Posted by: koherston | January 9, 2012

Property Classification, Transitional Alimony, and Attorney’s Fees: May v. May

Facts: Husband and Wife divorced after a 25-year marriage. At the time of divorce, Husband was 75 years old and “semi-retired,” earning $1,250 per month as a consultant. Wife was 59 years old, had a GED, and earned $260 per month cleaning houses. She also had cancer and a painful nerve condition in her hip. The marital estate consisted of well over one million dollars in real property and investment accounts, much of which Husband argued should be classified as separate property because of an inheritance he received during the marriage. The proof showed Husband was very controlling with their finances. For example, Husband only allowed Wife to get gas for her car once a month. Wife resorted to selling her plasma twice a week for the past 10 years in order to have some gas and spending money. The trial court awarded Wife temporary alimony of $2,500 per month prior to trial. Husband was ordered to list the real property for sale, although Husband ignored that order because he simply “didn’t want to.” After hearing all the evidence, the trial court classified all of the various assets and bank accounts as marital property, equitably divided the marital estate, awarded Wife transitional alimony of $1,500 per month until the real properties were sold, and ordered Husband to pay approximately $65,000 to reimburse Wife for her attorney’s fees and expenses. Husband appealed.

On Appeal: The Court of Appeals affirmed the trial court.

Husband first argued the trial court erred in classifying certain assets as marital property. Although Husband’s inheritance was his separate property when it was received, separate property becomes marital property through “commingling” if it is inextricably mingled with marital property or with the separate property of the other spouse. If the separate property continues to be segregated or can be traced into its product, commingling does not occur. Separate property can also become marital property through “transmutation,” which occurs when separate property is treated in such a way as to give evidence of an intention that it become marital property. The rationale underlying these doctrines is that dealing with property in these ways creates a rebuttable presumption of a gift to the marital estate. This presumption is based also upon the provision in many marital property statutes that property acquired during the marriage is presumed to be marital. The presumption can be rebutted by evidence of circumstances or communications clearly indicating an intent that the property remain separate.

Husband’s argument was rejected because the inheritance funds had been passed through and commingled with so many marital accounts to such an extent that even Husband admitted it would be “financial chaos” to attempt to untangle and trace the finances. Husband’s treatment of the funds created a presumption of a gift to the marital estate, which presumption Husband failed to rebut. The trial court was affirmed.

Husband also challenged the trial court’s award of transitional alimony of $1,500 per month until the real properties were sold such that Wife would receive her share of those assets. The Court found no error in the trial court’s award. The Court stated:

Furthermore, we note that the Trial Court specifically tied the end date of this alimony to the sale of the Farm and Gatlinburg properties, when Wife would receive her share of these marital assets. As the evidence in the record clearly shows that Husband had previously been ordered to list these properties for sale and had deliberately refused to comply with the Trial Court’s orders, it is clear that Husband has some measure of control over the duration of the alimony award. If Husband continues to refuse to list the properties for sale, then Husband will continue to be required to pay this alimony. We find no error in the award of alimony, and we affirm on this issue.

Finally, Husband challenged Wife’s award of nearly $65,000 in attorney’s fees as alimony in solido. A spouse with adequate property and income is not entitled to an award of alimony to pay attorney’s fees and expenses. Such awards are appropriate only when the spouse seeking them lacks sufficient funds to pay his or her own legal expenses, or the spouse would be required to deplete his or her resources in order to pay them. Here, the trial court found Wife lacked sufficient funds to pay her attorney’s fees, and her ability to pay the fees was solely dependant upon her use of the assets awarded her in the divorce. Husband did not exactly help his cause:

Furthermore, the Trial Court found that: “[Husband’s] conduct necessitate the incurring of significant and substantial attorneys’ fees which [Wife] should not have had to bear, but for the harassing and contemptuous conduct by [Husband].” The record contains much support for this particular finding.

For the icing on the cake, Wife was awarded her attorney’s fees on appeal.

K.O.’s Comment: Is the Court’s open-ended termination date for the transitional alimony award consistent with the its recent ruling in McKin v. McKin? How is this obligor’s “measure of control over the duration of the alimony award” any different from the obligor in McKin?

May v. May (Tennessee Court of Appeals, Eastern Section, November 29, 2011).

Information provided by K.O. Herston: Knoxville, Tennessee Matrimonial, Divorce and Family Law Attorney.


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