Martin v. Coleman

• Decision Date: 16 May 2000
• Citation: 19 S.W.3d 757
• Parties: Lisa MARTIN, Administratrix of the Estate of Delores J. Coleman v. Robert C. COLEMAN.
• Court: Tennessee Supreme Court

19 S.W.3d 757

Lisa MARTIN, Administratrix of the Estate of Delores J. Coleman v. Robert C. COLEMAN.

Supreme Court of Tennessee, at Knoxville.

May 16, 2000.

David R. Swafford, Pikeville, TN, for appellant, Robert C. Coleman.

Proctor Upchurch, Crossville, TN, for appellee, Delores J. Coleman.

OPINION

HOLDER, J., delivered the opinion of the court, in which ANDERSON, C.J., and DROWOTA, BIRCH, and BARKER, JJ., joined.

We granted this appeal to determine whether an implied partnership may be imposed upon the retirement benefits of one party to a relationship in which unmarried parties held themselves out as husband and wife. We hold that the lower courts erred in dividing the retirement benefits as property of an implied partnership.¹

Robert and Delores Coleman began a relationship that resulted in the birth of a daughter, Lisa, in 1966. After Mr. Coleman obtained a divorce from Evelyn Coleman in 1968, Robert and Delores Coleman were married. On January 27, 1978, Delores Coleman was granted a divorce from Robert Coleman. Shortly thereafter, however, Robert and Delores Coleman reunited. They never remarried, but they continued to live together for sixteen years.

Delores Coleman did not work outside the home. Robert Coleman, an engineer, was the family's sole provider. Mr. Coleman was employed by a manufacturing company that was later purchased by Johnson Controls. Mr. Coleman retired in 1991. Mr. Coleman had a pension plan and a 401(k) plan through his employer. Delores Coleman made no direct financial contribution to either of these retirement accounts.

During their sixteen-year relationship subsequent to their divorce, the parties held themselves out to the public as husband and wife. They filed joint tax returns, maintained health insurance as husband and wife, and conducted their affairs as though they were married. They jointly acquired assets and had reciprocal wills prepared referring to each other as "husband" and "wife." The parties both testified that they were aware that they were not married.

In 1992 Robert Coleman purchased a used car business. The couple's jointly-titled house was used as collateral to finance the purchase. Delores Coleman testified that she believed she and Mr. Coleman were partners in the business. Mr. Coleman testified that he intended to develop the business into a successful enterprise and to turn it over to the Colemans' daughter. The only work performed by Delores Coleman in the used car business occurred during one two-day period. She was not authorized to write checks on the business account and did not otherwise participate in the business. Near the time of their separation in 1994, Mr. Coleman financed the purchase of the lot on which the car business was located. The purchase was made in his name only although Delores Coleman signed the loan documents.

When the couple separated in 1994, Robert Coleman filed suit in Cumberland County circuit court seeking to have the couple's jointly-held accounts and home conveyed to him in his name. In the alternative, he sought to have the property partitioned. Ms. Coleman filed a complaint for divorce, alleging a marriage by estoppel and seeking a division of the parties' marital assets. The two actions were consolidated for trial.

The trial court held that "equity ought to require this relationship to be considered marriage by estoppel" but acknowledged that such a finding would be contrary to case law. Instead, the court found that an implied partnership existed between the parties for the duration of the Colemans' cohabitation and held that Mr. Coleman was estopped from denying that a partnership extended to "all of the assets." As a partnership, the parties' assets would be divided equally, regardless of the source of monetary contribution. The trial court further held that there was ample testimony to establish a business relationship between the parties. The trial court dissolved the partnership as of June 20, 1997, and stated:

With reference to the pension or retirement benefits, the record is clear that these benefits were accumulated during the period of the parties' implied partnership and during the period when, as a matter of equity, the defendant is estopped to deny plaintiff's partnership rights in the retirement benefits and/or pension. Plaintiff indirectly contributed to the retirement and/or pension with Johnson Control by providing all of those amenities and benefits customarily provided by a wife, although she made no direct monetary contribution to those funds. It is the ruling of the court that equity demands that Mrs. Delores J. Coleman be and she is hereby granted Fifty Percent (50%) ownership in the pension and/or retirement benefits due Robert L. Coleman as a result of his employment with Johnson Control.

The final order of the trial court did not list the valuations of all the property divided by the court.² The court stated at the conclusion of the trial that its intention was to divide the assets equally.

In the Court of Appeals, Mr. Coleman conceded his acceptance of the trial court's identification and valuation of the partnership assets and the adjustments made by the trial court, with the exception of the inclusion of his pension and 401(k).³ The Court of Appeals affirmed the trial court's holding that an implied partnership existed and that Ms. Coleman was entitled to a portion of Mr. Coleman's retirement benefits. The court remanded the case, however, finding that the record was unclear as to the amount of retirement benefits that accrued while the parties were living together.⁴

ANALYSIS

For purposes of this appeal, Mr. Coleman concedes that the used car business was implied partnership property. He objects only to the lower courts' inclusion of his retirement benefits in the division of "partnership" assets. Since this case was tried by the court sitting without a jury, we review the case de novo upon the record with a presumption of correctness of the findings of fact by the trial court. Unless the evidence preponderates against the findings, we must affirm absent an error of law. Tenn.R.App.P. 13(d).

In Tennessee, marriage is controlled by statute, and common-law marriages are not recognized. Crawford v. Crawford, 198 Tenn. 9,14, 277 S.W.2d 389, 391 (Tenn.1955); Rambeau v. Farris, 186 Tenn. 503, 506, 212 S.W.2d 359, 360 (1948); Bass v. Bass, 774 S.W.2d 170 (Tenn.Ct.App.1987). Our courts have recognized marriage by estoppel when parties have believed in the validity of their marriage and have evidenced that belief by cohabitation. Rambeau, 212 S.W.2d at 361. The doctrine of marriage by estoppel is applied in exceptional cases. It does not apply in cases where the parties knowingly live together in an unmarried state and are privileged to discontinue that relationship at will. Crawford, 277 S.W.2d at 392. It was uncontroverted that both Delores and Robert Coleman knew they were not married. The trial court correctly held that it could not find a marriage by estoppel. Stating that equity must be served, however, the trial court used the doctrine of implied partnership to divide all of the property acquired during the relationship.

In Bass v. Bass, 814 S.W.2d 38, 41 (Tenn.1991), we defined a partnership as an association of two or more persons to carry on as co-owners a business for profit. See Rowlett v. Guthrie, 867 S.W.2d 732, 735-36 (Tenn.Ct.App.1993) (declining to find an implied partnership extending to parties who cohabited in a home owned by one party and out of which the other party operated a barbeque business); Johnson v. Graves, 15 Tenn.App. 466 (1932) (finding implied partnership extending to a barber shop and boarding house but not to a certificate of deposit in the name of one party; the partners had lived together for twenty years but each partner was married); see also Tenn.Code Ann. § 61-1-105(a). In determining whether a partnership exists, all of the relevant facts, actions, and conduct of the parties must be considered. Bass, 814 S.W.2d at 41. No one fact or circumstance is conclusive. Id.; Roberts v. Lebanon Appliance Serv. Co., 779 S.W.2d 793, 795 (Tenn.1989). The existence of a partnership may be implied when it appears that the parties have entered into a business relationship for profit, combining...