TN Husband Bound By Deed To Wife Signed During Divorce

Tennessee case summary on transmutation of real property in divorce.

Mildred S. Draper v. Donald Mark Draper  – Tennessee divorce separate v. marital property

The wife in this Tennessee case filed for divorce after nearly forty years of marriage.  She cited inappropriate marital conduct and irreconcilable differences.  The husband denied wrongdoing, but before doing so, he withdrew over $173,000 from their joint checking account, although he later returned those funds.  He also filed a counter-complaint for divorce, also alleging inappropriate marital conduct and irreconcilable differences.

The parties had owned a cattle farm in McMinnville, Tennessee.  The farm had been deeded to them by the wife’s mother.  While the divorce case was pending, the husband signed his interest in the farm over to the wife, but ten days later, he asked to have the deed set aside.  He alleged that the wife had engaged in misrepresentation by claiming that she intended to reconcile.  Instead, he asked the divorce court to treat the farm as marital property.

A trial was held, and the wife did concede that she had requested ownership of the farm in exchange for continued counseling and the dismissal of the divorce case.  She also offered the husband the marital residence if the counseling did not prove successful.  After the husband signed the deed to the farm, the wife did not continue the counseling, but she claimed that her change of heart was the result of the husband’s behavior after signing the deed.

The trial court, after hearing all of the evidence, concluded that the farm was the wife’s separate property, and that the husband’s signing the deed was not the result of coercion or undue influence.  The trial court also divided the remaining assets.  Dissatisfied with this outcome, the husband appealed to the Tennessee Court of Appeals.

The appeals court first noted that it reviews a lower court’s factual findings de novo, but with a presumption of correctness.  They will not be set aside unless the preponderance of the evidence is to the contrary.  The court then turned to the question of the status of the farm.  It noted that property received by one spouse as a gift is generally separate property, and that this rule applies even when the gift is from the other spouse.  The wife argued that the husband’s signing the deed constituted a gift.  But the husband argued that it was a transfer of property that was conditional upon continued counseling and dismissal of the divorce complaint.  He argued that the wife’s actions amounted to fraud because she never intended to honor these conditions.

The appeals court zeroed in on the husband’s statement after signing the deed.  He had told the wife that he did something her parents would not do, namely give her sole ownership of the farm.  This, according to the appeals court, demonstrated that his intent was to give her the farm as a gift.

After reviewing the evidence, the appeals court also agreed with the lower court that the wife had not engaged in any fraud or undue influence.

The husband did fare better when it came to the division of the other property.  The lower court had divided the marital assets equally, but the husband argued that it should have taken into consideration the fact that the wife had already received the farm.  The appeals court agreed that this was a relevant factor, and remanded the case for proper consideration.

After considering a number of other issues, the Court of Appeals affirmed in part, reversed in part, and remanded the case.

No. E2014-02224-COA-R3-CV (Tenn. Ct. App. Nov. 12, 2015).

See original opinion for exact language.  Legal citations omitted.

To learn more, see Property Division in Tennessee Divorce.