Tennessee Dream House Was Joint Property, Notwithstanding Prenuptial Agreement

Tennessee law case summary on prenuptial agreements in divorce from the Court of Appeals.

Carolyn M. Heaton v. Jason Barrett Heaton – Tennessee divorce prenuptial agreement & classification

Carolyn and Jason Heaton were married in 2006 in Alabama and had one daughter, who was three years old at the time of their Tennessee divorce.  Prior to the marriage, they had entered into a prenuptial agreement.  Among other things, that agreement stated that all property obtained by them during the marriage would remain separate property unless specifically designated as joint property.

Shortly after their marriage, they acquired real property, tore down the existing house, and began building their dream home, with the husband serving as the general contractor.  The husband was able to obtain all of the permits, since he was on the deed as one of the owners of the property.  The wife had paid for the property, and paid the husband for his services as general contractor.

When the divorce was filed, the wife argued that the deed should be reformed to reflect that it was her sole property, and not joint property.

The trial court first determined that the prenuptial agreement was enforceable.  The trial court found, based largely upon the testimony of the real estate agent and mortgage agent, that it was largely unexpected that both names would appear on the deed.  Therefore, it found that the property was the wife’s separate property, and that she would be awarded it, subject to any encumbrances.  Dissatisfied, the husband appealed to the Tennessee Court of Appeals.

Even though the Court of Appeals agreed that the prenuptial agreement was valid, it agreed with the husband that there were no grounds to reform the deed.  There was no fraud or mutual mistake.  Even though the parties originally intended for the property to be in the wife’s name, they were both aware of the fact that both names appeared on the deed as husband and wife.  The prenuptial agreement allowed for the parties to acquire joint property, and in this case, the appeals court agreed with the husband that they had done so.  Therefore, it was no longer the wife’s separate property.

The appeals court also looked at the child support determination and concluded that it should be revisited on remand.  It also found that attorney fees to the husband might be appropriate on remand, pursuant to the prenuptial agreement.

For these reasons, the appeals court vacated the judgment and remanded the case.

Judge Susano dissented, and would have affirmed the trial court’s ruling naming the wife the sole owner of the property.

No. E2013-01985-COA-R3-CV (Tenn. Ct. App. Aug. 29, 2014).

See original opinion for exact language.  Legal citations omitted.

To learn more, see Tennessee Prenuptial Agreement Pros and Cons in Family & Divorce Law.