Causing Fire Doesn’t Count as a Substantial Contribution and Property Remains Other Spouse’s Separate Property
Ballard v. Ballard, No. M2008-00713-COA-R3-CV (Tenn. Ct. App. Jan. 21, 2009).
Causing Fire Doesn’t Count as a Substantial Contribution and Property Remains Other Spouse’s Separate Property
Before he met his future wife, Mr. Ballard purchased a home in his own name for $81,000. The same year he began dating Mrs. Ballard, he paid off the first mortgage on his home in full and obtained a second mortgage. After the parties married, Mr. Ballard paid the second mortgage, utilities, property taxes, and homeowner’s insurance from a personal checking account that he maintained separately from his wife. While the parties were married, Mrs. Ballard and her child from another marriage caused two major fires in Mr. Ballard’s home. The homeowner’s insurance obtained by Mr. Ballard covered the substantial repairs needed after both of the fires. While Mrs. Ballard admitted to paying nothing towards the mortgage, she used income from child support and various part-time jobs to buy needed items for the family and “things for the house.”
When the parties divorced, the trial court held that the home was Mr. Ballard’s separate property. The trial court also held that Mrs. Ballard was entitled to 40% of the $50,000 appreciation of the home from the date of the marriage until the date of the divorce decree. The trial court, however, deducted money from Mrs. Ballard’s $20,000 award because she stole Mr. Ballard’s credit card to make unauthorized purchases and fraudulently forged checks on Mr. Ballard’s checking account. The trial court took further deductions for repairs on the house made by Mr. Ballard after the couple separated. Mrs. Ballard appealed the trial court’s decision, claiming that the holding was erroneous in its calculations of her equity in the marital residence and deductions for credit card charges and forged checks. The Tennessee Court of Appeals reversed the holding of the trial court and found that Mrs. Ballard made no significant contributions to the appreciation of Mr. Ballard’s home. In a strongly worded opinion, the court noted that “[Mrs. Ballard’s] only ‘contributions’ were contributing to two fires at the home, causing approximately $200,000 in damage, and contributing to the home’s filthiness by bringing two pot-bellied pigs into the home.” Accordingly, the court awarded Mr. Ballard the full value of the appreciation of the home.
This post is part of a series, Appreciation of Separate Property: The Forensic Accountant’s Full Employment Act.
