The opinion
IN THE COURT OF APPEALS OF TENNESSEE
WESTERN SECTION AT NASHVILLE
______________________________________________
SHEILA FAYE HAGEN MCCALL BARNETT,
Plaintiff-Appellee,
Davidson Circuit No. 95D-859
Vs. C.A. No. 01A01-9706-CV-00244
RONALD EDWARD BARNETT, SR.,
Defendant-Appellant.
____________________________________________________________________________
FROM THE DAVIDSON COUNTY CIRCUIT COURT
THE HONORABLE MURIEL ROBINSON, JUDGE
Jack Norman, Jr. of Nashville
Thomas F. Bloom of Nashville
For Appellee
Clark Lee Shaw of Nashville
Larry Houston Hagar of Nashville
For Appellant
AFFIRMED AND REMANDED
Opinion filed:
W. FRANK CRAWFORD,
PRESIDING JUDGE, W.S.
CONCUR:
ALAN E. HIGHERS, JUDGE
HOLLY KIRBY LILLARD, JUDGE
Plaintiff, Sheila Faye Hagen McCall Barnett (Wife), and defendant, Ronald Edward
Barnett, Sr. (Husband), were divorced by decree entered January 9, 1997. Husband appeals and
presents issues concerning property division, alimony, and attorney’s fees.
FACTS
After co-habitating for several years, Husband and Wife married in 1992. Husband and
Wife, age 53 and 43 respectively at the time of trial, did not have any children born of the
marriage. It was the third marriage for both parties. At the time of the marriage, Husband
earned a gross income of approximately $45,000 per year as a franchise salesman for ServPro
Corporation (“ServPro”), a carpet cleaning business. This was the only asset of material value
that Husband brought into the marriage. In fact, Husband had been discharged under Chapter
7 of the Bankruptcy Code shortly before the marriage. Wife, on the other hand, earned
approximately $80,000 per year gross income at the time of the marriage as a manufacturer’s
representative. Wife also owned certain real estate, bank accounts, and other personal property,
all of which had a substantial value.
Shortly before the marriage, Wife contracted to acquire a home on North Wilson
Boulevard in Nashville. The closing occurred shortly after the date of the marriage. Wife made
a down payment of $28,345 from her own assets and signed a note for $105,800. The title of the
real estate listed Wife as sole owner, and Husband was not obligated on the note. Husband
contributed one-half of the mortgage payments on the home, and the note was reduced to
$89,954 at the time of trial. Husband also contributed to taxes and insurance for the home and
to the cost of installing $3,500 worth of improvements to the home.
The parties retained separate bank accounts during the marriage. Each party, however,
funneled money into a joint bank account that was used to pay for household expenditures. In
1993 Husband learned of the opportunity to purchase a local ServPro franchise for $90,000.
Because Husband lacked the requisite capital to purchase the franchise, the parties agreed that
Wife would make a down payment of $25,000 and that both Husband and Wife would sign a
promissory note for the remainder of the purchase price. The parties formed a Subchapter S
Corporation named West End Management, Inc. (“West End Management”) to own the
franchise. Wife and Husband were the only members of the Board of Directors; Wife was
designated President and Husband designated Secretary/Treasurer. Wife owned seventy-five
(75%) percent of the stock and Husband owned the remaining twenty-five (25%) percent.
Husband controlled the day-to-day operations of West End Management and received a monthly
salary of $2,700 as compensation.
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Although West End Management’s business began to flourish, the parties’ relationship
started to deteriorate. In 1994 Husband unilaterally raised his salary to $4000 per month without
informing Wife. When Wife discovered this, she called a Board of Director’s meeting where
Husband was removed from his position of Secretary/Treasurer, and his monthly salary cut back
to $2,700. Although both parties filed for divorce in March of 1995, the couple attempted a
reconciliation the following summer. During this period, Wife contracted to purchase a
condominium in Florida for $335,000. Wife made a down payment of $67,000 from her bank
account and signed a note for the remainder of the purchase price. Husband did not contribute
to the down payment, did not sign the mortgage note, did not contribute to any mortgage
payments, and his name was not listed on the deed.
After the parties’ attempt at reconciliation failed, Wife filed an Amended Complaint for
divorce in May of 1996. Following a trial, the trial court issued a final decree of divorce on
January 9, 1997. The trial court granted the divorce to both parties on stipulated grounds of
inappropriate marital conduct by each party pursuant to T.C.A. § 36-4-129 (1996). The trial
court found by “[u]ncontradicted proof” that the parties “made a very concerted effort” to keep
their estates separate during the marriage. Therefore the trial court classified each of the parties’
personal bank accounts and investment accounts as separate property. In addition, the trial court
ruled that the North Wilson Boulevard home, with an equity of approximately $82,000, was
separate property owned by Wife, but recognized the increase in the value of the equity as
marital property. The trial court held that Husband was entitled to $9,572.61 as a division of this
marital property, in addition to one-half of the parties’ $1000 joint bank account. The trial court
did not value the West End Management business and found that the shares owned by each party
in the business were separate property. Among the court’s other holdings in its final decree, was
the refusal to grant alimony and the order that each party pay its own attorney’s fees.
After this judgment was entered, Wife terminated Husband from his employment with
West End Management. Husband filed a motion to alter or amend the judgment. Husband
sought to restrain Wife from firing him or, in the alternative, to be awarded alimony. The trial
court denied this motion.
ISSUES
The first issue for review is:
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1. Whether the preponderance of the evidence supports the Trial
Court’s division of property between the parties and whether the
distribution so ordered is equitable.
Since this case was tried by the court sitting without a jury, we review the case de novo
upon the record with a presumption of correctness of the findings of fact by the trial court.
Unless the evidence preponderates against the findings, we must affirm, absent error of law.
T.R.A.P. 13 (d). The valuation of an asset is a question of fact, and on appeal there is a
presumption that the trial court’s valuation is correct. Wallace v. Wallace, 733 S.W.2d 102, 107
(Tenn. App. 1987); Edwards v. Edwards, 501 S.W.2d 283, 288 (Tenn. App. 1973).
When dividing property, the trial court must distinguish separate property from marital
property and then “equitably divide” the marital property. T.C.A. § 36-4-121 (a)(1) (1996);
Batson v. Batson, 769 S.W.2d 849, 856 (Tenn. App. 1988). Guidelines for such division is set
forth in T.C.A. § 36-4-121:
(b) For purposes of this chapter:
(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.
(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 pension, retirement or other fringe benefit
rights accrued during the period of the marriage.
(C) 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.
(D) Property shall be considered marital property as
defined by this subsection for the sole purpose of dividing assets
upon divorce and for no other purpose; and
(2) "Separate property" means:
(A) All real and personal property owned by a spouse
before marriage;
(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); and
(D) Property acquired by a spouse at any time by gift,
bequest, devise or descent.
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T.C.A. § 36-4-121 (b)
Husband contends that the trial court erred by classifying most of the assets as separate
property owned by Wife instead of as marital property. Although the parties did not enter into
an antenuptial agreement, the record supports the trial court’s finding that both parties decided
before and during the marriage to maintain separate estates. At trial, Wife testified as follows:
We discussed his financial situation and my financial situation
and we agreed, at that time, that everything I earned would
remain in my bank accounts and would be solely mine, my
property and that everything that he had would remain in his bank
account and be solely his property and that I would have nothing
to do with his bank accounts and he would have nothing to do
with my bank accounts.
This testimony was not contradicted at trial.1 Husband testified that he made deposits into
Wife’s bank account on occasions, to make contributions to “half of the house note, taxes, and
insurance on the house.” With the exception of these deposits and deposits into the parties’ joint
bank account, the evidence indicates that the parties deposited their earnings into their own
individual accounts.
A somewhat similar situation was presented in Mose v. Mose, No. 01A01-9508-CH-
00337, 1996 WL 76321 (Tenn. App. Feb. 23, 1996). In Mose, the wife deposited her personal
earnings into a separate savings account. Id. at *1. The husband “always agreed” throughout
the marriage that “the income earned by the [w]ife was hers to use as she desired.” Id. at *2.
During the divorce litigation, the husband attempted to list the wife’s savings account, valued
at $10,000, as a marital asset. Id. This Court stated:
The $10,000 savings account should ordinarily be determined to
be marital property since the Wife acquired this money during the
marriage by saving her payroll checks while employed outside the
home. However, the Husband consented to her treating this
account as her own property. This, in effect, was a gift from
Husband to Wife. Thus, it was never the intention of either party
that this account be jointly held.
Id. at *7 (citing T.C.A. § 36-4-121 (b)(2)(D)).
In the case at bar, the uncontroverted evidence at trial indicates that both parties agreed
before and during the marriage to segregate their assets. As noted by the trial court, both parties
1
When questioned by Wife’s counsel, Husband initially responded that he did not
recall discussing such an arrangement with Wife. Wife’s counsel, however, referred
Husband to his deposition, in which he conceded that they agreed to maintain separate
bank accounts.
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were savvy business people who had been married twice before. The evidence supports the trial
court’s finding that the parties’ bank accounts, investment accounts, and retirement accounts
were all funded by each of the parties’ own separate earnings and by their express agreement.
Therefore, the parties in effect granted gifts to each other. T.C.A. § 36-4-121 (b)(2)(D); Mose,
1996 WL 76321 at *7. Consequently, the trial court did not err in declaring these accounts to
be separate property.
The evidence supports the trial court’s classification of other property as separate
property. The Florida condominium was purchased by Wife with money from her separate
account and constitutes property “acquired in exchange for property acquired before marriage.”
T.C.A. § 36-4-121(b)(2)(B). Husband’s name was not listed on the deed or the note and he
concedes that he did not make any financial contribution whatsoever to the real estate.
Therefore, the trial court properly classified the condominium as Wife’s separate property.
The record also supports the trial court’s determination that the stock in West End
Management was separate property owned by each party. The parties specifically agreed that
Wife would own seventy-five (75%) percent of the stock and that Husband would own twenty-
five (25%) percent of the stock.2 On its face, the fact that the shares were divided in such a
disproportionate arrangement evidences the parties’ intent to consider the shares as separate
property. Any contribution made by Husband to the value of Wife’s shares was done in the
performance of his duties as an officer of the corporation for the benefit of the shareholders and
not as a spouse contributing to the increase in value. Thus, we do not consider these efforts on
behalf of the corporation as a “substantial contribution” as contemplated by T.C.A. § 36-4-121
(b)(1)(C). Husband further claims that the home on North Wilson Boulevard should have
been characterized as marital property. Conceding that the home was initially purchased with
Wife’s separate funds, Husband maintains that the home was transmuted to marital property.
We must disagree. This house, like the Florida condominium, was purchased by Wife solely
from her separate funds and constitutes property “acquired in exchange for property acquired
before marriage.” T.C.A. § 36-4-121 (b)(2)(B). Husband also argues that he “substantially
2
Husband alleges that the parties orally agreed that after the initial $25,000 deposit
was paid back to Wife, the parties would co-own the shares 50/50. Wife disputes this
contention, and the trial court accredited Wife’s testimony. Mays v. Brighton Bank, 832
S.W.2d 347, 351 (Tenn. App. 1992).
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contributed” to the home’s appreciation in value due to such actions as assisting in locating the
home, contributing to mortgage payments, insurance and taxes, and contributing to the home’s
improvements, maintenance, upkeep, and preservation. Although the trial court credited
Husband for his contributions to mortgage payments and improvements in the amount of
$9,572.61, Husband contends that he should have a larger share in the home’s appreciation in
value.
The trial court, in fact, found that Husband had made a contribution to the increase in
equity of the home. Therefore, the trial court aptly classified this increase in equity as marital
property. See Cohen v. Cohen, 937 S.W.2d 823 (Tenn. 1996). The trial court proceeded to
divide this marital property in accordance with the guidelines set forth in T.C.A. § 36-4-121 (c),
allocating $9,572.61 to Husband as “an equitable division of the marital property.” Trial courts
are afforded “wide discretion in dividing the interests of the parties in jointly owned property.”
Barnhill v. Barnhill, 826 S.W.2d 443, 449 (Tenn. App. 1991). The record does not indicate that
the trial court abused its discretion.
The next issue for review is:
2. Whether the preponderance of the evidence supports the Trial
Court’s refusal to award alimony in solido or rehabilitative
alimony to the Husband.
Husband asserts that the trial court erred by refusing to order Wife to pay him alimony.
Husband claims that he is economically disadvantaged compared to Wife, since Wife retains
more financial assets and has a greater earning capacity. Husband argues that this disadvantage
is exacerbated by the fact that he is recovering from a heart condition. Thus, Husband seeks the
awarding of rehabilitative alimony or alimony in solido.
Guidelines for the determination of alimony are set forth in T.C.A. § 36-5-101 (d) (Supp.
1997). The trial court has wide discretion concerning the award of alimony, and an appellate
court should reverse the trial court’s findings only in instances in which this discretion “has
manifestly been abused.” Hanover v. Hanover, 775 S.W.2d 612, 617 (Tenn. App. 1989). The
evidence preponderates in favor of the trial court’s decision not to award alimony to either party.
The extremely short duration of the marriage is a key factor that weighs against the awarding of
alimony. T.C.A. § 36-5-101 (d)(1)(C); Flanagan v. Flanagan, 656 S.W.2d 1, 3-4 (Tenn. App.
1983). Furthermore, the record supports the trial court’s finding that both parties are highly
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intelligent business persons. T.C.A. § 36-5-101 (d)(1)(A) & (B).
Husband finally argues that the trial court erred by not awarding him attorney’s fees. We
find that the trial court acted within its discretion in refusing to award either party attorney’s fees,
and we also find that Husband is not entitled to his attorney’s fees for purposes of this appeal.
The judgment of the trial court is affirmed. The case is remanded for such further
proceedings are as are necessary. Costs on appeal are assessed to the
appellant.
_________________________________
W. FRANK CRAWFORD,
PRESIDING JUDGE, W.S.
CONCUR:
____________________________________
ALAN E. HIGHERS, JUDGE
____________________________________
HOLLY KIRBY LILLARD, JUDGE
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