Facts: The parties divorced after six years of marriage.
Prior to the marriage, Wife owned three tracts of real estate. Six months into the marriage, Wife signed quitclaim deeds jointly titling the properties with Husband.
Wife testified she never wanted to transfer any interest in the properties to Husband. She said Husband harassed and berated her daily and threatened to leave her if she did not execute the deeds.
Husband argued the parties lived together on one property during part of the marriage, that he helped maintain the properties and helped to renovate the marital residence, and he obtained a home equity line of credit secured by all three properties.
Wife insisted that the farmers who leased the properties maintained them. She also said the money for the renovations to the marital residence came from the sale of another property she owned prior to the marriage.
Husband denied ever asking Wife to transfer her property to him.
The trial court found Wife more credible than Husband about his activities with the properties. It also found that Husband’s actions and verbal harassment of Wife over the properties severely diminished her ability to resist his demands about putting his name on the properties so she did not intend to make a gift to the marital estate, but was attempting to buy peace and save her marriage.
The trial court found the three tracts of land were Wife’s separate property and awarded them to her.
On Appeal: The Court of Appeals affirmed the trial court.
When equitably dividing property, Tennessee courts must first classify the property as either separate or marital property.
Separate property includes all property owned by a spouse before marriage. Separate property may be considered marital property by operation of law under theories of commingling or transmutation.
Transmutation occurs when separate property is treated in such a way that shows an intention that it become marital property. Dealing with property in this way creates a rebuttable presumption of a gift to the marital estate. The presumption can be rebutted by evidence of circumstances or communications clearly indicating an intent that the property remain separate.
Four of the most common factors Tennessee courts use to determine whether real estate has been transmuted from separate property to marital property are:
- using the property is a marital residence;
- the ongoing maintenance and management of the property by both parties;
- placing the title to the property in joint ownership; and
- using the credit of the nonowner spouse to improve the property.
A confidential relationship is one where confidence is placed by one in the other, and the recipient of that confidence is the dominant personality, with the ability, because of that conference, to influence and exercise dominion over the weaker or dominated party. A confidential relationship may include a husband and wife. A confidential relationship followed by a transaction in which the dominant party receives a benefit from the other party creates a presumption of undue influence.
The Court of Appeals found the evidence supported the trial court’s findings:
Wife testified that Husband berated and badgered her daily regarding transferring ownership of the tracts. . . . Husband denied that he asked Wife to transfer the tracts of land to him. He further denied that he threatened to leave Wife if she didn’t execute the deeds.
[W]ife and her daughter both testified that Husband was frequently verbally abusive to Wife. Wife testified that Husband would often call her a “whore” and “stupid.” According to Wife, Husband was critical of any chore Wife performed and told her that she “wasn’t doing it right.” Wife’s daughter testified that she did not meet Husband until after the parties married, at which point, Wife became more isolated and distant. According to her daughter, Wife began missing important family events, including her grandchild’s baptism. Wife’s daughter witnessed Husband calling her mother “stupid,” and testified that she never saw Husband behave in a loving and supportive manner toward her mother. The testimony regarding Husband’s emotional abuse is unrefuted. . . . Wife properly rebutted the presumption of a gift to the marital estate.
The trial court’s judgment classifying the three tracts of land as Wife’s separate property was affirmed.