Facts: In May, Wife was hospitalized for dementia.

In August, Wife’s daughter from a previous marriage became her court-appointed Conservator.

Wife’s grandchildren, i.e., Conservator’s children, are beneficiaries in Wife’s will.

In September, to protect Conservator’s children’s interest in Wife’s assets, Conservator filed a petition for legal separation on Wife’s behalf alleging, in part, that, in August 2019, Husband and his daughter from a previous marriage sold over $99,000 of securities jointly owned by Husband and Wife and removed over $234,000 from bank accounts jointly owned by Husband and Wife.

The trial court entered a temporary restraining order directing Husband to provide a full accounting of all funds removed by him and his daughter from the jointly owned accounts.

Husband provided the accounting and a check for $179,340.23 to be deposited with the clerk and master.

In early October, Husband filed an answer to Wife’s petition for legal separation and a counterpetition for divorce.

On October 24, Wife passed away.

On November 4, Husband moved to dismiss Wife’s petition for legal separation and asked that the funds held by the clerk and master be returned to him because the litigation had abated upon Wife’s death.

Conservator asked that the clerk and master hold the money pending the outcome of any motions filed in probate court.

The trial court dismissed the legal separation/divorce litigation but determined it would retain jurisdiction over the funds held by the clerk and master until Wife’s estate is opened for probate and the funds can be transferred to the probate court.

Husband appealed.

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

Husband argued the trial court no longer maintained subject-matter jurisdiction over the disposition of the funds held by the clerk and master after Wife passed away and the legal separation/divorce litigation abated.

Subject-matter jurisdiction involves a court’s power to adjudicate a particular controversy brought before it.

It is a well-settled principle of law that a pending divorce action, being purely personal in nature, abates upon the death of one party. When the lawsuit abates upon the death of the party, the jurisdiction of the court to proceed with the lawsuit is terminated. The termination of the divorce action also abates all ancillary or interlocutory orders.

The Court found that the litigation, along with any ancillary matters, abated upon Wife’s death, depriving the trial court of judicial power to retain the funds:

[N]o final decree of divorce appears in the record, and it is undisputed that the trial court had not yet adjudicated Wife’s petition for legal separation or Husband’s counter-petition for divorce when Wife died. As such, the divorce action was still pending at the time of Wife’s death in October 2020….

[W]e determine that the trial court erred in determining that it retained subject-matter jurisdiction over the disposition of the funds maintained by the clerk and master. Those funds were originally held as a consequence of the legal separation and divorce actions and, accordingly, the holding of funds by the court was ancillary to those actions. … Upon Wife’s death, the funds were no longer subject to division by the court inasmuch as such actions had abated and could not proceed. Therefore, without the underlying actions for legal separation and divorce, the trial court lacked subject-matter jurisdiction concerning the disposition of funds and had no judicial power to withhold them from Husband.

*     *     *     *     *

[T]he death of Wife effected a termination of the actions for legal separation and divorce. All preliminary orders, including the court orders requiring Husband to deposit funds with the clerk and master, should have been set aside rather than extended.

The trial court’s judgment was reversed and the case remanded to the trial court to release the funds held by the clerk and master back to Husband.

K.O.’s Comment: Compare this case with Coleman v. Olson. Coleman involved a situation where the wife sued her husband for divorce, fell ill, changed the beneficiary of her life insurance policy from her husband to her mother in violation of the statutory injunction, and passed away before a hearing could occur.

The Tennessee Supreme Court found that the divorce action abated upon the wife’s death so the statutory injunction was no longer in effect. Still, the Supreme Court held that although a divorce action abates with the death of a party, a trial court “should have the authority to consider the equities of the parties and remedy the violation of a statutory injunction.”

Coleman limited this exception to the abatement rule to instances where a party to a divorce violates a statutory injunction and later dies while the divorce is pending.

Here, Husband withdrew the funds from joint accounts and sold joint securities before Conservator filed Wife’s petition for legal separation. Because the funds obtained by Husband did not violate a statutory injunction or temporary restraining order, the Coleman exception to the abatement rule did not apply.

Richey v. Richey (Tennessee Court of Appeals, Middle Section, December 21, 2021).

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