84/16 Division of Marital Estate Reversed in Williamson County; Williamson County Chancery Court

Telfer v. Telfer, (Tenn.Ct.App., filed March 5, 2018)

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Facts: This case arises from a divorce case that was appealed and remanded and is now before the Court of Appeals again. Wife filed for divorce from husband in 2010. A final decree of divorce was entered in 2012. Husband appealed the finding that he lacked a marital interest in two of Wife’s business entities. The Court of Appeals found that the appreciation in value of the entities at issue was marital property subject to equitable division. On remand, the Chancery Court for Williamson County (“the Remand Court”) valued the appreciation, divided the marital estate, and awarded Husband attorney’s fees. Husband now appeals that trial court ruling. The Court of Appeals held that the approximately 84/16 division of the marital estate in favor of Wife rendered by the Remand Court is inequitable in light of the evidence and the relevant statutory factors. The Court of Appeals vacated that portion of the Remand Court’s order and remanded for a fresh division of the marital estate on a 65/35 basis in favor of Wife.

Court of Appeals: With regard to the property division issue, the Court of Appeals wrote as follows:

Having declined to disturb in any way the Remand Court’s valuation of the marital interests, we move now to the overall division of the marital estate. Our review is hampered somewhat by the lack of clarity in the succession of orders below as to final values arrived upon. At oral arguments, the parties agreed generally that the marital estate is worth approximately $6.8 million—in any event, certainly north of six million dollars. The marital portion of the assets in dispute constitute around $5.8 million, of which Husband received $600,000. Husband’s calculations reflect an 84/16 division of the entire marital estate in favor of Wife. Wife denies that the discrepancy is so dramatic, instead stating that the division merely is 80/20 in favor of Wife. While our own calculations indicate that Husband is nearer the mark, the resulting breakdown staggeringly favors Wife whichever proportion put forward by the parties is adopted.

The Remand Court focused a great deal on the relative financial contributions of the parties in dividing the marital estate. We believe that the Remand Court, in dividing the appreciation of the business entities this Court instructed be included in the marital estate, lost sight of the forest for the trees. This was a long-term marriage, in which Husband exercised a great deal of the financial decision-making. If Husband, like Wife, benefited from Wife’s family’s largesse, that does not serve to undermine all the otherwise relevant statutory factors such as the economic circumstances of Husband and Wife when the division of the estate becomes effective and the duration of the marriage. We also note that if Husband had been successful rather than unsuccessful financially, there is little question that the fruits of his success would be fair game for equitable division. As long as it does not rise to the level of dissipation, spouses share the results not just in successful financial decisions but also in the unsuccessful ones.

We are very much disinclined to tinker with a lower court’s decisions regarding the division of a marital estate. However, the 84/16 division of the marital estate in this case is extreme and inequitable resulting in an injustice to Husband. The factual basis for the Remand Court’s division of the marital estate is not properly supported by evidence in the record. Further, the Remand Court did not properly identify and apply the most appropriate legal principles applicable to the equitable division of the marital estate. We vacate the Remand Court’s division of the marital estate, and remand for a new division that will award 65% of the entire marital estate to Wife and 35% to Husband. To emphasize, it does not matter how the court below divides a particular marital asset because ultimately it is the overall division of the entire marital estate that must be equitable, a fact seemingly lost in this drawn-out case. We have determined a 65/35 division in favor of Wife is an equitable division in light of all the evidence applied to the relevant factors as discussed above.


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