In Tenn. Divorce, Husband to Pay Back Wife Dissipated & Wasted Money

Tennessee law case summary on marital property and dissipation in Tennessee divorce and family law from the Tennessee Court of Appeals.

Ann Claudia Short Bowers v Frederick Allen Bowers – Tennessee Dissipation Law

Ann Claudia Short Bowers, the wife, and Frederick Allen Bowers, the husband, were married in April 2001 and divorced in 2009.   Each brought one daughter to the marriage from a previous marriage.   Both the wife and the husband also brought large financial assets with them to the marriage.  The wife owned a home, Loma Drive and the husband owned a yacht and property in Oklahoma.  During the marriage, the couple acquired another home in Navigator Pointe.  At the time of the divorce, the court decreed that the Loma Drive home was the wife’s separate property while the home at Navigator Pointe was marital property.  The Loma Drive home was sold during the marriage, the husband deposited the funds from that sale into his own account and used them for his own needs.  The court ruled that these dissipated funds also belonged solely to the wife, since they came from her separate property, and should be returned to the wife.  The husband appealed.

Dissipated separate funds must be returned

The husband presented two arguments on appeal.  First, he argued that the money paid from the sale of the Loma Drive home became marital property when it was “commingled with the money in his bank account.”  Second, he held that the trial court was mistaken in awarding the wife money that no longer existed.  The wife, in turn, argued that the money was her separate property and that the husband had unlawfully dissipated those funds.

The appeals court found in favor of the wife.   According to the testimony of the parties, after marriage they maintained separate finances, including separate checking accounts.   Money from the sales of the husband’s property in Oklahoma was deposited in his account alone.  Similarly, the wife paid for all expenses on the Loma Drive property.  When the husband put some money into renovating the basement at Loma Drive, the wife reimbursed him when they refinanced the house.  This clearly demonstrated the intention of both sides that the property belonged only to the wife and that the husband did not want to participate in the expenses on that home.  Although he deposited the funds from the sale of Loma Drive into his own account, the wife repeatedly asked the husband for these funds, evidence of their understanding that this was her property.

The court also rejected the husband’s claim that property, either separate or marital, that no longer exists, is not subject to distribution at the time of divorce because, essentially, there is nothing to divide.   The court held that this rule does not apply here.   In the two cases cited by the husband, money had either been merged into all of the other marital property or the money had actually disappeared (it had been placed in a drawer and when the husband went back later to retrieve it it was gone).

The current case was different from those cited.  The evidence showed that the money paid on the sale of Loma Drive was placed into the husband’s separate account and spent by him on personal affairs and not “immersed into the wealth of the marriage”.   The money was illegally held by the husband, despite the wife’s efforts to obtain them.  Finally, the money itself came from the sale of the wife’s separate property and was therefore hers alone and not subject to division as marital property.

The court further held that he dissipated or wasted the wife’s separate property.  The law requires that marital property be divided based on each person’s contribution to acquiring the money and their contribution to dissipating it.   In this case, although the husband wasted the wife’s separate property, the court held that the husband was still responsible for paying them back to the wife through his share of the marital property.

No. E2011-00978-COA-R3-CV (Tenn. Ct. App. May 17, 2012).

See original opinion for exact language.  Legal citations omitted.

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