Facts: Husband and Wife divorced after 23 years of marriage.
Husband is a successful real estate entrepreneur. The parties amassed what the Court describes as “a tremendous estate” valued at over $44 million that allowed them to enjoy “an extravagant lifestyle.”
The trial court found Husband guilty of 19 counts of criminal contempt for things such as his “deliberate attempts to hide assets” and even orchestrating the cover-up of his attempts, for which he was sentenced to serve 55 days in jail. Husband was found to have “zero credibility.”
Husband’s real estate portfolio contains many properties. To determine the value of those properties, Husband submitted the reports and testimony of two certified appraisers.
Wife did not object to the testimony of the appraisers, nor did she submit competing appraisals. Instead, Wife relied on a financial statement prepared by Husband over four years before the trial to determine the values of the properties.
Husband testified the financial statement he prepared is unreliable because he submitted substantially inflated values that are much higher than the actual values for the properties. Although the financial statement was submitted to Husband’s bank for financing, it was unsigned, unsworn, and unaudited.
For 20 specific properties, the difference between the appraised values and the values on the four-year-old financial statement totaled $16.8 million.
The trial court valued the properties consistent with the financial statement, stating:
The  financial statement was the last financial statement submitted by Husband to a bank prior to the filing of the instant divorce action. Moreover, even after Husband received the divorce appraisals, Husband continued to disregard same with respect to the values he presented to the bank on his final financial statement. As such, the Court utilized the  financial statement.
On Appeal: The Court of Appeals vacated the trial court’s judgment.
Husband argued the trial court erred in overvaluing many of the properties that comprise the marital estate.
The Court found the trial court failed to adequately explain its reasons for rejecting uncontradicted current appraisals in favor of a financial statement over four years old:
The trial court rejected the more recent certified appraisals in favor of the financial statement with very little explanation. In bench trials, trial courts must make findings of fact and conclusions of law to support their rulings. . . . Simply stating the trial court’s decision, without more, does not fulfill this mandate.
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Considering the trial court’s assessment and emphasis on Husband’s lack of credibility, it does not seem reasonable to assign credibility to his financial statements without a more in-depth explanation for ignoring independent appraisals of the properties. Husband even testified that he “grossly exaggerated” the values put on his  financial statement. Without a clear explanation from the trial court regarding exactly what it found to be unreliable within the appraisals themselves, it is impossible for us to know whether the court below employed the correct legal standard. We find this to be particularly true in this case where the court appears to have violated the statutory directive found in Tennessee Code Annotated § 36-4-121(b)(1)(A), which instructs the court to value the marital property is near as possible to the date it is divided. Wife did not object to the appraisals or to the testimony of “the appraisers” at trial. She also did not submit competing appraisals.
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Husband asserts that, in addition to the staleness of his  financial statement used by the courts, it was not specific enough to be considered competent evidence. Unlike the certified appraisals, the financial statement did not analyze specific factors such as current vacancy rates, interest rates, or comparable properties. In light of the fact-intensive nature of the valuation of the marital property, we deem it necessary to vacate and remand this matter for further analysis by the trial court.
The trial court’s valuations and division of property were vacated, and the case was remanded for further proceedings.
K.O.’s Comment: According to the opinion, Husband gave Wife a check for $1 million as a birthday gift and told her she looked like a million dollars.
Immediately after giving her this check, he gave her a second check for $1 million as a birthday gift. The opinion says:
He told her that saying she looked like $1 million was too cliché, so he gifted her a total of $2 million.
For anyone interested, my birthday is in June. Gifts can be sent directly to my office. Please, no clichés.