No Transmutation: Wife Retains Interest in Pre-marital Real Estate

Tennessee case summary on property classification and transmutation in divorce.

Ronald Dana Harper v. Annette Carrol Harper

The husband and wife in this Madison County, Tennessee, case were married in 2011.  It was the wife’s second marriag and the husband’s fourth.  They separated in 2016, and the husband filed for divorce.  The parties stipulated to the divorce and the division of most of their property.  The sticking point, however, was the disposition of three tracts of real property.

The first piece of property was a 69.5 acre property, which served as the marital residence for part of the marriage.  The other tracts were approximately 291 acres and 81 acres.  The wife owned all three parcels unencumbered at the time of the marriage, and testified that they had been in her family for over 150 years.

Shortly after the marriage, the wife executed quit claim deeds on the three tracts creating tenancies by the entirety with the husband.  With regard to these deeds, the wife testified that the husband harassed and berated her daily and threatened to leave if she did not execute the deeds.  The husband denied these allegations.  In fact, he denied ever asking the wife to transfer the property to him.

The case went to trial in 2017, and the husband argued that all three tracts were marital property.  He requested that the 291 acre tract be allocated to him.  The trial court held that all three were the wife’s separate property.  The husband then appealed to the Tennessee Court of Appeals.

The appeals court first noted the standard of review, that in non-jury cases, review is de novo, with a presumption of correctness of fact findings.  It also noted that the trial court found the wife to be a more credible witness.

In classification, separate property can sometimes become marital property under the doctrine of transmutation. Generally, this requires commingling with marital property or with the other spouse’s property.  But if property is segregated and can be traced, then there is generally no transmutation.

The husband specifically pointed to the use of one of the properties as the marital residence.  He also argued that maintenance and management was done by both spouses, and that the non-owner spouse’s credit was used to improve the property.

But the appeals court was quick to point out that much of the improvements were made by the sale of a fourth property held by the wife, rather than from marital assets.

Also, the appeals court pointed out that the land was farmed by third party tenants, and that neither of the spouses made significant management decisions.  Renovations of the marital residence were done by third parties, with very little input by either of the spouses.

The appeals court again noted that the lower court had weighed the credibility of the witnesses.  It had concluded that there had been no transmutation, and the appeals court agreed that there was sufficient evidence supporting this finding.

For these reasons, the Court of Appeals affirmed the lower court’s finding that the properties remained the wife’s separate property.

The appeals court was also called upon to address the valuation of the husband’s bank account, and affirmed this finding as well.

For these reasons, the Court of Appeals affirmed the lower court’s judgment and assessed the costs of appeal against the husband.

No. W2017-02193-COA-R3-CV  (Tenn. Ct. App. Oct. 24, 2018).

See original opinion for exact language.  Legal citations omitted.

To learn more, see Transmutation in Tennessee Property Division Divorce Law.