Facts: Eight years before their marriage, Husband bought some land. During their marriage, they built a marital residence on the property.

During the first 10 years of the marriage, Husband owned a business on the property. Wife was a stay-at-home parent who homeschooled their two children. She also managed the business when Husband was away.

Husband retired after 10 years. He would transfer money from his inheritance account into the parties’ joint account to pay their monthly expenses.

Later, Husband was diagnosed with cancer. During his treatment, Husband transferred money from his inheritance account to the joint account so Wife could pay his medical bills. Instead, Wife gave the money to someone she met online. She also deceived Husband into giving her money for household expenses when, in fact, she gave the money to someone she met online. Her dissipation totaled $39,000. At trial, Wife admitted she “spent and blew a bunch of money.”

After 20 years of marriage, Husband and Wife separated, and this divorce action followed.

To account for Wife’s dissipation, the trial court let Husband keep his personal property of $54,000 instead of equally dividing all the personal property, valued at $60,000.

The trial court found the property on which the marital residence was built had transmuted from Husband’s separate property into marital property. It valued that property at $1,070,000 and divided it 50% to each party.

Husband appealed.

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

Husband argued the trial court did not consider Wife’s dissipation in the equitable division. He argued an equitable division would give him at least 75% of the marital estate.

Dissipation of marital property occurs when one spouse wastes marital property, reducing the available marital property for equitable distribution. Tennessee courts must distinguish between dissipation and discretionary spending in determining whether dissipation occurred. Discretionary spending may be ill-advised, but unlike dissipation, discretionary spending is typical of the parties’ spending throughout the marriage.

The most common factors considered in analyzing dissipation are:

• whether the spending benefited the marriage or was made for a purpose unrelated to the marriage;
• whether the spending or transaction occurred when the parties were experiencing marital difficulties or contemplating divorce;
• whether the spending was excessive or de minimis;
• whether the dissipating party intended to hide, deplete, or divert a marital asset.

The Court found an equal division was not equitable on these facts:

Under the facts of this case, the dissipation of assets by Wife should be considered in equitably dividing the entire marital estate.

As to the age, physical and mental health, vocational skills, employability, earning capacity, estate, and the financial liabilities and financial needs of the parties, Husband is almost 80 and Wife is 26 years younger…. Husband has leukemia and multiple myeloma but is still cognitively sharp. During the trial, Husband appeared to be managing his illnesses well, but he suffers from chemotherapy-induced deafness. The record does not reflect that Wife has any physical or mental health issues. Husband possesses numerous skills but is unable to work any longer because of his age and the diseases from which he suffers. He receives approximately $2000 a month in Social Security benefits. Wife served as the office manager for the family’s business for many years, leased and operated the business when Husband retired, and is currently employed by a supermarket. Accordingly, Husband no longer possesses any earning capacity, while Wife does. Wife has already received a cash payment in this case of $152,500; she dissipated the marital estate in the amount of at least $39,000.

As to the economic circumstances of each party at the time the division of property is to become effective, Husband retains an interest in [his separate property]…. Husband claims he is “land poor,” as his cash has been eaten up by medical bills and supporting his children. The $225,000-$250,000 estate left to him by his mother was consumed in construction of the marital residence on the property.

Upon considering all relevant statutory factors in Tennessee Code Annotated § 36-4-121(c) in making an equitable division of the marital property, we find that the percentage of distribution should be adjusted to 75% to Husband and 25% to Wife; therefore, the final judgment of divorce should be affirmed as modified.

K.O.’s Comment: The entirety of the Court’s reasoning is quoted above. I could easily agree with the outcome had the Court’s reasoning been better explained. Instead, I’m left with many questions.

First, the opinion does not mention the well-established presumption that an equitable division is an “essentially equal” one in marriages of long duration like this one. Even if the Court wants to find that that presumption has been rebutted on these facts, it should at least acknowledge the presumption exists and discuss why it’s been overcome here.

Second, the opinion does not explain how the trial court’s judgment is an abuse of discretion. Does the evidence preponderate against the trial court’s findings? Did the trial court make a legal error? The opinion doesn’t say.

Third, the trial court expressly considered Wife’s dissipation when it awarded 90% of the $60,000 worth of personal property to Husband. What makes it reversible error for the trial court to handle that issue like it did, particularly when the dissipation only totaled $39,000?

I was excited to read this opinion when I saw that an equal division in a long marriage was reversed in favor of a 75%-25% division. That is a rare outcome, so I looked forward to studying the rationale. While I can create a clear rationale in my mind, I didn’t find it in the opinion.

Source: Harris v. Harris (Tennessee Court of Appeals, Eastern Section, December 18, 2023).

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