Owens v. Owens

• Decision Date: 29 March 2007
• Docket Number: No. M2005-00639-COA-R3-CV.,M2005-00639-COA-R3-CV.
• Citation: 241 S.W.3d 478
• Parties: Linda Alexander OWENS v. James Emery OWENS.
• Court: Tennessee Court of Appeals

241 S.W.3d 478

Linda Alexander OWENS v. James Emery OWENS.

No. M2005-00639-COA-R3-CV.

Court of Appeals of Tennessee, at Nashville.

May 24, 2006 Session.

March 29, 2007.

Opinion Denying Petition for Rehearing April 19, 2007.

Permission to Appeal Denied by Supreme Court September 17, 2007.

Robert A. Anderson, Nashville, Tennessee, for the appellant, Linda Alexander Owens.

Roger A. Maness, Clarksville, Tennessee, for the appellee, James Emery Owens.

OPINION

WILLIAM C. KOCH, JR., P.J., M.S., delivered the opinion of the court, in which PATRICIA J. COTTRELL and FRANK G. CLEMENT, JR., JJ., joined.

This appeal involves the financial aspects of the dissolution of a marriage that lasted approximately twenty-five years. Both parties sought a divorce in the Circuit Court for Davidson County. Following a bench trial, the trial court declared the parties divorced, divided the parties' marital estate, and awarded the wife rehabilitative alimony for six years. On this appeal, the wife takes issue with the trial court's valuation and division of the marital estate and with the amount and duration of the spousal support award. She also takes issue with the trial court's refusal to award her attorney's fees and discretionary costs. We have determined that the evidence does not support the trial court's valuation of one marital property interest and that a more equitable division of the marital estate is required. We have also determined that the amount and length of the wife's spousal support should be increased. Finally, we have determined that the trial court erred by denying the wife's request for payment of her attorney's fees but did not err by declining to award her discretionary costs.

I.

James Emery Owens and Linda Alexander Owens married in 1977. Mr. Owens was twenty-seven years old and had not been married before. Ms. Owens was twenty-eight years old. She had been married before and had custody of her daughter from her prior marriage. The parties also had two children of their own. All the children attained majority before this case was brought to trial.

Mr. Owens had served in the United States Army and had completed one year of college. Throughout most of the marriage, he was employed as a real estate broker and investor. Ms. Owens had a teaching certificate and worked as a substitute teacher during the early years of the marriage. She eventually stopped working to devote her efforts to homemaking. The parties enjoyed an affluent standard of living during the marriage. Their children attended private elementary and secondary schools, and each of them was enrolled in a private college at the time of trial.

In March 2003, Ms. Owens filed a petition for divorce in the Circuit Court for Davidson County. She alleged inappropriate marital conduct and irreconcilable differences. Mr. Owens responded with the counterclaim for divorce on the same grounds. Prior to trial, Mr. Owens agreed to pay Ms. Owens approximately $6,000 per month for living expenses, $150 per month for her car payment, and $1,500 per month for discretionary expenses.

The parties disagreed over the classification and valuation of their assets. Ms. Owens offered to share the costs of retaining experts to value the assets, but Mr. Owens declined the offer. After a prolonged and contentious discovery period, the case was tried on September 28 and October 18, 2004. The parties' disagreements centered on (1) the classification of Mr. Owens's IRA and a house in Boca Raton, (2) the value of the Boca Raton house, the marital home, a partnership to own and manage rental property, and Mr. Owens's real estate business, and (3) Ms. Owens's need for spousal support and Mr. Owens's ability to pay support. In its memorandum opinion filed on November 18, 2004, the trial court declared the parties divorced, allocated the marital property and debt, and directed Mr. Owens to pay Ms. Owens $2,500 per month for three years and then $1,500 per month for three additional years.

Ms. Owens requested an order requiring Mr. Owens to pay $40,251.71 in discretionary costs and also filed a Tenn. R. Civ. P. 59.04 motion seeking an increase in the spousal support and an additional award for her legal expenses. The trial court denied both motions, and Ms. Owens appealed.

II. THE CLASSIFICATION AND VALUATION OF THE MARITAL PROPERTY

Ms. Owens insists that the trial court erred in its valuation of the Boca Raton house, the marital home, and Mr. Owens's interest in his realty business. For his part, Mr. Owens asserts that the trial court erred by classifying the Boca Raton house as marital property. We have determined that the evidence does not preponderate against the manner in which the trial court classified each of these properties but that the evidence does not support the trial court's valuation of the Boca Raton house.

A. The Applicable Legal Standards

Dividing a marital estate necessarily begins with the systematic identification of all of the parties' property interests. 19 W. Walton Garrett, Tennessee Practice: Tennessee Divorce, Alimony and Child Custody § 15:2, at 321 (rev. ed. 2004) (Tennessee Divorce). The second step is to classify each of these property interests as either separate or marital property. Flannary v. Flannary, 121 S.W.3d 647, 650 (Tenn.2003); Conley v. Conley, 181 S.W.3d 692, 700 (Tenn.Ct.App. 2005); Anderton v. Anderton, 988 S.W.2d 675, 679 (Tenn.Ct.App.1998). Tennessee is a "dual property" state. Smith v. Smith, 93 S.W.3d 871, 875-76 (Tenn.Ct.App.2002). Accordingly, property cannot be included in the marital estate unless it fits within the definition of "marital property" in Tenn.Code Ann. § 36-4-121(b)(1)(A) (2005). By the same token, "separate property," as defined in Tenn.Code Ann. § 36-4-121(b)(2), should not be included in the marital estate.

Questions regarding the classification of property as either marital or separate, as opposed to questions involving the appropriateness of the division of the marital estate, are inherently factual. Current v. Current, No. M2004-02678-COA-R3-CV, 2006 WL 656791, at *1 (Tenn.Ct.App. Mar.15, 2006) (No Tenn. R.App. P. 11 application filed); Bilyeu v. Bilyeu, 196 S.W.3d 131, 135 (Tenn.Ct.App., 2005), perm. app. denied (Tenn. June 12, 2006); Tennessee Divorce § 15:3, at 324. Accordingly, the appellate courts review a trial court's decisions classifying property using the familiar standard of review in Tenn. R.App. P. 13(d).

As a general rule, assets acquired by either spouse during the marriage are presumed to be marital property. Tenn.Code Ann. § 36-4-121(b)(1)(A); Church v. Church, No. M2004-02702-COA-R3-CV, 2006 WL 2168271, at *7 (Tenn.Ct.App.Aug.1, 2006) (No Tenn. R.App. P. 11 application filed); Hunter v. Hunter, No. M2002-02560-COA-R3-CV, 2005 WL 1469465, at *4 (Tenn.Ct.App. June 21, 2005) (No Tenn. R.App. P. 11 application filed); Tennessee Divorce § 15:4, at 333, and, similarly, assets acquired by either spouse prior to the marriage are presumed to be separate property. Tenn.Code Ann. § 36-4-121(b)(2)(A). Thus, the classification of all assets acquired by either spouse during the marriage begins with the presumption that the asset is marital. Fox v. Fox, No. M2004-02616-COA-R3-CV, 2006 WL 2535407, at *4 (Tenn.Ct.App. Sept.1, 2006) (No Tenn. R.App. P. 11 application filed). A party asserting that an asset acquired during the marriage is separate property has the burden of proving by a preponderance of the evidence that the asset is separate property. Goulet v. Heede, No. E2000-02535-COA-R3-CV, 2002 WL 126279, at *5 (Tenn.Ct.App.Jan.31, 2002) (No Tenn. R.App. P. 11 application filed); Dunlap v. Dunlap, 996 S.W.2d 803, 814 (Tenn.Ct. App.1998). The types of evidence that will be sufficient to rebut the presumption that an asset acquired during the marriage is marital property are found in Tenn.Code Ann. § 36-4-121(b)(2)(B)-(F).

After a trial court has classified the parties' property as either marital or separate, it should place a reasonable value on each piece of property subject to division. Davidson v. Davidson, No. M2003-01839-COA-R3-CV, 2005 WL 2860270, at * 2 (Tenn.Ct.App. Oct.31, 2005) (No Tenn. R.App. P. 11 application filed). Edmisten v. Edmisten, No. M2001-00081-COA-R3-CV, 2003 WL 21077990, at *11 (Tenn.Ct.App. May 13, 2003) (No Tenn. R.App. P. 11 application filed). The parties themselves must come forward with competent valuation evidence. Kinard v. Kinard, 986 S.W.2d 220, 231 (Tenn.Ct.App. 1998); Wallace v. Wallace, 733 S.W.2d 102, 107 (Tenn.Ct.App.1987). When valuation evidence is conflicting, the court may place a value on the property that is within the range of the values represented by all the relevant valuation evidence. Watters v. Watters, 959 S.W.2d 585, 589 (Tenn.Ct. App.1997); Brock v. Brock, 941 S.W.2d 896, 902 (Tenn.Ct.App.1996). Decisions regarding the value of marital property are questions of fact. Kinard v. Kinard, 986 S.W.2d at 231. Accordingly, they are entitled to great weight on appeal and will not be second-guessed unless they are not supported by a preponderance of the evidence. Smith v. Smith, 93 S.W.3d at 875; Ray v. Ray, 916 S.W.2d 469, 470 (Tenn.Ct. App.1995).

B. The Classification of the Boca Raton House

We turn first to the trial court's decision to classify Mr. Owens's interest in the Boca Raton house as marital property. Even though he concedes that he paid $150 per month in marital funds to help pay the mortgage on the house, Mr. Owens insists that classifying the house as marital property was error because his parents also paid a portion of the mortgage and because the title to the property was partly in his brother's name.

Mr. Owens's parents purchased the house in Boca Raton when they moved there from Memphis. Mr. Owens and his brother loaned his parents the earnest money, and his brother later assumed the mortgage. Mr. Owens's earnest money loan was paid off when his parents sold their home in Memphis. Eventually, Mr. Owens's brother quitclaimed...