Granoff v. Granoff, E2015-00605-COA-R3-CV

Decision Date16 March 2016
Docket NumberNo. E2015-00605-COA-R3-CV,E2015-00605-COA-R3-CV
PartiesELIZABETH ANN MORROW GRANOFF v. ANDREW SCOTT GRANOFF
CourtCourt of Appeals of Tennessee

Appeal from the Circuit Court for Jefferson County

No. 19472-II

Hon. Richard Vance, Judge

This second appeal of this post-divorce case concerns the husband's continued occupation of the marital residence. Upon remand, the trial court imposed a rental obligation upon the husband and established a reserve price for the auction sale of the residence. We modify the court's decision to reflect an imposition of rent that conforms to the marital dissolution agreement. We affirm the decision in all other respects.

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

JOHN. W. MCCLARTY, J., delivered the opinion of the Court, in which D. MICHAEL SWINEY, C.J. and THOMAS R. FRIERSON, II, J., joined.

William A. Mynatt, Jr., Knoxville, Tennessee, for the appellant, Andrew Scott Granoff.

James R. Scroggins, Jefferson City, Tennessee, for the appellee, Elizabeth Ann Morrow Granoff.

OPINION
I. BACKGROUND

Elizabeth Ann Morrow Granoff ("Wife") and Andrew Scott Granoff ("Husband") were divorced by order of the court on May 16, 2006. In their 21 years of marriage, Husband and Wife (collectively "the Parties") amassed significant assets, including their marital residence ("the Property"), a luxury estate situated on 26 acres with an approximately 9,000 square foot home, a guest house, a swimming pool, and tennis courts. As pertinent to this appeal, the Parties' marital dissolution agreement ("MDA"), incorporated into the final judgment of divorce, provided as follows:

REAL PROPERTY: The parties own a residence and land located at 390 Highway 113, White Pine, Tennessee 37980, as tenants by the entireties. The land shall be immediately placed for sale. Wife shall be given a Trust Deed to secure an interest in the property of $460,000.00 or 30% of the proceeds, whichever is higher. If the house and land are not sold within four years of the date of the entry of the Final Judgment of Divorce, Husband shall have an additional two years to sell the property but shall begin paying a monthly payment to [W]ife equal to a monthly portion of the prime interest rate on the $460,000.00, should Husband fail to make a payment as required, Wife shall have the right to demand an immediate auction subject to the same conditions set forth herein regarding an auction of the property. If the house has not sold in six years from the date of entry of the divorce it shall be auctioned by a reputable auction company with a mutually agreeable reserve. At the time of any nonauction sale, after the payment of any expenses of said sale, the Wife shall receive (30%) of the net proceeds or $460,000.00, whichever is greater. Should the property require an auction, the parties shall divide the proceeds of the auction, after the payment of the expenses of the sale evenly between them. Until such time as the property is sold, Husband shall have the right to reside in the marital residence and shall be responsible for the reasonable maintenance and upkeep as well as the property tax and insurance. The Husband may decide to auction the home at any time with a reputable auction [company] and a mutually agreeable reserve.

When Husband's efforts to sell the Property proved unsuccessful, the parties announced an agreement whereby Wife was permitted to market and sell the Property. The agreement was memorialized in a written order on September 6, 2011. The order provided, in pertinent part, as follows:

1. [Wife] shall assume the right to list, market, show and sell [the Property]. [Husband] shall continue to occupy the residence and he shall cooperate fully with [Wife] with regard to showing the premises and marketing the premises for sale. [Wife] shall have full access to come upon the [P]roperty, to show the [P]roperty, inspect the [P]roperty, and otherwise participate in the usual and customary acts associated with sale.
2. In the event that [the Property] does not sell pursuant to the listing of said property on or before August 1, 2009, [Wife] shall select a date during the month of October 2009 for the [P]roperty to be sold at auction with an auctioneering firm to be agreed between the attorneys of the parties. [Husband] shall comply with previous orders relative to upkeep,maintenance, payment of real estate taxes and maintaining sufficient insurance with regard to the [P]roperty.
3. [Wife] shall assume responsibility for attempting to secure a one (1) year loan with monthly interest only and principal being payable on the anniversary date of the loan in an amount up to sixty thousand dollars ($60,000.00) with the loan proceeds utilized to satisfy past-due taxes, penalty and interest, and the expense of insurance premium for [the Property]. [Husband] shall cooperate fully with [Wife] in her attempts to secure the loan and he shall sign notes, instruments, or other documents necessary and associated with applications and the securing of the loan. The funds borrowed shall be repaid from funds of [Husband] upon sale of [the Property]. He shall continue to be responsible for all of the expenses associated with taxes, maintenance, insurance and upkeep of the marital residence that he occupies pending sale.

Despite the significant passage of time and the provision providing for an auction, the Property was never offered at auction because the Parties could not agree on a reserve price. In August 2013, Wife secured an offer for the sale of the Property at a price of $925,000. She filed a motion to approve the sale at that price. Husband opposed the sale and questioned her authority to convey the Property without his approval. The trial court approved the sale and affirmed Wife's authority to convey the property without Husband's approval. A panel of this court affirmed the trial court's order, despite the fact that the purchase and sale contract had expired and had not been renewed by the potential purchasers. Granoff v. Granoff, No. E2013-02598-COA-R3CV, 2014 WL 4792652, at *6-15 (Tenn. Ct. App. Sept. 26, 2014) ("Granoff I").

Upon remand, the trial court considered Wife's post-judgment motion to impose a monthly rental obligation of $10,000 per month for Husband's continued occupancy of the Property. Wife later filed a motion to order the sale of the Property at auction with a reserve price established by the trial court. In support of her motion, she alleged that the recent proceedings, as recounted in Granoff I, indicated that she and Husband could not establish a mutually agreeable reserve price. She provided her preferred reserve price under seal and requested that Husband also propose a reserve price for the court's consideration. Husband obliged and provided his proposal under seal. We will not recount the specific reserve price suggested by either party in an effort to protect the future marketability of the Property. We do note that Husband's reserve price exceeded $925,000, while Wife's price was below $925,000.

Following a hearing on the pending motions, the court adopted Wife's reserve price, appointed two auctioneers, ordered the auction sale of the Property "at the earliestreasonable time," and imposed a rental obligation on Husband in the amount of $6,000 per month. Husband filed a motion to alter or amend, requesting a reduction in his monthly rental obligation and questioning the court's authority to impose a rental obligation beyond that provided for in the MDA. A hearing was held during which Wife recounted her financial difficulties as a result of Husband's refusal to cooperate with the sale of the Property. The court granted the motion to alter or amend, in part, by reducing the rental obligation to $3,000 per month. This timely appeal followed.

II. ISSUES

We consolidate and restate the issues raised on appeal by Husband as follows:

A. Whether the trial court erred in setting the monthly rental obligation.
B. Whether the trial court erred in setting the reserve price for the auction sale of the Property.

Wife presented an issue for our consideration on appeal that we restate as follows:

C. Whether Wife may approve the auction sale of the Property without court approval in the event that the highest bid is less than the reserve price set by the trial court.
III. STANDARD OF REVIEW

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); Bogan v. Bogan, 60 S.W.3d 721, 727 (Tenn. 2001). We review questions of law de novo with no presumption of correctness. Whaley v. Perkins, 197 S.W.3d 665, 670 (Tenn. 2006).

In Tennessee, a marital dissolution agreement incorporated into a final decree of divorce "is a contract which is binding on the parties and as such it is 'subject to the rules governing construction of contracts.'" Johnson v. Johnson, 37 S.W.3d 892, 896 (Tenn. 2001); Honeycutt v. Honeycutt, 152 S.W.3d 556, 561 (Tenn. Ct. App. 2003). "[T]he interpretation of a contract is a matter of law." Honeycutt, 152 S.W.3d at 561. Decisions regarding the value of marital property are questions of fact. Kinard v. Kinard, 986 S.W.2d 220, 231 (Tenn. Ct. App. 1998).

IV. DISCUSSION
A.

Husband argues that the trial court's imposition of a monthly rental obligation was an impermissible modification of the MDA. In the alternative, he claims that the court imposed an obligation he cannot meet given his monthly income and expenses. Wife responds that review of this issue is waived because Husband did not object to the court's authority to impose a rental obligation. In the alternative, she claims that the court did not err in setting the rental obligation.

Our review confirms that this issue is not waived because Husband objected to the court's authority to impose a rental obligation beyond that provided for in the MDA. In Husband's motion to alter or amend, he argued, in...

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