Husband’s Share of Debt Should Be Same As Share of Property

Tennessee case summary on property division in divorce.

Kim Lewis Neas v. Patricia Erskine Heffernan Neas

The husband and wife in this Tennessee divorce case were married in 1985.  At the time of their divorce, they had one child who was still a minor, a 15 year old son.  During the marriage, they jointly owned a welding and steel fabrication company which the husband operated.  The wife worked as a bookkeeper and also earned an associates degree in nursing.

After trial, the lower court awarded the wife about 55% of the marital assets, valued at about $700,000.  The husband received the welding business, and the wife received the marital residence.

About 99% of the couple’s debt, approximately $50,000 was assigned to the husband.  The husband then appealed to the Tennessee Court of Appeals.

On appeal, the husband argued that the trial court had set his income too high, at $5,500 per month.  He also argued that the welding business was over valued at $110,000.  He also argued that it was error to assign him 99% of the debt.

The appeals court first listed the statutory factors for dividing marital property, and noted that the trial court has a great deal of discretion in making the division.

In looking at the husband’s income, the court first noted that his W-2 income as only $3,000 per month.  The trial court raised this amount because the business paid some of his personal expenses, and that he had control of the business.

Even though the numbers were difficult to pin down, the appeals court ruled that the evidence did not preponderate against the lower court’s ruling.  In particular, the appeals court pointed out that the husband made considerable charitable donations, which the appeals court found were out of line with his W-2 income.

The appeals court then turned to the valuation of the business, which the lower court had set at $110,000.  Even though the husband pointed out that some of the equipment was not working, the appeals court believed that the lower court had already taken this into account.  Therefore, it affirmed this portion of the court’s ruling.  Overall, it ruled that the division, even though not exactly equal, was equitable.

Then, the appeals court looked at the assignment of the debt to the husband.  On this issue, the husband fared better.  The appeals court could find no rationale for assigning the debt 99% to the husband.  Therefore, it modified this portion of the order and split the debt 55% to the husband, and 45% to the wife.

Finally, the husband argued that the lower court erred in ordering him to pay $4,500 alimony in solido to cover the wife’s attorney’s fees.  Once again, the husband prevailed on this issue, since the Court of Appeals found that the lower court had applied improper factors in making this award.

For these reasons, the Court of Appeals affirmed in part, reversed in part, and sent the case back for further proceedings.

No. E2015-00292-COA-R3-CV (Tenn. Ct. App. Dec. 15, 2015).

See original opinion for exact language.  Legal citations omitted.

To learn more, see Property Division in Tennessee Divorce.