Classification of Separate Property Scrutinized in Memphis, Tennessee Divorce: Myers v. Boone

June 15, 2022 K.O. Herston 0 Comments

Facts: Well before the marriage, Husband formed a corporation, St. Charles Place, Inc., and was the sole owner of it. The corporation was successful, and Husband amassed significant wealth before the marriage.

Also before the marriage, Husband acquired real estate on Poplar Avenue and Ricky Bell Cove and the billboards located on those properties. Poplar Avenue was owned by Husband, and Ricky Bell Cove was owned by Husband’s corporation.

The parties married in October 2014. In April 2015, they entered into two billboard marketing agreements with Outfront Media, LLC. The beginning of the contracts say they are made between Husband and Wife and Outfront Media. The contracts required payments to the owner. In the signature area at the bottom of both contracts, it lists “St. Charles Place” as the owner with both Husband’s and Wife’s signatures underneath. Husband also wrote “President” after his signature.

Husband filed for divorce in February 2017.

Husband testified he signed the billboard marketing agreements as president of the corporation. He acknowledged that Wife also signed the contracts but said she was not an owner. Per the contracts, the checks from Outfront Media were made payable to both Husband and Wife.

The trial court found the real estate and the billboards to be Husband’s separate property. It also found the proceeds from Outfront Media flowing from the billboard marketing agreements to be the property of Husband’s corporation.

Wife appealed. Husband died, and the executor of his estate was substituted as a party.

Wife argued the billboard marketing agreements should be classified as marital property.

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

The division of property in a divorce begins with the identification and classification of all property interests. All property should be classified as either marital or separate property before it is divided because the trial court lacks the authority to divide separate property.

Generally, unless proven otherwise, property acquired by either spouse during the marriage is presumed to be marital property, while property acquired by either party before the marriage is presumed to be separate property.

Separate property can become marital property through transmutation, which occurs when separate property is treated in such a way as to show an intention that it become marital property.

The Court found no error in the trial court’s classification of the billboard marketing agreements as Husband separate property:

The billboard marketing agreements were entered into concerning those two billboards. We acknowledge that Wife was listed in the body of the contract as an owner of the two billboards and had signed the billboard marketing agreements at the request of Outfront Media. However, Husband wrote on the signature line that St. Charles Place with the owner and signed the contract as the president of St. Charles Place, Inc. Despite participating in Husband’s business, Husband never added Wife to either deed concerning the two billboard properties or the required permits for the billboards. Although not determinative, Wife also was not included as an owner of the billboard on the application to obtain the building permit for construction code enforcement required to upgrade one of the billboards.

The trial court found that the two billboard marketing agreements were owned by the corporation. Although Wife is listed as an owner in the body of the billboard marketing agreements, Husband never completed any paperwork in order to officially provide Wife with an ownership interest in the billboards, either in his individual capacity or on behalf of the corporation. At the time the parties entered into the contracts, Wife had no ownership interest in the billboards where the billboards are located. Wife’s name being listed as an owner of the billboards in a contract with a third party, wherein the contract also identified St. Charles Place, Inc. as the owner, does not transmute the billboard marketing agreements into marital property.

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Although the billboard marketing agreements were entered into during the marriage, Husband and his corporation had owned the billboards and the real property on which they were located prior to the marriage. In its judgment, the trial court considered the evidence presented and determined that the corporate entity owned by Husband was the owner of the billboard marketing agreements. The evidence presented does not preponderate against the trial court’s finding in this regard.

The Court affirmed the trial court’s classification of the billboard marketing agreements as the property of Husband’s wholly owned corporation and not marital property.

Myers v. Boone (Tennessee Court of Appeals, Western Section, June 8, 2022).

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Classification of Separate Property Scrutinized in Memphis, Tennessee Divorce: Myers v. Boone was last modified: June 11th, 2022 by K.O. Herston

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