IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
February 8, 2005 Session
LISA R. ALTMAN v. ALAN ALTMAN
Appeal from the Chancery Court for Montgomery County
No. 2001-12-0021 Carol A. Catalano, Chancellor
No. M2003-02707-COA-R3-CV - Filed April 7, 2005
This appeal involves the division of marital property. Following almost fifteen years of marriage,
both the husband and the wife sought a divorce in the Chancery Court for Montgomery County. The
trial court, disregarding the marital dissolution agreement and quitclaim deed that the husband
induced the wife to sign following their separation, awarded 58.5% of the marital estate to the
husband and the remainder to the wife. The husband asserts on this appeal that the trial court erred
by declining to follow the marital dissolution agreement and by overvaluing the marital property.
We find that the trial court properly ignored the marital dissolution agreement and the quitclaim deed
and that its valuation of the marital property is supported by the evidence. We have also determined
that the manner in which the trial court divided the marital property was equitable.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed
WILLIAM C. KOCH , JR., P.J., M.S., delivered the opinion of the court, in which WILLIAM B. CAIN and
PATRICIA J. COTTRELL, JJ., joined.
Gregory D. Smith, Clarksville, Tennessee, for the appellant, Alan Altman.
Michael K. Williamson, Clarksville, Tennessee, for the appellee, Lisa R. Altman.
OPINION
I.
Alan Altman and Lisa Altman were married in September 1986 in Nashville. They separated
in March 2001, and Ms. Altman filed for divorce in the Chancery Court for Montgomery County in
December 2001. In June 2003, after Ms. Altman’s original lawyer withdrew from the case, Mr.
Altman convinced Ms. Altman to sign a marital dissolution agreement and quitclaim deed conveying
substantially all of the parties’ assets to him. He recorded the quitclaim deed immediately but waited
until the day of trial, October 6, 2003, to file the marital dissolution agreement, along with his
answer and counterclaim for divorce.
Ms. Altman’s new lawyer, who was unfamiliar with the marital dissolution agreement and
the quitclaim deed, informed the trial court that his client no longer agreed to the marital dissolution
agreement. The trial court decided that the marital dissolution agreement was not binding on the
parties until accepted by the trial court and declined to give it any effect because Ms. Altman no
longer agreed to it. Since both parties desired a divorce, the remainder of the trial focused on the
parties’ disputes regarding the classification and valuation of the marital property. Their most
significant disagreement related to the value of the marital residence, which had been destroyed by
a tornado. The court valued the total marital estate at $126,622.95, which included the proceeds of
the insurance settlement1 and the value of the real property minus the two mortgages on the property,
totaling $68,383.95.2
The trial court determined that the marital estate should be divided in an “approximately
50/50 split” between the parties after taking into consideration (1) that Mr. Altman had been paying
the mortgage on the marital home, (2) that Ms. Altman had owned and operated a money losing
consignment business for eight years, (3) that Mr. Altman had used marital funds to pay tax
obligations and other debts of Ms. Altman’s business, and (4) that Ms. Altman had contributed
separate assets to the marriage, including a $67,900 inheritance. Accordingly, the trial court awarded
Mr. Altman 58.5% of the net marital estate and awarded Ms. Altman the remaining 41.5%.
Mr. Altman has appealed despite receiving more than one-half of the marital estate. He
insists that the trial court erred by declining to divide the marital estate in accordance with the
marital dissolution agreement and that the trial court erred in its valuation of the marital residence.
Ms. Altman asserts that she should have been awarded a larger portion of the marital estate and that
Mr. Altman should be required to pay her legal expenses for this appeal.
II.
THE EFFICACY OF THE MARITAL DISSOLUTION AGREEMENT
Mr. Altman first takes the trial court to task for failing to use the marital dissolution
agreement to guide its division of the marital estate. This argument overlooks the fact that Ms.
Altman unequivocally repudiated the marital dissolution agreement before the trial started. The
effect of Ms. Altman’s action was to undermine the enforceability of the marital dissolution
agreement and to free the trial court to make its own equitable division of the marital estate.
Martial dissolution agreements are contracts. Johnson v. Johnson, 37 S.W.3d 892, 896
(Tenn. 2001); Wade v. Wade, 115 S.W.3d 917, 924 (Tenn. Ct. App. 2002). They provide a vehicle
for divorcing parties to, among other things, provide “for the equitable settlement of any property
rights between the parties.” See Tenn. Code Ann. § 36-4-103(b) (2001). While these contracts
1
Mr. Altman asserts in his brief that the insurance proceeds totaled $103,000. However, the insurance proceeds
actually totaled $109,500, which included $103,000 for the parties’ house, $4,500 for their kennel, and $2,000 for their
barn. The trial court used this amount in all of its calculations.
2
$109,500.00 [insurance proceeds] + $90,000.00 [value of real property] - $131,116.05 [balance of outstanding
mortgages] = $68,383.95.
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become absolutely binding and enforceable after approval by the trial court, this court has recognized
that parties may be permitted to withdraw from these agreements before they have been approved
by the court, as long as one or both parties have not relied on the agreement to their detriment.
Denbow v. Denbow, No. 02A01-9410-CH-00238, 116 WL 243894, at *1-2 (Tenn. Ct. App. May 9,
1996) (No Tenn. R. App. P. 11 application filed); Sutton v. Sutton, No. 03A01-9309-CH-00315,
1994 WL 108927, at *1 (Tenn. Ct. App. Mar. 31, 1994) (No Tenn. R. App. P. 11 application filed).3
This record contains no evidence of detrimental reliance on the marital dissolution agreement
by either of the Altmans. Accordingly, the trial court did not err by refusing to enforce the property
settlement provisions in the agreement after Ms. Altman unequivocally repudiated it. While Mr.
Altman remained free to argue that the marital dissolution agreement’s disposition of the marital
property was fair and equitable, the trial court had the prerogative to come up with its own equitable
division of the marital estate based on the facts.
III.
THE SIGNIFICANCE OF THE QUITCLAIM DEED
Mr. Altman also insists that the trial court erred by awarding Ms. Altman an interest in the
real property where the marital home had been located and in the insurance proceeds resulting from
the destruction of the home. He argues that Ms. Altman quitclaimed her interest in this property to
him and, therefore, that the property should not have been included in the marital estate. This
argument overlooks the important principle that the classification of property does not depend on
the state of its record title but on the conduct of the parties. Mondelli v. Howard, 780 S.W.2d 769,
774 (Tenn. Ct. App. 1989). Thus, the courts will consider all the parties’ legal and equitable
interests in property when they are called upon to divide the marital estate. Jones v. Jones, 597
S.W.2d 886 (Tenn. 1979).
Both the marital dissolution agreement and the quitclaim deed are transparent attempts by
Mr. Altman to keep the parties’ marital home out of their marital estate. Neither accomplished their
desired effect because no matter where the current legal title to the property lies, the property remains
marital property because it was the parties’ home. Accordingly, the trial court properly classified
both the real property where the house once stood and the insurance proceeds from the destruction
of the house as marital property.
IV.
THE VALUATION OF THE MARITAL RESIDENCE
Finally, Mr. Altman asserts that the trial court erred in its valuation of the marital residence
by refusing to base its calculation on the cost of replacing the home. Relying on some creative
mathematics, he insists that the value of the marital residence is $54,500 – the difference between
3
Some commentators have argued that parties who sign a marital dissolution agreement should be estopped to
repudiate it even in the absence of part performance or receipt of benefits. See J AN ET L EACH R ICH ARD S , R ICH ARD S O N
T ENN ESSEE F AM ILY L AW § 13-7(c) (2d ed. 2004).
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the combined value of the insurance proceeds and the real property and cost he will incur to rebuild
the home.4 We disagree with this approach to valuation for two reasons. First, the value of the
marital residence is determined at the time of the divorce, and the future costs associated with
rebuilding the home are simply not part of the equation. See Tenn. Code Ann. § 36-4-121(b)(1)(A)
(Supp. 2004) (“[a]ll marital property shall be valued as of a date as near as possible to the date of
entry of the order finally dividing the marital property”). Second, Mr. Altman’s suggested
calculation fails to take the outstanding mortgages on the marital residence into consideration.
V.
THE EQUITABLE DIVISION OF THE MARITAL ESTATE
Ms. Altman complains that she should have received a larger share of the marital estate. She
insists that the trial court unfairly awarded her only 41.5% of the marital estate because the court
improperly viewed her failed consignment business as dissipation of marital assets. While we have
determined that the evidence does not support the trial court’s conclusion that Ms. Altman dissipated
marital funds in the operation of her consignment business, we find that the manner in which the trial
court divided the marital estate was equitable based on the factors in Tenn. Code Ann. § 36-4-121(c).
A.
Mr. Altman’s Dissipation Claim
Among the factors that courts may consider when fashioning an equitable division of a
marital estate is a party’s dissipation of the marital or separate property. Tenn. Code Ann. § 36-4-
121(c)(5). Even though no statutory definition of “dissipation” exists, the term has a common
meaning in the context of divorce. The concept of dissipation is based on waste. Ward v. Ward, No.
W2001-01078-COA-R3-CV, 2002 WL 31845229, at *3 (Tenn. Ct. App. Dec. 19, 2002) (No Tenn.
R. App. P. 11 application filed). Dissipation of marital property occurs when one spouse uses
marital property, frivolously and without justification, for a purpose unrelated to the marriage and
at a time when the marriage is breaking down. See, e.g., In re Marriage of Cerven, 742 N.E.2d 343,
348 (Ill. App. Ct. 2000); Goodman v. Goodman, 754 N.E.2d 595, 598 (Ind. Ct. App. 2001); Allison
v. Allison, 864 A.2d 191, 195 (Md. Ct. Spec. App. 2004); Kittredge v. Kittredge, 803 N.E.2d 306,
317 (Mass. 2004); Budnick v. Budnick, 595 S.E.2d 50, 58 (Va. Ct. App. 2004). Dissipation involves
intentional or purposeful conduct, Stock v. Stock, 693 So. 2d 1080, 1084 (Fla. Dist. Ct. App. 1997);
K. v. B., 784 N.Y.S.2d 76, 90 (App. Div. 2004), that has the effect of reducing the funds available
for equitable distribution. See In re Marriage of Miller, 796 N.E.2d 135, 141 (Ill. Ct. App. 2003);
Goodman v. Goodman, 754 N.E.2d at 598; Jeffcoat v. Jeffcoat, 649 A.2d 1137, 1142 (Md. Ct. Spec.
App. 1994).
Whether a particular course of conduct constitutes a dissipation depends on the particular
facts of the case. In re Marriage of Cerven, 742 N.E.2d at 348; Solomon v. Solomon, 857 A.2d
1109, 1112 (Md. 2004); Kittredge v. Kittredge, 803 N.E.2d at 316. The party claiming that
4
$199,500 [the insurance proceeds + the value of the real property] – $145,000 [the cost of rebuilding the
house] = $54,500.
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dissipation has occurred has the burden of persuasion and the initial burden of production. After the
party alleging dissipation establishes a prima facie case that marital funds have been dissipated, the
burden shifts to the party who spent the money to present evidence sufficient to show that the
challenged expenditures were appropriate. Wiltse v. Wiltse, No. W2002-03132-COA-R3-CV, 2004
WL 1908803, at *4 (Tenn. Ct. App. Aug. 24, 2004) (No Tenn. R. App. P. 11 application filed); see
also Bratcher v. Bratcher, 26 S.W.3d 797, 799 (Ky. Ct. App. 2000); Turner v. Turner, 809 A.2d 18,
52 (Md. Ct. Spec. App. 2002); Anderson v. Anderson, 514 S.E.2d 369, 380 (Va. Ct. App. 1999).
An equitable division of marital property requires a thoughtful consideration of all the
relevant factors listed in Tenn. Code Ann. § 36-4-121(c). Flannary v. Flannary, 121 S.W.3d 647,
650-51 (Tenn. 2003); Kinard v. Kinard, 986 S.W.2d 220, 230-31 (Tenn. Ct. App. 1998). Dissipation
is not a separate factor. To the contrary, the allegedly improper or wasteful expenditure or
transaction must be considered in the context of the marriage as a whole, and it must be weighed
along with all the other relevant factors in the case. Kittredge v. Kittredge, 803 N.E.2d at 316. The
factors that courts most frequently consider when determining whether a particular expenditure or
transaction amounts to dissipation include: (1) whether the expenditure benefitted the marriage or
was made for a purpose entirely unrelated to the marriage; (2) whether the expenditure or transaction
occurred when the parties were experiencing marital difficulties or were contemplating divorce;5 (3)
whether the expenditure was excessive or de minimis; and (4) whether the dissipating party intended
to hide, deplete, or divert a marital asset. Halkiades v. Halkiades, No. W2004-00226-COA-R3-CV,
2004 WL 3021092, at *4 (Tenn. Ct. App. Dec. 29, 2004); Wiltse v. Wiltse, 2004 WL 1908803, at *4;
Ward v. Ward, 2002 WL 31845229, at *3; see also Thompson v. Thompson, 811 N.E.2d 888, 914
(Ind. Ct. App. 2004).
Mr. Altman’s dissipation claim focuses on the unsuccessful consignment business that Ms.
Altman operated for eight years during the marriage. Before the business finally closed down, the
parties were required to use marital funds to pay business taxes and other operating expenses.
Simple mismanagement of family finances is not dissipation, Cornell v. Smith, 616 So. 2d 629, 630
n.3 (Fla. Dist. Ct. App. 1993), nor is using marital funds to prop up a failing business. McDavid v.
McDavid, 511 S.E.2d 365, 368 (S.C. 1999). As far as this record shows, Ms. Altman started this
business long before the parties began experiencing marital problems. Mr. Altman was aware of the
business and was directly involved in the decision to use marital funds to pay its taxes and to defray
its operating expenses. Because Mr. Altman failed to present any evidence that Ms. Altman started
or operated her business for the purpose of depleting the marital estate, the trial court erred by
characterizing Ms. Altman’s management of the business as “dissipation” for the purpose of Tenn.
Code Ann. § 36-4-121(c)(5).
5
The timing of the expenditure or transaction is extremely relevant. It is unlikely that expenditures that were
typical or commonplace during the marriage will constitute dissipation, especially when the other spouse acquiesced in
them. Askinazi v. Askinazi, 641 A.2d 413, 416 (Conn. Ct. App. 1994); Rosenfeld v. Rosenfeld, 597 So. 2d 835, 836-37
(Fla. Dist. Ct. App. 1992); Bojrab v. Bojrab, 786 N.E.2d 713, 728 (Ind. Ct. App. 2003).
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B.
The Division of the Marital Estate
Our decision that the evidence does not support the trial court’s conclusion that Ms. Altman
dissipated marital assets by continuing to operate her consignment business does not necessarily
undermine the validity of the manner in which the trial court divided the parties’ marital estate. In
the final analysis, the appropriateness of the trial court’s division depends on its results. Bolin v.
Bolin, 99 S.W.3d 102, 107 (Tenn. Ct. App. 2002); Watters v. Watters, 959 S.W.2d 585, 591 (Tenn.
Ct. App. 1997). Based on our analysis of the evidence in light of the factors in Tenn. Code Ann. §
36-4-121(c), we have determined that awarding Ms. Altman 41.5% of the marital estate was
equitable.
Trial courts have wide latitude in fashioning an equitable division of marital property, Fisher
v. Fisher, 648 S.W.2d 244, 246 (Tenn. 1983); Manis v. Manis, 49 S.W.3d 295, 306 (Tenn. Ct. App.
2001), and appellate courts accord great weight to a trial court’s division of marital property. Wilson
v. Moore, 929 S.W.2d 367, 372 (Tenn. Ct. App. 1996); Edwards v. Edwards, 501 S.W.2d 283, 288
(Tenn. Ct. App. 1973). Thus, we will ordinarily defer to the trial court’s division of the parties’
marital estate unless it is inconsistent with the factors in Tenn. Code Ann. § 36-4-121(c) or is not
supported by a preponderance of the evidence. Brown v. Brown, 913 S.W.2d 163, 168 (Tenn. Ct.
App. 1994); Mahaffey v. Mahaffey, 775 S.W.2d 618, 622 (Tenn. Ct. App. 1989); Hardin v. Hardin,
689 S.W.2d 152, 154 (Tenn. Ct. App. 1983).
A division of marital property is not rendered inequitable simply because it is not precisely
equal. Robertson v. Robertson, 76 S.W.3d 337, 341 (Tenn. 2002); Cohen v. Cohen, 937 S.W.2d 823,
832 (Tenn. 1996). It is essentially undisputed that Mr. Altman’s income provided most of the
parties’ cash flow during the marriage and that he continued to pay the mortgages on the parties’ real
property during the two years between the parties’ separation and the final divorce hearing. These
mortgage payments enabled the parties to maintain and preserve the most valuable asset in the
marital estate. The evidence regarding Mr. Altman’s financial contributions to the marriage provide
a sufficient basis for awarding Mr. Altman a larger share of the marital estate.
VI.
We affirm the October 27, 2003 final decree of divorce and remand the case to the trial court
for whatever further proceedings may be required. We also decline to award Ms. Altman her
attorney’s fees for this appeal and tax the costs, in equal proportions, to Alan Altman and his surety
and to Lisa R. Altman for execution, if necessary, may issue.
______________________________
WILLIAM C. KOCH, JR., P.J., M.S.
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