Long v. Long

642 S.W.3d 803

Carolyn Diane LONG

v.Steven Lawrence LONG

No. E2020-01350-COA-R3-CV

Court of Appeals of Tennessee, Eastern Section, AT KNOXVILLE.

June 3, 2021 Session

FILED September 27, 2021

Permission to Appeal Denied by Supreme Court: February 10, 2022

Eric J. Burch, Manchester, Tennessee, for the appellant, Carolyn Diane Long.

Daniel H. Rader, IV, Cookeville, Tennessee, for the appellee, Steven Lawrence Long.

Thomas R. Frierson, II, J., delivered the opinion of the court, in which D. Michael Swiney, C.J., and John W. McClarty, J., joined.

Thomas R. Frierson, II, J.

Following a bench trial in this divorce action, the trial court entered an order in October 2018, granting the parties a divorce and distributing the marital estate. Upon the wife's appeal, this Court vacated the trial court's distribution of marital property and remanded, directing the trial court to make sufficient findings of fact and conclusions of law, pursuant to Tennessee Rule of Civil Procedure 52.01, concerning the classification and valuation of various real estate and real estate partnership assets. Following an evidentiary hearing on remand, the trial court entered a final order in September 2020. Noting that the parties had stipulated that the wife's interests in a realty company and two property partnerships were separate property, the trial court found that the wife's partnership interest in a fourth realty enterprise at issue was marital property and also found that several specific realty assets were marital property. The trial court determined its valuation of each property or property interest and, pursuant to the factors provided in Tennessee Code Annotated § 36-4-121(c), set forth what it found to be an equitable distribution of the marital property. Wife has appealed. Discerning no reversible error, we affirm.

I. Factual and Procedural Background

The plaintiff, Carolyn Diane Long ("Wife"), and the defendant, Steven Lawrence Long ("Husband"), have been involved in this action since Wife filed a complaint for divorce in October 2014 in the Cumberland County Probate and Family Court ("trial court"). This matter initially came before this Court on appeal in Long v. Long , No. E2018-01868-COA-R3-CV, 2019 WL 3986281 (Tenn. Ct. App. Aug. 23, 2019) (" Long I "). In Long I , this Court vacated the trial court's division of marital property and remanded "with instructions to make sufficient findings of fact and conclusions of law as required by Tenn. R. Civ. P. 52.01," specifically as to the trial court's classification of Wife's partnership interest in a partnership entity known as Pioneer Properties, the values of specific properties, and the trial court's overall distribution of marital property. See Long I , 2019 WL 3986281, at *1, 9. This Court set forth the following factual and procedural background in Long I :

[Wife] and [Husband] were married for the first time in 1984. Following a divorce a year later, they remarried in 1987. Wife's family was involved in real estate development and investment. In 1993, wife's mother and stepfather created and funded a partnership entity known as "Pioneer Properties." The partners were wife, her brother, sister, two stepbrothers, and her stepfather. Wife testified that the primary activity of Pioneer Properties was "buying land, subdividing it, and then selling it." It is undisputed that neither husband nor wife contributed any funds to Pioneer Properties. When wife received distributions from the partnership, she deposited them into an account jointly held by the parties.

In 1988, while they were married, the parties acquired a property on George Smith Road. At that time, they were contemplating divorce and, according to wife, they "were separated for a long time." Wife intended to move into the house on George Smith Road and live in it by herself. Husband executed a deed quitclaiming his interest in the George Smith Road property to wife in 1988. The parties reconciled and lived together in the house for several years. Later, they moved to another house and rented the George Smith Road property.

On October 31, 2014, wife filed her complaint for divorce. The only issues contested were the classification of two assets – wife's interest in Pioneer Properties and the George Smith Road property – and the division of the marital estate. By agreement, the trial was bifurcated. At the first hearing on March 10, 2017, the trial court was asked to decide whether the two contested assets were marital or wife's separate property. The parties agreed that the interests held by wife in three other business entities, Pioneer Realty, Inc., Robinson Properties Family LP, and RLW Properties, were her separate property. No value for these three assets was presented to the trial court, and it did not find or set a value for any of them.

The only witnesses at the relatively brief first hearing were husband and wife. Wife argued that, notwithstanding the fact that the two contested assets were acquired during the course of the marriage, they were gifts to her and should be classified as her separate property. Husband argued that he made substantial contributions to the preservation and appreciation of the assets, and therefore their increase in value during the marriage should be classified as marital property. Additionally and in the alternative, husband argued that the assets were converted to marital property by operation of the doctrines of commingling and transmutation.

The only factual findings pertaining to the disputed assets in the trial court's order following the first hearing are as follows:

That with regard to the home and real property on George Smith Road, in Cumberland County, titled solely in the name of the [wife]: The [husband] conveyed his interest in said real property to the [wife], by quitclaim deed in 1988; and the parties further exhibited an intent throughout the marriage that said real property would remain the [wife's] sole and separate property.

That with regard to the parties’ interest in the partnership entity known as Pioneer Properties: This entity was a more fluid asset, with properties being bought and sold at various times throughout the marriage. The Court finds that this entity is marital property due to the fluidity of the asset and due to the fact that proceeds were regularly deposited from said partnership into a joint account of the parties.

(Numbering in original omitted).

The second hearing took place on August 17, 2018. The trial court heard testimony from the parties and a real estate appraiser. The parties agreed on the values of many, but not all, of the numerous marital real estate assets. The only factual findings contained in the trial court's final judgment state as follows:

That for at least 27 years of this 31 year marriage the wife treated all of the property the parties collectively owned as if it were owned equally by her and husband and that all of their property should now be divided equally.

Pioneer Properties is a real estate investment business owned and run by wife and her family, and it would not be feasible for husband to continue in that business relationship after the divorce.

(Numbering in original omitted).

The trial court awarded wife the entire interest in Pioneer Properties. Wife estimated the value of this asset to be $311,295.81. It does not appear from the record that husband proffered a written estimated value of the Pioneer Properties interest. During the second hearing, husband's counsel argued that the value of wife's interest was $429,527.50. To offset this award, the court awarded husband apartments on Old Mail Road that the parties agreed were worth $300,000; two parcels of land on Woodlawn Road worth $90,000, and a parcel on Rockledge Drive worth $3,000. The trial court further ordered several other real estate holdings to be sold and the proceeds split equally. The marital residence was ordered to be sold and the proceeds equally divided after payment of debts associated with the residence. The parties did not agree on the value of all these assets, including the marital residence. As noted, the trial court made no findings of fact regarding the value of any asset of the marital or separate estates. Consequently, it is difficult to state an accounting of the division of the assets with any certainty. As appendices to her brief, wife submits two charts showing her argument as to the division according to her values, and according to husband's. Using wife's values, she states that she was awarded property worth $622,147.08, and husband awarded property worth $641,851.27. Using husband's values, wife states that the property was divided $659,109.58 to her, and $678,813.77 to husband. Wife timely filed a notice of appeal.

Id. at *1-2.

On appeal in Long I , Wife raised issues concerning whether the trial court had made sufficient findings of fact and conclusions of law and whether the trial court had erred by classifying her interest in Pioneer Properties as marital property. Id. at *2. Husband raised an issue concerning the trial court's classification of the property located on George Smith Road as Wife's separate property. Id. Because this Court in Long I affirmed the "trial court's judgment finding the George Smith Road property to be wife's separate asset," see id. at *9, the classification of that property was not at issue on remand. Concerning the trial court's lack of sufficient findings, this Court stated in pertinent part:

[T]he trial court did not make a finding regarding the value of any of the assets, including those assigned to wife as her separate property, and those upon which the parties disagreed as to their value. The trial court's order does not refer to Tenn. Code Ann. § 36-4-121(c), or make a finding regarding any of the factors prescribed therein.

Id. This Court vacated the trial court's division of marital property and "remanded for appropriate findings of fact and conclusions of law pursuant to Tenn. R. Civ. P. 52.01." Id.

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