Parker v. Lambert

• Decision Date: 10 April 2006
• Citation: 206 S.W.3d 1
• Parties: Susan PARKER v. Richard LAMBERT.
• Court: Tennessee Court of Appeals

Page 1

206 S.W.3d 1

Susan PARKER v. Richard LAMBERT.

Court of Appeals of Tennessee, Eastern Section, at Knoxville.

February 7, 2006 Session.

April 10, 2006.

Permission to Appeal Denied by Supreme Court October 16, 2006.

J. Christopher Hall and Valerie H. Richardson, Chattanooga, Tennessee, for appellant.

Andrew L. Berke and Megan C. England, Chattanooga, Tennessee, for appellee.

OPINION

HERSCHEL PICKENS FRANKS, P.J., delivered the opinion of the court, in which D. MICHAEL SWINEY, J., and SHARON G. LEE, J., joined.

The Trial Court Ordered jointly held property sold, the proceeds divided equally, and awarded attorney's fees to one party. On appeal, we vacate the Judgment and direct the Trial Court to divide the proceeds, taking into account the contributions and entitlements of the parties and reconsider the award of attorney's fees.

Parker filed this action against Lambert, averring that the parties are tenants in common in a parcel of real estate, and that the property could be partitioned in kind. She asked that the Court order the property sold and divide the proceeds equally between the parties. Parker also asked the Court to require Lambert to pay rent to her for his use of the property until the property was sold and she also asked for attorney's fees and costs.

In Lambert's Amended Answer and Counter Claim, he averred that he solely provided the consideration for the purchase of the property, and that he made all the payments on the promissory note, except for approximately $5,000.00 provided by Parker. He also asserted the defenses of setoff, contribution, and recoupment.

After hearing evidence, the Chancery Court entered a Memorandum Opinion and Order, providing Lambert an opportunity to pay Parker a sum for her half of the equity in the property, and if the parties could not agree on such a sum, the Court would order the property sold and the proceeds divided equally between the parties, after Parker's reasonable attorney's fees were deducted from the net-sale proceeds. Lambert has appealed.

Parker and Lambert became romantically involved in 1992, and in December of that year, Parker moved into Lambert's home on Hale Road in Hamilton County, Tennessee (the "Hale Road Residence"). The Parties eventually decided they needed more space than the Hale Road Residence could provide, and Lambert found an unimproved tract of land on Birchwood Pike in Hamilton County (the "Property"), which he purchased in August of 1994 using $13,000.00 of his own assets. The initial warranty deed to the Property from the sellers was placed in Lambert's name alone, but on April 14, 1995, Lambert signed a Quitclaim Deed to Parker conveying a "One-Half (½) Undivided Interest in and to" the Property. On the same day, the parties signed a Deed of Trust and transferred title to the property to a trustee to secure the repayment of a $75,000.00 construction loan from Northwest Georgia Bank. The Deed of Trust lists both Lambert and Parker as borrowers. In addition to the proceeds from the loan, Lambert testified he spent $5,000.00 of his own assets on construction of the home.

The Parties undertook construction of a home on the Property (the "Home") in May of 1995, and there is a dispute between them as to who did most of the work as general contractor. Lambert claims that he did 95 percent of the decision-making, and he also claims that Parker made a number of mistakes that caused extra expenses and delays. He admitted, however, that Parker managed the paper work and bookkeeping for the construction project. Parker claims that she was "the contractor" and hired the subcontractors and supervised their everyday work. She produced a copy of the building permit which shows her as the permit applicant. The evidence establishes that most of the checks drawn from the construction account to pay subcontractors were written by Parker. Parker was able to use her connections in the building industry to reduce the cost of construction by at least 15 percent.

The construction was completed in November 1995, and the parties moved into the Home at that time. On December 29, 1995, Lambert obtained permanent financing in his name alone with a disbursement date of January 4, 1996. The loan proceeds were used to paid off the construction loan. Repayment of the permanent loan was secured by a Deed of Trust on the Property, which was signed by Lambert on December 29, 1995. On January 4, 1996, Parker executed a Quitclaim Deed conveying all of her rights in the Property to Lambert so that he could secure the best financing available on the permanent loan. The Quitclaim Deed was recorded before the Deed of Trust, and on January 9, 1996, Lambert signed another Quitclaim Deed, conveying the Property to himself and Parker as "joint tenants with right of survivorship for and during their joint natural lives, with the remainder over upon the death of either of them to the survivor of them. . . ." This Deed was recorded on January 10, 1996.

The parties' relationship ended in December 2002, when Parker voluntarily moved out of the Home and into an apartment. In November 2003, she attempted to move back into the Home, but Lambert refused to allow her to return.

Our review on appeal is de novo based upon the record of the proceedings. Keaton v. Hancock County Bd. of Educ., 119 S.W.3d 218, 222 (Tenn.Ct.App.2003). The Court presumes the Trial Court's findings of fact are correct, unless the evidence preponderates to the contrary. Tenn. R.App. P. 13(d); Walker v. Moore, 745 S.W.2d 292 (Tenn.Ct.App.1987). This presumption, however, does not apply to the Trial Court's conclusions of law. Keaton, 119 S.W.3d at 222.

The record before us establishes that the Judgment appealed from is not a final judgment under the meaning of Tenn. R.App. P. 3(a). In re Estate of Henderson, 121 S.W.3d 643, 645 (Tenn. 2003).

The Chancery Court's Memorandum Opinion concluded that the Property should be sold and the proceeds divided equally. The Judgment also provided:

3. That, unless the parties agree to an amount of money to be paid to Ms. Parker within thirty (30) days from the entry of this Order, then Mr. Lambert and Ms. Parker shall list the real estate to be sold by a realtor of, and at a price of, their agreement or the parties shall advise the court of their inability to agree and the court will order the real estate to be appraised and will select a realtor to sell the property at the appraised price;

4. Counsel for Ms. Parker shall be entitled to recover reasonable attorney fees from the sales proceeds if the real estate is listed for sale and sold, pursuant to T.C.A. § 29-27-121, and the net sales proceeds from the sale of the house shall be deposited with the Clerk & Master until the attorney fee issue is resolved;

The Order left to a future date the calculation of Parker's attorney's fees. In addition, the Order opened the possibility that the Court would have to supervise the sale of the Property, if the parties could not agree on a sales price or realtor, and such sale would require the Court's confirmation. Tenn.Code Ann. § 29-27-216 (2005); also see, Vineyard v. Vineyard, 26 Tenn.App. 232, 170 S.W.2d 917, 920 (1943).

Tennessee Rules of Appellate Procedure, Rule 2, allows us to suspend Rule 3(a). Bayberry Assocs. v. Jones, 783 S.W.2d 553, 559 (Tenn.1990). The issues which have already been adjudicated by the Chancery Court are unlikely to be pretermitted by future events. Rather than delaying the inevitable need to address these issues, judicial economy is best served by addressing the issues on their merits in this appeal. In the interest of expediting a decision on these issues, good cause exists to suspend the application of Rule 3(a) pursuant to Rule 2. See Rector v. Halliburton, No. M1999-02802-COA-R3-CV, 2003 WL 535924, at *3 (Tenn.Ct.App. Feb.26, 2003). Accordingly, we suspend the application of Rule 3(a) in this case.

The first issue on appeal is whether the Trial Court erred in holding that the proceeds from the sale of the Property should be equally divided between the parties? Where jointly held property is sold, the sale proceeds are to be divided between the parties in accordance with their rights as determined by the court. Tenn. Code. Ann. § 29-27-217 (2005); see also Tenn.Code. Ann. § 29-27-113 (2005). "[T]he Court has a statutory and inherent right to adjust the equities and settle all claims between or among the parties . . . ." Yates v. Yates, 571 S.W.2d 293, 296 (Tenn. 1978).

The Court did not award Lambert any compensation for his contributions to the preservation, maintenance, and improvements to the Property.¹ The Trial Court relied on the legal principles in Rivkin v. Postal, No. M1999-01947-COA-R3CV, 2001 WL 1077952 (Tenn.Ct.App. Sept. 14, 2001). In Rivkin, Rivkin had purchased the real estate and then quitclaimed a one-half interest to Postal. Rivkin also paid most of the mortgage payments, and the Court of Appeals affirmed the equal division of the property between the unmarried couple.

The Trial Court relied on Rivkin, for the proposition that the partition-sale proceeds could be divided equally despite the fact that one cotenant had carried a disproportionate share of the financial burden in preserving the property. The persuasiveness of this proposition, however, is diminished by the fact that Rivkin did not assert a claim for contribution from Postal. Id. at *10-11.

This proposition is also contrary to well settled principles governing when one cotenant is entitled to compensation from another cotenant.² The common theme of these principles is that a cotenant must equally share both the burdens of land ownership (i.e., the responsibility of preserving the land) as well as the benefits of the land ownership. If one cotenant bears a disproportionate share of the burden, the other cotenants must provide compensation. Alternatively, if one cotenant enjoys a disproportionate share of the benefits, the other cotenants must...