Divorce distribution must be based on the date of judgment
Tennessee case summary on property division in divorce.
Divorce valuation must be as of date of judgment, despite husband’s crime.
Mary Rachel Cayson v. Patrick Cayson
The husband and wife in this Tipton County, Tennessee, case were married in 2015 and separated in 2019.
In 2017, the wife received from her grandfather shares of stock. The husband sold the shares in the following year, despite everyone agreeing that the stock belonged to the wife. He also ran up a large amount of debt without her knowledge. He was sentenced to 8 years in prison and ordered to pay restitution, but only had to serve 6 months. The rest of the time was spent on probation. He was incarcerated from July 2022 until January 2023, and the divorce became final two months after his release.
There were two significant assets. The wife’s grandmother purchased the marital home prior to the marriage. However, the husband testified he had lived there before his wife moved in. The wife had a 401(k), which she opened shortly after the marriage. At the time of separation, it was worth about $32,000, and $62,000 at the time of divorce proceedings.
The trial court held that $175,000 of equity in the home was the wife’s separate property, despite an earlier holding that it had transmuted into marital property. The trial court also determined the value of the home and the 401(k), based on the time of separation rather than the date of divorce. The husband appealed the final judgment to the Tennessee Court of Appeals.
The first argument was that the treatment of the home by the trial court was incorrect. The parties agreed that the house had become marital property over the course of their marriage. The appeals court referred to the case as one that arose from extreme circumstances due to the husband’s theft. The Court of Appeals reversed the lower court’s decision for these reasons.
The appeals court then addressed the issue of when the property should have been appraised.The court noted that, normally, it should be a date as close as possible to the entry of final judgment. It stated that it is normal to value property as soon as possible after the final judgment. The appeals court, however, pointed out that the relevant statute uses mandatory language to set the date as the final decree. It also reversed and sent the case back to the district court on this issue. It also reversed the decision and remanded the case with respect to the timing for the valuation of the 401 (k).After addressing a few procedural issues, it concluded by remanding this case.
