IN THE COURT OF APPEALS OF TENNESSEE FILED AT KNOXVILLE February 19, 1999
Cecil Crowson, Jr. Appellate C ourt Clerk JACK DAVIS, ) C/A NO. 03A01-9708-CH-00381 ) Plaintiff-Appellant,) ) ) ) v. ) APPEAL AS OF RIGHT FROM THE ) UNICOI COUNTY CHANCERY COURT ) ) ) ) CLANETTA B. DAVIS, ) ) HONORABLE THOMAS J. SEELEY, JR., Defendant-Appellee. ) JUDGE
For Appellant For Appellee
THOMAS C. JESSEE1 MARGARET B. FUGATE Jessee & Jessee Anderson, Fugate, Givens & Belisle Johnson City, Tennessee Johnson City, Tennessee
O P I N IO N
AFFIRMED AND REMANDED Susano, J.
1 Mr. Jessee did not represent Mr. Davis at trial.
1 This is a divorce case. The core issues on appeal
focus on the trial court’s classification and division of
property. The plaintiff, Jack Davis (“Husband”), appealed,
claiming that the trial court erred in classifying certain
property as marital property when the property should have been
classified as his separate property; that the trial court awarded
his wife, Clanetta Davis (“Wife”), a disproportionate share of
the marital property; and that the trial court failed to
adequately direct the work of the court-appointed special master.
Wife, for her part, argues that she is entitled to a larger share
of the marital property and that the trial court undervalued
certain marital assets to her disadvantage. As an additional
issue, she seeks attorney’s fees for a frivolous appeal.
I. General Overview
The trial court’s judgment dissolved a marriage of 33-
plus years. At the time of trial, Husband was 65 years of age.
Wife was 59. The trial court found that Husband had physical
problems “which would likely make it impossible [for him]...to
engage in gainful employment.” Wife was in relatively good
health “and should be able to work several more years.” She is a
school teacher by profession. The sole contested issue at trial
was the classification and division of the parties’ property.2
2 The parties stipulated to the existence of grounds for divorce pursuant to the provisions of T.C.A. § 36-4-129 (1996 Repl.). Neither party sought alimony. There were no issues pertaining to the parties’ two children, both of whom are adults.
2 II. Trial Court’s Judgment
This case was tried before Judge Thomas J. Seeley, Jr.
Judge Seeley filed an exhaustive, 34-page memorandum opinion, in
which he addressed each asset of the parties. He also examined
the division-of-property factors found at T.C.A. § 36-4-121(c)
with particular reference to the facts of this case. He
segregated the parties’ property into the separate property and
marital property categories; awarded the separate property to the
party to whom it belonged; and then divided the marital property
equally between the parties.
The final judgment, as subsequently modified by the
trial court, includes a detailed recapitulation schedule, which
is attached as an exhibit to this opinion. In summary, the trial
court awarded the parties’ property as follows:
Husband
Separate Property $ 686,917.07 50% of Marital Property 552,423.24
$1,239,340.31
Wife
Separate Property $ 26,761.00 50% of Marital Property 552,423.23
$ 579,184.23
The trial court was faced with a Herculean task in this
case of tracing assets, classifying property as separate or
marital, and attempting to unravel relatively complicated
financial transactions and dealings. Its task was made more
3 difficult by the machinations of Husband, as described by the
trial court in its excellent memorandum opinion:
The number of real properties involved (presently some 20 parcels) and the different manners in which title was acquired and exists (deed; inheritance; inter vivos gift; being held singly, jointly, in partnership and some in trust) make classification difficult. Jack Davis tried to retain certain properties and monies as his separate property. However, he commingled his separate funds with marital funds and used marital funds along with gifted funds to acquire some of the properties he now claims as his separate property. Further, Jack Davis attempted to secrete several hundred thousand dollars ($452,000) prior to his filing for divorce. He gave $200,000 to one friend in a plastic valise; he gave another $100,000 to a second friend in a paper sack; and placed $26,500 in his automobile’s spare tire well. He put $25,500 in a roll of carpet, which money disappeared. He claims to have done this because he was concerned that his son’s possible involvement with drugs would subject all Mr. Davis’ property to seizure by the government. The Court considers this statement to be disingenuous. On the contrary, Fred Steward, the friend to whom Jack Davis gave $100,000, testified that Mr. Davis asked him to keep the money because he “foresaw a divorce” with Ms. Davis. This is, the Court believes, the true reason Mr. Davis attempted to hide those monies. Mr. Davis established and moved monies in and out of some 42 different bank accounts between July 10, 1992, and December 31, 1995, in this continuing effort. The Court felt it necessary to appoint John Sanders, attorney in Johnson City, as a Special Master to take control of certain monies and to attempt to track the financial maneuvering of Jack Davis, which were so numerous and convoluted that Sanders requested the Court for authorization to hire an accountant for assistance. David Frizzell, C.P.A., was hired. Mr. Davis kept voluminous records and notes regarding his transactions; however, even relying solely on his word as to how some monies were spent during the referenced three and one-half year period, including the disappearance of the $25,500, Jack Davis still cannot account for over $83,000. The total amount for which Mr. Davis has no
4 documentation was $183,285.23. Mr. Davis’ actions in trying to secrete his holdings and his financial (banking) manipulations have frustrated the Court’s duty to classify properties as separate or marital and then equitably divide the parties’ marital assets.
III. Standard of Review
Our review of this non-jury case is de novo
upon the record with a presumption of correctness as to the trial
court’s factual findings, unless the “preponderance of the
evidence is otherwise.” Rule 13(d), T.R.A.P.; Wright v. City of
Knoxville, 898 S.W.2d 177, 181 (Tenn. 1995); Union Carbide v.
Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993); Catlett v. Chinery,
952 S.W.2d 433, 434 (Tenn.App. 1997). The trial court’s
conclusions of law are not accorded the same deference. Campbell
v. Florida Steel Corp., 919 S.W.2d 26, 35 (Tenn. 1996); Presley
v. Bennett, 860 S.W.2d 857, 859 (Tenn. 1993). Our review is
tempered by the well-established principle that the trial court
is in the best position to assess the credibility of the
witnesses; accordingly, such determinations are entitled to great
weight on appeal. Massengale v. Massengale, 915 S.W.2d 818, 819
(Tenn.App. 1995); Bowman v. Bowman, 836 S.W.2d 563, 567
(Tenn.App. 1991).
IV. Applicable Law
The legal principles that control the division of
property in a divorce case are well-stated by the Middle Section
5 of this Court in the case of Batson v. Batson, 769 S.W.2d 849
(Tenn.App. 1988):
Tennessee is a “dual property” jurisdiction because its divorce statutes draw a distinction between marital and separate property. Since Tenn.Code Ann. § 36-4- 121(a)(Supp. 1988) provides only for the division of marital property, proper classification of a couple’s property is essential. See 3 Family Law and Practice § 37.08[1](1988). Thus, as a first order of business, it is incumbent on the trial court to classify the property, to give each party their separate property, and then to divide the marital property equitably. See 2 H. Clark, The Law of Domestic Relations in the United States § 16.2, at 183-84 (2d ed. 1987).
Tenn.Code Ann. § 36-4-121(b) contains the ground rules for classifying property, and little elaboration is needed beyond the statute itself.
* * *
In accordance with this statute, marital property includes the increase in value of separate property “if each party substantially contributed to its preservation and appreciation.” Ellis v. Ellis, 748 S.W.2d 424, 426-27 (Tenn. 1988); Crews v. Crews, 743 S.W.2d 182, 189 (Tenn.Ct.App. 1987).
Id. at 856.
Tenn.Code Ann. § 36-4-121(a) provides that marital property should be divided equitably without regard to fault. It gives a trial court wide discretion in adjusting and adjudicating the parties’ rights and interests in all jointly owned property. Fisher v. Fisher, 648 S.W.2d 244, 246 (Tenn. 1983). Accordingly, a trial court’s division of the marital estate is entitled to great weight on appeal, Edwards v. Edwards, 501 S.W.2d 283, 288 (Tenn.Ct.App. 1973), and should be presumed to be proper unless the
6 evidence preponderates otherwise. Lancaster v. Lancaster, 671 S.W.2d 501, 502 (Tenn.Ct.App. 1984); Hardin v. Hardin, 689 S.W.2d 152, 154 (Tenn.Ct.App. 1983).
A trial court’s division of marital property is to be guided by the factors contained in Tenn.Code Ann. § 36-4-121(c).
Id. at 859. We will now apply these principles to the facts of
this case.
V. Husband’s Issues
A. Unicoi County Farm
The parties were married on June 22, 1962. In October,
1977, the parties moved from Bristol to a farm in Unicoi County.
As the trial court noted, this property “was acquired by
[Husband] from [his] family members in 1968 through a combination
of deeds, litigation and inheritance.” The property was titled
solely in Husband’s name. Over the years, the property was
improved. When the parties first moved to the farm, they lived
in a “‘shack’ with no indoor plumbing” while their new residence
was being built.
Husband contends that only $80,000 of the value of the
farm found by the trial court, i.e., $225,000, should have been
designated as marital property. He argues that the trial court
should have classified $145,000 of the farm’s value as separate
property rather than the $35,000 found by the trial court. He
takes this position because, in the words of his brief, “the farm
was inherited by [him] to begin with.” He concedes that Wife is
7 entitled to share in that portion of the value of the farm
related to improvements to the property “acquired by monies
earned during the marriage.” However, he claims that the bulk of
the appreciation in value of the property should be classified as
Husband’s separate property because, so the argument goes, Wife
did not substantially contribute to the preservation and
appreciation of the underlying separate property component of the
total value. In other words, Husband urges us to find that the
only marital component of the property’s value is composed of the
additions to its value occasioned by the infusions of marital
income during the marriage and the increase in value of those
additions. He pegs this number at $80,000.
The trial court found that as of 1968 -- when the
property was originally acquired by Husband from his family --
the underlying separate property interest in the farm was
properly valued at $35,000. The evidence does not preponderate
against this finding. In fact, Husband testified that he paid
only $22,500 when he acquired the entire interest in 1968. While
one of the appraisers assessed the value of the farm in 1968 at
$52,500, both of the experts who testified regarding its value
“stated that any appraisal of its value in 1968 would be highly
speculative.”
The trial court found that Wife “substantially
contributed to [the farm’s] preservation and appreciation.” See
T.C.A. § 36-4-121(b)(1)(B). The court noted as follows:
Thus, the total property appreciated $190,000 over the years since 1968. Certainly a good
8 part of that appreciation would be simply from inflation. However, without proper maintenance and improvement, the farm would not have increased nearly so much. Both parties contributed to such improvements and maintenance. The only substantial farm activity conducted by either party was Ms. Davis’ cattle raising. The grazing of cattle contributes to the maintenance of the farm and its appreciation in value. Ms. Davis also did some plowing; did the gardening; helped put up hay and did fencing. According to both Mr. Davis and a neighbor, Lloyd Garland, Ms. Davis was a “hard worker.” Clanetta Davis has made substantial contribution to the preservation and appreciation of the farm.
The evidence does not preponderate against the trial
court’s finding that all of the increase in value beyond the
initial separate property interest of $35,000 is marital
property.
B. Bristol Property
The trial court concluded that property in Bristol
worth $170,000 was properly classified as marital property.
Husband takes the position that a portion of this property --
valued at $46,000 -- should be classified as separate property
because the property “was purchased by [Husband] solely from
monies given him by his uncle.” He claims that this $46,000
increment is his separate property because it was “acquired...by
gift, bequest, devise or descent.” See T.C.A. § 36-4-
121(b)(2)(D).
The trial court considered Husband’s contention with
respect to the Bristol property but found that there was
“insufficient proof to substantiate” his testimony that his uncle
9 paid for a portion of this property. This dispute presented an
issue of credibility to be resolved by the trial court. It
resolved that issue against Husband. There is nothing in the
record that is so compelling as to persuade us to ignore the
trial court’s credibility determination. This being the case, we
cannot say that the evidence preponderates against the trial
court’s determination that the Bristol property is entirely
marital property.
C. Life Insurance Cash Value
The trial court found that Husband’s life insurance
policy, which had a cash value of $14,000, is a marital asset.
Husband claims that the policy was purchased ten years prior to
the parties’ marriage and that $3,050 of the value of this asset
at the time of the divorce should be classified as separate
property. This argument is said to be based on “[Husband’s]
testimony”; however, the brief does not cite us to the page of
the record where such testimony can be found. Suffice it to say
that the record does not support Husband’s position. The
evidence does not preponderate against the trial court’s
classification of the entire cash value of the life insurance as
D. Miscellaneous Cash Funds
The trial court found that the parties owned five bank
accounts, the total value of which amounted to $13,740.63. While
these accounts were all in Husband’s name, the trial court
concluded that they were marital property because of
10 “commingling.” These accounts are reflected in a report from
David Frizzell, the C.P.A. who was hired by the special master.
Husband objects to the trial court’s finding that these
bank accounts were a part of the marital estate because,
according to Husband’s brief, they “did not exist at the time of
trial.” The record does not support Husband’s contention. In
view of Mr. Frizzell’s report, we cannot say that the evidence
preponderates against the trial court’s determination with
respect to these miscellaneous bank accounts.
E. Special Master’s Report
Husband contends that the trial court erred in allowing
the special master “to file a report which did not encompass
periods after 1993.” Even if this was error -- and we do not
concede that it was -- it did not affect the outcome of this
trial. The trial court had a full hearing in this matter. That
hearing extended over four days and generated ten volumes of
testimony and 98 exhibits. There is nothing in the record that
even remotely suggests that the trial court refused to receive
any relevant evidence. On the contrary, the trial court heard
some 19 witnesses, and it is obvious that the parties were
afforded an opportunity to fully present their respective
positions. If Husband thought that the special master’s report
was incomplete, he could have supplemented it by presenting
relevant evidence during the four-day trial.
11 There is no reversible error pertaining to the report
of the special master. See Rule 36(b), T.R.A.P.3
VI. Division of Marital Property
Both of the parties contend that the trial court’s
division of property is not equitable. Husband suggests a
different division. His suggestion is based partially on his
position that the court erred in classifying certain assets as
marital rather than as his separate property. We have previously
held that the trial court’s classifications are not in error.
Hence, to the extent that Husband’s proposal is based on these
classifications, it is rejected. To the extent his proposal
simply suggests a different division of what the trial court
found to be marital assets, we do not agree that it is
appropriate to modify the division decreed by the trial court. A
trial court has wide discretion in dividing marital property.
Watters v. Watters, 959 S.W.2d 585, 590 (Tenn.App. 1997).
Wife, on the other hand, contends that the trial court
erred in selecting certain values which -- while testified to by
one of the experts -- were to her disadvantage. She also
contends that the trial court, when it divided the parties’
marital property, should have considered the fact that Husband
dissipated marital assets.
3 Rule 36(b), T.R.A.P., provides as follows:
A final judgment from which relief is available and otherwise appropriate shall not be set aside unless, considering the whole record, error involving a substantial right more probably than not affected the judgment...
12 The trial court’s findings as to the value of the
various assets are within the range of the “value” testimony
presented at trial. See Watters, 959 S.W.2d at 589. In this
case, we find no error in the trial court’s determinations, i.e.,
the evidence does not preponderate against these findings.
As to the trial court’s overall division of property,
we do not find that the evidence preponderates against the trial
court’s findings.
13 VII. Frivolous Appeal Claim
Wife claims that Husband’s appeal is frivolous. She
seeks damages pursuant to the provisions of T.C.A. § 27-1-122.4
We do not find that Husband’s appeal is frivolous. This issue is
found adverse to Wife.
VIII. Conclusion
The judgment of the trial court is affirmed with costs
on appeal being taxed against the appellant. This case is
remanded for enforcement of the trial court’s judgment and
collection of costs assessed below, all pursuant to applicable
law.
__________________________ Charles D. Susano, Jr., J.
CONCUR:
______________________ Herschel P. Franks, J.
_______________________ William H. Inman, Sr.J.
4 T.C.A. § 27-1-122 provides as follows:
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.