House Held Marital, But Husband Gets Back Down Payment

Tennessee case summary on property division in divorce.

Wife v. Husband (No. E2018-00175-COA-R3-CV (Tenn. Ct. App. Mar. 3, 2020). Names removed upon request of a party.

Prior to their 2013 marriage, the husband and wife in this Hamilton County, Tennessee, case were living in a home owned by the husband and leased by the wife.  The wife was paying the utility bills and had an alarm system installed.  Two months before the wedding, they moved to Chattanooga and moved into a house purchased by the husband.  The title to the property and the debt were in his name.  The down payment came from money he had obtained in an insurance settlement.  The realtor testified that when looking at the property, the husband said that “they” were looking for a house that would fit their family.  The wife testified that she decorated and got the house ready as a home for the family.

The wife alleged that the husband began abusing her in 2014.  In 2015, she filed for an order of protection and then for divorce.

The husband took the position that the wife was faking severe abuse in order to get his house.

After trial of the conflicting accusations, Judge Ward Jeffrey Hollingsworth noted that “neither party distinguished themselves in the field of veracity,” but that the husband was the less credible of the two.  He granted the wife a divorce on the grounds of inappropriate marital conduct.  With respect to the house, the court held that it was marital property, since the husband intended to make it a gift to the marital estate.  He ordered that upon sale of the house, the wife was to receive $100,000 of the proceeds.  The court also found that approximately $100,000 of the husband’s retirement was marital, and ordered that divided.  The husband appealed to the Tennessee Court of Appeals.

After discussing the standard of review, the court turned to the disposition of the house.  It noted that, in general, assets held by a party prior to marriage are presumed to be separate property.  Whether the property transmuted into marital property is a question of fact, over which the trial court has discretion.

The appeals court focused on the fact that the couple shopped for the house as an engaged couple for the house they would move into as their marital residence.  Mortgage payments were made from a commingled joint account.  The appeals court agreed that the property had become marital, even though the title of the property was never formally changed.

The appeals court did, however, adjust the lower court’s ruling as to the amount of the wife’s share, which had been set at a specific amount, $100,000.  The appeals court held that the down payment, which had come from the husband’s insurance settlement, was his separate property.  Therefore, after the property was sold, the wife’s share would be half of whatever remained after that amount was subtracted.

After addressing alimony and attorney’s fees, the Court of Appeals remanded the case to the trial court.

No. E2018-00175-COA-R3-CV (Tenn. Ct. App. Mar.  3,  2020).

See original opinion for exact language.  Legal citations omitted.

To learn more, see Property Division in Tennessee Divorce.