May 2019 final judgment, the Trial Court found as follows concerning the
property at issue:

       Based upon the testimony of the witnesses, the evidence presented, exhibits
       and arguments of counsel, the Court is of the opinion that there is missing
       gold which is a marital asset and the Court would make the following
       findings relative to this issue. This has been a hotly contested issue between
       the parties, but it is uncontested that $500,000 worth of gold was purchased
       and but for the small amount which the parties have divided by agreement in
       their February 19, 2019, announcement the vast majority of this gold is
       missing. The Court finds that there is no question that the gold was
       purchased, that the gold was in the bank and the same was removed based
       upon a prophecy that never occurred and the gold was then kept in the safe
       room. The safe room was in the marital residence which was occupied by
       the Husband and controlled by the Husband. Further, while the Husband has
       allegations regarding the Wife or their son taking the gold, the same is
       speculation and there is no proof to support that. The Court would note that
       there have been no records provided relative to the purchased gold despite
       attempts to get the Husband to provide records and that the Husband’s
       testimony on the entire issue has been inconsistent and vague and he has
       expressed a cavalier attitude while testifying which reflects badly on the
       credibility of the Husband. The Court further finds that based upon all of the
       evidence that was presented, there is no question that this marital asset
       existed and it was in the control of the Husband, Douglas Dailey, and that he
       is responsible for this marital asset being gone and missing and therefore, he
                                              -5-
      owes to the Wife the value of half of the gold. The Court finds that the
      preponderance of the evidence indicates that there is 487 ounces of missing
      gold and finds that the value of the missing gold is $600,000. The Court
      finds that the Husband, Douglas D. Dailey, is responsible and owes to the
      Wife, Violet L. Dailey, one-half (1/2) of this amount or $300,000 for which
      she receives judgment and a lien on the real property previously awarded by
      the Court to the Husband, Douglas D. Dailey.

Husband timely appealed to this Court.

                                         Discussion

       Although not stated exactly as such, Husband raises as issues on appeal the
following: (1) whether the Trial Court erred by finding by a preponderance of the evidence
that Husband had stolen or absconded with the missing gold and awarding Wife one-half
the value of the missing gold, (2) whether the Trial Court erred by classifying the missing
gold as marital property, and (3) whether the Trial Court erred in awarding one-half the
missing gold as marital property when it was no longer in existence. Wife raises one issue
for our review on appeal as follows: whether the Husband’s appeal is frivolous such that
she should be awarded attorney’s fees incurred during the appeal.

       Our review is 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.

       We first address Husband’s issue that the evidence did not support the Trial Court’s
finding that Husband was responsible for the disappearance of the gold. According to
Husband, “[t]he record and the proof simply do not support the finding by the Trial Court
that [Husband] is legally responsible for the gold going missing.” We disagree.

      Importantly, we note that the Trial Court found Husband not to be credible due to
his “cavalier attitude” and the inconsistent and vague testimony he had provided
throughout the proceedings. 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
      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
                                           -6-
       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). As instructed in Hughes, we provide great deference to the Trial Court’s credibility
determinations, which will not be overturned on appeal unless clear and convincing
evidence proves otherwise. No such clear and convincing evidence exists in this case as
to Husband’s credibility.

       During trial, Husband argued that he had not taken the missing gold and that it was
either Wife or the parties’ son, Brent, who took the gold. Husband argued during trial that
because Wife had taken some gold and sold it at one point during the marriage, she must
have necessarily taken this gold as well. As part of his argument on appeal, Husband states
that Wife “had stolen the parties’ gold before and sold it” and refers to Wife as a thief.
During oral arguments, Husband’s counsel stated that Wife “had stolen in the past from
the marital estate.” First, we point out that the gold sold by Wife during the marriage was
marital property belonging jointly to both Husband and Wife. Thus, Wife had not stolen
the gold as Husband alleges. Second, other than his own uncredible testimony, Husband
offered no proof that Wife had taken the missing gold at issue from the safe room.

       Husband alternatively argued that their son, Brent, was responsible for the missing
gold. Husband testified that Brent had, in the past, taken gold coins, money from his wallet,
and guns from Husband. Brent admitted to taking two gold coins when he was a teenager,
which was approximately fifteen years prior, but denied taking any gold since. Brent also
acknowledged that he had stolen from Walmart and, on one occasion, his grandmother.
Other than Husband’s speculative testimony, which the Trial Court deemed as not credible,
Husband provided no other evidence to prove that Brent was actually the individual to take
the gold from the safe room.

       The evidence presented during trial supported the Trial Court’s finding that
Husband had control over the gold at the time it disappeared. The Trial Court found that
the gold at issue was kept in the safe room in the marital home that was occupied and
controlled by Husband. At the time the divorce was filed, Wife was not residing in the
home. Prior to filing the divorce complaint, Husband had filed a petition for an order of
protection, which resulted in Wife being required to leave the marital home. Even when
Wife was residing in the home, Husband had almost exclusive access to the downstairs
except that Wife had borrowed a key from his Mother a couple of times and Husband had
sometimes allowed Wife to access the downstairs when he was home.

       When Wife accessed the basement of the home, the key provided to Wife by
Husband’s mother did not open the safe room where the gold was located, only the
basement door. Wife testified that she was only ever in the safe room when Husband was
present to open the safe room door. Nonetheless, Husband claimed that Wife had access
                                          -7-
to the safe room because she had occasional access to the basement and that the key to the
safe room was often left in the lock. However, Husband’s testimony was deemed to not
be credible. Wife testified that Husband kept all of his keys on one very large key ring,
and Wife denied that she ever observed the key left in the lock to the safe room. Brent also
testified that no one except Husband had access to the safe room because, to his knowledge,
Husband was “the only one that had the key.”

        Additionally, as the Trial Court noted, Husband had a “cavalier attitude” during his
testimony. Husband testified at trial that he first began investigating the missing gold
around the time he discovered that the money was missing from the parties’ joint checking
account. However, Husband did not contact law enforcement to report the gold as stolen
or mention the missing gold in his petition for an order of protection, wherein he alleged
in part that Wife had taken money from the parties’ joint bank account. Although Husband
testified that he did not report the gold as missing or mention it in the petition because he
expected to find who took the gold on the security system, Husband was not credible. The
Trial Court found that Husband was “responsible for this marital asset being gone and
missing,” and the evidence presented during trial does not preponderate against that
finding. We, therefore, find Husband’s argument in this regard to be without merit and
determine that the evidence presented supports the Trial Court’s findings that Husband had
control over the gold and the safe room where the gold was located and that Husband was
responsible for the gold being missing.

        We next address Husband’s final two issues regarding whether the Trial Court erred
by classifying the missing gold, which he alleges did not exist, as marital property and
awarding half of the value of the gold to Wife.3 Although Husband raises these as two
separate issues, we will address them together as they are interrelated. According to
Husband, the gold at issue was missing when the divorce case was initiated and therefore
did not exist to be classified as marital property subject to equitable distribution. Husband
relies on Flannary v. Flannary, 121 S.W.3d 647 (Tenn. 2003) to support his argument that
the Trial Court erred by treating the missing gold as marital property. Wife, however,
argues that the present case is distinguishable from Flannary.

       In Flannary, a husband withdrew $48,000 from the parties’ savings account in 1999
due to the Y2K scare and placed the money in a drawer in his home. Id. at 649. The
husband intended to re-deposit the money back into the account after January 1, 2000. Id.
However, the money was missing when he went to re-deposit it. Id. Both parties denied
taking the money. Id. Our Supreme Court held in Flannary as follows:

3
  Although Wife correctly states in her appellate brief that Husband did not challenge the classification of
the missing gold as a marital asset at trial, we note that during closing arguments, Husband’s counsel
questioned the Trial Court’s ability to determine how much gold existed at the time of the divorce and when
the gold went missing. As such, we will exercise our discretion and address Husband’s remaining issues
on appeal.
                                                   -8-
       Under the definition found at Tennessee Code Annotated section 36-4-
       121(b)(1)(A), the missing funds are not “marital property” that is subject to
       division. It is undisputed that the money was missing before Husband filed
       for divorce, and both parties testified that the money was not in their
       possession. Furthermore, the trial court concluded that anything could have
       happened to the money and stated that “neither one of [the parties] knows
       what happened to it.” Thus, it appears from the record that the property was
       not owned by either of the parties as of the date the complaint for divorce
       was filed. Accordingly, this property does not fit within the definition of
       “marital property” and should not have been divided as part of the marital
       estate. [Tenn. Code Ann. § 36-4-121(b)(1)(A) (2001)]; see also Brock [v.
       Brock], 941 S.W.2d [896,] 900 [(Tenn. Ct. App. 1996)] (stating that
       “property once owned by a spouse, either as separate property or marital
       property, but not owned by either spouse at the time of divorce, is not subject
       to classification and division or distribution when the divorce is
       pronounced”).

Flannary, 121 S.W.3d at 650.

        We determine this case to be distinguishable from Flannary. In Flannary, the trial
court found that the money was not in existence when the divorce action began. Id. The
trial court in Flannary further found that neither party knew what happened to the missing
money. Id. Because the missing money was not owned by either party at the time of the
divorce action, the Tennessee Supreme Court determined that the money was not marital
property and was not subject to division as part of the marital estate. Id.

       Conversely, the Trial Court in this case found that the missing gold existed, that it
was within Husband’s exclusive control, and that Husband was responsible for the gold
being missing. Although Husband claims on appeal that the missing gold did not exist, the
Trial Court found that it did exist. The only evidence to the contrary was Husband’s
testimony that the Trial Court found to be not credible.

       Husband argues in his appellate brief that the present case is similar to Flannary
because “[i]n both instances, something of value went missing with no explanation as to
where it went” and one spouse was awarded half the value of the missing items. However,
this argument mischaracterizes the Trial Court’s findings in the present case. The Trial
Court in this matter found that the gold existed and that Husband was responsible for the
gold being missing. As such, this case is not a situation where there is “no explanation as
to where [the gold] went” as Husband argues. Based on the foregoing, we find Husband’s
argument in this regard to be without merit and that the Trial Court did not err by
determining the missing gold was a marital asset subject to division as marital property.
Additionally, the Trial Court did not err by awarding to Wife one-half the value of the

                                            -9-
missing gold upon its determination that Husband was responsible for the gold’s
disappearance.

        We next consider the issue raised by Wife regarding whether Husband’s appeal is
frivolous. “‘A frivolous appeal is one that is ‘devoid of merit,’ or one in which there is
little prospect that [an appeal] can ever succeed.’” Morton v. Morton, 182 S.W.3d 821,
838 (Tenn. Ct. App. 2005) (quoting Industrial Dev. Bd. of the City of Tullahoma v.
Hancock, 901 S.W.2d 382, 385 (Tenn. Ct. App. 1995)) (other internal citations omitted).
In pertinent part, Tennessee Code Annotated § 27-1-122 (2017) addresses damages for
frivolous appeals stating:

      When it appears to any reviewing court that the appeal from any court of
      record was frivolous or taken solely for delay, the court may, either upon
      motion of a party or of its own motion, award just damages against the
      appellant, which may include, but need not be limited to, costs, interest on
      the judgment, and expenses incurred by the appellee as a result of the appeal.

       A successful party should not be forced to bear the costs and vexation of a baseless
appeal, nor should appellate courts be saddled with such appeals. See Henderson v. SAIA,
Inc., 318 S.W.3d 328, 342 (Tenn. 2010). However, the courts must take care not to
discourage legitimate appeals and should only impose a penalty pursuant to Tennessee
Code Annotated § 27-1-122 in rare and obvious cases of frivolity. Id. Whether to award
damages due to a frivolous appeal is a discretionary decision by the appellate court. Young
v. Barrow, 130 S.W.3d 59, 66-67 (Tenn. Ct. App. 2003). Based on the evidence presented
during trial and the Trial Court’s finding that Husband was not credible, we find that
Husband’s appeal had little prospect of success. We, therefore, hold that this appeal was
frivolous, and we award Wife her attorney’s fees on appeal. We remand this case to the
Trial Court for a determination of the appropriate amount of attorney’s fees.

                                       Conclusion

       The judgment of the Trial Court is affirmed in its entirety, and this cause is
remanded to the Trial Court for a determination of an appropriate award to Wife of her
attorney’s fees on appeal and for collection of the costs assessed below. The costs on
appeal are assessed against the appellant, Douglas D. Dailey, and his surety, if any.

                                         _________________________________
                                         D. MICHAEL SWINEY, CHIEF JUDGE

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