In a recent partition case between former domestic partners, the Court of Appeals of Tennessee set forth some good reminders of the factors Tennessee courts are to consider when dividing up the interests of joint owners of real estate. While the case involved former domestic partners, the principles laid out in the opinion are equally applicable to cases involving joint owners other than those who are former domestic partners.
Although the case was not filed as a partition case, it should have been, and the Court of Appeals treated it as a partition case. The case is remarkable, not only because it contains a clear and concise review of partition principles, but also, because, in reversing the trial court, the Court of Appeals showed what is not a proper way for a trial court to adjudicate a partition case.
Here are the basic facts:
- The man (“Man”) and woman (“Woman”) involved were domestic partners, but never married
- The Man and Woman bought a home (“Property”) together in 2013 for $223,000
- The Property was deeded to the Man and Woman as joint tenants with a right of survivorship
- The Man paid a $50,000 down payment from the Property using proceeds from another property that Man and Woman had owned together
- Woman testified that Man had received $200,000 from the sale of the other jointly owned property, but had never given her any of those proceeds
- The Man and Woman financed the $171,000 purchase price balance
- The Woman testified that she consistently paid $1,000 a month towards the mortgage loan for the Property
- The Man denied that she had consistently paid $1,000 a month, but admitted that she may have paid around $7,000 in total over the course of the years
- In 2015, Woman bought a home in Washington state
- Man sent Woman a $5,000 check for the down payment on the Washington home and wrote “loan” on it
- There was proof that Woman had, through her employer, provided valuable medical insurance benefits to Man for many years
- Woman also testified that she had put a lot of work into the Property
The trial court described the circumstances as a “crazy mess.” It then took a simplistic approach to resolving the dispute. It found that the equity in the Property was $229,000 and that it should be divided equally except Man should receive $10,000 from Woman’s one-half for the money paid for the down payment for the Washington home and for attorneys’ fees.