Facts: Husband and Wife divorced after 15 years of marriage. Both were represented by counsel, agreed to the division of marital property, and signed a marital dissolution agreement (MDA) by the trial court.

The MDA allowed each party to dispose of their property however they wished.

Four years later, Wife moved to set aside the MDA because Husband did not disclose his lottery winnings. The basis for Wife’s belief was this email Husband sent four years earlier:

A friend at Dean Witter years ago had a poster that proclaimed, “Living well is the best revenge!” How true.

So you enjoy your one-bedroom apartment, your sub-zero wind chills, and your stolen money while your precious belongings gather dust in storage.

Meanwhile, I’ll be enjoying my lakefront dream home, my bachelorhood, and my lottery winnings while your face fades in my rear-view mirror!

Have a great life.

Wife later amended her motion to add other items to the list of assets Husband failed to disclose, including a retirement account.

Husband testified he only won three dollars in the lottery.

Initially, the trial court found that Husband “fraudulently and intentionally failed to disclose all of his financial assets” before the MDA was signed.

After more discovery and more hearings, the trial court found that while Husband insinuated to Wife that he concealed valuable assets from her, in reality, he had not:

There is no credible proof before the court that the lottery winnings were substantial, nor much of anything. However, due to statements made by [Husband] to [Wife], the appearance was given to [Wife] that there was possibly a failure to disclose what was a substantial asset.

The court finds that for reasons known only to [Husband], he appeared to lead and possibly even goad [Wife] into believing that there were other greater assets that he owned and/or had possession of, and that she was losing out on certain assets. It now appears, based upon the further proof, that there were no real substantial or other additional assets. The court finds that it is very unfortunate that these parties are back before the court upon such an apparent animosity between each other that they continue to litigate what should have been fully and completely settled.

The trial court reinstated the MDA and awarded Wife her attorney’s fees and expenses “due to [Husband’s] false statements and misrepresentations.”

Wife appealed.

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

With live, in-court witnesses, trial courts are afforded considerable deference on issues that hinge on the witnesses’ credibility because trial courts are uniquely positioned to observe the demeanor and conduct of witnesses.

The Court found the trial court implicitly found Husband to be credible:

Husband testified among other things . . . that Wife was fully aware of the marital assets at the time the MDA was negotiated. This implicates whether Husband’s testimony was credible, and we extend strong deference to a trial court’s determination of witness credibility. Wife argued, however, that since the trial court did not make any specific credibility determination, its conclusion is not entitled to any deference on that basis. It certainly is preferable for trial courts to make explicit credibility determinations, lest there be any ambiguity. Nevertheless, from time to time, this Court has acknowledged implicit credibility determinations. To illustrate, if party (A) testified to (X), and party (B) testified to contrasting account (Y), and the trial court’s order reflected that it believed (Y) to be the case, then one can discern that the trial court credited party (B)’s testimony rather than party (A)’s even if the court failed to make explicit credibility determination. Here, the trial court implicitly credited Husband’s testimony at the [] hearing notwithstanding its finding that Husband goaded Wife into believing he concealed certain valuable assets.

The trial court’s judgment was affirmed.

Kautz v. Berberich (Tennessee Court of Appeals, Eastern Section, March 18, 2021).

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