Wife Didn’t Get Marital Interest in Husband’s Motorcycle Dealership in Tennessee Divorce
Tennessee law case summary on transmutation and property classification in divorce law from the Court of Appeals.
Christy L. Griffith v. Glen H. Griffith – transmutation of business in Tennessee divorce
The husband and wife in this Tennessee divorce case had been married for fifteen years and had one child. At the time of the marriage, the husband owned a part interest in his family’s motorcycle dealership, and he inherited the remaining interest during the marriage.
The trial court held that the dealership was a separately owned asset, but that it became marital property because of transmutation. The husband then appealed to the Tennessee Court of Appeals.
The wife had been employed by a bank with a salary of about $100,000 per year. The husband claimed that the dealership gave him little income, but the wife claimed that he was inattentive to the business, and often used company funds for personal purposes.
The trial court had first noted that it was only because of the wife’s efforts that the husband had been able to continue operating the dealership. On appeal, the husband first pointed to a stipulation at trial in which the wife agreed that the business was the husband’s separate property. The wife, however, argued that this was not the meaning of the stipulation. The appeals court agreed with the wife that she had actually not made such a stipulation.
On the issue of transmutation, the wife pointed out that she performed bookkeeping services, obtained loans against her 401(k) to pay property taxes, and co-signed a loan.
The appeals court first noted that property can be transmuted if it is treated in such a way as to show an intention to make it marital property. Four factors are considered in making this determination. For example, if property is used as a marital residence, that can support transmutation. In addition, if both parties take part in the maintenance and management of the property, if they place the title in joint ownership, or if they use the credit of the other spouse, these factors can support transmutation.
In this case, the only relevant factor was the wife’s co-signing a loan and using her 401(k). The court held that this was insufficient. Therefore, it held that the trial court had erred in finding transmutation and reversed that part of the lower court’s ruling.
After considering other issues, the Court of Appeals vacated the finding of transmutation and remanded the case.
No. E2014-00892-COA-R3-CV (Tenn. Ct. App. Apr. 14, 2015).
See original opinion for exact language. Legal citations omitted.
To learn more, see Transmutation in Tennessee Property Division Divorce Law.
