I N THE COURT OF APPEALS OF TENNESSEE
EASTERN SECTI ON
FILED
July 3, 1996
Cecil Crowson, Jr.
ERNEST W TE PATTON, I I I ,
HI ) C/ A NO. 03A01-Appellate C ourt Clerk
9601- CH- 00001
)
Pl a i nt i f f , ) HAM LTON CHANCERY
I
)
v. ) HON. R. VANN OWENS,
) CHANCELLOR
LI NDA HARVEY PATTON, )
) MODI FI ED AND
De f e nda nt . ) REMANDED
ALBERT L. WATSON, I I I , Cha t t a nooga , f or Pl a i nt i f f - Appe l l a nt .
ARTHUR C. GRI SHAM J R. , GRI SHAM KNI GHT & HOOPER, Cha t t a noo g a ,
, ,
f o r De f e nda nt - Appe l l e e .
O P I N I O N
Fr a nks . J .
I n t hi s di vor c e a c t i on, t he hus ba nd a ppe a l s f r om t h e
Tr i a l Cour t ’ s de t e r mi na t i on of t he c l a s s i f i c a t i on of pr ope r t y
a s ma r i t a l pr ope r t y a nd t he di vi s i on of t he ma r i t a l e s t a t e .
The pa r t i e s we r e ma r r i e d i n 1984, a nd r e s i de d
t o g e t h e r f or a ppr oxi ma t e l y ni ne ye a r s . Pr i or t o t he i r
ma r r i a ge , t he hus ba nd ha d pur c ha s e d a hous e a nd l a nd a t 260 6
Cr e s c e nt Cl ub Dr i ve ( ?Cr e s c e nt Cl ub pr ope r t y?) , a nd t he wi f e
h a d p ur c ha s e d 2. 5 a c r e s of uni mpr ove d l a nd on Sc e ni c Hi ghwa y
i n Ha mi l t on Count y. Ti t l e t o t he Cr e s c e nt Cl ub pr ope r t y i s
h e l d s ol e l y by t he hus ba nd, a nd t he t i t l e t o t he Sc e ni c
Hi gh wa y p r ope r t y i s t i t l e d s ol e l y t o t he wi f e . Howe ve r , t h e
Tr i a l J udge de c l a r e d bot h pr ope r t i e s t o be ma r i t a l pr ope r t y
a n d a wa r de d t he Sc e ni c Hi ghwa y pr ope r t y t o t he hus ba nd, a nd
t h e Cr e s c e nt Cl ub pr ope r t y t o t he wi f e . The Cour t di d not
p l a c e a va l ue on t he Cr e s c e nt Cl ub pr ope r t y, but c onc l ude d
t h e r e wa s a ppr oxi ma t e l y $74, 000. 00 i n e qui t y i n t ha t pr ope r t y ,
b u t h e di d f i nd t ha t t he Sc e ni c Hi ghwa y pr ope r t y wa s va l ue d a t
$ 3 0 , 0 00. 00.
W n t he hus ba nd pur c ha s e d t he Cr e s c e nt Cl ub
he
p r o p e r t y he ma de a downpa yme nt of $73, 000. 00, a nd bor r owe d
$ 9 , 5 0 0. 00 f r om hi s s oon- t o- be wi f e , a nd ga ve he r a pr omi s s or y
n o t e i n r e t ur n, whi c h wa s a ppl i e d a s a n a ddi t i ona l downpa yme n t
o n t h e pr ope r t y, a s we l l . W n t he wi f e pur c ha s e d t he Sc e n i c
he
Hi g h wa y pr ope r t y, whi c h wa s a l s o be f or e t he pa r t i e s ma r r i e d,
t h e h u s ba nd pa i d $10, 000. 00 t owa r d t he pur c ha s e of t ha t
p r o p e r t y.
Thi s c a s e i s be f or e us de nov o wi t h a pr e s umpt i on o f
c o r r e c t ne s s a s t o f a c t ua l i s s ue s . T. R. A. P. Rul e 13. The
e v i d e n c e e s t a bl i s he s t ha t t he hus ba nd, i n a ddi t i on t o ma ki n g
t h e d o wnpa yme nt on t he Cr e s c e nt Cl ub pr ope r t y, pa i d t he
mo n t h l y mor t ga ge pa yme nt s out of hi s moni e s , a nd t he
d o wn p a yme nt , wi t h t he e xc e pt i on of t he l oa n f r om t he wi f e ,
c a me f r om t he hus ba nd’ s i nhe r i t a nc e .
I n de f e ndi ng t he Tr i a l Cour t ’ s c l a s s i f i c a t i on of t h e
p r o p e r t y, t he wi f e a r gue s t ha t t he doc t r i ne of t r a ns mut a t i o n
i s a ppl i c a bl e he r e . W c a nnot a gr e e .
e Bat s on v . Bat s on, 76 9
2
S. W 2 d 849 ( Te nn. App. 1988) i s i ns t r uc t i ve .
. The Cour t f i r s t
o b s e r ve d:
Te nne s s e e i s a ?dua l pr ope r t y? j ur i s di c t i on be c a us e
i t s d i vor c e s t a t ut e s dr a w a di s t i nc t i on be t we e n
ma r i t a l a nd s e pa r a t e pr ope r t y. Si nc e Te nn. Code
Ann. §36- 4- 121( a ) ( Supp. 1988) pr ovi de s onl y f or t h e
di vi s i on o f ma r i t a l pr ope r t y, p r ope r c l a s s i f i c a t i on
of a c oupl e ’ s pr ope r t y i s e s s e nt i a l . Se e 3 Fami l y
Law and Pr ac t i c e §37. 08[ 1] ( 1988) . Thus , a s a f i r s t
or de r of bus i n e s s , i t i s i nc umbe nt on t he t r i a l
c our t t o c l a s s i f y t he pr ope r t y, t o gi ve e a c h pa r t y
t he i r s e pa r a t e pr ope r t y, a nd t he n t o di vi de t he
ma r i t a l pr ope r t y e qui t a bl y. Se e 2 h. Cl a r k, The Law
of Dome s t i c Re l at i ons i n t he Uni t e d St at e s §16. 2, a t
183- 84 ( 2d e d. 1987) .
Te nn. Code Ann. §36- 4- 121( b) c ont a i ns t he
gr ound r ul e s f or c l a s s i f yi ng pr ope r t y, a nd l i t t l e
e l a bor a t i on i s ne e de d be yond t he s t a t ut e i t s e l f .
Te nn. Code Ann. §36- 4- 121( b) ( 2) de f i ne s ?s e pa r a t e
pr ope r t y? a s :
a l l r e a l a nd pe r s ona l pr ope r t y owne d by a
s pous e be f or e ma r r i a ge ; pr ope r t y a c qui r e d i n
e xc ha nge f or pr ope r t y a c qui r e d be f or e ma r r i a g e ;
i nc ome f r om a nd a ppr e c i a t i on of pr ope r t y own e d
by a s pous e be f or e ma r r i a ge e xc e pt whe n
c ha r a c t e r i z e d a s ma r i t a l pr ope r t y unde r
s ubdi vi s i on ( b) ( 1) ; a nd pr ope r t y a c qui r e d by a
s pous e a t a ny t i me by gi f t , be que s t , de vi s e o r
de s c e nt .
Thi s Cour t ha s c ons t r ue d t hi s s e c t i on t o me a n t ha t
gi f t s by one s pous e t o a not he r of pr ope r t y t ha t
woul d ot he r wi s e be c l a s s i f i e d a s ma r i t a l pr ope r t y
a r e t he s e pa r a t e pr ope r t y of t he r e c i pi e nt s pous e .
Thi s Cour t ha s a l s o f ound t ha t t he por t i on of a
s pous e ’ s pe ns i on or ot he r r e t i r e me nt be ne f i t
a t t r i but a bl e t o c r e di t a bl e s e r vi c e pr i or t o t he
ma r r i a ge i s s e pa r a t e pr ope r t y.
Th e Co ur t t he n we nt a he a d t o di s c us s t he doc t r i ne of
t r a n s mut a t i on a nd s a i d:
[ s ] e pa r a t e pr ope r t y ma y be c ome pa r t of t he ma r i t a l
es t at e i f i t s owne r t r e a t s i t a s i f i t we r e ma r i t a l
pr ope r t y. Pr of e s s or Cl a r k de s c r i be s t he doc t r i ne o f
t r a ns mut a t i on a s f ol l ows :
[ Tr a ns mut a t i on] oc c ur s whe n s e pa r a t e pr ope r t y
i s t r e a t e d i n s uc h a wa y a s t o gi ve e vi de nc e of
a n i nt e nt i on t ha t i t be c ome ma r i t a l pr ope r t y.
One me t hod of c a us i ng t r a ns mut a t i on i s t o
3
pur c ha s e pr ope r t y wi t h s e pa r a t e f unds but t o
t a ke t i t l e i n j oi nt t e na nc y. Thi s ma y a l s o b e
done by pl a c i ng s e pa r a t e pr ope r t y i n t he na me s
of bot h s pous e s . The r a t i ona l e unde r l yi ng bo t h
t he s e doc t r i ne s i s t ha t de a l i ng wi t h pr ope r t y
i n t he s e wa ys c r e a t e s a r e but t a bl e pr e s umpt i o n
of a g i f t t o t he ma r i t a l e s t a t e . Thi s
pr e s umpt i on i s ba s e d a l s o upon t he pr ovi s i on i n
ma ny ma r i t a l pr ope r t y s t a t ut e s t ha t pr ope r t y
a c qui r e d dur i ng t he ma r r i a ge i s pr e s ume d
ma r i t a l . The pr e s umpt i on c a n be r e but t e d by
e vi de nc e of c i r c ums t a nc e s or c ommuni c a t i ons
c l e a r l y i ndi c a t i ng a n i nt e nt t ha t t he pr ope r t y
r e ma i n s e pa r a t e .
1 H. Cl a r k, The Law of Dome s t i c Re l at i ons i n t he
Uni t e d St at e s §16. 2, a t 185 ( 1987) .
Se ve r a l r e por t e d a nd unr e por t e d c a s e s ha ve di s c us s e d
a n d a ppl i e d t he doc t r i ne of t r a ns mut a t i on i n pr ope r t y
s e t t l e me nt s i t ua t i ons , b ut none i s a ppl i c a bl e t o t he f a c t s of
t hi s c a s e .
Dur i ng t he c our s e of t he t r i a l , t he hus ba nd
e x p l a i ne d why he he l d t i t l e s ol e l y t o t he Cr e s c e nt Cl ub
p r o p e r t y. He s a i d:
Q. M . Pa t t o n, wa s t he r e a ny r e a s on why you di d
r
not pur c ha s e t hi s pr ope r t y a t Cr e s c e nt Cl ub
wi t h M s . Pa t t on pr i or t o t he ma r r i a ge ?
r
A. Ye s , s i r , t h e r e i s .
Q. W t i s t ha t r e a s on?
ha
A. W l l , M s . Pa t t on, Be t s y ha d be e n ma r r i e d t hr e e
e r
t i me s pr e vi ous t o our ma r r i a ge , t hr e e t i me s
pr e vi ous l y. I woul d be put t i ng mys e l f I
t hought a t gr e a t r i s k t o pur c ha s e a nyt hi ng
j oi nt l y wi t h he r . I r e a l l y di dn’ t know wha t
woul d ha ppe n, wha t woul d t r a ns pi r e i n t he
ma r r i a ge , but t he hi s t or y pr e t t y muc h s pe a ks
f or i t s e l f s o I wa s t r yi ng t o pr ot e c t my a s s e t s
a nd my pr ope r t y.
Q. Di d you e ve r t r a ns f e r a ny i nt e r e s t of t he
Cr e s c e nt Cl ub pr ope r t y t o M s . Pa t t on?
r
A. No, s i r .
Th e p a r t i e s r e s i de d i n t he Cr e s c e nt Cl ub pr ope r t y, but t hi s
4
f a c t a l one doe s not t r i gge r t he doc t r i ne of t r a ns mut a t i on.
Th e e v i de nc e i s c l e a r t ha t t he hus ba nd i nt e nde d t ha t t hi s
p r o p e r t y be hi s s e pa r a t e pr ope r t y, a s e vi de nc e d by t he l e ga l
t i t l e a nd hi s pa yi ng t he mor t ga ge pa yme nt s , t a xe s a nd
ma i n t e na nc e out of hi s i nc ome . M e ove r , t he e vi de nc e
or
p r e p o n de r a t e s a ga i ns t t he f i ndi ng t ha t t he Sc e ni c Hi ghwa y
p r o p e r t y wa s ma r i t a l pr ope r t y.
Fr om t he pa r t i e s ’ t e s t i mony, bot h a r e of t he opi ni o n
t h a t t he Cr e s c e nt Cl ub p r ope r t y ha s mor e e qui t y t ha n f ound b y
t h e Tr i a l Cour t . The wi f e woul d be e nt i t l e d t o a ny i nc r e a s e
i n t h e va l ue of t he Cr e s c e nt Cl ub pr ope r t y dur i ng t he ma r r i a g e
b e c a u s e s he s ubs t a nt i a l l y c ont r i but e d t o t he a ppr e c i a t i on a n d
p r e s e r va t i on of t he pr ope r t y. Har r i s on v . Har r i s on, 912
S. W 2 d 124 ( Te nn. 1996) .
. W c onc l ude t ha t t he Cr e s c e nt Cl u b
e
p r o p e r t y s houl d be s ol d, t he ba l a nc e of t he i nde bt e dne s s be
p a i d , a nd t he hus ba nd be t he n gi ve n t he $73, 000. 00 downpa yme n t
wh i c h he pa i d, wi t h a ny r e ma i ni ng mone y di vi de d e qua l l y
b e t we e n t he pa r t i e s . The Sc e ni c Hi ghwa y pr ope r t y we f i nd i s
t h e wi f e ’ s s e pa r a t e pr ope r t y, a nd s he i s a wa r de d t ha t t r a c t .
Th e $ 9 , 500. 00 not e t o t he wi f e wi l l be s e t of f a ga i ns t t he
h u s b a nd’ s $10, 000. 00 pa yme nt t owa r d t he pur c ha s e of t he Sc e n i c
Hi g h wa y pr ope r t y. The He mphi l l pr ope r t y whi c h wa s a l s o t he
wi f e ’ s s e pa r a t e pr ope r t y, i s l i ke wi s e a wa r de d t o t he wi f e .
The hus ba nd a l s o c ompl a i ns a bout t he a wa r d of
p e r s o n a l pr ope r t y t o t h e wi f e . At t he t i me of s e pa r a t i on, t h e
h u s b a nd t ook pe r s ona l p r ope r t y f r om t he hous e , but c ont e nds
t h a t t he r e i s a ddi t i ona l pr ope r t y t ha t he i nhe r i t e d f r om hi s
mo t h e r whi c h he s houl d be a wa r de d, a nd i s now i n t he
p o s s e s s i on of t he wi f e . The hus ba nd r a i s e d t hi s i s s ue be f o r e
5
t h e Tr i a l J udge i n t he mot i on f or a ne w t r i a l , a nd t he Tr i a l
J u d g e a ppoi nt e d a me di a t or t o r e s ol ve t he di s put e , but
a p p a r e nt l y t he hus ba nd di d not me e t wi t h t he me di a t or a l t ho u g h
s e v e r a l oppor t uni t i e s we r e gi ve n. W do not gr a nt t he hus ba n d
e
r e l i e f o n t hi s i s s ue be c a us e he f a i l e d t o t a ke a c t i on
a v a i l a bl e t o h i m t o p r e v e nt t he a l l e ge d e r r or . T. R. A. P. Ru l e
36( a ) .
The j udgme nt of t he Tr i a l Cour t i s a f f i r me d a s
mo d i f i e d, a nd t he c a us e r e ma nde d wi t h t he c os t s a s s e s s e d on e -
h a l f t o e a c h p a r t y.
________________________
He r s c he l P. Fr a nks , J .
CONCUR:
_ _ _ _ _ ______________________
Ho u s t o n M Godda r d, P. J .
.
_ _ _ _ _ _ _____________________
Ch a r l e s D. Sus a no, J r . , J .
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