Session April 2, 2019
from the Circuit Court for Robertson County No.
74CC2-2015-CV-233 Ross H. Hicks, Judge
appeal arises from a divorce. All the issues pertain to the
classification, valuation, and equitable division of three
large tracts of land. Husband acquired two of the tracts
before the marriage: a 197-acre tract and a 103-acre tract.
Both of these tracts were used in Husband's farming
operation before and during the marriage. During the
marriage, Husband and Wife built their marital residence on a
portion of the 197-acre tract. Husband acquired the third
tract during the marriage but after the parties separated.
Wife's name is not on any of the deeds. Wife contends
that the tracts Husband owned prior to the marriage
transmuted into marital property. Alternatively, she contends
their appreciation in value during the marriage was marital
property. Wife also contends the third tract was marital
property because Husband purchased it with marital funds from
their joint bank account during the marriage. The trial court
classified the 197-acre tract and the 103-acre tract as
Husband's separate property and held that none of the
land transmuted into marital property. The trial court also
concluded that Wife was not entitled to an interest in the
appreciation of the properties because she did not
substantially contribute to their maintenance or increase in
value. The trial court classified the marital residenceâthat
being the improvement but not any of the land associated with
the marital residenceâas marital property. As for the tract
Husband acquired during the marriage, the court ruled that it
was Husband's separate property because Husband purchased
it with his separate funds. This appeal followed. Based on
the parties' treatment and use of some of the 197-acre
tract on Highland Road as their marital residence, it is
evident that the parties intended for some portion of the
land to transmute into marital property. Therefore, we
reverse the trial court's determination that the entire
197-acre tract remained Husband's separate property and
remand for the trial court to identify that portion of the
land the parties treated and used as part of their marital
residence, classify that land as marital property, and
determine its value. Based on this change of classification,
the trial court should also consider whether the change in
value necessitates a revision of the equitable division of
the marital estate and, if so, enter judgment accordingly. In
all other respects, we affirm the judgment of the trial
R. App. P. 3 Appeal as of Right; Judgment of the Circuit
Court Affirmed in Part, Reversed in Part, and
Elizabeth A. Garrett and Trudy L. Bloodworth, Nashville,
Tennessee, for the appellant, Marilyn Kay Anderson.
Christopher J. Pittmans and Hollie L. Smith, Clarksville,
Tennessee, for the appellee, James Cephas Anderson.
G. Clement Jr., P.J., M.S., delivered the opinion of the
Court, in which D. Michael Swiney, C.J. and W. Neal McBrayer,
G. CLEMENT JR., P.J., M.S.
Kay Anderson ("Wife") and James Cephas Anderson
("Husband") met in 1988. Husband lived in Robertson
County, Tennessee, where he operated a farm on Duer's
Mill Road. Husband owned the 103-acre tract of land jointly
with his brother. In 1990, Husband expanded his farming
operation by purchasing a 197-acre tract of land on Highland
Road. During this time, Wife lived in the Nashville area and
spent her weekends on the farm with Husband.
the parties married in 1995, they moved into a trailer
located on the 197-acre tract of land on Highland Road.
Husband added Wife to the farm's credit line and his
previously separate checking account; however, he did not add
Wife's name to either deed.
worked as a medical project manager throughout the marriage
and deposited all her income into the joint account.
Likewise, Husband deposited all his farming income into the
same joint account. The parties paid all their personal and
business expenses from the account, including payments for
Husband's $160, 000 mortgage on the Highland Road
2002, Husband and Wife purchased a tract of land on Eubanks
Road, the deed for which was titled to them jointly. In 2007,
the parties moved into a house on the Eubanks Road property
while they built their marital residence on the Highland Road
property. The parties financed the new home with $250, 000 in
loans secured by the jointly-owned Eubanks Road property.
When construction was completed, the parties moved into their
new marital residence on the 197-acre Highland Road property.
March 2015, the parties separated. That same month, the State
of Tennessee initiated an eminent domain action to condemn a
portion of the Eubanks Road property the parties owned
jointly. In April 2015, the parties received an initial
disbursement of $320, 000 from the State of which $158, 000
was remitted to the mortgage company to pay off the loans for
the construction of the marital residence. The balance of
$162, 000 was deposited into the parties' joint checking
account on April 15, 2015.
thereafter, while separated and in anticipation of the
divorce, although neither party had filed a complaint for a
divorce, Wife "equally divide[d]" the funds on
deposit in the joint account by withdrawing "her
half"-approximately $96, 000-and depositing it in a
separate account titled to her name only.
mother died in March of 2015. In her will, she granted
Husband an option to purchase the J. B. Anderson family farm
for $150, 000. Pursuant to the will, Husband had only 90
days to exercise his option. Husband timely exercised his
option and purchased the J. B. Anderson family farm with $80,
000 he withdrew from the parties' joint checking account
on April 21, 2015, and a $70, 000 loan he obtained in his
name only. The deed to the property was in Husband's name
filed her complaint for divorce on April 29, 2015, and
Husband filed a counter-complaint on June 26, 2015.
September 2017, the State of Tennessee remitted an additional
$489, 000 payable to Husband and Wife in furtherance of the
condemnation of the jointly owned Eubanks Road property. In
October 2017, the trial court entered an agreed order
dividing the award equally between the parties and stating
that the funds "shall be deemed to be each part[y]s'
parties' only daughter was an adult at the time of trial,
and neither party sought alimony. Thus, the issues at trial
were limited to the classification, valuation, and equitable
division of the marital estate. Wife contended that Husband's
interests in the Highland Road and Duer's Mill Road
tracts transformed into marital property during the marriage
under the doctrine of transmutation. In the alternative, Wife
claimed the properties' increase in value during the
marriage was marital property due to her personal and
financial contributions to the properties' preservation
and appreciation. As for the Anderson Road tract, Wife argued
that it was a marital asset because Husband purchased it
during the marriage with funds from the joint account. For
his part, Husband contended all three tracts were his
separate property. But Husband conceded that the marital
residence, which was located on the 197-acre Highland Road
tract, was marital property.
party testified on their separate contributions, or lack
thereof, to the marriage and the farming operation. In
addition, each presented an expert witness to testify on the
properties' values and the reasons for their
appreciation. Wife's appraiser, Ben Bolinger, attributed
the land's increase in value to the successful farming
operation and soil quality. He reasoned that soil
productivity was important for buyers because the
highest-and-best use of the property was farming.
Husband's appraiser, Luther Bratton, attributed the
appreciation primarily to the passage of time.
final order entered on June 8, 2018, the court classified the
marital residence and a machine shed on the Highland Road
tract as marital property, but it found the underlying 197
acres of land remained Husband's separate property. The
court also classified Husband's interest in the 103 acres
of land on Duer's Mill Road as Husband's separate
property. As for both tracts, the court reasoned, inter
alia, that Husband used the land primarily for his
farming operation and Wife's financial contributions were
unnecessary because the farming operation was successful.
Additionally, the court found that the properties'
increase in value during the marriage remained Husband's
separate property. The court found that Wife's testimony
about her personal contributions to the day-to-day farming
operations was "substantially exaggerated or
fabricated," and the primary factor in the
properties' appreciation was the passage of time. As for
the Anderson Road property, the court classified it as
Husband's separate property because Husband purchased it
with his share of the recently and equally divided bank
valuing the properties, the court found Husband's expert,
Mr. Bratton, more credible than Wife's expert, Mr.
Bolinger. The court noted that Mr. Bolinger valued one
property without visiting it and included a building on the
Duer's Mill tract where other evidence suggested there
was none. Using Mr. Bratton's property values, the court
valued Husband's separate property at $2.1 million and
Wife's separate property-which comprised only her share
from the condemnation proceeds-was worth $160,
the factors for equitable division of marital property under
Tenn. Code Ann. § 36-4-121(c), the court found both
parties were in good physical and mental health and had
substantial income earning capacity. Because Husband's
separate property was worth substantially more than
Wife's, the court found it was equitable to award Wife a
larger portion of marital property, including the majority of
the liquid assets. Accordingly, the court awarded 59% of the
marital estate to Wife, valued at $866, 950, and awarded 41%
of the marital estate to Husband, valued at $605, 976. This
raises four issues on appeal, which we restate as follows:
(1) Whether the trial court erred in classifying the Highland
Road tract as Husband's separate property;
(2) Whether the trial court erred in classifying the
appreciation of the Highland Road tract and the Duer's
Mill tract as Husband's separate property;
(3) Whether the trial court erred in adopting Mr.
Bratton's values for the Highland Road, Duer's Mill,