Grethy Hirt v. Ernst H. Hirt

IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

October 29, 2004 Session

GRETHY HIRT v. ERNST H. HIRT

Appeal from the General Sessions Court for Loudon County

No. 8450 William H. Russell, Judge

No. E2004-00354-COA-R3-CV - FILED FEBRUARY 8, 2005

Grethy Hirt (“Wife”) filed for divorce from Ernst H. Hirt (“Husband”) after twenty-seven years of

marriage. The parties had five financial accounts. Two of these accounts clearly were marital

property, were divided evenly by the Trial Court, and are not at issue on appeal. As to the three

remaining accounts, the Trial Court concluded two were marital property with the third being Wife’s

separate property. After making these findings, the Trial Court distributed the property with

Husband receiving 54% of the marital property, and Wife receiving the remaining 46%. Husband

appeals claiming the Trial Court erred when it classified two of the accounts as marital property and

the third as Wife’s separate property. Both parties claim the Trial Court’s overall distribution of the

marital property was inequitable. We conclude the Trial Court properly classified the three accounts

at issue and did not abuse its discretion when distributing the marital property. The judgment of the

Trial Court is, therefore, affirmed.

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

General Sessions Court Affirmed; Case Remanded

D. MICHAEL SWINEY , J., delivered the opinion of the court, in which HERSCHEL P. FRANKS, P.J., and

CHARLES D. SUSANO , JR., J., joined.

Robert G. Hinton, Lenoir City, Tennessee, for the Appellant Ernst H. Hirt.

Loren E. Plemmons, Lenoir City, Tennessee, for the Appellee Grethy Hirt.

OPINION

Background

This is a divorce case with the primary issues on appeal involving the Trial Court’s

classification of two financial accounts as marital property and a third account as Wife’s separate

property. The parties also challenge the Trial Court’s overall distribution of the marital property,

with both sides claiming the distribution was inequitable.

Wife filed a complaint for divorce alleging Husband was guilty of inappropriate

marital conduct or, in the alternative, that irreconcilable differences had arisen between the parties.

When the complaint for divorce was filed in September of 2001, Husband was 73 years of age, Wife

was 62, and the parties had been married for over 27 years. Husband filed an answer denying he was

guilty of any inappropriate marital conduct, although he did admit that irreconcilable differences had

arisen between the parties. Husband also filed a counter-complaint for divorce alleging Wife was

guilty of cruel and inhuman treatment as well as inappropriate marital conduct.

This was the second marriage for both parties. There are no children born of this

marriage. Husband maintains citizenship in the United States and Switzerland, and Wife is a Dutch

citizen. Husband retired in 1997 and was the sole wage earner while the parties were married. The

parties were living in Tellico Village, Loudon County, Tennessee, when Wife filed for divorce. Wife

has since moved to Georgia and Husband has moved to Mississippi. Husband is in very poor health

and has a history of serious coronary artery disease and intermittent atrial fibrillation. Husband

underwent quadruple bypass in 2000 and his cardiologist has opined that only 20% of Husband’s

heart currently is functioning.

Soon after the complaint was filed, an agreed order was entered disbursing

$139,844.98 contained in a First Central Bank money market account which was opened using the

proceeds from the sale of the marital residence. These funds, which are not at issue on appeal, were

divided evenly between Husband and Wife and considered an advance on any final award by the

Trial Court when distributing the marital property.

After a trial, the parties stipulated to and were declared divorced pursuant to Tenn.

Code Ann. § 36-4-129.1 The Trial Court then classified property as either marital or separate and

distributed the property according to these findings. The parties had five separate financial accounts.

Two of these were joint accounts maintained in the names of both Husband and Wife and were

valued at $308,080 and $219,262. The Trial Court classified these two accounts as marital property

1

Among other things this statute permits a trial court, upon stipulation, to declare the parties divorced as

opposed to awarding a divorce to only one of the parties.

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and divided them evenly, with each party receiving $263,671.2 Neither party challenges the Trial

Court’s classification of these two accounts as marital property or the manner in which these

accounts were divided. It is the remaining three accounts which form the primary dispute on appeal.

These three accounts are:

1. Salomon Smith Barney account # 423-62348-13, which is an IRA held solely

in Husband’s name and valued at $261,486. The Trial Court concluded this account was

marital property and divided it 60% or $156,891 to Husband, and 40% or $104,595 to Wife;

2. Salomon Smith Barney account # 423-27671-13, which was held in the names

of Husband and his daughter, Heidi Kroptavich, as joint tenants with the right of

survivorship. This account was valued at $182,723, and the Trial Court concluded it was

marital property and divided it 60% or $109,634 to Husband, and 40% or $73,089 to Wife;

and

3. Salomon Smith Barney account #572-00759-19-096, which was held in the

names of Wife and her daughter, Collette Hutson, as joint tenants with the right of

survivorship. This account was valued at $313,000, and the Trial Court awarded the entire

account to Wife as her separate property after expressly finding “that [Husband] has failed

to carry his burden of proof that he made a substantial contribution to the existing separate

account of [Wife].”

The Trial Court’s classification and distribution of the remaining property is not

directly in dispute. As noted previously, the marital residence was sold after the divorce action was

filed. Wife moved to Georgia and Husband moved to Mississippi. The parties used the proceeds

from the sale of the marital residence toward the purchase of new homes once they relocated. In

addition to the property distribution set forth above, Wife was awarded as her separate property her

house in Georgia, 14.5 acres of land located in Arkansas, and any funds she held in bank accounts

in Georgia. Husband was awarded as his separate property his Mississippi residence and any funds

he held in bank accounts in Mississippi. Each party was awarded the personal property currently in

their possession and the Trial Court divided the few remaining items of personal property which then

were in dispute but which are not at issue on appeal.

Husband claims the Trial Court erred when it classified as marital property Salomon

Smith Barney accounts #423-62348-13 and #423-27671-13. Husband also claims the Trial Court

erred when it classified Salomon Smith Barney account #572-00759-19-096 as Wife’s separate

property. Husband’s final issue is his claim that the Trial Court did not consider all relevant factors

when distributing the marital property, thereby resulting in an inequitable distribution. While Wife

2

One account contained 253,373.51 Euros. According to Husband, a correct conversion to U.S. dollars would

result in this account being worth approximately $296,000, not $219,262. W hether this account is valued at $219,262

or $296,000 will not significantly impact the overall property distribution since this account was divided evenly between

the parties.

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agrees with the Trial Court’s classification of the three accounts, she also claims that the distribution

of the marital property was inequitable when considering the relevant factors.

Discussion

The factual findings of the Trial Court are accorded a presumption of correctness, and

we will not overturn those factual findings unless the evidence preponderates against them. See

Tenn. R. App. P. 13(d); Bogan v. Bogan, 60 S.W.3d 721, 727 (Tenn. 2001). With respect to legal

issues, our review is conducted “under a pure de novo standard of review, according no deference

to the conclusions of law made by the lower courts.” Southern Constructors, Inc. v. Loudon County

Bd. Of Educ., 58 S.W.3d 706, 710 (Tenn. 2001).

Before we discuss the Trial Court’s classification and distribution of the three

accounts at issue, we note the parties’ factual agreement that Husband was the sole wage earner

during the marriage, Wife served as homemaker, and neither party expected Wife to work outside

of the home. Pursuant to Tenn. Code Ann. § 36-4-121(c)(5), when equitably distributing marital

property a trial court should consider as one of the various factors the contributions of each party to

the acquisition, appreciation, dissipation or depreciation 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.” On appeal neither party argues that the other did not fulfill his or her respective

role, and the record certainly supports the conclusion that they both did just that. Therefore, we will

discuss neither the testimony in the record pertaining to the parties fulfilling their wage

earner/homemaker roles in the marriage nor the testimony relevant only to Wife’s claim for alimony,

a claim denied by the Trial Court and a decision not appealed by Wife.

We first must decide whether the Trial Court correctly classified the disputed property

as either marital or separate property before we can determine whether the overall distribution of the

marital property was equitable. As relevant to this appeal, Tenn. Code Ann. § 36-4-121(b) provides

the following definitions of marital and separate property:

(1)(A) "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 divorce hearing

date.… All marital property shall be valued as of a date as near as

possible to the date of entry of the order finally dividing the marital

property.

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(B) "Marital property" includes income from, and any increase in

value during the marriage of, property determined to be separate

property in accordance with subdivision (b)(2) if each party

substantially contributed to its preservation and appreciation, and the

value of vested and unvested pension, vested and unvested stock

option rights, retirement or other fringe benefit rights relating to

employment that accrued during the period of the marriage.

***

(D) As used in this subsection, "substantial contribution" may

include, but not be limited to, the direct or indirect contribution of a

spouse as homemaker, wage earner, parent or family financial

manager, together with such other factors as the court having

jurisdiction thereof may determine.

***

(2) "Separate property" means:

(A) All real and personal property owned by a spouse before

marriage, including, but not limited to, assets held in individual

retirement accounts (IRAs) as that term is defined in the Internal

Revenue Code of 1986, as amended;

(B) Property acquired in exchange for property acquired before the

marriage;

(C) Income from and appreciation of property owned by a spouse

before marriage except when characterized as marital property under

subdivision (b)(1);

(D) Property acquired by a spouse at any time by gift, bequest, devise

or descent ….

Tenn. Code Ann. § 36-4-121(b).

Our Supreme Court had occasion to discuss the concepts of marital property and

separate property in the recent case of Langschmidt v. Langschmidt, 81 S.W.3d 741 (Tenn. 2002).

In Langschmidt, the Supreme Court noted that in addition to the statutory provisions contained in

Tenn. Code Ann. § 36-4-121(b), Tennessee intermediate appellate courts have recognized two

methods by which separate property may be converted into marital property. Id. at 747. These two

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methods are commingling and transmutation, which the Supreme Court noted have been described

by this Court as follows:

[S]eparate property becomes marital property [by commingling] if

inextricably mingled with marital property or with the separate

property of the other spouse. If the separate property continues to be

segregated or can be traced into its product, commingling does not

occur.... [Transmutation] occurs when separate property is treated in

such a way as to give evidence of an intention that it become marital

property.... The rationale underlying these doctrines is that dealing

with property in these ways creates a rebuttable presumption of a gift

to the marital estate. This presumption is based also upon the

provision in many marital property statutes that property acquired

during the marriage is presumed to be marital. The presumption can

be rebutted by evidence of circumstances or communications clearly

indicating an intent that the property remain separate.

Langschmidt, 81 S.W.3d at 747 (citations omitted).

One of the issues in Langschmidt was whether the husband’s IRAs which had been

established prior to the marriage were marital or separate property when the husband made

absolutely no contributions to those IRAs during the marriage. The Supreme Court’s resolution of

this issue was summarized by this Court in Smith v. Smith, 93 S.W.3d 871 (Tenn. Ct. App. 2002)

as follows:

The supreme court … began its analysis by stating that

"[r]etirement benefits accrued during the marriage clearly are marital

property under Tennessee law." [Langschmidt, 81 S.W.3d] at 749.

(citing Tenn. Code Ann. § 36-4-121(b)(1)(B); Gragg v. Gragg, 12

S.W.3d 412 (Tenn. 2000); Cohen v. Cohen, 937 S.W.2d 823

(Tenn.1996)). The court then stated that the issue was "whether a

premarital IRA is a retirement benefit under Tenn. Code Ann.

§ 36-4-121(b)(1)(B)." Id. at 749. Because the premarital IRAs at

issue were funded with premarital assets and did not represent

deferred compensation during the marriage, the court concluded that

"Husband's premarital IRAs are not retirement benefits under Tenn.

Code Ann. § 36-4-121(b)(1)(B)." Id. at 749.

After concluding that Husband's IRAs were not retirement

benefits, the court determined that Husband's IRAs remained his

separate property according to section 36-4-121(b)(2)(A) of the

Tennessee Code. Id. at 749. This was due to fact that Husband

owned the IRAs and funded them prior to the parties' marriage. Id.

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The court then stated that the appreciation of the IRAs during the

marriage could properly be considered marital property if "both

parties 'substantially contributed to [the IRA's] preservation and

appreciation.'" Id. (citing Tenn. Code Ann. § 36-4-121(b)(1)(B), -

121(b)(2)(C)). In order to support a finding of substantial

contribution, the court required some connection between the marital

efforts of a spouse and the appreciation of the separate property. Id.

at 746, 750. The court determined that the evidence failed to support

a finding that "Wife substantially contributed to the preservation and

appreciation of Husband's IRA assets." Id. at 750. Accordingly, the

court held that "these IRA assets, including their appreciation during

the marriage, are Husband's separate property under sections

36-4-121(b)(2)(A) and 36-4-121(b)(1)(B)" of the Tennessee Code.

Id. at 750-51.

Smith, 93 S.W.3d at 877.

Keeping these principles in mind, we now turn to the Trial Court’s classification of

the three accounts at issue in this appeal. Much of the pertinent testimony at trial focused on the

parties’ finances and these three accounts. Wife was the first witness, and she testified that she and

her first husband owned a subdivision, a duplex, the house in which they lived, and land in Arkansas.

Wife received some of this property when she divorced her first husband. Most of these assets were

sold over time with the proceeds being deposited into a bank account in Holland, which is where

Wife moved after her first divorce. Wife originally opened this account in her name and her sister’s

name because Wife’s daughter was a minor at that time. Once Wife’s daughter was no longer a

minor, her daughter eventually was added to the account and Wife’s sister was removed. Wife also

opened an account in Arkansas with Salomon Smith Barney (“SSB”) using funds from her first

marriage. This account also was in the names of Wife and her daughter. Wife stated that Husband

did not contribute any money to these two accounts which Wife referred to as her “personal

accounts.”3

According to Wife, the parties’ normal monthly bills were paid from a joint checking

account funded entirely with Husband’s earnings. Wife did not contribute any money from her two

personal accounts toward operating the household, with the exception of two “loans” she made to

Husband in the 1970's. According to Wife, she loaned Husband $10,000 from her personal account

in Arkansas in January of 1974. Wife had Husband sign a promissory note evidencing this loan and

the note was admitted into evidence at trial. Wife testified that Husband wanted to borrow another

$10,000 in 1976. Wife claims Husband accompanied her to the bank and discovered that she

3

W ife’s reference to these accounts as her “personal” accounts certainly is not determinative of whether the

accounts were her separate property. W e use W ife’s reference to these accounts as her personal accounts primarily

because it assists in distinguishing between the several accounts at issue.

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actually had $18,000 in the account. Husband then informed Wife that he wanted to borrow the

entire amount, and she acquiesced.

Wife claimed Husband was upset because she would not give him all of the money

contained in her “personal” accounts. Wife explained the reason she did not do this was to protect

her daughter financially, even if it made Husband angry. Wife used the money in her personal

accounts for taking care of her daughter, who lived for some time with Wife’s sister in Holland.

Wife used this money to pay for her daughter’s schooling, medical bills, etc. Husband contributed

nothing toward these expenses pertaining to Wife’s daughter.

Husband had worked approximately ten or eleven years for a Dutch company called

Uiterwoyk before the parties were married. Wife acknowledged that shortly after they were married,

Husband told her that he had $40,000 in a pension account with Uiterwoyk. Wife went on to add,

however, that she never saw any documentation verifying Husband’s statement that he had $40,000

in that account prior to their marriage.

Approximately ten years after Husband and Wife were married, Wife assisted her

mother in buying a house. Wife testified that it was decided her mother would pay 1/3 of the

purchase price, and “I would pay 1/3, and my husband and I would pay 1/3.” When the house was

sold ten years later after Wife’s mother passed away, Wife paid off a loan that Husband had made

on the house with 1/3 of the remaining proceeds being deposited into a joint account of Husband and

Wife, and the remaining 2/3 being deposited into Wife’s personal account in Holland.

Wife testified that she had a stockbroker who assisted her with investing the money

in the accounts she held with her daughter, although she sometimes would ask Husband whether he

agreed with the stockbroker’s advice. Wife claimed Husband made no financials decisions regarding

her personal accounts, “except insofar as he would agree” with the stockbroker. After Wife filed for

divorce, she moved to Georgia to be with her daughter. While in Georgia, Wife closed both of her

personal accounts and combined them into one new account with SSB in Atlanta. The current value

of this account is $313,000 and is the third account still at issue on appeal. Wife receives interest

income on this account ranging from $500 to $1,500 per month. She also receives $554 per month

in social security benefits.

With regard to the account held in the names of Husband and his daughter, Wife

stated Husband added his daughter to that account shortly before Wife filed for divorce. Wife

admitted she did not contribute any funds to any of the financial accounts except her two personal

accounts. Wife further stated that Husband made no financial contributions to her two personal

accounts. Wife never transferred money from her personal accounts into any of the other accounts.

The next witness was Husband who testified that he had worked for Uiterwoyk

Corporation for eleven years before he married Wife. Husband continued to work for that company

for approximately nine more years. When questioned about his IRA account, SSB account #423-

62348-13, Husband testified this account initially was funded with “about $67,017… which was a

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pension plan from Uiterwoyk Corporation prior to my marriage.” In other words, Husband appeared

to claim that the entire pension was earned prior to his marriage to Wife. However, on cross-

examination Husband was questioned further regarding whether he continued to accrue pension

benefits during the last nine or ten years of his employment with Uiterwoyk, during which time he

was married to Wife. This questioning was as follows:

Q. So, you are saying that you didn’t earn any of the

Uiterwoyk pension during the last ten years that you were employed

there?

A. No. I said – What I’m saying is that I worked for

Uiterwoyk, had a pension plan. And when Uiterwoyk sold out, I took

the pension plan, reinvested it and then rolled it over in 1984 into the

IRA plan.

Q. Right. And during half of the time that you worked for

Uiterwoyk, you were married to Mrs. Hirt, were you not?

A. That is correct.

Based on this testimony, it seems clear that Husband earned pension benefits during his entire tenure

with Uiterwoyk, which would include the first nine or ten years he was married to Wife. We note

there was no documentary evidence from Uiterwoyk or any other source introduced at trial showing

the value of the pension at the time of the marriage, and this may be because such evidence no longer

exists.4 However, over the course of the years Husband maintained a handwritten ledger which listed

the parties’ various assets and liabilities. In 1981, approximately seven years after the parties were

married, Husband indicated in the ledger that his pension was worth $22,945. In 1986, the ledger

has an entry for “Pension Plan IRA” and indicates a value of $55,785.

After leaving Uiterwoyk’s employment, Husband worked for a company called Ryan

Walsh. Husband worked for Ryan Walsh from 1984 until 1996 and was married to Wife during this

entire period of time. Husband testified he had a life annuity agreement with Ryan Walsh which

eventually was worth $82,000. Husband stated he converted the annuity into cash and these funds

were deposited into his IRA account. Husband also had $65,000 in a savings plan with Ryan Walsh,

which he likewise deposited into his IRA account.

With regard to the account held in the names of Husband and his daughter, SSB

account #423-027671-13, Husband testified on direct examination that this account contained only

4

Husband also had an annuity with Uiterwoyk. W hen asked if he had any documentation showing the value

of the annuity at the time of the marriage, Husband stated he was unable to obtain that type of information because the

company is now “broke” and “out of business.” W e assume the same reason holds true as to why Husband had no

documentation from Uiterwoyk regarding the pre-marital value of his pension.

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premarital funds. According to Husband, he received $50,000 in U.S. dollars upon his divorce from

his first wife. Husband claims he invested this money into long term certificates of deposit (“CD’s”)

with the Rabo Bank in Holland in 1974 or 1975. Husband then claims that many years later and after

the CD’s had matured, he transferred these funds into SSB account #423-27671-13, which is

currently held in his and his daughter’s names.

The origin of the funds in SSB account #423-27671-13 seemed rather straight-

forward based on Husband’s testimony on direct examination. This result changed during cross-

examination when Husband was questioned about his handwritten ledgers referenced above. The

ledger for 1980 does not show an entry for the Rabo Bank, although by this time Husband claims

to have had over $50,000 in CD deposits with that bank. However, the 1980 ledger does list two

CD’s with a total value of $42,104. The 1981 ledger entry no longer has any CD’s listed, but does

contain the first entry for the Rabo Bank and lists the amount of money being held there as $15,000.

Suffice it to say, Husband’s ledger entries do not square with his testimony on direct examination.

Documentation provided by SSB on account #423-27671-13 was entered into

evidence at trial. This documentation is far from complete and details sporadic transactions for very

limited periods of time between August of 1998 and February of 2003. Husband testified that every

year he is required to take mandatory distributions from his IRA, SSB account # 423-62348-13.

Husband testified that these mandatory distributions average between $10,000 to $12,000 annually.

Returning to the documentation provided by SSB on account #423-27671-13, the records indicate

that on December 14, 1999, there was a $15,000 deposit from Husband’s IRA account which was

described as the “normal distribution.” Similarly, on September 25, 2001, there was a $9,600

deposit from Husband’s IRA into account #423-27671-13, which also was described as the “normal

distribution.”

With regard to Wife’s “personal accounts,” Husband testified that for several years

he advised Wife regarding which stocks to purchase and how to invest that money. Wife listened

to Husband for a time, but in 1999 she refused to sell some stock and went against Husband’s advice.

Husband stated that soon thereafter, the value of the stock declined significantly.

Husband receives social security retirement benefits in the amount of $1,575 per

month and also receives a pension from his last employer in the amount of $240 per month. As

noted, Husband also receives mandatory IRA distributions averaging somewhere between $10,000

to $12,000 each year. Husband testified that he is selling his house in Mississippi because of his

poor health and intends to move into an assisted living center. Husband has investigated the cost of

various assisted living centers in the area where he lives, and they cost a minimum of between

$3,000 to $4,500 per month.

The Trial Court concluded Husband’s IRA account valued at $261,486 was marital

property. Langschmidt and Smith, supra, make clear that an account such as an IRA which is funded

entirely with pre-marital assets remains separate property. In addition, when the appreciation in the

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value of the account is entirely market driven, then the appreciation likewise remains separate

property. See Langschmidt, 81 S.W.3d at 745-747; Smith, 93 S.W.3d at 877.

When marital funds are mixed with separate property, matters can get more

complicated. In Smith, the husband had six IRAs, two of which had been partially funded with

marital dollars.5 The premarital funds in these two accounts consisted of bonds with fixed interest

rates and this allowed husband’s accountant to determine the value of the accounts attributable to

premarital funds, and the amount properly attributable to the marital funds. As a result, the

premarital funds did not become “inextricably” commingled with the marital funds and the “separate

property in the accounts did not become marital property by virtue of the doctrine of commingling.”

Smith, 93 S.W.3d at 879.

In Langschmidt, supra, the Supreme Court remanded the case to the trial court to

consider whether the husband’s commingling of marital earnings with his separate money market

account was such that the “marital earnings became inextricably mingled with the remaining funds

in the money market account.” Langschmidt, 81 S.W.3d at 748 (emphasis in original). The Supreme

Court then added:

[I]f the trial court finds that Husband commingled his marital income

with his separate account, then the entire value of the money market

account and the entire value of assets purchased or transactions

funded from the money market account after the first deposit of

marital earnings would also be marital property. If, however, the trial

court finds that Husband did not commingle his marital earnings with

his money market funds, then the money market account and any

purchases of assets from money market funds are Husband's separate

property.

Langschmidt, 81 S.W.3d at 748 (footnote omitted).

Husband testified that his IRA account began when he deposited his pension from

Uiterwoyk in the amount of $67,017. Husband’s pension with Uiterwoyk was earned over a period

of twenty years and Husband was married to Wife for almost one-half of that time. If this had been

the only asset deposited into the IRA account, then trying to determine how much was attributable

to premarital earnings versus post-marital earnings might be accomplished given the fact that the

parties were married close to one-half of the time Husband worked at Uiterwoyk. Husband,

however, deposited into the IRA account approximately $147,000 in funds earned through his

employment with Ryan Walsh, and these funds clearly were earned in their entirety while the parties

were married. Husband submitted no proof at trial which would have enabled the Trial Court to

5

The Smith Court quickly concluded that the four IRAs which had been funded entirely with premarital dollars

were the husband’s separate property, as was their appreciation in value during the marriage which was due solely to

“market factors and the compounding of the interest.” Smith, 93 S.W .3d at 878.

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determine the value of his premarital pension earnings. Husband even admitted that he did not know

how much was earned prior to the marriage. Unlike the situation in Smith, no accountant was called

as an expert witness to testify regarding the amount in the IRA account which was attributable to

premarital earnings and the appreciation of those earnings. Given all of these factors, we believe the

Trial Court had no choice but to declare the entire IRA as marital property because Husband

inextricably commingled marital property with his separate property. Therefore, we affirm the Trial

Court’s conclusion that Husband’s entire IRA account is marital property.

The same holds true for the account held in Husband’s and his daughter’s names.

While Husband testified this account initially began with a $50,000 deposit from premarital funds

obtained after his first divorce, Husband’s ledgers do not support this testimony. More importantly,

in December of 1999 and September of 2001, there was a total of $24,600 deposited into this account

from Husband’s IRA account, an account which we have determined was marital property. These

deposits from the IRA account were characterized by SSB as “normal distributions.” This would

lead one to believe that these “normal distributions” from Husband’s IRA account occurred at least

once a year and on a regular basis, but we cannot determine how much more marital money from

Husband’s IRA was deposited into this account without complete documentation from SSB. As with

the IRA account, there was absolutely no proof offered at trial establishing how much of the money

in this account was premarital money versus post-marital money. Even assuming that this account

did begin with a $50,000 deposit from Husband’s first marriage, we have no choice but to conclude

Husband commingled these separate funds with marital funds to the point that they have become

inextricably commingled and the entire account must, therefore, be deemed marital property. The

Trial Court’s conclusion that all of the money contained in this account was marital property is

likewise affirmed.

As to the account the Trial Court concluded was Wife’s separate property, there was

some factual disagreement over how much of a contribution, if any, Husband made to the

appreciation of this account. For example, Husband’s and Wife’s testimony differs about the degree

of his assistance with her investment decisions. There also was some dispute over the funds used

to purchase Wife’s mother’s house, with Husband claiming Wife deposited some marital funds into

her “personal” account after the house was sold. The Trial Court obviously resolved these factual

issues in Wife’s favor. The Trial Court's decision to credit Wife’s testimony over Husband’s was

nothing more than a credibility determination. "Unlike this Court, the trial court observed the manner

and demeanor of the witnesses and was in the best position to evaluate their credibility." Union

Planters Nat'l Bank v. Island Mgmt. Auth., Inc., 43 S.W.3d 498, 502 (Tenn. Ct. App. 2000). A trial

court's determinations regarding credibility are accorded deference by this Court. Id.; Davis v.

Liberty Mutual Ins. Co., 38 S.W.3d 560, 563 (Tenn. 2001). We are unable to conclude that the

preponderance of the evidence weighs against the Trial Court's findings that the funds in this account

originated solely with Wife’s premarital funds and that Husband did not substantially contribute to

their appreciation during the course of the marriage. Accordingly, the findings and resulting

conclusions of the Trial Court regarding the funds in this account are affirmed.

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Having affirmed the Trial Court’s classification of the various accounts at issue, we

now turn to the Trial Court’s distribution of the marital property. As noted, both parties claim they

received an inequitable distribution. Tenn. Code Ann. § 36-4-121(c) requires a trial court to consider

all relevant factors when making an equitable distribution of marital property, including:

(1) The duration of the marriage;

(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) 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;

(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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A trial court has wide discretion in dividing the interest of the parties in marital

property. Barnhill v. Barnhill, 826 S.W.2d 443, 449 (Tenn. Ct. App. 1991). As noted by this Court

in King v. King, when dividing marital property:

The trial court’s goal in every divorce case is to divide the parties’

marital estate in a just and equitable manner. The division of the

estate is not rendered inequitable simply because it is not

mathematically equal, Cohen v. Cohen, 937 S.W.2d 823, 832 (Tenn.

1996); Ellis v. Ellis, 748 S.W.2d 424, 427 (Tenn. 1988), or because

each party did not receive a share of every item of marital property.

Brown v. Brown, 913 S.W.2d [163] at 168. . . . In the final analysis,

the justness of a particular division of the marital property and

allocation of marital debt depends on its final results. See Thompson

v. Thompson, 797 S.W.2d 599, 604 (Tenn. App. 1990).

King v. King, 986 S.W.2d 216, 219 (Tenn. Ct. App. 1998) (quoting Roseberry v. Roseberry, No.

03A01-9706-CH-00237, 1998 Tenn. App. LEXIS 100, at *11-12 (Tenn. Ct. App. Feb. 9, 1998), no

appl. perm. appeal filed).

When considering the proceeds from the sale of the marital residence as well as the

value of the financial accounts deemed to constitute marital property, Husband was awarded

$600,118.49 in assets, which constitutes 54% of the marital property. Wife was awarded the

remaining 46% which totaled $511,277.49. However, Wife also was awarded all of the $313,000

in funds contained in her separate account. While determining the percentage of the marital property

each party was awarded is certainly helpful in understanding the overall property distribution, the

fact that one party was not awarded exactly 50% of the marital property, standing alone, will rarely

if ever constitute an abuse of discretion and a basis for reversal. There is no doubt that some of the

factors contained in Tenn. Code Ann. § 36-4-121(c) weigh equally for Husband and Wife, while

others tend to favor Wife and yet others tend to favor Husband. Our review of the entire record in

this case convinces this Court that the Trial Court properly considered all relevant factors when

distributing the marital property. We hold the Trial Court did not abuse its discretion when

distributing the marital property. The Trial Court’s overall distribution of the marital property is

equitable, and, therefore, is affirmed.

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Conclusion

The judgment of the Trial Court is affirmed and this cause is remanded to the Trial

Court for collection of the costs below. Costs on appeal are assessed equally against Appellant,

Ernst H. Hirt, and his surety, and Appellee, Grethy Hirt.

____________________________________

D. MICHAEL SWINEY, JUDGE

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