Norma Simpson, Ind. and next of kin of J. W. Simpson v. Faye Fowler

IN THE COURT OF APPEALS OF TENNESSEE

AT JACKSON

Assigned on Briefs March 25, 2014

NORMA SIMPSON, IND. AND NEXT OF KIN OF J. W. SIMPSON v. FAYE

FOWLER

Appeal from the Chancery Court for Obion County

No. 28448 W. Michael Maloan, Chancellor

No. W2013-02109-COA-R3-CV - Filed April 22, 2014

This is the second appeal of this case, involving the application of Tennessee Code

Annotated Section 31-1-105 to set aside certain transfers by decedent to his long-term

companion, which transfers were allegedly made with intent to deny his surviving spouse of

her share of his estate. From the totality of the circumstances, and applying the factors

outlined by this Court in Finley v. Finley, 726 S.W.2d 923 (Tenn. Ct. App. 1986), we

conclude that the evidence preponderates in favor of the trial court’s award of $8,500.00 in

insurance proceeds to the surviving spouse for decedent’s funeral costs, but that the evidence

preponderates against the trial court’s award of a $28,000.00 bank account to the surviving

spouse. Affirmed in part, reversed in part, and remanded.

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

Part; Reversed in Part; and Remanded

J. S TEVEN S TAFFORD, J., delivered the opinion of the Court, in which A LAN E. H IGHERS, P.J.,

W.S., and D AVID R. F ARMER, J., joined.

Charles S. Kelly, Sr., Dyersburg, Tennessee, for the appellant, Faye Fowler.

Bruce Conley, Union City, Tennessee, for the appellee, Norma Simpson.

OPINION

This is the second appeal of this case. In Simpson v. Fowler, No. W2011-02112-

COA-R3-CV, 2012 WL 3675321 (Tenn. Ct. App. Aug. 28, 2012) (“Simpson I”), we vacated

the order of the trial court for lack of findings under Tennessee Rule of Civil Procedure

52.01. A full recitation of the factual history of the case is set out in Simpson I. In the

interest of continuity and judicial economy, we restate the relevant facts here:

Appellee Norma Simpson and J.W. Simpson

(“Decedent”) were married on May 17, 1951. In October of

1967, the Simpsons were divorced but reconciled after eight

months. The Simpsons married again in June of 1968 and they

lived together until about 1990, when they again separated. At

that time, Ms. Simpson moved into her mother’s home, and Mr.

Simpson remained in the marital residence. Although the

Simpsons did not reconcile, neither filed for divorce. Mr.

Simpson did not support Ms. Simpson after their final

separation, except that Ms. Simpson continued her health

insurance coverage under Mr. Simpson’s policy.

In 1992 or 1993, Mr. Simpson began a relationship with

Appellant Faye Fowler. Mr. Simpson and Ms. Fowler never

lived together, but were involved until Mr. Simpson’s death on

February 11, 2010. Mr. Simpson died intestate. During his

relationship with Ms. Fowler, sometime in 2005, Mr. Simpson

changed the ownership of his bank account at First State Bank

to a joint account with right of survivorship with Ms. Fowler.

Both Ms. Simpson and Ms. Fowler testified that neither of them

had written checks on this account during their respective

relationships with Mr. Simpson. Ms. Fowler testified that she

neither deposited, nor withdrew any funds from this account,

and that she thought that the account funds were comprised of

Mr. Simpson’s pension and social security benefits. At the time

of Mr. Simpson’s death, the checking account had a balance of

approximately $28,000. Mr. Simpson also changed the beneficiary on both his MetLife

Company, and Minnesota Life Insurance Company life insurance policies to Ms. Fowler. The

total benefit under both policies was approximately $8,500. The insurance policies and the

bank account totaling approximately $36,500 are the disputed assets in this lawsuit.

On February 11, 2010, Ms. Simpson, individually and as

next-of-kin of J.W. Simpson filed a complaint and application

for restraining order against Ms. Fowler, seeking to set aside

Decedent’s transfer of the First State Bank account funds, and

the proceeds of the two life insurance policies to Ms. Fowler.

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On February 25, 2010, the trial court granted Ms. Simpson’s

request for a temporary injunction, enjoining Ms. Fowler from

using or transferring any of the disputed funds. On March 10,

2010, Ms. Fowler filed her answer and counter-complaint,

seeking attorney’s fees and costs on the ground that Ms.

Simpson’s lawsuit was frivolous.

On May 17, 2011, the trial court conducted a bench trial.

Following the trial, the court held that the transfers to Ms.

Fowler should be set aside under Tennessee Code Annotated

Section 31-1-105. On June 9, 2011, the trial court entered an

order, which reads, in its entirety, as follows:

This cause is before the Court on the 17th

day of May 2011, on the Complaint of the

Plaintiff, the Answer and Counter–Complaint of

the D efendant, the A nsw er to the

Counter–Complaint, the testimony of the parties

and other witnesses, and from a consideration of

the record and applicable authorities.

It satisfactorily appears to the Court that

Tennessee Code 31-1-105 is applicable to the

facts and issues in this litigation, and that the

transfers of J.W. Simpson to Faye Fowler should

be set aside.

IT IS, THEREFORE, ORDERED BY THE

COURT that all transfers to Faye Fowler by J.W.

Simpson, including the survivorship account at

First State Bank, the change of beneficiary of

policies at MetLife Company and Minnesota Life

Insurance Company are all set aside, and the

funds from these transfers are to be paid into the

office of the Chancery Court Clerk pending the

administration of the Estate of J.W. Simpson.

Ms. Fowler filed a timely notice of appeal from this

order.

Simpson I, 2012 WL 3675321, at *1–*2. In Simpson I, we determined that the trial court’s

June 9, 2012 order was deficient in two respects. First, although the trial court made oral

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findings from the bench, it failed to incorporate those findings into the June 9, 2012 order.

Accordingly, we held that the order was not in compliance with Tennessee Rule of Civil

Procedure 52.01, which provides, in relevant part, that: “In all actions tried upon the facts

without a jury, the court shall find the facts specially and shall state separately its conclusions

of law and direct the entry of the appropriate judgment.” Second, we held that the June 9,

2011 order was deficient because:

[T]he trial court appears to misapprehend the relevant law

pertaining to Tennessee Code Annotated Section 31-1-105. The

trial court found that the effect of the transfer to deprive Ms.

Simpson of her share of the estate is sufficient to set the transfer

aside under the statute. However, we hold that the statute

requires that the trial court must also determine whether Mr.

Simpson possessed the intent to deprive Ms. Simpson of her

share of the estate as well.

Simpson I, 2012 WL 3675321, at *3. Tennessee Code Annotated Section 31-1-105

provides:

Any conveyance made fraudulently to children or others, with

an intent to defeat the surviving spouse of the surviving spouse’s

distributive or elective share, is, at the election of the surviving

spouse, includable in the decedent’s net estate under § 31-4-

101(b), and voidable to the extent the other assets in the

decedent’s net estate are insufficient to fund and pay the elective

share amount payable to the surviving spouse under § 31-4-

101(c).

In order to give the trial court guidance upon remand, we explained the requirements

of the statute as follows:

Cases that have previously dealt with this issue make it

clear that the gravamen of this action is whether the decedent

spouse intended to practice fraud on the surviving spouse. In

Finley v. Finley, 726 S.W.2d 923 (Tenn. Ct. App. 1986) the

Court set forth the following factors to be considered in

determining if a conveyance has been made with fraudulent

intent. These factors include: (1) the consideration given for the

transfer, (2) the size of the transfer in relation to the decedent’s

total estate, (3) the time between the transfer and the transferor’s

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death, (4) the relations which existed between the spouses at the

time of the transfer, (5) the source from which the property

came, (6) whether the transfer was illusory, and (7) whether the

surviving spouse was adequately provided for in the will. Id. at

924.

In Warren v. Compton, 626 S.W.2d 12 (Tenn. Ct. App.

1981), this Court dealt with the same issue, and stated:

However, we do not limit our considerations to

those factors alone. Circumstances which

establish fraudulent intent are as varied as the

ingenuity of the human mind may devise. All

facts and circumstances surrounding the transfer

must be considered.

Id. at 17. Furthermore, as stated in Sherrill v. Mallicote, 417

S.W.2d 798 (Tenn. Ct. App. 1967): “In cases of this type there

can be no fixed rule of determining when a transfer or gift is

fraudulent . . . each case must be determined on its own facts

and circumstances.” Id. at 802.

* * *

Accordingly, under a proper application of Tennessee

Code Annotated Section 31-1-105, the trial court should

consider the objective factors as set forth in Finley, as well as

any other relevant considerations, to determine whether the

decedent in fact intended to commit fraud or intentionally deny

the surviving spouse of his or her share of the estate. See Finley

v. Finley, 726 S.W .2d 923, 925 (Tenn. Ct. App.1986) (noting

that the court should consider whether the facts supporting each

factor “may be taken as an indication of fraud”). Consequently,

the court may rely upon the effect of the transfer, but must

actually find that the effect of the transfer supports a finding of

intent to deprive on the part of the decedent spouse. Here, the

trial court makes no such finding. Rather, the court simply

concluded that because the “effect” of the transfer was to

deprive Ms. Simpson of her widow’s share of the estate, that

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finding was sufficient to set aside the transfers. While it may be

true that the transfers worked to deprive Ms. Simpson of her

widow’s share, without a finding of intent to accomplish this

result on the part of Mr. Simpson, the fact that the transfer

lessened Ms. Simpson’s share of the Decedent’s estate is not

sufficient to set aside the transfers under Tennessee Code

Annotated Section 31-1-105. See McClure v. Stegall, 729

S.W.2d 263 (Tenn. Ct. App. 1987) (holding that the surviving

spouse failed to prove that the decedent intended to deprive her

of her distributive share by placing over $150,000.00 in

certificates of deposit in the decedent’s mother’s name).

Because the trial court did not make a specific finding of fraud

or intent to deprive, it is impossible for this Court to review the

trial court’s order in any meaningful way.

Simpson I, 2012 WL 3675321, at *5–7 (footnote in original). Although we vacated the trial

court’s June 9, 2011 order in Simpson I, we noted:

Our holding here does not preclude the trial court from allowing

the parties to offer more, or different, evidence. Although we

concede that the trial court may reach the same conclusion, it is

required to make specific findings of fact and conclusions of

law in its order, including (if the same outcome is reached) a

finding that Mr. Simpson’s intent, in making the transfers to Ms.

Fowler, were for purposes of fraud or were made with intent to

deprive Ms. Simpson of her share of the estate.

Simpson I, 2012 WL 3675321, at *8.

A remand hearing was held on June 20, 2013. On August 14, 2013, the trial court

entered a document styled “Judgment,” wherein the court made specific findings of fact and

conclusions of law. However, the trial court neither adjudicated any matters within the

“Judgment,” nor did it incorporate its prior order. Ms. Fowler filed a notice of appeal from

this “Judgment” on September 11, 2013. Upon review, we determined that because the trial

court’s June 9, 2011 order was vacated, and because the August 14, 2013 “Judgment” did not

adjudicate anything, it was not a valid order. Accordingly, we instructed the trial court to

cure this defect, which it has done by amended order of January 17, 2014. In addition, the

court made the following, specific findings of fact and conclusions of law:

On remand, this Court has considered the entire record[],

including the additional testimony of Faye Fowler on the June

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20, 2013 rehearing, and makes the following findings of fact and

conclusions of law:

FACTS

Norma Simpson and J.W. Simpson were married on May

17, 1951. They divorced in 1967 and remarried June 29, 1968.

They separated in the early 1990s, but never divorced. J.W.

Simpson began a relationship with Faye Fowler in 1993. J.W.

Simpson died intestate on February 11, 2010.

J.W. Simpson opened a checking account in his sole

name at First State Bank on March 30, 1991. On January 4,

2005, he added Faye Fowler as a joint owner with right of

survivorship. Ms. Fowler never deposited any funds into this

account or wrote checks. At the time of J.W. Simpson’s death,

the account contained approximately $28,000.00. The account

contained Mr. Simpson’s pension and social security benefits.

On November 30, 2007, J.W. Simpson named Faye

Fowler as the beneficiary of his life insurance policy with

Minnesota Life. Mr. Simpson also made Ms. Fowler the

beneficiary of a Met Life policy with a death benefit of $845.00.

The policies provided a total approximate death benefit of

$8,500.00.

Ms. Fowler testified it was her obligation to pay Mr.

Simpson’s funeral bill from the life insurance policies. Norma

Simpson paid the funeral expense of $7,475.52.

LAW

[Here, the trial court set out Tennessee Code Annotated Section

31-1-105, which we have included above. The court also set out

the Finley requirements, which are also set out in the excerpt

from Simpson I, supra. Applying these factors, the trial court

went on to conclude:]

In the present case, the proof is not disputed that (1) there

was no consideration for the transfers in question; (2) the

checking account was the decedent’s major asset; (3) the

transfers occurred some three to five years before the decedent’s

death; (4) the only relationship between spouses at the time of

the transfers was Mr. Simpson kept Mrs. Simpson on his

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Goodyear health insurance policy, but he did not otherwise

support her; (5) the source of all the funds in the checking

account came from Mr. Simpson; (6) there is no evidence the

transfers were illusory; and (7) J.W. Simpson died without a

will, therefore, he made no provision for Norma Simpson’s

support.

To determine fraudulent intent, the Court must consider

all facts and circumstances of the case. Warren v. Compton . .

..

At trial and on remand, Faye Fowler relies on the fact she

became an owner, rather than a beneficiary, of the joint

checking account with right of survivorship and these funds

pass[ed] to her by operation of law outside of the J.W. Simpson

estate. T.C.A. §45-2-703(f)(1).1 The Court agrees that J.W.

Simpson intended to create an ownership interest in the

checking account, however, the Court finds the provision of this

statute does not apply to the facts of this case if J.W. Simpson

transferred the account fraudulently with the intent to defeat his

wife of her distributive or elective share.

CONCLUSION

Based on the objective factors in Finley, the other

relevant factors of this case, including Ms. Fowler’s

acknowledgment [that] the life insurance proceeds were to be

used to pay for Mr. Simpson’s funeral; as well as the effect of

these transfers; the Court finds the decedent, J.W. Simpson,

1

Tennessee Code Annotated Section 45-2-703(f)(1) provides:

(f) Without incurring any liability, any bank may, but shall not be required

to, provide to depositors disclosures in form similar to the following:

(1) Joint tenants with right of survivorship. This designation means that the

deposit account or certificate of deposit shall become the property of each

owner as joint tenants, and that the survivor is entitled to all moneys in the

account or represented by the certificate even if the first person to die had

a will specifically directing disposition to someone else. The bank may

release all moneys in the account or represented by the certificate to, or

honor checks or orders drawn by, or withdrawal requests from, the survivor

upon the death of any joint tenant . . .

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fraudulently transferred his checking account and life insurance

to Faye Fowler with the intent to defeat his spouse, Norma

Simpson, of her distributive or elective share.

The court also incorporated its August 14, 2013 order, by reference, into the foregoing

order. Based upon its findings of fact and conclusions of law, the trial court ordered the life

insurance proceeds from both of Mr. Simpson’s policies, along with the proceeds of the First

State Bank account, to be paid to Ms. Simpson. Ms. Fowler appeals. She raises one issue

for review, which we take from her brief:

Whether the trial court erred in setting aside the joint tenant with

the right of survivorship bank account and whether the trial

court [erred in] holding that Mrs. Simpson was due the life

insurance proceeds payable to Mrs. Fowler.

Because this case was tried by the court, sitting without a jury, we review the factual

issues de novo upon the record with a presumption of correctness. Tenn. R. App. P. 13(d).

Unless the evidence preponderates against the trial court’s findings, we must affirm, absent

error of law. Id. In order for the evidence to preponderate against the trial court’s findings,

it must support another finding of fact with greater convincing effect. Walker v. Sidney

Gilreath & Assocs., 40 S.W.3d 66, 71 (Tenn. Ct. App. 2000).

As an initial matter, we note that, in her appellate brief, Ms. Fowler argues, inter alia,

that Tennessee Code Annotated Section 45-2-703 should govern this lawsuit. As set out in

footnote 1, supra, this statute governs joint tenant with right of survivorship bank accounts,

and indicates that this designation “means that the deposit account. . . shall become the

property of each owner as joint tenants [upon the death of the other owner].” This argument,

however, is outside the law of the case. The phrase “law of the case” refers to a legal

doctrine which generally prohibits reconsideration of issues that have already been decided

in a prior appeal of the same case. Memphis Publ’g Co. v. Tennessee Petroleum

Underground Storage Tank Bd., 975 S.W.2d 303, 306 (Tenn. 1998) (citations omitted).

Therefore, when an initial appeal results in a remand to the trial

court, the decision of the appellate court establishes the law of

the case which generally must be followed upon remand by the

trial court, and by an appellate court if a second appeal is taken

from the judgment of the trial court entered after remand. There

are limited circumstances which may justify reconsideration of

an issue which [] was decided in a prior appeal: (1) the evidence

offered at a trial or hearing after remand was substantially

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different from the evidence in the initial proceeding; (2) the

prior ruling was clearly erroneous and would result in a manifest

injustice if allowed to stand; or (3) the prior decision is contrary

to a change in the controlling law which has occurred between

the first and second appeal.

Memphis Publ’g, 975 S.W.2d at 306 (citations omitted). In Simpson I, this Court held that

Tennessee Code Annotated Section 31-1-105 governs the case. Citing Finley v. Finley, 726

S.W.2d 923 (Tenn. Ct. App. 1986), we noted that the gravamen of this action is whether the

decedent spouse, Mr. Simpson, intended to practice fraud on the surviving spouse, Ms.

Simpson, in making Ms. Fowler the beneficiary of his bank account and insurance policies.

Therefore, the designation of the bank account as a joint tenancy with right of survivorship

is secondary to the question of whether Mr. Simpson intended to commit fraud or intended

to intentionally deny Ms. Simpson her share of the estate. Id. Thus, the law of the case is

Tennessee Code Annotated Section 31-1-305, and the type of bank account is irrelevant upon

a finding of fraud or intent to deny the surviving spouse’s share under that statute. Likewise,

if the evidence preponderates in favor of the trial court’s finding that Mr. Simpson named

Ms. Fowler as the beneficiary of the disputed life insurance policies in order to deny Ms.

Simpson her spousal share of the proceeds, then these transactions may also be set aside

under Tennessee Code Annotated Section 31-1-305. Consequently, Ms. Fowler’s arguments

that the bank account and the insurance proceeds pass outside Mr. Simpson’s estate is true

only insofar as her interest in those proceeds was not created as a result of Mr. Simpson’s

intent to deny Ms. Simpson her spousal share of these assets.

In Simpson I, we outlined the requirements under Tennessee Code Annotated Section

31-1-305, and the relevant caselaw. The question presented in this appeal is whether the

evidence preponderates against the trial court’s finding that Mr. Simpson committed fraud

or intended to deny Ms. Simpson her share of the estate by his transfers.

In reaching its decision the trial court properly considered the factors set out in Finley

v. Finley, 726 S.W.2d 923 (Tenn. Ct. App. 1986), which factors include: (1) the

consideration given for the transfer, (2) the size of the transfer in relation to the decedent’s

total estate, (3) the time between the transfer and the transferor’s death, (4) the relations

which existed between the spouses at the time of the transfer, (5) the source from which the

property came, (6) whether the transfer was illusory, and (7) whether the surviving spouse

was adequately provided for in the will. Id. at 924. However, these factors should not be

applied mechanically, but rather, “the weight and significance to be given to each factor [will

depend upon] the facts of each particular case.” Id. at 926; see also Warren v. Compton, 626

S.W.2d 12, 17 (Tenn. Ct. App. 1981) (“All facts and circumstances surrounding the transfer

must be considered.”). In determining whether the conveyance was fraudulently made with

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an intent to defeat the spouse’s interest, “the Court should not mechanically list the factors

favorable to one party and those favorable to another and add up the total and base his

judgment upon that alone, but instead, should consider the weight and significance to be

given to each factor under the facts of each particular case.” Finley, 726 S.W.2d at 925–926.

Although the trial court listed the applicable factors, it did not state what weight or

significance it attributed to each factor. Even though the court’s order correctly notes that

“[t]o determine fraudulent intent, the Court must consider all facts and circumstances of the

case,” its analysis stops there. Thereafter, the court immediately addresses Ms. Fowler’s

contention that Tennessee Code Annotated Section 45-2-703 is applicable, but it never

returns to “consider all facts and circumstances of the case.” Rather, it appears that, in

reaching its decision that Mr. Simpson committed fraud in this case,” the court placed

substantial emphasis on the “effect” of the transfers: “[b]ased on the objective factors in

Finley, the other relevant factors of this case . . . as well as the effect of these transfers.” The

“other relevant factors of this case” are not enumerated except for the fact that “Ms. Fowler

acknowledg[ed] [that] the life insurance proceeds were to be used for Mr. Simpson’s

funeral.” This fact, however, goes more to Ms. Fowler’s actions than to Mr. Simpson’s. The

fact that Ms. Fowler did not use the insurance proceeds for the funeral does not answer the

question of whether Mr. Simpson intended to deprive Ms. Simpson of these assets by naming

Ms. Fowler as his beneficiary. As discussed, infra, after reviewing the entire record in this

case, we are of the opinion that certain of the Finley factors should be given more weight in

this case based upon the particular facts of this case. Before addressing those specific factors,

we first pause to discuss the type of fraud or intent that is contemplated under Tennessee

Code Annotated Section 31-1-105.

The type of fraud that is at issue in this case, is “fraud in law,” which is also known

as “legal fraud,” or “constructive fraud.” As explained by Bryan Garner, A Dictionary of

Modern Legal Usage 374 (2nd ed.1995):

Fraud in law is fraud that is presumed under the

circumstances, as, for example, when a debtor transfers assets

and thereby impairs the efforts of creditors to collect sums due

. . . or an unintentional deception that causes injury to another.

As noted by this Court in Sherrill v. Mallicote, 417 S.W.2d 798 (Tenn. Ct. App. 1967),

“[w]hile the effect of the transfer is certainly a relevant consideration, even if the effect of

the disputed transfer is to deprive the surviving spouse of his or her share of the estate, the

court must still find that the decedent’s intent was to do so.” Id.; accord Warren v.

Compton, 626 S.W.2d at 15-16 (“The courts of Tennessee have interpreted [the predecessor

statutes to Tennessee Code Annotated Section 31-1-105] to apply only to conveyances made

by husband with actual intent to defeat the widow of her dower . . . .”); accord Pritchard on

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the Law of Wills and Administration of Estates, Chapter 20-24, §835 n.32 (2009) (“Intent

to defraud surviving spouse must be clear, though it need not be expressly stated.”) (citing

Hughes’ Lessee v. Shaw, 48 Tenn. 323, 1827 WL 672 (Tenn. 1827)). Undoubtedly, the

effect of Mr. Simpson’s actions in making Ms. Fowler his joint tenant on the bank account,

and in making her his beneficiary on the life insurance policies, was to deprive Ms. Simpson

of these assets. However, the inquiry must go further. The question is whether, at the time

of the transfers, Mr. Simpson was acting under scienter, i.e., “guilty knowledge,” that his

actions would deny Ms. Simpson of her spousal share of his estate, and that he acted with

the intent to do so. Warren, 626 S.W.2d at 17.

As noted above, the factors set out in Finley are not a “one size fits all” proposition.

Rather, in almost all cases, the deciding court must look outside these factors to make a

determination on the intent requirement of Tennessee Code Annotated Section 31-1-105. At

a minimum, the court will usually have to give different weight to these factors based upon

the particular facts of each case. The instant case is no different. In fact, the circumstances

in this case are fairly unique. Here, we have a married couple that have not resided in the

same home since the early 1990s, but have not gone through the divorce process. Despite

the fact that he and Ms. Simpson were still legally married, Mr. Simpson had a long-term

relationship with Ms. Fowler. The record indicates that Mr. Simpson and Ms. Fowler began

their relationship around 1993, and that they remained in that relationship until his death, a

period of approximately seventeen years. The record further indicates that Ms. Simpson was

aware of Mr. Simpson’s relationship with Ms. Fowler and that she did not seek a divorce

because of it. These facts raise questions around the fourth Finley factor, i.e., “the relations

which existed between the spouses at the time of the transfer.” We find guidance in the

Warren v. Compton case. In Warren, this Court applied the Finley factors and found that

a $40,000.00 gift that Oliver Warren, the deceased husband, had made to his girlfriend,

Opalyne Compton, shortly before he died was not a fraudulent conveyance. We reasoned that

Mr. Warren’s donative intent was justified by the long relationship between Mr. Warren and

Ms. Compton, and the care and attention she gave him during the difficult months of his last

illness. In Warren, we observed that “a strained marriage relationship is a sword which cuts

both ways.” That is, the existence of such strains under Finley factor four could be used as

proof of a decedent spouse’s motivation to fraudulently defeat a surviving spouse’s rights.

But, on the other side of the equation, “[t]he surviving spouse could have been so

inconsiderate, cold, and self-centered as to justify a transfer of property by the other spouse

to those in whom he found solace, comfort, and care.” Warren, 626 S.W.2d at 18. In the

instant case, the evidence does not suggest a particularly acrimonious relationship between

Ms. Simpson and her estranged husband. In fact, Ms. Simpson testified that she was in the

home immediately after Mr. Simpson died:

Q [to Ms. Simpson]. Okay. And I believe all of you were

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present when Mr. Simpson was in the home deceased.

A. Yes, sir.

Q. He died at home and–

A. Yes, sir.

Q. –you were there, and Ms. Fowler was there, and some of your

children were there.

A. Yes, sir.

Furthermore, it is uncontested that Ms. Simpson arranged for Mr. Simpson’s burial. In

addition, Ms. Simpson knew of Mr. Simpson’s long-term relationship with Ms. Fowler:

Q [to Ms. Simpson]. I would assume you knew of his long-term

relationship with Faye Fowler. You knew that.

A. Yes, sir.

Concerning her relationship with Mr. Simpson, Ms. Fowler testified, in relevant part, as

follows:

Q [to Ms. Fowler]. And did you and Mr. Simpson live together

or did you maintain separate residences?

A. We had separate residences, but we were together.

Q. Okay. How much were you together?

A. Well, I say there was only one or two days of the week

maybe that we wasn’t [sic] together. The rest of it we were

together.

* * *

Q. And during this relationship was [sic] there any third parties

involved or was it just you and Mr. Simpson?

A. Just me and Mr. Simpson.

* * *

Q. Okay. And during the relationship did you cook Mr.

Simpson’s meals?

A. Yes, I did.

Q. Did you iron his clothes?

A. Yes, I did.

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Q. And did you clean his house?

A. Yes, I did.

Q. And was this on a regular basis during this seventeen years?

A. Yes, it was.

Q. Okay. And that relationship continued until his death?

A. Yes, it did. Could I say that he had surgery and I took care

of him then? I went over daily and bathed him.

Q. Okay.

A. Took care of him.

Q. All right. He had some kind of serious surgery?

A Yes, he had prostate cancer.

Q. Okay. And you were his care giver during that period of

time?

A. Yes, I–Yes, I was.

Based upon the evidence, we conclude that this case is analogous to Warren in that the facts

suggest that Mr. Simpson’s intent in transferring the disputed assets to Ms. Fowler was not

to usurp Ms. Simpson’s spousal rights because there was no overt animosity between these

two at the time the transfers were made. Rather, it appears that, based upon his long term

relationship with Ms. Fowler, Mr. Simpson’s donative intent, like the decedent’s in Warren,

was justified by the long relationship he had with Ms. Fowler, and the care she provided

him.2

Concerning the second Finley factor, i.e., the size of the transfer in relation to the

decedent’s total estate, Ms. Fowler argues that the estate was not merely comprised of the

bank account and insurance policies, but that it also included Mr. Simpson’s home, its

contents, and two vehicles, all of which passed to Ms. Simpson upon his death. In evaluating

her argument, we cannot lose sight of the fact that Ms. Simpson was, at the time of Mr.

Simpson’s death, his legal spouse. The home where Mr. Simpson lived was the marital home

that he had shared with Ms. Simpson until she left it around 1990. So, unlike Ms. Fowler,

and in the absence of any countervailing evidence, it appears that Ms. Simpson had a tenancy

by the entirety with Mr. Simpson in the marital residence. “A conveyance to a married

couple-silent as to the type of ownership-creates a presumption of a tenancy by the entirety.”

Dickson v. Long, No. M2008-00279-COA-R3-CV, 2009 WL 961784, at * 13 (Tenn. Ct.

App. Apr. 8, 2009) (citing In re Estate of Russell, No. 01A01-9611-PB-00516, 1997 WL

2

As noted in Simpson I, although the Warren case was decided prior to the current

enactment of Tennessee Code Annotated Section 31-1-105, and the statute has changed drastically

since its first enactment, the requirement of intentionality has remained the same. Accordingly, Warren

is applicable insofar as it addresses the intent of the decedent spouse.

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249961, at *7 (Tenn. Ct. App. May 14, 1997); Bost v. Johnson, 175 Tenn. 232, 133 S.W.2d

491 (1939); Young v. Brown, 136 Tenn. 184, 188 S.W. 1149 (1916)). Tenancy by the

entirety is property ownership unique to married persons. Property acquired during a

marriage is presumed to be held by the entirety, unless proven otherwise. Batson v. Batson,

769 S.W.2d 849, 858 (Tenn. Ct. App.1988). “The essential characteristic of tenancy by the

entirety is that ‘each spouse is seized of the whole or the entirety and not of a share, moiety,

or divisible part.’” Grahl v. Davis, 971 S.W.2d 373, 378 (Tenn.1998) (quoting Sloan v.

Jones, 192 Tenn. 400, 241 S.W.2d 506, 507 (Tenn.1951)). “[O]nce a tenancy by the entirety

is created, it can be terminated only when both convey, when one spouse dies and the

survivor becomes owner of the whole, or when the survivorship is dissolved by divorce and

the parties become tenants in common in the property.” White v. Watson, 571 S.W.2d 493,

495 (Tenn. Ct. App.1978). Because they were never divorced, the legal construct concerning

the house remained unchanged and, accordingly, Ms. Simpson was always “seized of the

whole.” Accordingly, the house passed to her outside the estate. In addition, although the

record does not elaborate on the specific types of personalty, or the value, Ms. Simpson

testified that she took all of the contents of the house, including furnishings, tools, and the

like.

Furthermore, Ms. Simpson testified that she received spouse death benefits from

Goodyear, Mr. Simpson’s former employer, in the total amount of $4,500.00:

Well, I [i.e., Ms. Simpson] got two checks, one for thirty-five

hundred and one for a thousand that came from Goodyear,

spouse-only, one-time payment.

In addition, Ms. Simpson took possession of Mr. Simpson’s two vehicles:

Q [to Ms. Simpson]. And did Mr. Simpson have these

automobiles . . . at his house when he died?

A. Yes, sir.

Q. Okay. And did somebody tell you to just take those, or did

you just do it or what?

A. I just did it.

* * *

Q. Okay. And you’ve still got both of them–

A. Yes, sir.

Q. –and still use both of them.

A. Yes, sir.

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It does not appear that the trial court considered all of Mr. Simpson’s assets in

reaching its conclusion that the proceeds of the disputed bank account and insurance policies

comprised the majority of his estate under the second Finely factor. While the $28,000.00

bank account, and the $8,500.00 in insurance proceeds certainly comprised a significant

portion of Mr. Simpson’s total estate, in light of the fact that there were two operable

vehicles, a household of personalty, and additional death benefits from Goodyear, the

evidence does not establish that the bank account and insurance proceeds constituted the

majority of the estate. Accordingly, this factor does not appear to favor either party.

The record indicates that Mr. Simpson changed ownership of the bank account on

January 15, 2005. He signed the beneficiary designation and change request for the

Minnesota Life Policy on November 30, 2007. Although the date of the change of

beneficiary on the MetLife policy is not in the record, we glean from the evidence that Mr.

Simpson made this change at or about the same time that he changed the Minnesota Life

Policy. Mr. Simpson died on February 11, 2010. Considering Finley factor three, i.e., the

time between the transfer and the transferor’s death, the evidence does not suggest that Mr.

Simpson changed ownership of his bank account, or beneficiary of his life insurance in

anticipation of his death, or based upon any clear desire to keep Ms. Simpson from reaching

these assets. Although Mr. Simpson had suffered from prostate cancer, as discussed in Ms.

Fowler’s testimony, supra, his death certificate indicates that the cause of death was cardiac

arrest. There is no indication in the record that, at the time of the disputed transfers, Mr.

Simpson was anticipating his death based upon a long-term illness. Rather, it appears that

Mr. Simpson’s motive was not vindictive, but was an attempt to ensure that he provided for

his long-term companion, Ms. Fowler. In addition, it is undisputed in the record that Mr.

Simpson intended the proceeds from the disputed insurance policies to be used for his funeral

expenses. Given the long-term nature of his relationship with Ms. Fowler, and his

estrangement from Ms. Simpson, it is reasonable to assume that he thought Ms. Fowler

would be the one to make his final arrangements. The record indicates that Ms. Fowler’s

attempt to make funeral arrangements may have been hindered by the fact that Ms. Simpson

and her children (with Mr. Simpson) stepped in to make these arrangements. Regardless,

from the totality of the circumstances, we cannot conclude that the timing of the disputed

transfers indicates any ill intent to deprive Ms. Simpson of her share of the estate.

Concerning the proceeds from the insurance policy, it is undisputed that these

proceeds were to be used for Mr. Simpson’s funeral. Yet, it is undisputed that Ms. Simpson

paid for the funeral without using these funds. Trial Exhibit 1 is an invoice from Leitherland

Funeral Home, showing total funeral expenses of $7,475.52. Because the insurance

proceeds were intended to cover the funeral expenses, and because Ms. Simpson bore these

costs, we conclude that the trial court correctly awarded Ms. Simpson the $8,500.00 in

insurance proceeds. In this regard, Ms. Simpson was reimbursed for her expenditures, and

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the insurance proceeds were applied to funeral costs as Mr. Simpson intended. Accordingly,

we affirm this portion of the trial court’s judgment, i.e., $8,500.00 to Ms. Simpson.

However, concerning the proceeds from the bank account, i.e., $28,000.00, from the

totality of the circumstance, in light of the applicable Finley factors, and based upon the

foregoing discussion, we conclude that the evidence preponderates against the trial court’s

finding that Mr. Simpson’s intent was to deprive Ms. Simpson of this asset. Specifically, as

previously discussed, Finley factors three (i.e., “the time between the transfer and the

transferor’s death”), and four (i.e., “the relations which existed between the spouses at the

time of the transfer”) weigh heavily in favor of finding that Mr. Simpson’s intent was

donative, rather than to deprive Ms. Simpson of her share of the estate. See Finley, 726

S.W.2d at 924. However, there was no monetary consideration for any of the disputed

transfers and Mr. Simpson executed no will to provide for Ms. Simpson. Accordingly, both

Finley factors one and seven weigh in favor of Ms. Simpson. Further, it is undisputed that

all funds contained in the disputed transfers belonged to Mr. Simpson and that the transfers

were not illusory; thus, Finley factors five and six weigh in favor of neither party. Id.

Finally, we have concluded that Finley factor two (i.e., the size of the transfer in relation to

the decedent’s total estate), also weighs in favor of neither party; although the bank account

was a large portion of Mr. Simpson’s estate, his estate contained other items, all of which

passed to Ms. Simpson. Id. Based on the undisputed evidence, it appears that both Ms.

Simpson and Ms. Fowler are evenly matched with regard to the number of Finley factors in

their favor. However, as previously stated, the court is not directed to simply add up the

number of factors in each party’s favor, but must consider “the weight and significance to

be given to each factor.”Id. at 926. Based on the particular circumstances of this case, we

conclude that Finley factors three and four (i.e., the timing of the transfer and the

relationship between the parties) are significant and weigh against the trial court’s finding

that Mr. Simpson intended to deprive Ms. Simpson of her share of the estate. Further, the

factors that weigh in Ms. Simpson’s favor (i.e., the lack of consideration and the failure to

provide for Ms. Simpson in a will) carry less weight in our analysis because the evidence is

undisputed (1) Ms. Fowler contributed to Mr. Simpson’s life in other, non-monetary ways,

like in the Warren case; and (2) Mr. Simpson had not been providing for Ms. Simpson for

over a decade. Finally, the burden was on Ms. Simpson to prove, by a preponderance of the

evidence, that Mr. Simpson had the intent to deprive her of her share in the estate in order

to void the transfers. See id. at 924 (noting that the trial court ruled that wife had not met her

burden, and affirming the trial court). Considering the totality of the circumstances, and

giving appropriate weight to the Finley factors, we must conclude that Ms. Simpson failed

to meet her burden with regard to the bank account. Rather, from the totality of the

circumstances, and in light of the nature and duration of his relationship with Ms. Fowler,

and in light of the Warren case, we conclude that the record preponderates in favor of

concluding that Mr. Simpson’s intent in entering a joint tenancy with Ms. Fowler on the bank

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account was to ensure that his long-term companion was provided for after his death.

Accordingly, we reverse the award of the $28,000.00 to Ms. Simpson, and remand for entry

of judgment in this amount to Ms. Fowler.

For the foregoing reasons, we affirm the order of the trial court concerning the award

of $8,500.00 in insurance proceeds to Ms. Simpson. We reverse the trial court’s order

concerning the award of the $28,000.00 bank account to Ms. Simpson. We remand the case

for such further proceedings as may be necessary and are consistent with this Opinion,

including, but not limited to, entry of judgment in the amount of $28,000.00 in favor of Ms.

Fowler. Costs of the appeal are assessed one-half to the Appellant, Faye Fowler, and her

surety, and one-half to the Appellee, Norma Simpson, for all of which execution may issue

if necessary.

_________________________________

J. STEVEN STAFFORD, JUDGE

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