Court Must Make Detailed Findings Before Concluding that Wife’s House Transmuted to Marital Property

If the husband had made substantial contributions, then the trial court would need to determine the amount of increase in value.

Tennessee case summary on classification and transmutation in divorce.

Jennifer Lynn Morgan Esposito v. Joseph Diego Esposito

The parties in this Campbell County, Tennessee, case were married in 2012 and had no children.  In 2021, the wife filed for divorce, alleging inappropriate marital conduct and irreconcilable differences.  The wife was 55 years old, and the husband was 64.

The residence had been owned by the wife prior to marriage and remained in her name.  The wife alleged that the parties had scrupulously kept their finances separate, although the husband had made a few payments on the house over the years.  The husband, on the other hand, claimed that he had invested over a quarter million dollars in the residence, and attached copies of checks to the wife and receipts for materials and repairs.

The parties agreed that the residence would be sold at auction, with the proceeds to be paid into the court.

After the sale, a trial was held on various issues, including whether the residence was marital property or separate.  The trial court concluded that the husband had contributed significantly, and that the residence was marital property.  The wife appealed to the Tennessee Court of Appeals.  Among her issues was the correctness of this ruling.

The wife argued that the property was her separate property, and the husband contended that it had transmuted to marital property due to his contributions.

Unfortunately, the trial court had not stated the exact reason for its reason.  In particular, it had not discussed the doctrine of transmutation.

The lower court’s findings held simply that the property was marital, but the appeals court held that this was insufficient.

The appeals court vacated the lower court’s ruling, and offered some guidelines for the lower court to follow.  It noted that if the lower court found that the husband had made substantial contributions, then the trial court would need to determine the amount of increase in value.  Only the increase in value resulting from those contributions would be marital property, and the remaining amounts would be separate property.

The appeals court addressed a number of other issues, affirming with respect to those issues.  It then remanded the case.

No. E2022-01784-COA-R3-CV (Tenn. Ct. App. Dec. 12, 2023).

See original opinion for exact language.  Legal citations omitted.

To learn more, see The Tennessee Divorce Process: How Divorces Work Start to Finish, Property Division in Tennessee Divorce and view our video Is Tennessee a 50 50 divorce state?