Michael Givens v. Tristine Givens, (Tenn.Ct.App. at Knoxville, filed September 29, 2017)
One of the issues raised on appeal in this case concerns the classification of property as either separate or marital.
Husband and Wife were married in December of 2002. No children were born of the marriage. Husband filed for divorce in August of 2012. At the time of trial, Husband was 55 years old, Wife was 61 years old, and the parties had been married for thirteen years.
(HUSBAND CLAIMED TAGGART REAL PROPERTY WAS HIS SEPARATE PROPERTY)
Husband testified at trial about Taggart explaining that Taggart is rental property that he acquired in the summer of 1998, prior to the marriage. Wife’s name never has
been on the deed to Taggart. Husband and Wife never lived at Taggart. Husband testified that Taggart was rented prior to the marriage and that it has remained rented during the marriage. Husband receives income from the rental of Taggart. Husband testified that Taggart generates $1,130 in income per month.
Husband stated that the purchase price of $78,000 for Taggart was financed 100 percent. At the time of the marriage, Husband owed around $70,000 on Taggart. Husband testified that the value of Taggart as of the date of the marriage was $78,000. In 2004, Husband refinanced Taggart and borrowed $72,000. At that time, Wife signed a deed of trust to relinquish any marital interest she had in that property. In 2012, during the marriage, Husband paid off Taggart. Husband stated that the value of Taggart at the time of trial was around $83,500. Husband testified that Wife made no payments on Taggart. Husband stated: “They came strictly from the rental income. The rent was like 560, and it paid for itself, so I doubled the payments to pay it off quicker.” When questioned further about how he paid the mortgage on Taggart, Husband stated: The rent. The rent was like five – – the payment’s 560. The rent was anywhere from 1,000, then it raised to like 1,130, so I would just take the rent and make the payment with it. And then at one point I upped the payments up to 1,130 to pay it off quicker. I paid it off in eight years.
When Husband was asked if he paid Taggart off solely from the rents, he stated: “No. I sold Dr. Heinsohn two houses in 2012. One closed in May, one closed in June. I took the money from those and paid off the – – I think it was right at 29 to $30,000 off.” When questioned, Husband admitted that he spent $33,865 of his income during the marriage remodeling Taggart. Husband admitted that the taxes and insurance payments on Taggart came from his income during the marriage. Husband also stated that he paid the property taxes on Taggart, and that Wife never did so. Husband testified that he managed Taggart. With regard to the maintenance of Taggart, Husband stated: “[Wife] went over one – – I think maybe two times when it came empty, we planted some shrubs and done some mulch out front. And then she actually cleaned the refrigerator out a couple of times.”
“The issues raised in this appeal concern the classification of property as either separate or marital and the distribution of the marital property. As our Supreme Court
Tennessee is a “dual property” state because its domestic relations
law recognizes both “marital property” and “separate property.” See
generally Tenn. Code Ann. § 36–4–121. When a married couple seeks a divorce, the
“marital property” must be divided equitably between them, without regard
to fault on the part of either party. Tenn. Code Ann. § 36–4–121(a)(1).
“Separate property” is not part of the marital estate and is therefore not
subject to division. Thus, it is imperative that the parties, the trial court, or both identify all of the assets
possessed by the divorcing parties as either marital or separate so that a
proper division can be accomplished.
The evidence in the record on appeal showed that Taggart was acquired by Husband pre-marriage. Thus, Taggart would be classified as Husband’s separate property unless the evidence showed that Taggart was converted into marital property through transmutation.
Husband testified that Taggart was rental property that paid for itself and that Wife never contributed toward Taggart in any significant manner. Husband, however, admitted that he paid off the mortgage owed on Taggart during the marriage and that he used marital funds that he earned during the course of the marriage to do so, at least in part. Specifically, Husband testified that at the time the parties were married, the debt on Taggart was approximately $70,000, and that during the marriage he took income he earned from selling two houses and paid off “right at 29 to $30,000 . . .” on Taggart. Husband also admitted that he spent $33,865 of his income during the marriage remodeling Taggart. The Court of Appeals held on appeal that Husband transmutted Taggart into marital property when he expended these significant amounts of marital income on paying off and remodeling Taggart. Thus, a rebuttable presumption of a gift to the marital estate was created, and that presumption was not rebutted.