Harper v. Harper

Decision Date24 October 2018
Docket NumberNo. W2017-02193-COA-R3-CV,W2017-02193-COA-R3-CV
PartiesRONALD DANA HARPER v. ANNETTE CARROL HARPER
CourtTennessee Court of Appeals

Appeal from the Chancery Court for Madison County

No. 73947

James F. Butler, Chancellor

This is a divorce case. Husband appeals the trial court's classification of three tracts of land as Wife's separate property and its valuation of Husband's bank account. Discerning no error, we affirm and remand.

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

KENNY ARMSTRONG, J., delivered the opinion of the court, in which J. STEVEN STAFFORD, P.J., W.S., and ARNOLD B. GOLDIN, J., joined.

C. Timothy Crocker, Michael A. Carter, and Ryan L. Hall, Milan, Tennessee, for the appellant, Ronald Dana Harper.

Andrea D. Sipes, Jackson, Tennessee, for the appellee, Annette Carrol Harper.

OPINION
I. Background

Appellant Ronald Dana Harper ("Husband") and Appellee Annette Carrol Harper ("Wife") were married on May 14, 2011. This was Wife's second marriage and Husband's fourth marriage. The parties separated in January 2016, and Husband filed for divorce on January 27, 2016. On March 31, 2016, Wife filed an answer and counter-complaint for divorce. The parties stipulated to divorce under Tennessee Code Annotated section 36-4-129 and further agreed to the division of the majority of the marital property. However, as to three tracts of real property, the parties could not reach an agreement. The tracts include one 69.5 acre property ("Farmhouse"), which was used as the parties' marital residence for part of the marriage. The second tract is approximately 291 acres, and the third tract is approximately 81 acres. Wife owned all three tracts prior to the marriage, and all of the tracts were unencumbered at the time of marriage. She testified that she acquired the 69.5 acre tract from her father prior to his death and inherited the other two tracts from her father's estate. According to Wife, these tracts have been in her family for more than 150 years.

In December 2011, Wife signed quit claim deeds on the three tracts creating tenancies by the entirety with Husband. Wife testified that she never wanted to transfer any interest in the tracts to Husband; however, Wife alleged that Husband harassed and berated her daily and threatened to leave her if she did not execute the deeds. Wife testified that the daily arguments over the properties escalated until she finally gave in to Husband's demand that she put the properties in both their names. Wife further testified that after she signed the quit claim deeds, Husband's treatment of her worsened. Husband denied ever asking Wife to transfer her property to him.

The case was heard on May 11, 2017. At trial, Husband argued that the three tracts were marital property and requested that the trial court allocate the 291 acre tract of land to him. On August 10, 2017, the trial court issued a letter ruling, which was incorporated into the final decree of divorce entered on October 23, 2017. The trial court held that the three tracts of land were Wife's separate property and awarded them to her. Husband appeals.

II. Issues

Husband raises two issues for review as stated in his brief:

1. The trial court erred by classifying three tracts of real property in Madison County as Wife's separate property rather than marital property.
2. The trial court erred by over-valuing Husband's bank account.
III. Standard of Review

We review a non-jury case de novo upon the record, with a presumption of correctness as to the findings of fact unless the preponderance of the evidence is otherwise. See Tenn. R. App. P. 13(d); Kaplan v. Bugalla, 188 S.W.3d 632, 635 (Tenn. 2006). However, we accord no presumption of correctness to the trial court's conclusions of law. Snodgrass 295 S.W.3d at 245-46 (Tenn. 2009); Luplow v. Luplow, 450 S.W.3d 105, 109 (Tenn. Ct. App. 2014).

The trial court found Wife to be more credible than Husband regarding certain issues. The weight, faith, and credit to be given to any witness's testimony lies in the first instance with the trier of fact. The credibility accorded will be given great weight by the appellate court. In re Navada N., 498 S.W.3d 579, 591 (Tenn. Ct. App. 2016); Manning v. Manning, 474 S.W.3d 252, 262 (Tenn. Ct. App. 2015); Audio Visual Artistry v. Tanzer, 403 S.W.3d 789, 810 (Tenn. Ct. App. 2012).

IV. Analysis
A. Transmutation

In making a division of property, the trial court must first classify the property as either separate or marital property. Tenn. Code Ann. § 36-4-121(b); Kinard v. Kinard, 986 S.W.2d 220, 230 (Tenn. Ct. App. 1998). The classification of particular property as either separate or marital is a question of fact to be determined in light of all relevant circumstances. Snodgrass v. Snodgrass, 295 S.W.3d 240, 245 (Tenn. 2009); See Langford v. Langford, 220 Tenn. 600, 421 S.W.2d 632, 634 (1967); Cutsinger v. Cutsinger, 917 S.W.2d 238, 241 (Tenn. Ct. App. 1995). This Court gives great weight to a trial court's decision regarding the division of marital assets, and we will not disturb the trial court's ruling unless the distribution lacks proper evidentiary support, misapplies statutory requirements or procedures, or results in some error of law. Keyt v. Keyt, 244 S.W.3d 321, 327 (Tenn. 2007). This distinction is important because Tennessee Code Annotated section 36-4-121(a) provides for the distribution of marital property only. Tenn. Code Ann. §36-4-121(a); Larsen-Ball v. Ball, 301 S.W.3d 228, 231 (Tenn. 2010).

Separate property is defined in part as "all real and personal property owned by a spouse before marriage, including, but not limited to property acquired by a spouse at any time by gift, bequest, devise or descent." Tenn. Code Ann. §36-4-121(b)(2). The classification of property does not depend on the state of its record title but on the conduct of the parties. Altman v. Altman, 181 S.W.3d 676, 680-81 (Tenn. Ct. App. 2005); Mondelli v. Howard, 780 S.W.2d 769, 774 (Tenn. Ct. App. 1989). "[S]eparate property can become part of the marital estate due to the parties' treatment of the separate property." Eldridge v. Eldridge, 137 S.W.3d 1, 13 (Tenn. Ct. App. 2002). Separate property may be deemed marital by operation of law under theories of commingling or transmutation. Snodgrass, 295 S.W.3d at 247 (citing Langschmidt v. Langschmidt, 81 S.W.3d 741, 747 (Tenn. 2002)); Eldridge, 137 S.W.3d at 13. This Court addressed the related doctrines of commingling and transmutation for the first time in Langschmidt and adopted the following explanation:

[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.

81 S.W.3d at 747 (quoting 2 Homer H. Clark, The Law of Domestic Relations in the United States § 16.2 at 185 (2d ed. 1987)).

Here, Husband argues that the trial court incorrectly classified the three tracts of real property as Wife's separate property. He contends that the property became marital property, subject to equitable division, under the doctrine of transmutation. Four of the most common factors courts use to determine whether real property has been transmuted from separate property to marital property are: (1) the use of the property as a marital residence; (2) the ongoing maintenance and management of the property by both parties; (3) placing the title to the property in joint ownership; and (4) using the credit of the non-owner spouse to improve the property. Treadwell v. Lamb, No. M2015-01391-COA-R3-CV, 2017 WL 945940, at *7 (Tenn. Ct. App. Jan. 19, 2017); Liner v. Liner, No. M2010-00582-COA-R3-CV, 2011 WL 1420883, at *2-3 (Tenn. Ct. App. Apr. 13, 2011); Fox v. Fox, No. M2004-02616-COA-R3-CV, 2006 WL 2535407, at *5 (Tenn. Ct. App. Sept. 1, 2006). Relying on these factors, Husband argues that the disputed tracts are marital property. Specifically, he contends that: (1) the parties lived together on the farmhouse tract during part of the marriage; (2) he bush-hogged the land and maintained the properties and also assisted in the renovation of the farmhouse; (3) in 2011, Wife executed quit claim deeds on all three tracts creating tenancies by the entirety; and (4) he obtained a home equity line of credit secured by all three tracts. Husband further argues that the parties used $50,000 to renovate the farmhouse. These funds, however, originated from the sale of a fourth piece of property, known as the Medina property, which Wife owned before the marriage and transferred to Wife and Husband as tenants by the entirety after the marriage.

In response to Husband's argument, Wife avers that Husband did not maintain the 291 acre tract of land after the parties were married. Instead, Wife insists that the farmers, who have leased the land since before she inherited it, were responsible for the bush-hogging and maintaining the property. Wife maintains that the farmers were responsible for the maintenance of the other tracts as well, and that Husband did not do the bush-hogging he described. As to the renovations on the farmhouse, Wife testified that the money for the renovations came from the sale of the Medina property, which she purchased prior to the marriage with funds she received as...

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