Ernest White Patton, III v. Linda Harvey Patton

Court of Appeals of Tennessee

Ernest White Patton, III v. Linda Harvey Patton

Court of Appeals of Tennessee·Decided July 3, 1996·No. 03A01-9601-CH-00001·Published

Opinion

I N THE COURT OF APPEALS OF TENNESSEE

EASTERN SECTI ON FILED July 3, 1996

Cecil Crowson, Jr. ERNEST W TE PATTON, I I I , HI ) C/ A NO. 03A01-Appellate C ourt Clerk 9601- CH- 00001 ) Pl a i nt i f f , ) HAM LTON CHANCERY I ) v. ) HON. R. VANN OWENS, ) CHANCELLOR LI NDA HARVEY PATTON, ) ) MODI FI ED AND De f e nda nt . ) REMANDED

ALBERT L. WATSON, I I I , Cha t t a nooga , f or Pl a i nt i f f - Appe l l a nt .

ARTHUR C. GRI SHAM J R. , GRI SHAM KNI GHT & HOOPER, Cha t t a noo g a , , , f o r De f e nda nt - Appe l l e e .

O P I N I O N

Fr a nks . J .

I n t hi s di vor c e a c t i on, t he hus ba nd a ppe a l s f r om t h e

Tr i a l Cour t ’ s de t e r mi na t i on of t he c l a s s i f i c a t i on of pr ope r t y

a s ma r i t a l pr ope r t y a nd t he di vi s i on of t he ma r i t a l e s t a t e .

The pa r t i e s we r e ma r r i e d i n 1984, a nd r e s i de d

t o g e t h e r f or a ppr oxi ma t e l y ni ne ye a r s . Pr i or t o t he i r

ma r r i a ge , t he hus ba nd ha d pur c ha s e d a hous e a nd l a nd a t 260 6

Cr e s c e nt Cl ub Dr i ve ( ?Cr e s c e nt Cl ub pr ope r t y?) , a nd t he wi f e h a d p ur c ha s e d 2. 5 a c r e s of uni mpr ove d l a nd on Sc e ni c Hi ghwa y

i n Ha mi l t on Count y. Ti t l e t o t he Cr e s c e nt Cl ub pr ope r t y i s

h e l d s ol e l y by t he hus ba nd, a nd t he t i t l e t o t he Sc e ni c

Hi gh wa y p r ope r t y i s t i t l e d s ol e l y t o t he wi f e . Howe ve r , t h e

Tr i a l J udge de c l a r e d bot h pr ope r t i e s t o be ma r i t a l pr ope r t y

a n d a wa r de d t he Sc e ni c Hi ghwa y pr ope r t y t o t he hus ba nd, a nd

t h e Cr e s c e nt Cl ub pr ope r t y t o t he wi f e . The Cour t di d not

p l a c e a va l ue on t he Cr e s c e nt Cl ub pr ope r t y, but c onc l ude d

t h e r e wa s a ppr oxi ma t e l y $74, 000. 00 i n e qui t y i n t ha t pr ope r t y ,

b u t h e di d f i nd t ha t t he Sc e ni c Hi ghwa y pr ope r t y wa s va l ue d a t

$ 3 0 , 0 00. 00.

W n t he hus ba nd pur c ha s e d t he Cr e s c e nt Cl ub he

p r o p e r t y he ma de a downpa yme nt of $73, 000. 00, a nd bor r owe d

$ 9 , 5 0 0. 00 f r om hi s s oon- t o- be wi f e , a nd ga ve he r a pr omi s s or y

n o t e i n r e t ur n, whi c h wa s a ppl i e d a s a n a ddi t i ona l downpa yme n t

o n t h e pr ope r t y, a s we l l . W n t he wi f e pur c ha s e d t he Sc e n i c he

Hi g h wa y pr ope r t y, whi c h wa s a l s o be f or e t he pa r t i e s ma r r i e d,

t h e h u s ba nd pa i d $10, 000. 00 t owa r d t he pur c ha s e of t ha t

p r o p e r t y.

Thi s c a s e i s be f or e us de nov o wi t h a pr e s umpt i on o f

c o r r e c t ne s s a s t o f a c t ua l i s s ue s . T. R. A. P. Rul e 13. The

e v i d e n c e e s t a bl i s he s t ha t t he hus ba nd, i n a ddi t i on t o ma ki n g

t h e d o wnpa yme nt on t he Cr e s c e nt Cl ub pr ope r t y, pa i d t he

mo n t h l y mor t ga ge pa yme nt s out of hi s moni e s , a nd t he

d o wn p a yme nt , wi t h t he e xc e pt i on of t he l oa n f r om t he wi f e ,

c a me f r om t he hus ba nd’ s i nhe r i t a nc e .

I n de f e ndi ng t he Tr i a l Cour t ’ s c l a s s i f i c a t i on of t h e

p r o p e r t y, t he wi f e a r gue s t ha t t he doc t r i ne of t r a ns mut a t i o n

i s a ppl i c a bl e he r e . W c a nnot a gr e e . e Bat s on v . Bat s on, 76 9

2 S. W 2 d 849 ( Te nn. App. 1988) i s i ns t r uc t i ve . . The Cour t f i r s t

o b s e r ve d:

Te nne s s e e i s a ?dua l pr ope r t y? j ur i s di c t i on be c a us e i t s d i vor c e s t a t ut e s dr a w a di s t i nc t i on be t we e n ma r i t a l a nd s e pa r a t e pr ope r t y. Si nc e Te nn. Code Ann. §36- 4- 121( a ) ( Supp. 1988) pr ovi de s onl y f or t h e di vi s i on o f ma r i t a l pr ope r t y, p r ope r c l a s s i f i c a t i on of a c oupl e ’ s pr ope r t y i s e s s e nt i a l . Se e 3 Fami l y Law and Pr ac t i c e §37. 08[ 1] ( 1988) . Thus , a s a f i r s t or de r of bus i n e s s , i t i s i nc umbe nt on t he t r i a l c our t t o c l a s s i f y t he pr ope r t y, t o gi ve e a c h pa r t y t he i r s e pa r a t e pr ope r t y, a nd t he n t o di vi de t he ma r i t a l pr ope r t y e qui t a bl y. Se e 2 h. Cl a r k, The Law of Dome s t i c Re l at i ons i n t he Uni t e d St at e s §16. 2, a t 183- 84 ( 2d e d. 1987) .

Te nn. Code Ann. §36- 4- 121( b) c ont a i ns t he gr ound r ul e s f or c l a s s i f yi ng pr ope r t y, a nd l i t t l e e l a bor a t i on i s ne e de d be yond t he s t a t ut e i t s e l f . Te nn. Code Ann. §36- 4- 121( b) ( 2) de f i ne s ?s e pa r a t e pr ope r t y? a s :

a l l r e a l a nd pe r s ona l pr ope r t y owne d by a s pous e be f or e ma r r i a ge ; pr ope r t y a c qui r e d i n e xc ha nge f or pr ope r t y a c qui r e d be f or e ma r r i a g e ; i nc ome f r om a nd a ppr e c i a t i on of pr ope r t y own e d by a s pous e be f or e ma r r i a ge e xc e pt whe n c ha r a c t e r i z e d a s ma r i t a l pr ope r t y unde r s ubdi vi s i on ( b) ( 1) ; a nd pr ope r t y a c qui r e d by a s pous e a t a ny t i me by gi f t , be que s t , de vi s e o r de s c e nt .

Thi s Cour t ha s c ons t r ue d t hi s s e c t i on t o me a n t ha t gi f t s by one s pous e t o a not he r of pr ope r t y t ha t woul d ot he r wi s e be c l a s s i f i e d a s ma r i t a l pr ope r t y a r e t he s e pa r a t e pr ope r t y of t he r e c i pi e nt s pous e . Thi s Cour t ha s a l s o f ound t ha t t he por t i on of a s pous e ’ s pe ns i on or ot he r r e t i r e me nt be ne f i t a t t r i but a bl e t o c r e di t a bl e s e r vi c e pr i or t o t he ma r r i a ge i s s e pa r a t e pr ope r t y.

Th e Co ur t t he n we nt a he a d t o di s c us s t he doc t r i ne of

t r a n s mut a t i on a nd s a i d:

[ s ] e pa r a t e pr ope r t y ma y be c ome pa r t of t he ma r i t a l es t at e i f i t s owne r t r e a t s i t a s i f i t we r e ma r i t a l pr ope r t y. Pr of e s s or Cl a r k de s c r i be s t he doc t r i ne o f t r a ns mut a t i on a s f ol l ows :

[ Tr a ns mut a t i on] oc c ur s whe n s e pa r a t e pr ope r t y i s t r e a t e d i n s uc h a wa y a s t o gi ve e vi de nc e of a n i nt e nt i on t ha t i t be c ome ma r i t a l pr ope r t y. One me t hod of c a us i ng t r a ns mut a t i on i s t o

3 pur c ha s e pr ope r t y wi t h s e pa r a t e f unds but t o t a ke t i t l e i n j oi nt t e na nc y. Thi s ma y a l s o b e done by pl a c i ng s e pa r a t e pr ope r t y i n t he na me s of bot h s pous e s . The r a t i ona l e unde r l yi ng bo t h t he s e doc t r i ne s i s t ha t de a l i ng wi t h pr ope r t y i n t he s e wa ys c r e a t e s a r e but t a bl e pr e s umpt i o n of a g i f t t o t he ma r i t a l e s t a t e . Thi s pr e s umpt i on i s ba s e d a l s o upon t he pr ovi s i on i n ma ny ma r i t a l pr ope r t y s t a t ut e s t ha t pr ope r t y a c qui r e d dur i ng t he ma r r i a ge i s pr e s ume d ma r i t a l . The pr e s umpt i on c a n be r e but t e d by e vi de nc e of c i r c ums t a nc e s or c ommuni c a t i ons c l e a r l y i ndi c a t i ng a n i nt e nt t ha t t he pr ope r t y r e ma i n s e pa r a t e .

1 H. Cl a r k, The Law of Dome s t i c Re l at i ons i n t he Uni t e d St at e s §16. 2, a t 185 ( 1987) .

Se ve r a l r e por t e d a nd unr e por t e d c a s e s ha ve di s c us s e d

a n d a ppl i e d t he doc t r i ne of t r a ns mut a t i on i n pr ope r t y

s e t t l e me nt s i t ua t i ons , b ut none i s a ppl i c a bl e t o t he f a c t s of

t hi s c a s e .

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