Facts: The parties, the parents of two children, divorced after 29 years of marriage.

During the marriage, they owned and operated three Subway franchises.

Wife argued that Husband dissipated marital assets with various withdrawals, draws against a line of credit, and expenses totaling approximately $85,000, some of which were to pay legal fees and to purchase equipment for a smoothie shop he planned to open but never did.

The trial court found Husband dissipated the marital estate by $65,000, half of which was his, so he owes Wife $32,500. This ruling was not supported by specific findings of fact.

Husband appealed.

Husband admitted that the record contained evidence he dissipated $39,000 but disputed the trial court’s finding of dissipation of $65,000. He argued that many of the transactions Wife complained about were for his living expenses and to pay off marital debt.

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

Dissipation of marital property occurs when one spouse uses marital property, frivolously and without justification, for a purpose unrelated to the marriage and at a time when the marriage is breaking down. Dissipation involves intentional conduct that has the effect of reducing the funds available for equitable distribution.

Whether a particular course of conduct constitutes dissipation depends on the particular facts of the case.

The Court of Appeals was hampered by the trial court’s lack of factual findings. Still, it analyzed the facts in the record and found them lacking:

The spouse alleging dissipation has the burden of persuasion and the initial burden of production to show that the other spouse engaged in intentional, purposeful, wasteful conduct. Moreover, that burden includes distinguishing between dissipation and discretionary spending. After careful review of the record, we have determined that Wife failed to carry her burden of proof to establish that Husband dissipated assets in excess of the $39,044.72 that Husband admits Wife provided sufficient testimony to prove.

The Court reversed the trial court’s judgment and modified it to enter a judgment indicating that Husband dissipated the marital estate for $39,044.72, not $65,000.

K.O.’s Comment: It’s important for lawyers to remember how the burden of proof works—and shifts—when dealing with dissipation. After the party alleging dissipation establishes a prima facie case that marital funds have been dissipated, the burden shifts to the party who spent the money to present evidence sufficient to show the challenged expenditures were appropriate. Here, it appears the burden of proof never shifted. Proving that money was spent is often easy. Proving it was dissipation is more challenging. Spending and dissipation are not the same thing.

Robinson v. Robinson (Tennessee Court of Appeals, Eastern Section, June 29, 2022).

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