Wanda Sue Averwater v. James Paul Averwater

                                                                                              12/28/2023
                IN THE COURT OF APPEALS OF TENNESSEE
                            AT NASHVILLE
                                  January 4, 2023 Session

        WANDA SUE AVERWATER v. JAMES PAUL AVERWATER

               Appeal from the Chancery Court for Rutherford County
                      No. 15CV-1326    Philip E. Smith, Judge
                      ___________________________________

                            No. M2020-00851-COA-R3-CV
                        ___________________________________


In this divorce, the trial court evenly divided the marital estate and denied the wife’s request
for alimony. It also ordered wife to pay the attorney’s fees and costs of a third party. On
appeal, the wife challenges the court’s decisions on multiple grounds. After a thorough
review, we find that the court erred in not dividing the profit from a business the husband
created during the pendency of the divorce as marital property. And the court erred in
ordering the wife to pay attorney’s fees and costs. We affirm in all other respects.

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

W. NEAL MCBRAYER, J., delivered the opinion of the court, in which FRANK G. CLEMENT
JR., P.J., M.S, and ANDY D. BENNETT, J., joined.

Donald K. Vowell, Knoxville, Tennessee, for the appellant, Wanda Sue Averwater.

Donald Capparella, Nashville, Tennessee, and John J. Hollins, Jr. and LB McCullum,
Franklin, Tennessee, for the appellee, James Paul Averwater.


                                          OPINION

                                               I.

                                              A.

       Wanda Sue Averwater (“Wife”) and James Paul Averwater (“Husband”) were
married in 1992. At the time, both worked for a construction company — Wife as an
operations manager and Husband as a construction superintendent. Three years later, they
started their own construction company, Averwater Construction, Inc. And they had one
child together (“Daughter”).

       After 27 years of marriage, Wife filed for divorce in September 2015. She alleged
irreconcilable differences and inappropriate marital conduct as grounds. She requested an
equitable division of the marital estate and an award of alimony and attorney’s fees.
Husband filed an answer and counter-complaint. He denied Wife’s allegations and instead
alleged that she was guilty of inappropriate marital conduct.

        The case was initially set for a two-day trial in June 2016. But the parties needed
more time for discovery, so they agreed to continue the case until September 2016. Over
the next nine months, the case was continued three more times and eventually set for trial
in August 2017. Less than two weeks before the August 2017 trial date, however, the court
struck the case from its docket and sent the parties to mediation. When mediation proved
unsuccessful, the case was again set for trial, now in December 2017. But then the judge
presiding over the case passed away. And the remaining judges in the judicial district
recused themselves. So the case was reassigned by interchange to a judge from another
district.

       Soon after the reassignment, $380 was deposited into an Averwater Construction
account at First National Bank — an account that was supposed to be closed. Wife
contacted the bank. The bank told her that there had been a clerical error, but it would not
provide her with any more information. Suspicious that Husband was hiding money, Wife
subpoenaed First National Bank for all records related to Husband and Averwater
Construction. The bank responded with a letter informing Wife that it did not have any
records or active accounts in Husband’s name. Dissatisfied, Wife issued a subpoena and
notice of deposition for several of the bank’s employees.

       First National Bank moved to quash the subpoena and depositions. After a motion
hearing in February 2019, the court ordered the bank to provide Wife’s counsel with “a full
and complete explanation of the deposit,” but instructed counsel to “not divulge said
information to anyone including Wife unless otherwise ordered by the Court.” The court
also ruled that Wife’s counsel could conduct discovery “of the individual whose account
ultimately received the funds.”

        The bank provided Wife’s counsel an explanation on April 2019, one month before
the new trial date. It revealed that Daughter was a borrower of the bank, and one of her
loan payments was accidentally deposited into the Averwater Construction account. When
the bank learned of the mistake, it moved the funds into the correct account. Based on this
explanation, Wife deposed Daughter, who confirmed the bank’s explanation. Still
dissatisfied, Wife moved to continue the trial for a seventh time and to seek additional
discovery from the bank. The court denied her motions, and the case finally proceeded to
trial on May 7, 2019.
                                             2
       After three days of trial, Wife fired her attorney. She requested another continuance
and a disbursement from the marital estate so that she could hire new counsel. The court
granted the request in part. It continued the case until September 2019 with the
understanding that Wife had identified substitute counsel. But the court did not allow her
to draw additional funds from the marital estate.

       One month before trial was set to resume, Wife moved for another continuance on
the basis that she had not yet obtained counsel. She apparently found an attorney willing
to take her case, but the attorney was not available until December 2019. The court denied
Wife’s motion, and the case resumed as scheduled.

       Wife represented herself on the fourth and fifth days of trial. On the fourth day, the
court ended the proceedings in the early afternoon because Wife did not bring extra copies
of exhibits she intended to introduce into evidence. On the fifth day, the proceedings again
ended early; Wife suffered a panic attack during a break and could not proceed. On
January 7 and 8, 2020, the final two days of the trial, Wife was represented by counsel.

                                             B.

        The proof at trial showed that, for most of their marriage, Husband and Wife ran
Averwater Construction together. The company primarily built residential homes and
occasionally did repair work or built additions to existing homes. Wife handled the
administrative side of the business while Husband managed the job sites. By the time Wife
filed for divorce, the couple was making between $200,000 and $300,000 per year from
the business. But the parties decided to shut it down when they separated in 2015.

       Husband and Wife were also involved in another business called Puckett Station. It
was a general partnership formed to develop a large tract of farmland in Murfreesboro,
Tennessee. Husband and Wife owned 50 percent of the partnership, and John Floyd owned
the other 50 percent. The development was nearly complete by the time of trial, with only
a few lots left to sell. But the business needed to stay open for at least a few more years to
honor several outstanding maintenance bonds. During the pendency of the divorce,
Husband and Wife lived off draws from their Puckett Station capital account.

        Much of the trial was devoted to Wife’s claim that Husband was trying to hide
money from her. As evidence, Wife pointed to the accidental deposit into the Averwater
Construction account; transfers of property between Puckett Station and Mr. Floyd’s
company, Ole South; and the creation of Spring Creek, LLC, a construction company
formed by Husband after Wife filed for divorce. Wife believed that Husband, Mr. Floyd,
and others were conspiring to shield money and property so that it would not be included
as part of the marital estate.

                                              3
       In response to Wife’s allegations, Mr. Floyd and one of his employees testified that
the property transfers between Puckett Station and Ole South were in the normal course of
business. As for Spring Creek, Husband explained that he only created the company to
build one home for a longtime customer of Averwater Construction. And after he finished
that job, he dissolved the company and let his contractor’s license lapse into retirement
status. Still, he conceded that the $34,000 profit earned from the Spring Creek job was
marital property.

       While the parties had business success, their marriage did not fare as well. Their
home life was a major point of contention. Husband was severely allergic to cats and
bothered by cigarette smoke. Yet Wife smoked inside and kept many cats and dogs as pets.
Eventually, Wife moved to the third floor of the house with the animals while Husband
stayed on the first floor with Daughter.

        Daughter testified that Wife isolated herself on the third floor. It was filthy. No
one went up, and Wife rarely came down. Daughter believed that this was a significant
factor in the breakdown of her parents’ marriage. But Wife disputed this. She did not think
that Husband had any justifiable complaints about her actions other than her not sleeping
with him often enough.

       Another point of contention was the parties’ relationships with their children.
According to Husband, Wife did not have a meaningful relationship with Daughter or her
two sons from a previous marriage. Husband thought that Wife’s behavior was the primary
cause for the breakdown of those relationships. Wife agreed that the relationships were
strained, but she blamed Husband.

        Daughter testified extensively about her relationship with Wife. She told the court
that it began to deteriorate during her teenage years and had only worsened since then.
When Daughter testified, the two had not spoken for several years. And Wife had not been
invited to Daughter’s recent wedding or law school graduation. Daughter blamed Wife for
the state of their relationship, but Wife again blamed Husband.

                                            C.

       In its final divorce decree, the trial court found Wife was at greater fault for the
demise of the marriage, so it granted Husband a divorce on the ground of inappropriate
marital conduct. See 

(b) (2021) (permitting a court to “grant
a divorce to the party who was less at fault”). The court also determined that there was no
proof of fraud by Husband or anyone else.

       The court then classified and divided the parties’ property. Husband and Wife
stipulated to the classification and valuation of most of their property. But they disputed
$190,444.49 held within one of Husband’s retirement accounts. Husband contended that
                                              4
the money was separate property he brought into the marriage. And the funds were never
commingled with or transmuted into marital property. Wife disagreed. She argued that
Husband could not prove that the assets in the account predated the marriage. So the entire
account was marital property.

       The court resolved the factual dispute in favor of Husband and awarded him the
disputed funds as separate property. It then ordered the parties to liquidate most of the
marital estate and divide the proceeds evenly. The court also denied Wife’s request for
alimony and both parties’ requests for attorneys’ fees. In a separate order entered two
weeks later, the court ordered Wife to pay First National Bank for fees and costs incurred
opposing her subpoena and requests for additional discovery.

                                              II.

        Wife raises several issues on appeal. She argues that the trial court did not afford
her fair treatment as a pro se litigant; improperly denied her requests for continuances;
misclassified certain property; improperly denied her alimony; and improperly granted
First National Bank an award of fees and costs. For his part, Husband requests an award
of attorneys’ fees for this appeal.

       As this is a nonjury case, our review of the trial court’s factual findings is de novo
upon the record, accompanied by a presumption of the correctness of the findings, unless
the preponderance of the evidence is otherwise. See TENN. R. APP. P. 13(d). Evidence
preponderates against a finding of fact if the evidence “support[s] another finding of fact
with greater convincing effect.” Rawlings v. John Hancock Mut. Life Ins. Co., 

 (Tenn. Ct. App. 2001). Our review of questions of law is de novo with no
presumption of correctness. Armbrister v. Armbrister, 

 (Tenn. 2013).

                                              A.

        We first address Wife’s argument that the trial court did not afford her fair treatment
as a pro se litigant. A party is entitled to fair treatment by our courts when they decide to
represent themselves, but “[p]ro se litigants are not . . . entitled to shift the burden of
litigating their case to the courts.” Whitaker v. Whirlpool Corp., 

 (Tenn.
Ct. App. 2000). While pro se litigants are afforded a certain amount of leeway, they are
ultimately still subject to the same substantive and procedural rules imposed on represented
parties. Young v. Barrow, 

 (Tenn. Ct. App. 2003).




                                              5
        Wife points to several examples of the court’s actions that she believes constitute
unfair treatment. Most of these examples simply restate other issues she has raised on
appeal.1 As for her remaining complaints, we find no basis for relief. The difficulties Wife
experienced while proceeding pro se were the result of her “legal naivete” and the “very
heavy burden” she faced trying a case without representation, not unfair treatment by the
trial court. Irvin v. City of Clarksville, 

 (Tenn. Ct. App. 1988).

                                                    B.

       Wife next argues that the trial court abused its discretion in denying her requests for
continuances before and during trial. The party seeking a continuance bears the burden of
establishing the circumstances that justify the continuance. Osagie v. Peakload Temp.
Servs., 

 (Tenn. Ct. App. 2002). Decisions regarding the grant or denial
of a continuance are fact-specific and “should be viewed in the context of all the
circumstances existing” when the request is made. Nagarajan v. Terry, 

 (Tenn. Ct. App. 2003). Among the circumstances are “(1) the length of time the
proceeding has been pending, (2) the reason for the continuance, (3) the diligence of the
party seeking the continuance, and (4) the prejudice to the requesting party if the
continuance is not granted.” 

 (footnotes omitted).

       Because the decision to grant or deny a continuance “lies in the sound discretion of
the court,” we will not disturb it on appeal “unless the record clearly shows abuse of
discretion and prejudice to the party seeking a continuance.” Blake v. Plus Mark, Inc., 

 (Tenn. 1997). “Where adequate time for trial preparation and notice of
trial date are furnished, the proper procedure is to file an affidavit showing lack of
preparation and a ‘strong excuse’ for changing the trial date.” Barber & McMurry, Inc. v.
Top-Flite Dev. Corp., 

 (Tenn. Ct. App. 1986) (footnote omitted).

       One basis for Wife’s request for a continuance was the need to depose employees
from First National Bank. We review a trial court’s rulings on discovery issues using the
same abuse of discretion standard used for rulings on continuances. See Lee Med. v.
Beecher, 

 (Tenn. 2010). When Wife requested a continuance to obtain
additional discovery from the bank, the case had been pending for almost four years. Wife
had already received an explanation from the bank about the deposit. And she had deposed
Daughter, who provided the same explanation as the bank. Although Wife was dissatisfied
with the explanations she received, she did not show how further discovery from the bank

        1
          The examples include leading questions posed by the court to witnesses and sua sponte evidentiary
rulings. To the extent Wife seeks review of those issues, they were not preserved below or properly raised
on appeal, so they are waived. Lawrence v. Stanford, 

 (Tenn. 1983) (recognizing “the
general rule that questions not raised in the trial court will not be entertained on appeal”); Forbess v.
Forbess, 

 (Tenn. Ct. App. 2011) (an issue is “waived where it is argued in the brief
but not designated as an issue.”).

                                                    6
would resolve her concerns. So the court did not abuse its discretion in denying her request
for a continuance on this basis.

        Another basis for Wife’s request was the need to hire substitute counsel. Wife
argues that her efforts to hire new counsel were thwarted by the court’s denial of her request
for additional pendente lite support. According to Wife, the denial of both requests forced
her to represent herself for two days of trial.

       Trial courts also have “broad discretion” in awarding pendente lite support. See
Brock v. Brock, 

 (Tenn. Ct. App. 1996). And, under the
circumstances, we discern no abuse of discretion in either decision by the court. Wife fired
her attorney after three days of trial.2 By that point, the case had been pending for four
years and had previously been continued six times. Still, the court granted her a short
continuance on the understanding that she had identified substitute counsel. But in the six
weeks that followed, Wife did not obtain representation. And, while she contends that she
could not afford to hire a lawyer, she had already received over $500,000 from the marital
estate during the pendency of the divorce.

                                                  C.

        Wife’s issue with the court’s classification of property focuses on only two assets.
But Husband argues that Wife waived this issue because she failed to furnish a proper Rule
7 table. Where the classification of property or the division or allocation of marital property
are at issue, Rule 7 of this Court requires “the brief of the party raising the issue” to include,
either in the body of the brief or as an appendix, a table of property and debt and their
valuations. TENN. CT. APP. R. 7(a). The table must “list all property and debts considered
by the trial court, including (1) all separate property, (2) all marital property, and (3) all
separate and marital debts.” 

 (emphasis added).

        Here, Wife’s Rule 7 table only included the two assets that she contends were not
properly classified: the disputed retirement account and the profit from Spring Creek. This
does not satisfy Rule 7’s requirement that the table “comprehensibly lists the trial court’s
division of a divorced couple’s assets.” Blount v. Blount, No. E2017-00243-COA-R3-CV,

, at *3 (Tenn. Ct. App. Mar. 22, 2018); see also Robbins v. Robbins, No.
E2017-01427-COA-R3-CV, 

, at *14 (Tenn. Ct. App. Aug. 16, 2018)
(holding that a Rule 7 table is deficient when it does not include the entire marital state but
instead “simply itemizes various funds, properties and debts”). Still, where possible, cases
should “be decided on their merits rather than on strict compliance with the rules.” Dilley
v. Dilley, No. M2009-02585-COA-R3-CV, 

, at *9 (Tenn. Ct. App. May

       2
        Despite Wife’s contentions that her previous counsel performed poorly, the trial court indicated
Wife was well represented during the first three days of trial.

                                                   7
23, 2011). And a Rule 7 table’s deficiencies may be overlooked when they do not impact
our ability to address the issues raised on appeal. See Tarver v. Tarver, No. W2017-01556-
COA-R3-CV, 

, at *14 (Tenn. Ct. App. Mar. 13, 2019); TENN. CT. APP.
R. 1(b). That is the case here.

       Only marital property is subject to division. 

(a)(1)
(Supp. 2022); Snodgrass v. Snodgrass, 

 (Tenn. 2009). So a court must
classify each of the parties’ property interests as either separate or marital property before
dividing the marital estate. See Owens v. Owens, 

 (Tenn. Ct. App.
2007). Classification is a question of fact. 

       Wife first contends that the trial court erred in classifying a portion of a retirement
account as Husband’s separate property. She acknowledges that assets held by a spouse
before marriage in a retirement account are separate property, 

-
121(a)(4)(A), but she argues that Husband did not prove that he brought the disputed funds
into the marriage.

       The only testimony about the disputed funds came from Husband’s expert, Mike
Hallum. Mr. Hallum testified that he reviewed the parties’ IRA statements and tax returns
and traced the funds through several accounts back to their original source. No
contributions were made to the accounts during the marriage. Mr. Hallum testified that the
disputed funds were Husband’s before the marriage, and Wife offered no proof to rebut his
testimony.

       Wife does not dispute that Mr. Hallum traced the funds, but she argues that he did
not trace them back to before the marriage. She points to his expert report, which was
introduced as an exhibit at trial. The report does not list any accounts before 1995, three
years after the parties were married. So, Wife reasons, Mr. Hallum did not establish that
any portion of the funds existed before the marriage.

       But Mr. Hallum testified that he traced the funds back to their origin. His report
showed that the accounts were already funded in 1995, and no contributions were made
during the marriage. And Mr. Hallum’s testified that the contested funds were rollovers
from pre-marital employer pension and profit-sharing plans. And the court credited his
testimony. We cannot say that the evidence preponderates against the court’s finding.

       Wife next contends that the court erred in not dividing the profit from Spring Creek
as marital property. The court did not discuss the money at all in its final order. Although
Husband agrees that the profit is marital property, he argues that the court’s distribution of
the estate was equitable, so it should not be disturbed on appeal. See Bates v. Bates, No.
M2010-02590-COA-R3-CV, 

, at *3 (Tenn. Ct. App. June 26, 2012)
(holding that an error in the classification of property is harmless when “the overall division
of the parties’ property was equitable”).
                                                 8
       We faced a similar situation in Dortch v. Dortch. There, the trial court was
“extremely explicit” with its intention to divide the marital estate evenly. No. M1999-
02053-COA-R3-CV, 

, at *3 (Tenn. Ct. App. July 17, 2001). But based
on an “oversight,” the court awarded the wife more property than the husband. 

 We
corrected the court’s mistake on appeal and reduced the equalization payment the husband
was ordered to pay to achieve an equal division of the marital estate as intended by the trial
court. 

.

        We adopt a similar approach here. Neither party disputes that the profit from Spring
Creek is marital property. Nor do they challenge the court’s decision to divide the marital
estate equally. The court’s failure to address the Spring Creek profit was solely the result
of an oversight. So Husband must pay Wife half of the profit.

                                              D.

         Wife next takes issue with the trial court’s failure to award at least nominal alimony.
“[T]rial courts have broad discretion to determine whether spousal support is needed and,
if so, the nature, amount, and duration of the award.” Gonsewski v. Gonsewski, 

 (Tenn. 2011). In exercising that discretion, the court must consider a non-exclusive
list of statutory factors found in Tennessee Code Annotated § 36-5-121(i). Id. at 109-10.
Alimony decisions are factually driven and “involve[] the careful balancing of many
factors.” Id. at 105. The two most important factors are the disadvantaged spouse’s need
and the obligor spouse’s ability to pay. Id. at 110.

       Nominal alimony is a type of alimony in futuro. See Hernandez v. Hernandez, No.
E2012-02056-COA-R3-CV, 

, at *7 (Tenn. Ct. App. Sept. 27, 2013). It
enables a court “to retain jurisdiction to alter the amount [of alimony] later if the
circumstances warrant it.” Justice v. Justice, No. M1998-00916-COA-R3-CV, 

, at *5 (Tenn. Ct. App. Feb. 23, 2001). Nominal alimony may be appropriate when
“there is some uncertainty about one party’s present or future finances, health, or earning
power.” 

 This can occur “when there is uncertainty regarding the future needs of the
disadvantaged spouse or when the obligor spouse’s income potential has not been fully
realized.” 

 (internal citations omitted).

        Here, Wife contends that nominal alimony is appropriate because Husband could
start building homes again, at which point he would have the ability to pay alimony. To
do so, Husband would need to reactivate his contractor’s license, hire employees, obtain
insurance, pledge assets, and acquire empty lots to build on. Husband testified that he did
not intend to come out of retirement, and the court found his testimony credible.

      We discern no abuse of discretion in the denial of alimony to Wife. At trial, Wife
and Husband were 58 and 61 years old, respectively. See 

(i)(4)
                                           9
(Supp. 2022). Both worked for Averwater Construction for most of the marriage but
largely retired after Wife filed for divorce. See 

 § 36-5-121(i)(1). Except for the home
built by Spring Creek, neither spouse worked during the pendency of the divorce. See id.
And they had similar monthly expenses and abilities to pay. See id.; see also Gonsewski,

. Husband and Wife received an equal share of the marital estate. See

(i)(1). And the court found that Wife was more at fault for
the breakdown of the marriage. See 

 § 36-5-121(i)(11).

                                            E.

       Wife next challenges the court’s award of fees and costs to First National Bank.
Throughout the litigation, Wife spent great time and energy investigating the accidental
deposit into the Averwater Construction bank account. But when she was not satisfied
with the explanations she received from the bank and Daughter, Wife issued a subpoena
and filed a notice of deposition. The court quashed the subpoena for not complying with
Financial Records Privacy Act. See id. § 45-10-107 (2020). But the court ordered Wife to
pay First National Bank’s attorney’s fees and costs under the Uniform Interstate
Depositions and Discovery Act. See id. § 24-9-207 (2017) (allowing for an award of
reasonable attorney’s fees and expenses incurred in defending against a subpoena if the
court grants a motion to modify or quash the subpoena). The subpoena Wife issued was
not subject to the Uniform Interstate Depositions and Discovery Act. That statute only
applies when a party submits a “foreign subpoena” for issuance in this state. See id.
§ 24-9-203.

       Husband concedes that the trial court erred in relying on Uniform Interstate
Depositions and Discovery Act, but he argues that we should nevertheless affirm the award
under the Financial Records Privacy Act. Under the Financial Records Privacy Act, the
issuer of a subpoena must “pay the financial institution’s reasonable expenses incurred in
complying with the subpoena.” Id. § 45-10-109 (2020). Under these circumstances, we
decline to do so.

                                            F.

        Both Husband and Wife request an award of attorney’s fees on appeal under
Tennessee Code Annotated § 36-5-103(c). This statute gives us the discretion to award a
plaintiff spouse reasonable attorney’s fees incurred “in enforcing any decree for alimony
and/or child support, or in regard to any suit or action concerning the adjudication of the
custody or the change of custody of any child, or children, of the parties.” 

(c) (2017). The trial court did not award alimony. And neither child
support nor child custody were at issue here. So we decline to award either party attorney’s
fees based on this statute.


                                            10
        Husband also requests an award of attorney’s fees for defending against a frivolous
appeal. 

 § 27-1-122 (2017). The statute authorizing an award of damages for a frivolous
appeal “must be interpreted and applied strictly so as not to discourage legitimate appeals.”
See Davis v. Gulf Ins. Grp., 

 (Tenn.1977). A frivolous appeal is one
“utterly devoid of merit.” Combustion Eng’g, Inc. v. Kennedy, 

 (Tenn.
1978). This appeal was not devoid of merit. Wife “made legitimate arguments and cited
to relevant law and facts.” See Coolidge v. Keene, 

, 120 (Tenn. Ct. App.
2020). Her appeal was unsuccessful, not frivolous. See 

 So we decline to award fees
for frivolous appeal.

                                            III

       The trial court did not abuse its discretion in denying Wife’s requests for
continuances, pendente lite support, or nominal alimony. And the evidence does not
preponderate against the court’s determination that part of Husband’s retirement account
was separate property. We modify the division of marital property to include the profit
from Spring Creek, LLC. We reverse the award of attorney’s fees and expenses, and we
decline to award attorney’s fees on appeal. This case is remanded for entry of a judgment
in favor of Wife for one-half of the profits from Spring Creek, and for such further
proceedings as may be necessary and consistent with this opinion.


                                                     s/ W. Neal McBrayer
                                                  W. NEAL MCBRAYER, JUDGE




                                             11