Frank Ray Baggett v. Anne Marie Baggett

IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

June 18, 2013 Session

FRANK RAY BAGGETT v. ANNE MARIE BAGGETT

Appeal from the Chancery Court for Hamilton County

Nos. 12-0260 & 12-0356 W. Frank Brown, III, Chancellor

No. E2012-02013-COA-R3-CV-FILED-AUGUST 26, 2013

This is the divorce case of Frank Ray Baggett (“Husband”) and Anne Marie Baggett

(“Wife”). After eight years of marriage, Wife sued Husband for divorce. The following

year, Husband sued Wife for wrongfully excluding him from A&F Computers, a computer

sales and repair business. Husband sought his alleged share of the profits from the business,

damages, and dissolution of the claimed partnership. By agreement, the two cases were

consolidated for trial. The parties stipulated that grounds for divorce exist and the trial court

decreed a divorce. Following the hearing, the court classified, valued, and divided the

parties’ property. The court determined that A&F was a sole proprietorship and awarded it

to Wife. On appeal, Husband challenges the determination and disposition of A&F and the

overall property division. He argues that the court’s division is not equitable. We affirm.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court

Affirmed; Case Remanded

C HARLES D. S USANO, J R., P.J., delivered the opinion of the Court, in which J OHN W.

M CC LARTY and T HOMAS R. F RIERSON, II, JJ., joined.

Grace E. Daniell, Chattanooga, Tennessee, for the appellant, Frank Ray Baggett.

Linda B. Hall, Soddy Daisy, Tennessee, and William A. Harris, III, Chattanooga, Tennessee,

for the appellee, Anne Marie Baggett.

OPINION

I.

This appeal focuses on the trial court’s division of the parties’ property. In reaching

its decision, the trial court was necessarily required to determine the classification and value

of A&F and other assets including the parties’ real property. Trial was held over two days

in July and August of 2012. We summarize the relevant proof.

Husband and Wife met in 2000. They were then married to others. Husband, who

was then recently retired from TVA , owned Intech, a computer sales and repair business.

Wife, a high school graduate, owned a retail store. She met Husband when she purchased

a computer from Intech for her store. Two years later, the parties met again. By then, Wife’s

marriage, her second, had ended, and she had closed her store. Husband was going through

a divorce from his first wife, Connie. The parties began seeing each other and Wife spent

much time with Husband at Intech learning about computers. In April 2002, Husband’s

divorce was finalized; in the settlement, his wife Connie was awarded Intech, but she did not

continue the business. Husband and Wife decided to start a new computer sales and repair

business. They opened A&F, utilizing the first initial in each of their first names for the

company’s name. The new business was in the location of the former home of Intech. As

Wife explained, Husband “took the [Intech] name down and gave [Connie] the name, and

A&F opened up.” At trial, the parties agreed that it was Husband’s idea to start A&F and to

obtain the business license in Wife’s name alone – Husband wanted to ensure that it was

shielded from his ex-wife. He also sought to avoid any potential effect on his social security

benefits.

A year later, in April 2003, Husband, then 61, and Wife, then 43, were married.

Throughout the marriage, both parties worked full-time as computer technicians at A&F. In

addition to those duties, Wife was the one who was primarily responsible for A&F’s

finances. The A&F income was reported under Wife’s social security number. Most of

A&F’s business came from computer repairs that on average were billed at $100 or less. In

addition, the parties took trade-ins and purchased used computers from various sources, such

as government auctions, to acquire parts for refurbishing computers. Husband focused on

hardware issues and built refurbished computers, while Wife focused on software, formatting

and reprogramming. Wife testified that “[w]e both did pretty much everything.” Throughout

the marriage, the parties shared the income they earned from A&F as well as approximately

$2,200 a month that Husband received from his TVA retirement and social security.

In November 2004, Husband and Wife purchased property in Soddy Daisy for their

marital home. Husband renovated a detached garage on the property as the new location for

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A&F. At the time of the marriage, Husband owned a motor home. During the marriage, it

caught on fire and was destroyed. In 2006, the parties purchased a replacement motor home,

a Coachman, for $46,000. They applied the insurance proceeds from the fire toward the

Coachman purchase. This left a balance due on the purchase of some $20,000, which was

eventually incorporated into a home equity line of credit. In addition to the burned-out motor

home, Husband brought a truck, and $42,000 in a 401(k) into the marriage. He testified that

shortly after the marriage, he loaned $15,000 to Wife’s sister, paid for a lengthy vacation for

the parties, and invested the rest in A&F. Wife acknowledged that she owned no separate

assets of any value at the time of the marriage.

The proof shows that the parties shared both the income from A&F as well as

Husband’s retirement income. During the marriage, Husband’s income was set up for

automatic drafts for the mortgage and utilities. The expenses for operating A&F – the

“shop” and its associated utilities – were paid for as a part of home mortgage and utility bills

for the marital home. Income from A&F was either deposited into a jointly owned business

account or kept in cash in the parties’ safe. The parties used the money to pay for purchases

for themselves and the business. Husband took no direct salary from A&F, but

acknowledged that he and Wife paid for food, clothing, and several lengthy vacations from

income derived from A&F.

The parties’ testimony regarding the receipts and profits of A&F varied widely. Wife

testified to monthly receipts of $1,700 – $3,200, for an average income of approximately

$2,200 a month. Husband testified to gross receipts, which he “conservatively” estimated

at $200,000 a year. Husband estimated average daily gross receipts of $700, six days a week.

Husband testified that “98%” of A&F’s business was cash payments for computer repairs.

He said that Wife placed the cash in the couple’s safe, while the checks were deposited into

their business account. Husband explained that he arrived at his estimated gross receipts of

$200,000 based on his awareness of the payments, mainly in cash, that A&F took in. For her

part, Wife disputed that A&F was almost exclusively a “cash-only” business, but agreed that

she and Husband had always placed some of the cash they received directly into a safe to buy

anything they wanted or needed. Husband said that at their separation, there was $9,000 in

the safe. Wife testified there was $6,000, and that she gave half of it to Husband. On

questioning by the court, Husband conceded that the parties had never filed a joint tax return

reflecting $200,000 in gross receipts from A&F; he took the position that they had

understated their income. Bank statements reflect that in the months before the parties’

separation, the A&F account carried a balance of approximately $1,800 a month. Up until

the time of trial, the new A&F account Wife opened showed monthly balances ranging from

several hundred dollars to, at most, $29,000.

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In February 2011, the marriage “hit the rocks.” By Wife’s account, the parties argued

one day and Husband, for at least the “fifteenth time,” said he wanted a divorce. Wife

suggested he go to the beach and decide if that was what he really wanted. Husband could

not recall any dispute that precipitated their separation. He denied that he had ever before

asked for a divorce. He denied any marital problems except to say that he and Wife were not

as physically close anymore. Husband testified to agreeing that they should take a break

from each other and further agreed that he went to Florida for about a week in the motor

home. It was undisputed that, when he returned, Wife refused to allow him to live in the

marital home due to his continued shouting at her, making false accusations, and being

irrational. On his return, Husband rented a space for the motor home and lived in it.

Husband insisted that he repeatedly offered to return to work at A&F, but Wife threatened

to “take out a warrant” and call the police if he did. Husband said he never returned home

or to work because he didn’t want to risk going to jail.

Wife testified that after Husband left, she deposited every payment of any type from

A&F directly into the new A&F business account. From there, she transferred money to her

personal account, or vice versa, as necessary to pay the bills and continue the business.

Wife’s 2011 individual tax return reflected that she was self-employed and earned a gross

income of $27,107. On his 2011 tax return, Husband stated his occupation as “retired” and

listed his “income” as that received from retirement and social security. The testimony

indicated that the parties had filed joint tax returns during the marriage, but these returns

were not put into evidence.

Wife testified that she felt insecure about Husband’s behavior toward her when they

first separated, but never tried to bar him from A&F. She said she did bar him from their

home. For the first few months after they separated, according to Wife, Husband came to the

business about once a week, but made no effort to do any work. In March 2011, Husband

sent two emails to Wife regarding their bank accounts and other matters. On March 16,

Husband wrote: “Annie, just to let you know I diverted my SSI and retirement checks to a

new account . . . I will not touch either account anymore. You can remove me from both

accounts. Also I will take no action in any other way about the house or business. The next

action will be yours. Best of luck.” On March 17, Husband wrote concerning their bank

account: “Annie, you’re welcome for the balances. As you are the primary owner you can

add or remove anyone on the account. It doesn’t matter to me either way.”

In May 2011, Wife filed for divorce. The same month, she obtained a protective order

against Husband that alleged he had threatened to break into the house and harm her. At her

request, the restraining order was dismissed a few weeks later. Husband continued coming

around the business, but had no involvement in its operation. In September 2011, Husband

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voluntarily agreed to a second protective order that prohibited his presence on the property

and ordered the parties to have no contact with each other.

In August 2011, Husband obtained a license for another computer business. With

some financial assistance from his ex-wife, Husband opened another “Intech” the following

month. The business was short-lived. Husband testified it was in an isolated location and

had few customers. He closed Intech in December 2011, and reported an associated loss on

his tax return of nearly $9,000. Around that time, the parties’ divorce case had been set for

a February 2012 trial. To that point, neither Husband nor Wife had referenced A&F in their

pleadings in the divorce case. Thereafter, Wife filed a motion in limine regarding A&F, and

Husband responded with a motion for exclusive possession of the marital home and pets. In

another motion, he requested that the home be sold. In turn, Wife asked for an injunction to

prevent Husband from competing with A&F. The court denied all of the requested relief.

On April 5, 2012, Husband filed the “partnership” action against Wife. He claimed

that he and Wife were partners in A&F and that Wife had excluded him from the business

for more than a year. Husband sought fifty percent of the profits earned during that time, an

accounting and equitable division of the income and assets. He sought judicial dissolution

of A&F. Wife answered as follows: “Wife admits that she and Husband formed a partnership

which operated under the name of [A&F]. Wife admits that she and Husband jointly

operated A&F until her separation from Husband in February of 2011” and that A&F was

“operated at . . . jointly owned property, prior to its dissolution.” Wife further admitted that

“she operated a computer sales and repair business under the name [A&F] after the

separation of the parties and after the dissolution of the partnership with Husband.” Wife

concluded that “[t]o the extent any semblance of partnership remains, Wife admits that

dissolution is necessary and proper.” Shortly before trial, an inventory of A&F was

completed. Husband agreed to purchase A&F’s inventory and equipment for $1,500. His

offer, however, was conditioned on A&F and the marital home being awarded to him.

At trial, Husband testified that he always considered himself to be a co-owner of

A&F. Wife’s position was not entirely clear. She testified: “Actually the way it was, I didn’t

think we were partners at all. I mean we worked together, but the business wasn’t listed as

a partnership. I only know that it became a partnership after, so I don’t quite know how to

answer your question.” At the time of trial, Husband was nearly 70 and Wife was 52. In the

eighteen months since the separation, Wife had continued to operate A&F and pay all of the

household/business expenses with the income from A&F. Wife remained in the marital

home. Husband continued to live in the motor home, which he had since moved onto rent-

free property owned by his ex-wife. Both parties requested that they be awarded the marital

home and possession of their two dogs.

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Following a bench trial of the consolidated cases, the trial court determined that A&F

was not a partnership, but a sole proprietorship, and awarded it to Wife. Further, the court

divided the marital estate. Husband filed a timely notice of appeal.

II.

Husband raises the following issues for our review:

1. Whether the trial court erred in finding that the business

operated by the parties known as A&F Computers is not a

partnership under the Revised Uniform Partnership Act.

2. Whether the trial court erred in failing to award Husband his

interest in the partnership and damages for Wife’s violation of

the Revised Uniform Partnership Act.

3. Whether the trial court erred in failing to order the dissolution

and winding up of the partnership.

4. Whether the trial court erred in the classification of A&F

Computers as the separate property of Wife.

5. Whether the trial court erred in the valuation and division of

the marital assets and liabilities of the parties.1

III.

Our review of the trial court’s findings of fact is de novo upon the record of the

proceedings below, accompanied by a presumption of correctness, a presumption we must

honor unless the preponderance of the evidence is against those findings. Tenn. R. App. P.

13(d); Wright v. City of Knoxville, 898 S.W.2d 177, 181 (Tenn. 1995); Union Carbide Corp.

v. Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993). There is no presumption of correctness as

to the trial court’s conclusions of law. Kendrick v. Shoemake, 90 S.W.3d 566, 569 (Tenn.

2002); Campbell v. Florida Steel Corp., 919 S.W.2d 26, 35 (Tenn. 1996). We give great

1

In the final paragraph of the “conclusion” section of her responsive brief, Wife asserts that

Husband’s appeal is “frivolous.” Accordingly, she seeks an award of her attorney’s fees and costs on appeal.

Because Wife failed to raise this “issue” in the “issues presented” section of her brief, together with

appropriate argument and citations to authority, we decline to consider her request. As an aside, we would

note that we do not find Husband’s appeal to be frivolous.

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weight to a trial court’s credibility determinations. Estate of Walton v. Young, 950 S.W.2d

956, 959 (Tenn. 1997).

A trial court has broad discretion in fashioning a division of marital property. Fisher

v. Fisher, 648 S.W.2d 244, 246 (Tenn. 1983); Barnhill v. Barnhill, 826 S.W.2d 443, 449-50

(Tenn. Ct. App. 1991). To this end, this Court has observed:

Tenn. Code Ann. §36-4-121(c)[(2010)]outlines the relevant

factors that a court must consider when equitably dividing the

marital property without regard to fault on the part of either

party. An equitable division of marital property is not

necessarily an equal division, and §36-4-121(a)(1) only requires

an equitable division.

* * *

This court will not disturb the trial court’s division of the marital

estate “unless the distribution lacks proper evidentiary support

or results from an error of law or a misapplication of statutory

requirements or procedures.”

Cradic v. Cradic, E2012-00227-COA-R3-CV, 2013 WL 672576 at *2 (Tenn. Ct. App. E.S.,

filed Feb. 22, 2013)(citing McHugh v. McHugh, E2009-01391-COA-R3-CV, 2010 WL

1526140 at *3-4 (Tenn. Ct. App. E.S., filed Apr. 16, 2010)(citations omitted)). See also

Manis v. Manis, 49 S.W.3d 295, 306 (Tenn. Ct. App. 2001) (appellate courts “ordinarily

defer to the trial judge’s decision unless it is inconsistent with the factors in Tenn. Code Ann.

§ 36-4-121(c) or is not supported by a preponderance of the evidence”).

IV.

A.

The thrust of Husband’s argument is essentially two-fold: (1) the trial court erred in

concluding that A&F is a sole proprietorship and (2) the overall property division is

inequitable. We address these issues in turn.

B.

Taken together, Husband’s first several issues stem from his core position that A&F

is a partnership and should have been treated as such under the Revised Uniform Partnership

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Act, Tenn. Code Ann. § 61-1-101, et seq. (2002 & Supp. 2012). In particular, Husband

asserts that the proof demonstrates that A&F is an implied partnership between the parties.

We quote pertinent portions of the trial court’s findings regarding A&F:

[Husband] and the soon-to-be [Wife] began a new computer

business, know as [A&F], while [Husband] was in divorce

proceedings with his first wife. . . . This new business was put

in the soon-to-be [Wife’s] name because [Husband] did not

want the new company to be involved in his divorce case. Also,

he did not want to report any income on his federal income tax

return which might result in income tax consequences as a result

of his receipt of Social Security Old Age benefits. [Husband and

Wife] only filed one joint federal income tax return.

* * *

The parties . . . bought [the marital home] after their marriage.

[Husband] did much of the work in converting a detached

garage into the business location for A&F. It appears from the

trial testimony that the . . . business licenses were listed in

[Wife’s] name. She testified that all income of A&F was

reported under her Social Security number.

The parties agreed that [Husband] could purchase the inventory

and equipment of A&F for $1,500.00. [Husband] contends that

the business produced income of $200,000.00 per year and had

large accounts receivable. [Husband] valued the accounts

receivable of A&F to be $200,000.00. At trial, he agreed that

A&F probably had no accounts receivable as customers had to

pay for goods bought or services rendered at the time of

purchase or receipt of their repaired merchandise. However,

[Husband] continued to assert that A&F had generated

$200,000.00 in gross receipts for the last several years before

the parties’ separation.

The trial court determined the ownership and value of A&F as follows:

A&F Computers is the separate property of [Wife]. The court

concludes that [Husband and Wife] are not partners in A&F.

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The only two tax returns submitted . . . were [Wife’s] 2011

federal income tax return and [Husband’s]. The returns show

the computer business as her business. Trial Exhibit 17 is a loan

application to Dupont Community Credit Union for the purchase

of the 2007 Hyundai automobile. [Husband] is listed as retired

and [Wife] is listed as the “owner of A&F Computer (self-

employed).” Both parties signed . . . Exhibit 17. It is not

treated as a partnership but as a proprietorship. [Husband] lists

$8,795.00 in business income losses, which was due to his new[]

Intech computer business, in late 2011. He listed the business[]

as a sole proprietorship on his new Regions Bank Account.

* * *

The court is going to assign A&F to [Wife] as her separate

property. There are various components to the business. There

is the value of the equipment and inventory. The parties have

agreed that this value is $1,500.00. [Husband] is of the opinion

that the business also has considerable accounts receivable.

[Wife] says there are no such accounts receivable. At trial[,]

[Husband] agreed that A&F had no accounts receivable. He still

maintained that A&F generated $200,000.00 per year in gross

revenue. The court agrees there are no accounts receivable. The

court is also going to assign A&F’s old business account at the

DCCU to [Wife]. The value of that account is $61.05. Good

will is not valued in a sole proprietorship. Evidently, both

[parties] have a certain amount of “good will.”

In support of its findings, the court expressly found that Husband’s testimony with respect

to A&F was not credible.

A partnership is “an association of two (2) or more persons to carry on as co-owners

of a business or other undertaking for profit. . . .” Tenn. Code Ann. § 61-1-101(7)(Supp.

2012). The receipt of a share of the profits of that business is prima facie evidence that a

partnership exists. Tenn. Code Ann. § 61-1-106(4)(2002). The Supreme Court has

explained:

In determining whether one is a partner, no one fact or

circumstance may be pointed to as a conclusive test, but each

case must be decided upon consideration of all relevant facts,

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actions, and conduct of the parties. If the parties’ business brings

them within the scope of a joint business undertaking for mutual

profit–that is to say if they place their money, assets, labor, or

skill in commerce with the understanding that profits will be

shared between them-the result is a partnership whether or not

the parties understood that it would be so.

Bass v. Bass, 814 S.W.2d 38, 41 (Tenn. 1991)(internal citations omitted). This court has

further observed that “determining what constitutes a partnership is generally a matter of law,

but whether a partnership exists under conflicting evidence is a question of fact.” In re

Estate of Price, 273 S.W.3d 113, 138 (Tenn. Ct. App. 2008). Absent a written partnership

agreement, the burden is on the one asserting its existence to establish an implied partnership

by clear and convincing evidence. Id. (citing Tidwell v. Walden, 205 Tenn. 705, 330 S.W.2d

317, 319 (1959); Kuderewski v. Estate of Hobbs, No. E2000-02515-COA-R3-CV, 2001 WL

862618 at *3 (Tenn. Ct. App. E.S., filed July 30, 2001)).

In the present case, the trial court expressly found that A&F was not a partnership. We

respectfully disagree; however, our conclusion does not change the ultimate holdings of the

trial court. We think this Court’s decision in Lyles v. Lyles, C.A. No.

03A01-9412-GS-00434, 1995 WL 324033 at *2 (Tenn. Ct. App., E.S. filed May 31, 1995),

is most instructive. Therein, the husband and wife were partners in a veterinary clinic

pursuant to a written partnership agreement. In their divorce, the trial court classified and

distributed the partnership as a part of it division of the marital estate. On appeal, the wife

challenged the trial court’s authority to “dissolve a partnership.” In affirming the judgment,

we observed:

We are of the opinion, however, that the provisions of the

Uniform Partnership Act have no application whatever to the

case at hand. The pertinent statutory power of the court is to be

found in T.C.A. § 36-4-121. This section of the code gives the

court in which the action for divorce is pending, wide discretion

in the division of marital property. “Marital property” means all

real and personal property, both tangible and intangible,

acquired by either or both spouses during the course of the

marriage up to the date of the final divorce hearing and owned

by either or both spouses as of the date of filing of a complaint

for divorce, except in the case of fraudulent conveyance in

anticipation of filing, and including any property to which a

right was acquired up to the date of the final divorce hearing,

and valued as of a date as near as reasonably possible to the final

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divorce hearing date. T.C.A. § 36-4-121(b)(1)(A). There can be

no genuine question but that partnership interests fall within the

definition of “marital property.”

The court possesses the power to effectuate its decree by

divesting and reinvesting title to property, order the sale of

property and order the sale of proceeds divided between the

parties. There is no limitation on the type of property in

question. We take the authority granted to the courts by this

section (T.C.A. § 36-4-121(b)(1)(A)) to be all inclusive.

Therefore, partnership interests, at least where the situs is within

the State of Tennessee, may be marital property and treated as

any other marital asset.

In the division of marital property, if a partnership is owned

exclusively by the husband and wife, as is the case here, and is

a part of the marital estate and is awarded wholly to one of the

parties, its value is determined in accordance with T.C.A. §

36-4-121(b)(1)(A), and an accounting as contemplated by the

Uniform Partnership Act would be a futile function. The law

does not require futile acts.

We recognize that the present case is somewhat factually distinguishable in that

Husband must first overcome the burden of proving the existence of a partnership in A&F.

We think he has done this. The proof showed that while they were still dating, Husband

taught Wife about computers and the computer business. Husband then suggested they open

a new computer business together. They started A&F in the same location as Husband’s

former Intech business. They married and continued to work side-by-side at A&F, full-time,

six days a week. According to Wife, both did “everything” at A&F. Although the business

was listed in Wife’s name on its license and other documents, such as a car loan application

and tax returns, it is undisputed that both parties devoted their time, experience, and effort

into its operation and shared in the profits. Husband took no salary for his efforts, but relied

upon the money earned, as did Wife, to pay for food, clothing, and other purchases. He and

Wife shared several vacations paid for by A&F monies. Although Wife held the view at trial

that there was no partnership, she expressly admitted to its existence in her answer to

Husband’s lawsuit. She took the position that A&F was a partnership that was essentially

dissolved when Husband never returned to work after the parties separated. At their

separation, Wife took half of the cash in the parties’ safe, money earned from A&F, and gave

half of it to Husband. Again, “the existence of a partnership may be implied from the

circumstances where it appears that the individuals involved have entered into a business

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relationship for profit, combining their property, labor, skill, experience, or money.” Bass,

814 S.W.2d at 41. In our view, the trial court’s conclusion that A&F was not a partnership

is incorrect. After the parties separated, Wife operated A&F on her own and kept all of the

earnings. Husband’s emails acknowledged and agreed to Wife’s actions.

We thus conclude that Husband and Wife had a partnership in A&F. As in Lyles, we

further conclude, however, that domestic relations law, and not partnership law, is controlling

in the context of the parties’ divorce. To this end, it is our view that the trial court properly

included A&F among the parties’ assets, to be valued and distributed. As in Lyles,

application of partnership law and its provisions to this case would be redundant and “futile.”

We conclude that the Revised Uniform Partnership Act has no application to the case at bar.

C.

Husband asserts that the trial court further erred in awarding A&F to Wife as her

“separate property.” He submits that whether it is determined to be a partnership or a sole

proprietorship, A&F is properly classified as marital property. Husband concludes that a

consideration of the relevant factors weighs heavily in favor of Husband “receiving at least

50% of the marital assets” as set forth by him in his Asset and Liability Statement.

Tennessee’s divorce statutes draw a distinction between “marital” and “separate”

property. Batson v. Batson, 769 S.W.2d 849, 856 (Tenn. Ct. App. 1988); Tenn. Code Ann.

§ 36-4-121 (2007). Consequently, “as a first order of business, it is incumbent on the trial

court to classify the property, to give each party their separate property, and then to divide

the marital property equitably.” Id. In the case at bar, there is some question as to the trial

court’s treatment of A&F in the context of the property division. In its findings, the court

expressly determined that “[A&F] is the separate property of [Wife]” and “assigned” it to

her. Within its schedule of the property allocated to each party, however, the trial court

included an entry for Wife – “Plus value of marital property (A&F)” – and added A&F’s

value to the other marital property awarded to Wife. Later in this opinion, we will further

consider the trial court’s treatment of A&F.

In all divorce cases, after classifying the parties’ property, the trial court is directed

to “equitably divide, distribute or assign the marital property between the parties without

regard to marital fault in proportions as the court deems just.” Tenn. Code Ann. § 36-4-

121(a)(1). In making an equitable division of marital property, the trial court is guided by

relevant factors to include:

(1) The duration of the marriage;

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(2) The age, physical and mental health, vocational skills,

employability, earning capacity, estate, financial liabilities and

financial needs of each of the parties;

(3) The tangible or intangible contribution by one (1) party to

the education, training or increased earning power of the other

party;

(4) The relative ability of each party for future acquisitions of

capital assets and income;

(5) (A) The contribution of each party to the acquisition,

preservation, appreciation, depreciation or dissipation of the

marital or separate property, including the contribution of a

party to the marriage as homemaker, wage earner or parent, with

the contribution of a party as homemaker or wage earner to be

given the same weight if each party has fulfilled its role;

(B) For purposes of this subdivision (c)(5), dissipation of assets

means wasteful expenditures which reduce the marital property

available for equitable distributions and which are made for a

purpose contrary to the marriage either before or after a

complaint for divorce or legal separation has been filed.

(6) The value of the separate property of each party;

(7) The estate of each party at the time of the marriage;

(8) The economic circumstances of each party at the time the

division of property is to become effective;

(9) The tax consequences to each party, costs associated with

the reasonably foreseeable sale of the asset, and other reasonably

foreseeable expenses associated with the asset;

(10) The amount of social security benefits available to each

spouse; and

(11) Such other factors as are necessary to consider the equities

between the parties.

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Tenn. Code Ann. §36-1-121(c).

In the case at bar, the court set forth its property division as follows:

WIFE

Net Value

Marital home $43,117.61

2007 Hyundai Accent 7,379.00

#512111 DCCU2 506.19

#488288 DCCU 144.46

#448287 DCCU 61.05

#511845 DCCU 850.79

Post-separation purchases 1,721.00

Cameras, lens 500.00

Computer & laptop 600.00

Household goods & furnishings 2,000.00

Marital Subtotal $56,880.10

Debt Assigned to Wife (Visa) 1,448.24

Net Marital $55,431.86

Plus Value of marital property (A&F) 1,500.00

Total $56,931.86

HUSBAND

2003 Coachman Motor home $29,000.00

1991 Astrovan 700.00

DCCU #2146 2,000.00

Items taken by Husband 200.00

Intech balance taken by Husband 2,108.22

Total $34,008.22

In summary, as we see it, the trial court valued the marital estate at $90,940.08

($56,931.86 + $34,008.22). Husband was awarded $34,008.22, or 37% of the estate, while

Wife received $56,931.86, or 63%. In making its property division, the trial court stated, in

part:

2

The “DCCU” allocations represent the parties’ various old and new, business and personal accounts

at Dupont Community Credit Union.

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At first blush, this appears to be an uneven allocation. Yet, the

[motor home] obtained by [Husband] has been paid in full by

payment of monies added on the home loan [Wife] will pay.

This amount was around $10,000.00 or more. There is also the

dissipation of marital assets by [Husband] of $8,795.00 on

Intech in late 2011. He did not have collision on the Vespa

scooter is his possession.3 He testified the Vespa scooter [was]

damaged by someone backing a car over it. Evidently,

[Husband] did not make a claim to recover the value of the

scooter. In . . . Exhibit 35, he valued the . . . scooter at

$2,000.00. The value in . . . Exhibit 9 was zero.

* * *

The court has made the allocation for a number of reasons.

First, [Wife] needs the home more than [Husband] needs the

home. She needs a residence and a place to restart her new

business. [Husband] has used the [motor home] as his home for

18 months. It may have gotten “old” by now but in March 2011

everything was fine. [Husband] had another business in another

location before these parties married. He also had another

business, in his name, during part of the parties’ separation.

Thus, he has operated two [computer] businesses at two

different locations and the location of the home place is not as

important to him as it is to her. This is the location of the only

computer business she has owned or operated. She has been the

sole worker, as between these parties, in the business since late

February of 2011. She has made all of the house payments since

March of 2011. She has a longer life expectancy than does

[Husband] and the home is more valuable to her than him for the

future.

* * *

[Husband] alleged that there was approximately $9,000.00 in a

safe at the parties’ home when they separated. [Wife] said there

was $6,000.00 in cash and she gave him $3,000.00 when he left

3

Husband testified he purchased the scooter during the marriage.

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to go to Florida . . . and she kept $3,000.00. The court accepts

[Wife’s] version.

[Husband], when he retired from TVA . . ., irrevocably elected

a retirement plan whereby, at his death, Connie Baggett would

be paid a portion of his retirement if he predeceased her.

Shortly after his marriage to [Wife], he also made her a similar

beneficiary under his retirement plan. He valued this “asset” at

$300.00 per month because that amount represents the reduction

of his monthly retirement to cover such an election. This is

somewhat speculative as no one knows if [Wife] will survive

[Husband] or not.

* * *

[Husband] has two sources of annual income: (1) Social

Security . . . of $17,034.00, gross and $15,876.00 net after

Medicare premiums and (2) TVA retirement of $11,064.26. He

can start another computer business. [Wife’s] monthly income

was listed at $2,200.00 with total expenses of $1,996.00, leaving

a net balance of $204.00. [Husband] is receiving Social Security

benefits now and [Wife] is over nine years away. . . .

Finally, the court was more impressed with the credible

testimony and evidence of [Wife]. [Husband] refused to answer

questions at trial about what he did with personal loans he

obtained. At times, he could not remember specific events. He

was very detailed about claims on items [Wife] had but short on

information about his own assets. He also stated high values on

items he attributed to [Wife]. [Husband] did not produce records

to verify his value or his positions. The court did not find his

testimony about A&F to be credible.

As this Court has often explained,

The division of the estate is not rendered inequitable simply

because it is not mathematically equal, or because each party did

not receive a share of every item of marital property. In the final

analysis, the justness of a particular division of the marital

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property and allocation of marital debt depends on its final

results.

Cradic, 2013 WL 672576 at *3. In the present case, the trial court explained the reasons it

achieved less than a “50/50” division of the marital property. We agree with the trial court

that the division is equitable. Husband assesses the overall property division as an award of

“$367,842.60 + dogs + $1,000 death benefit” to Wife, and $25,620 to Husband. On our

considered review of the entire record, we conclude that the evidence offers no support for

Husband’s assessment. As the trial court found, Husband assigns many values in his

proposed property division that are uncorroborated and appear to be inflated or clearly

speculative. On appeal, for example, Husband assigns the entire appraised value of the

marital home to Wife without accounting for the substantial remaining mortgage she must

pay. Significantly, Husband includes in his calculations the $200,000.00 in “accounts

receivable” i.e., his term for “gross receipts,” that he continues to maintain remain in A&F.

At this juncture, we briefly return to consider the classification of A&F. As should

be readily evident, A&F, as a partnership between Husband and Wife, is properly classified

as a marital asset. The proof showed its value to include $1,500 in equipment and inventory

and the remaining balance of approximately $60 in the business account the parties jointly

held before their separation. In our view, the trial court’s award of A&F to Wife as her

“separate property” was its way of recognizing that, for all intents and purposes, Wife alone

owned and operated A&F following Husband’s departure from the marriage. At the same

time, the trial court clearly included the value of A&F as “marital property” in its allocation

of marital assets to Wife. In the final analysis, while we find A&F to be a marital asset, the

classification of this one asset does not render the overall division inequitable. Stated

otherwise, if A&F is Wife’s separate property, it was properly assigned to her alone. If it is

deemed a marital asset, the attendant award of $1,500 to Wife does not render the overall

property division inequitable. Either way, there is no evidence whatsoever to support

Husband’s assertion that the value of A&F should include hundreds of thousands of dollars

in “accounts receivable” and/or gross income.

In the end, the trial court’s decision essentially left Wife with a place to live and the

ability to continue to support herself using the knowledge and experience she developed

during the marriage. The trial court considered that Wife has no other assets, no separate

income, is years from receiving social security, and has relied upon the computer business

operated at the marital home as her sole source of income before, during, and since the

separation. Husband was awarded the unencumbered “home” he has lived in since the

parties separated. Considering his separate income, including social security, and his

relatively low expenses, it appears that Husband has the option to remain “retired” or start

another business. As to ownership of the parties’ dogs, it is evident that the trial court

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considered their needs and the ability of the parties to care for them. We find no error in this

issue.

In summary, we have considered the trial court’s overall property distribution in light

of the various factors set forth in Tenn. Code Ann. § 36-4-121(c). On our review, we are

unable to conclude that the property distribution was inequitable or that the trial court erred

in its distribution of the marital property. The evidence simply does not preponderate against

the trial court’s division of the parties’ property.

V.

The judgment of the trial court is affirmed. Costs on appeal are taxed to the appellant,

Frank Ray Baggett. This case is remanded, pursuant to applicable law, for enforcement of

the trial court’s judgment and for collection of costs assessed by the trial court.

__________________________________________

CHARLES D. SUSANO, JR., PRESIDING JUDGE

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