Davis v. Davis

IN THE COURT OF APPEALS OF TENNESSEE
FILED
AT KNOXVILLE February 19, 1999

Cecil Crowson, Jr.
Appellate C ourt
Clerk
JACK DAVIS, ) C/A NO. 03A01-9708-CH-00381
)
Plaintiff-Appellant,)
)
)
)
v. ) APPEAL AS OF RIGHT FROM THE
) UNICOI COUNTY CHANCERY COURT
)
)
)
)
CLANETTA B. DAVIS, )
) HONORABLE THOMAS J. SEELEY, JR.,
Defendant-Appellee. ) JUDGE

For Appellant For Appellee

THOMAS C. JESSEE1 MARGARET B. FUGATE
Jessee & Jessee Anderson, Fugate, Givens & Belisle
Johnson City, Tennessee Johnson City, Tennessee

O P I N IO N

AFFIRMED AND REMANDED Susano, J.

1
Mr. Jessee did not represent Mr. Davis at trial.

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 This is a divorce case. The core issues on appeal

focus on the trial court’s classification and division of

property. The plaintiff, Jack Davis (“Husband”), appealed,

claiming that the trial court erred in classifying certain

property as marital property when the property should have been

classified as his separate property; that the trial court awarded

his wife, Clanetta Davis (“Wife”), a disproportionate share of

the marital property; and that the trial court failed to

adequately direct the work of the court-appointed special master.

Wife, for her part, argues that she is entitled to a larger share

of the marital property and that the trial court undervalued

certain marital assets to her disadvantage. As an additional

issue, she seeks attorney’s fees for a frivolous appeal.

I. General Overview

The trial court’s judgment dissolved a marriage of 33-

plus years. At the time of trial, Husband was 65 years of age.

Wife was 59. The trial court found that Husband had physical

problems “which would likely make it impossible [for him]...to

engage in gainful employment.” Wife was in relatively good

health “and should be able to work several more years.” She is a

school teacher by profession. The sole contested issue at trial

was the classification and division of the parties’ property.2

2
The parties stipulated to the existence of grounds for divorce pursuant
to the provisions of T.C.A. § 36-4-129 (1996 Repl.). Neither party sought
alimony. There were no issues pertaining to the parties’ two children, both
of whom are adults.

2
 II. Trial Court’s Judgment

This case was tried before Judge Thomas J. Seeley, Jr.

Judge Seeley filed an exhaustive, 34-page memorandum opinion, in

which he addressed each asset of the parties. He also examined

the division-of-property factors found at T.C.A. § 36-4-121(c)

with particular reference to the facts of this case. He

segregated the parties’ property into the separate property and

marital property categories; awarded the separate property to the

party to whom it belonged; and then divided the marital property

equally between the parties.

The final judgment, as subsequently modified by the

trial court, includes a detailed recapitulation schedule, which

is attached as an exhibit to this opinion. In summary, the trial

court awarded the parties’ property as follows:

Husband

Separate Property $ 686,917.07
50% of Marital Property 552,423.24

$1,239,340.31

Wife

Separate Property $ 26,761.00
50% of Marital Property 552,423.23

$ 579,184.23

The trial court was faced with a Herculean task in this

case of tracing assets, classifying property as separate or

marital, and attempting to unravel relatively complicated

financial transactions and dealings. Its task was made more

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difficult by the machinations of Husband, as described by the

trial court in its excellent memorandum opinion:

The number of real properties involved
(presently some 20 parcels) and the different
manners in which title was acquired and
exists (deed; inheritance; inter vivos gift;
being held singly, jointly, in partnership
and some in trust) make classification
difficult. Jack Davis tried to retain
certain properties and monies as his separate
property. However, he commingled his
separate funds with marital funds and used
marital funds along with gifted funds to
acquire some of the properties he now claims
as his separate property. Further, Jack
Davis attempted to secrete several hundred
thousand dollars ($452,000) prior to his
filing for divorce. He gave $200,000 to one
friend in a plastic valise; he gave another
$100,000 to a second friend in a paper sack;
and placed $26,500 in his automobile’s spare
tire well. He put $25,500 in a roll of
carpet, which money disappeared. He claims
to have done this because he was concerned
that his son’s possible involvement with
drugs would subject all Mr. Davis’ property
to seizure by the government. The Court
considers this statement to be disingenuous.
On the contrary, Fred Steward, the friend to
whom Jack Davis gave $100,000, testified that
Mr. Davis asked him to keep the money because
he “foresaw a divorce” with Ms. Davis. This
is, the Court believes, the true reason Mr.
Davis attempted to hide those monies. Mr.
Davis established and moved monies in and out
of some 42 different bank accounts between
July 10, 1992, and December 31, 1995, in this
continuing effort. The Court felt it
necessary to appoint John Sanders, attorney
in Johnson City, as a Special Master to take
control of certain monies and to attempt to
track the financial maneuvering of Jack
Davis, which were so numerous and convoluted
that Sanders requested the Court for
authorization to hire an accountant for
assistance. David Frizzell, C.P.A., was
hired. Mr. Davis kept voluminous records and
notes regarding his transactions; however,
even relying solely on his word as to how
some monies were spent during the referenced
three and one-half year period, including the
disappearance of the $25,500, Jack Davis
still cannot account for over $83,000. The
total amount for which Mr. Davis has no

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 documentation was $183,285.23. Mr. Davis’
actions in trying to secrete his holdings and
his financial (banking) manipulations have
frustrated the Court’s duty to classify
properties as separate or marital and then
equitably divide the parties’ marital assets.

III. Standard of Review

Our review of this non-jury case is de novo

upon the record with a presumption of correctness as to the trial

court’s factual findings, unless the “preponderance of the

evidence is otherwise.” Rule 13(d), T.R.A.P.; Wright v. City of

Knoxville, 898 S.W.2d 177, 181 (Tenn. 1995); Union Carbide v.

Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993); Catlett v. Chinery,

952 S.W.2d 433, 434 (Tenn.App. 1997). The trial court’s

conclusions of law are not accorded the same deference. Campbell

v. Florida Steel Corp., 919 S.W.2d 26, 35 (Tenn. 1996); Presley

v. Bennett, 860 S.W.2d 857, 859 (Tenn. 1993). Our review is

tempered by the well-established principle that the trial court

is in the best position to assess the credibility of the

witnesses; accordingly, such determinations are entitled to great

weight on appeal. Massengale v. Massengale, 915 S.W.2d 818, 819

(Tenn.App. 1995); Bowman v. Bowman, 836 S.W.2d 563, 567

(Tenn.App. 1991).

IV. Applicable Law

The legal principles that control the division of

property in a divorce case are well-stated by the Middle Section

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of this Court in the case of Batson v. Batson, 769 S.W.2d 849

(Tenn.App. 1988):

Tennessee is a “dual property” jurisdiction
because its divorce statutes draw a
distinction between marital and separate
property. Since Tenn.Code Ann. § 36-4-
121(a)(Supp. 1988) provides only for the
division of marital property, proper
classification of a couple’s property is
essential. See 3 Family Law and Practice §
37.08[1](1988). Thus, as a first order of
business, it is incumbent on the trial court
to classify the property, to give each party
their separate property, and then to divide
the marital property equitably. See 2 H.
Clark, The Law of Domestic Relations in the
United States § 16.2, at 183-84 (2d ed.
1987).

Tenn.Code Ann. § 36-4-121(b) contains the
ground rules for classifying property, and
little elaboration is needed beyond the
statute itself.

* * *

In accordance with this statute, marital
property includes the increase in value of
separate property “if each party
substantially contributed to its preservation
and appreciation.” Ellis v. Ellis, 748
S.W.2d 424, 426-27 (Tenn. 1988); Crews v.
Crews, 743 S.W.2d 182, 189 (Tenn.Ct.App.
1987).

Id. at 856.

Tenn.Code Ann. § 36-4-121(a) provides that
marital property should be divided equitably
without regard to fault. It gives a trial
court wide discretion in adjusting and
adjudicating the parties’ rights and
interests in all jointly owned property.
Fisher v. Fisher, 648 S.W.2d 244, 246 (Tenn.
1983). Accordingly, a trial court’s division
of the marital estate is entitled to great
weight on appeal, Edwards v. Edwards, 501
S.W.2d 283, 288 (Tenn.Ct.App. 1973), and
should be presumed to be proper unless the

6
 evidence preponderates otherwise. Lancaster
v. Lancaster, 671 S.W.2d 501, 502
(Tenn.Ct.App. 1984); Hardin v. Hardin, 689
S.W.2d 152, 154 (Tenn.Ct.App. 1983).

A trial court’s division of marital property
is to be guided by the factors contained in
Tenn.Code Ann. § 36-4-121(c).

Id. at 859. We will now apply these principles to the facts of

this case.

V. Husband’s Issues

A. Unicoi County Farm

The parties were married on June 22, 1962. In October,

1977, the parties moved from Bristol to a farm in Unicoi County.

As the trial court noted, this property “was acquired by

[Husband] from [his] family members in 1968 through a combination

of deeds, litigation and inheritance.” The property was titled

solely in Husband’s name. Over the years, the property was

improved. When the parties first moved to the farm, they lived

in a “‘shack’ with no indoor plumbing” while their new residence

was being built.

Husband contends that only $80,000 of the value of the

farm found by the trial court, i.e., $225,000, should have been

designated as marital property. He argues that the trial court

should have classified $145,000 of the farm’s value as separate

property rather than the $35,000 found by the trial court. He

takes this position because, in the words of his brief, “the farm

was inherited by [him] to begin with.” He concedes that Wife is

7
entitled to share in that portion of the value of the farm

related to improvements to the property “acquired by monies

earned during the marriage.” However, he claims that the bulk of

the appreciation in value of the property should be classified as

Husband’s separate property because, so the argument goes, Wife

did not substantially contribute to the preservation and

appreciation of the underlying separate property component of the

total value. In other words, Husband urges us to find that the

only marital component of the property’s value is composed of the

additions to its value occasioned by the infusions of marital

income during the marriage and the increase in value of those

additions. He pegs this number at $80,000.

The trial court found that as of 1968 -- when the

property was originally acquired by Husband from his family --

the underlying separate property interest in the farm was

properly valued at $35,000. The evidence does not preponderate

against this finding. In fact, Husband testified that he paid

only $22,500 when he acquired the entire interest in 1968. While

one of the appraisers assessed the value of the farm in 1968 at

$52,500, both of the experts who testified regarding its value

“stated that any appraisal of its value in 1968 would be highly

speculative.”

The trial court found that Wife “substantially

contributed to [the farm’s] preservation and appreciation.” See

T.C.A. § 36-4-121(b)(1)(B). The court noted as follows:

Thus, the total property appreciated $190,000
over the years since 1968. Certainly a good

8
 part of that appreciation would be simply
from inflation. However, without proper
maintenance and improvement, the farm would
not have increased nearly so much. Both
parties contributed to such improvements and
maintenance. The only substantial farm
activity conducted by either party was Ms.
Davis’ cattle raising. The grazing of cattle
contributes to the maintenance of the farm
and its appreciation in value. Ms. Davis
also did some plowing; did the gardening;
helped put up hay and did fencing. According
to both Mr. Davis and a neighbor, Lloyd
Garland, Ms. Davis was a “hard worker.”
Clanetta Davis has made substantial
contribution to the preservation and
appreciation of the farm.

The evidence does not preponderate against the trial

court’s finding that all of the increase in value beyond the

initial separate property interest of $35,000 is marital

property.

B. Bristol Property

The trial court concluded that property in Bristol

worth $170,000 was properly classified as marital property.

Husband takes the position that a portion of this property --

valued at $46,000 -- should be classified as separate property

because the property “was purchased by [Husband] solely from

monies given him by his uncle.” He claims that this $46,000

increment is his separate property because it was “acquired...by

gift, bequest, devise or descent.” See T.C.A. § 36-4-

121(b)(2)(D).

The trial court considered Husband’s contention with

respect to the Bristol property but found that there was

“insufficient proof to substantiate” his testimony that his uncle

9
paid for a portion of this property. This dispute presented an

issue of credibility to be resolved by the trial court. It

resolved that issue against Husband. There is nothing in the

record that is so compelling as to persuade us to ignore the

trial court’s credibility determination. This being the case, we

cannot say that the evidence preponderates against the trial

court’s determination that the Bristol property is entirely

marital property.

C. Life Insurance Cash Value

The trial court found that Husband’s life insurance

policy, which had a cash value of $14,000, is a marital asset.

Husband claims that the policy was purchased ten years prior to

the parties’ marriage and that $3,050 of the value of this asset

at the time of the divorce should be classified as separate

property. This argument is said to be based on “[Husband’s]

testimony”; however, the brief does not cite us to the page of

the record where such testimony can be found. Suffice it to say

that the record does not support Husband’s position. The

evidence does not preponderate against the trial court’s

classification of the entire cash value of the life insurance as

marital property.

D. Miscellaneous Cash Funds

The trial court found that the parties owned five bank

accounts, the total value of which amounted to $13,740.63. While

these accounts were all in Husband’s name, the trial court

concluded that they were marital property because of

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“commingling.” These accounts are reflected in a report from

David Frizzell, the C.P.A. who was hired by the special master.

Husband objects to the trial court’s finding that these

bank accounts were a part of the marital estate because,

according to Husband’s brief, they “did not exist at the time of

trial.” The record does not support Husband’s contention. In

view of Mr. Frizzell’s report, we cannot say that the evidence

preponderates against the trial court’s determination with

respect to these miscellaneous bank accounts.

E. Special Master’s Report

Husband contends that the trial court erred in allowing

the special master “to file a report which did not encompass

periods after 1993.” Even if this was error -- and we do not

concede that it was -- it did not affect the outcome of this

trial. The trial court had a full hearing in this matter. That

hearing extended over four days and generated ten volumes of

testimony and 98 exhibits. There is nothing in the record that

even remotely suggests that the trial court refused to receive

any relevant evidence. On the contrary, the trial court heard

some 19 witnesses, and it is obvious that the parties were

afforded an opportunity to fully present their respective

positions. If Husband thought that the special master’s report

was incomplete, he could have supplemented it by presenting

relevant evidence during the four-day trial.

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 There is no reversible error pertaining to the report

of the special master. See Rule 36(b), T.R.A.P.3

VI. Division of Marital Property

Both of the parties contend that the trial court’s

division of property is not equitable. Husband suggests a

different division. His suggestion is based partially on his

position that the court erred in classifying certain assets as

marital rather than as his separate property. We have previously

held that the trial court’s classifications are not in error.

Hence, to the extent that Husband’s proposal is based on these

classifications, it is rejected. To the extent his proposal

simply suggests a different division of what the trial court

found to be marital assets, we do not agree that it is

appropriate to modify the division decreed by the trial court. A

trial court has wide discretion in dividing marital property.

Watters v. Watters, 959 S.W.2d 585, 590 (Tenn.App. 1997).

Wife, on the other hand, contends that the trial court

erred in selecting certain values which -- while testified to by

one of the experts -- were to her disadvantage. She also

contends that the trial court, when it divided the parties’

marital property, should have considered the fact that Husband

dissipated marital assets.

3
Rule 36(b), T.R.A.P., provides as follows:

A final judgment from which relief is available and
otherwise appropriate shall not be set aside unless,
considering the whole record, error involving a
substantial right more probably than not affected the
judgment...

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 The trial court’s findings as to the value of the

various assets are within the range of the “value” testimony

presented at trial. See Watters, 959 S.W.2d at 589. In this

case, we find no error in the trial court’s determinations, i.e.,

the evidence does not preponderate against these findings.

As to the trial court’s overall division of property,

we do not find that the evidence preponderates against the trial

court’s findings.

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 VII. Frivolous Appeal Claim

Wife claims that Husband’s appeal is frivolous. She

seeks damages pursuant to the provisions of T.C.A. § 27-1-122.4

We do not find that Husband’s appeal is frivolous. This issue is

found adverse to Wife.

VIII. Conclusion

The judgment of the trial court is affirmed with costs

on appeal being taxed against the appellant. This case is

remanded for enforcement of the trial court’s judgment and

collection of costs assessed below, all pursuant to applicable

law.

__________________________
Charles D. Susano, Jr., J.

CONCUR:

______________________
Herschel P. Franks, J.

_______________________
William H. Inman, Sr.J.

4
T.C.A. § 27-1-122 provides as follows:

When it appears to any reviewing court that the appeal
from any court of record was frivolous or taken solely
for delay, the court may, either upon motion of a
party or of its own motion, award just damages against
the appellant, which may include but need not be
limited to, costs, interest on the judgment, and
expenses incurred by the appellee as a result of the
appeal.

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