Divorced Couple’s Home to Be Valued at Time of Sale, Not Time of Divorce

Tennessee case summary on property division after divorce.

Taylor Brocato (now Dunn) v. Kyle Young

The husband and wife were divorced in Montgomery County, Tennessee, in 2019, and the final decree incorporated their Marital Dissolution Agreement (MDA).  Among other things, that agreement provided that when their house was sold, the wife would receive “half of what is made.”

At a hearing before the agreement was approved, the trial court inquired as to the meaning, and the wife testified that the husband was “going to just pay me equity.”

Two years later, the wife commenced an action to partition the property.  The husband took the position that the wife’s interest in the property would be valued at $9750, and that the wife had already accepted $6600 of this amount.

The trial court ruled that since the property was a single-family house, it was not suitable for partition.  Therefore, it was ordered sold, and ordered the wife to receive half of the equity, based upon the value at the date of divorce.

The trial court also refused to credit the $6600, since there was no written contract, and the oral modification of the written contract would violate the statute of frauds.  The property was sold, and the wife’s share was to be about $17,000.  Both parties appealed to the Tennessee Court of Appeals.

The wife took issue with the date at which her share was to be calculated.  She took the position that she was entitled to half the equity as of the sale date.  The appeals court applied general principles of contract law as it examined the agreement.

On this point, the appeals court agreed with the wife, and held that the date of the sale was the proper time to value the property.  It stressed that its ruling was based upon the unique facts of the case.

The court next turned to the effect of the husband’s payments of $6600.  Here, the appeals court first held that the alleged oral contract involved real property, and such agreements must be in writing under the statute for frauds.  But it went on to hold that it would be inequitable to unjustly enrich the wife in this amount.  Therefore, it reversed the lower court’s ruling in this regard, and credited the husband with this payment.

The appeals court also agreed with the husband that contributions made by his co-tenant after the divorce should have been considered in the equity calculation.

For these reasons, the Court of Appeals reversed and remanded, although it denied both parties’ requests for attorney’s fees.

No. M2023-00222-COA-R3-CV (Tenn. Ct. App. Jan. 2, 2024).

See original opinion for exact language.  Legal citations omitted.

To learn more, see The Tennessee Divorce Process: How Divorces Work Start to Finish.