                 IN THE COURT OF APPEALS OF TENNESSEE
                             AT NASHVILLE
                                   October 8, 2001 Session

                     JASON C. GOULET v. JENNIFER HEEDE

                       Appeal from the Circuit Court for Sevier County
                        No. 96-1011-III   Norma McGee Ogle, Judge

                                   FILED JANUARY 31, 2002

                                 No. E2000-02535-COA-R3-CV


This appeal concerns a divorce action in which the court classified a home purchased by Wife during
the marriage as her separate property and a second mortgage taken out by Husband on the couple’s
marital home as his separate debt. Husband appeals both of these decisions and also questions the
trial court’s decision to find Wife’s testimony credible, since she had previously given testimony in
another matter that was inconsistent with her testimony at the divorce hearing. We determine that
the trial court should be affirmed on all issues presented.

      Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed

WILLIAM B. CAIN , J., delivered the opinion of the court, in which BEN H. CANTRELL, P.J., M.S., and
JOHN A. TURNBULL, SP. J., joined.

Rebecca C. McCoy, Sevierville, Tennessee, for the appellant, Jason C. Goulet.

Martha Meares and Gretchen S. Johnson, Maryville, Tennessee, for the appellee, Jennifer Heede.

                                            OPINION

        This case involves a divorce between two parties who have both shown a propensity for
dishonesty and poor judgment. The parties met when they were both living in Florida. Plaintiff/
Appellant, Jason Goulet, owned a neon sign business, which he later relocated to Tennessee. Prior
to the parties’ marriage, Goulet lived in an apartment and owned no assets outside the business other
than his automobile.

        Jennifer Heede, Defendant/Appellee in this matter, had a run of good fortune prior to meeting
Goulet. Between the ages of 18 and 30, she had been the recipient of life insurance proceeds and
an inheritance together totaling more than $200,000.00, which was kept in a separate Dean Witter
account. The bulk of this money she received in 1994 upon her 30th birthday. In addition to her
inheritance, Heede also had the privilege of being a contestant on The Price is Right television show
and had won approximately $13,000.00 worth of merchandise.
        Prior to their marriage in August 1994, the parties lived together in a townhouse owned by
Heede. They shared living expenses while living in Heede’s townhouse, and continued to live there
after their marriage until November of 1994, at which time the parties moved to Tennessee.

        In January 1995, they purchased a home in Sevierville, Tennessee. Ms. Heede paid
$26,000.00 out of her inheritance plus another $6,000.00, apparently left from the sale of the Florida
townhouse, toward the down payment and closing costs on this home in Tennessee. Goulet,
thereafter, paid most, if not all, of the mortgage payments on the Tennessee home.

       Things broke down fairly quickly for these parties, as Goulet testified that his wife spent
most of her time back in Florida from January 1995 through March 1995, and Heede testified that
they agreed to separate in January or February of 1995. Some time that year, Heede decided to move
back to Florida. She closed on a house in Florida on November 2, 1995, paying $34,492.06 out of
her Dean Witter account at the closing. She has continued to pay all mortgage payments on this
property.

         On December 21, 1995, Goulet took out a second mortgage on the Tennessee home for
$11,125.00 and then paid $11,500.00 to Heede. Heede testified that this money was to purchase her
separate property that had been left in Tennessee. Goulet testified that this money was given to
Heede for a down payment on their house in Florida, as he intended to join her in Florida. He further
testified that, over the next few months, the parties talked on the phone frequently but never
discussed divorce, as it continued to be their plan for Goulet to join Heede in Florida. This move
never happened.

        In March 1996 the parties took a vacation together. According to Heede, this vacation was
taken just as friends and had been planned prior to their separation. According to Goulet, this
vacation was taken as a couple and as a prelude to his moving to Florida. He testified that, following
the vacation, the parties scouted for a location in Florida where he could relocate his business and
that he assisted Heede in making some minor repairs to “their” house.

        Goulet insisted that, as of this vacation, there still had been no discussion of divorce; yet, he
stated that the parties only spoke once after their vacation and had no further conversation until
Heede’s deposition in 1998. On June 14, 1996, Heede’s attorney forwarded a letter to Goulet
memorializing a property settlement. In spite of living in different states for eight months and not
talking to Heede for three months, Goulet testified that this letter came as a complete shock, as he
had no idea that Heede was considering a divorce. He subsequently filed a petition for divorce in
Tennessee on September 13, 1996.

       The circuit court heard the divorce in August 1999, granting a divorce to the parties,
determining their marital and personal property, and dividing the marital property and debts.
Pertinent portions of the court’s findings relative to this appeal are as follows:

               Shortly after the parties separated, the Wife purchased a condominium in
        Wellington, Florida (Stag Harbor). The Stag Harbor property was purchased in

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       November 1995 with assets from the Wife’s trust fund. The Wife has made all
       mortgage payments on the property and paid all maintenance expenses, primarily
       from the trust fund. The Husband made no contributions toward the purchase of the
       property, nor has he made any mortgage payments. While the Husband, as spouse,
       signed the note and deed of trust, the title to the property is solely in the name of
       Wife. Based upon the proof presented, the Court finds that the Stag Harbor property
       is the Wife’ separate property and is awarded to her.

The court also found that Heede’s Dean Witter account, containing approximately $138,000.00 at
the time of the hearing, was her separate property and that Goulet’s business was his separate
property. With regard to the home in Tennessee, the court found it to be marital property
encumbered by a first mortgage, with a balance of around $59,000.00, and a second mortgage, with
a balance of approximately $8,000.00. The court ordered that the home be sold, with costs of the
sale and first mortgage to be paid from the proceeds, and the net split between Goulet and Heede.
Goulet was to be responsible for the balance of the second mortgage from his share of the sale
proceeds. With regard to the second mortgage, the court found that:

       At the time of the marriage, the Wife was the owner of certain household furnishings
       which she won on the television show, “The Price Is Right”. Subsequent to the
       separation, the Husband obtained a second mortgage on the Snapwood Property in
       the amount of $11,125.00. The Husband used the proceeds from the second
       mortgage to pay the Wife for her interest in the household furnishings and personal
       property which were left in the Sevierville residence when the Wife returned to
       Florida.

The court further awarded each party the household furnishings and personal property in his or her
possession.

       Goulet presents, basically, three issues for review: (1) whether or not the trial court could
find Heede’s testimony credible due to past perjurous testimony and inconsistent statements made
by Heede; (2) whether or not the court erred in finding that Heede’s Florida property was separate
property; and (3) whether or not the court erred in finding the second mortgage on the Tennessee
property to be Goulet’s sole responsibility.

               WITNESS CREDIBILITY AND INCONSISTENT STATEMENTS

        A notable amount of time was devoted at trial by both parties in an attempt to show each
other’s lack of credibility and past dishonesty. Particularly, with regard to Heede, Goulet attempted
to argue that Heede’s prior instances of lying, as well as specific inconsistent statements made by
her in this proceeding, invalidated much of her testimony.

       Heede admitted to lying in a proceeding regarding another matter wherein she stated that she
and Goulet intended to reconcile. At the hearing of this cause, Heede testified that they agreed to
separate in January or February of 1995 and that she never had any intent or desire for reconciliation

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with Goulet. Heede also testified in the prior matter that she had taken all her personal property
when she left Tennessee and moved back to Florida. At the divorce hearing she testified that she
left some $13,000 of personal property, as well as marital property, in Tennessee.

       While Tennessee does recognize the rule of cancellation wherein contradictory statements
by witness regarding the same fact may cancel each other out, In Re Estate of Ross, 969 S.W.2d 398,
400 (Tenn. Ct. App. 1997); Price v. Becker, 812 S.W.2d 597, 598 (Tenn. Ct. App. 1991); State v.
Caldwell, 997 S.W.2d 110, 118 (Tenn. Crim. App. 1997), this rule of cancellation “applies when the
inconsistency in testimony is unexplained and when neither version of the testimony is corrborated
by other evidence.” Ross, 969 S.W.2d at 400.

        Upon review of the testimony and evidence, Heede presented a plausible explanation for
these inconsistencies, which was found credible by the judge. Heede stated that Goulet had staged
an automobile accident in order to file a fraudulent claim for damages and injuries. It was in
Goulet’s fraudulent suit for damages that she was asked, by Goulet, to testify falsely. As she was
still married to Goulet at the time, Heede stated that she was afraid not to go along with his scheme.
She also introduced documents showing a suit for fraud filed against Goulet as a result of his claim,
and Goulet admitted dropping his claim after being sued for fraud without obtaining any money from
the defendants to settle the claim.

       Heede’s testimony regarding her intent to reconcile is corroborated by her actions. She
moved to Florida alone, purchased a separate home titled in her name and went more than four
months without seeing Goulet. Heede’s testimony regarding personal property left in Tennessee is
corroborated by Goulet himself, as he admitted that she left some items of personal property, as well
as marital property, when she moved to Florida (although there is some disagreement on what those
items were).

       Goulet points out many other “inconsistent statements” made by Heede throughout this
divorce action. However, a review of those statements shows them to be an attempt to nit pick a
layman’s terminology or twist her words. The court had ample opportunity to view both these
witnesses and listen to their testimony. With regard to the home purchased by Heede in Florida and
the $11,500.00 paid by Goulet to Heede, the court found her version of all the “he said, she said”
testimony more credible.

               The findings of the trial court which are dependent upon determining the
       credibility of witnesses are entitled to great weight on appeal. The reason for this is
       that the trial judge alone has the opportunity to observe the manner and demeanor of
       the witnesses while testifying. Indeed, the trial judge, on an issue which hinges on
       witness credibility, will not be reversed unless there is found in the record concrete
       and convincing evidence, other than the oral testimony of the witnesses, which
       contradicts the trial court’s findings.

Bowman v. Bowman, 836 S.W.2d 563, 566 (Tenn. Ct. App. 1991) (citations omitted). “Where the
trial judge has seen and heard the witnesses, especially if issues of credibility and weight to be given

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oral testimony are involved, considerable deference must be accorded those circumstances on
review.” McCaleb v. Saturn Corp., 910 S.W.2d 412, 415 (Tenn. 1995). Heede’s contradictory
statements were explained and her divorce testimony was corroborated. Thus, the trial judge was
not required to discount her testimony and was free to use his judgment, as the lone observer of all
testimony given in this cause, to make factual determinations based on his opinion of witness
credibility.

                                    THE FLORIDA PROPERTY

        It is Goulet’s assertion that he paid Heede $11,500.00 in December 1995 for a down payment
on the home in Florida and that he planned to move with her at a later date. He testified that, in
March 1996, following a vacation taken by the parties, he assisted with some minor repairs like
fixing the toilet and installing a ceiling fan. He further alleged that the property was purchased with
the intent of being a marital home for the parties and that he had no notice or belief that a divorce
was eminent until he received a property settlement proposal from Heede’s attorney in June 1996.
However, based on Heede’s testimony and treatment of the property, the trial court determined that
this Florida property was Heede’s separate property.

               Trial courts are accorded wide discretion in classifying and dividing property
       in a divorce case, and their decisions are entitled to great weight on appeal. In
       accordance with Rule 13(d) T.R.A.P., the trial court’s decision regarding the
       classification and division of marital property will be presumed correct unless the
       evidence preponderates otherwise.

Corley v. Corley, No. 01-A-01-9011-CH00415, 1991 WL 66447, at *5 (Tenn. Ct. App. May 1, 1991)
(citation omitted); see also Dunlap v. Dunlap, 996 S.W.2d 803, 814 (Tenn. Ct. App. 1998). Unless
the evidence preponderates against the trial court’s determination, we must affirm the judge’s
decision to classify Heede’s Florida property as separate property, and we find that the evidence does
not preponderate against the findings of the trial court.

       Tennessee is a dual property jurisdiction dividing all property into two classifications, marital
and separate. Batson v. Batson, 769 S.W.2d 849, 856 (Tenn. Ct. App. 1988). These classifications
are contained in Tennessee Code Annotated section 36-4-121(b). Separate property is therein
defined as: “(A) All real and personal property owned by a spouse before marriage; (B) Property
acquired in exchange for property acquired before the marriage; . . . (D) Property acquired by a
spouse at any time by gift, bequest, devise, or dissent; . . . ” Tenn. Code Ann. § 36-4-
121(b)(2)(1996). The Code also defines marital property as, “all real and personal property, both
tangible and intangible, acquired by either or both spouses during the course of the marriage.” Tenn.
Code Ann. § 36-4-121(b)(1)(A)(1996). “Despite the fact that certain property may have been
acquired during the marriage, a party may rebut any presumption that the property is marital.”
Dunlap, 996 S.W.2d at 814. This rebuttal may be shown by demonstrating that the property is
“separate property” under the section 36-4-121 (b)(2). Id.; see also Batson, 769 S.W.2d at 858.



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       The trial court found that Heede’s inherited money kept in her Dean Witter account was her
separate property. This determination was not appealed. It is undisputed that Heede purchased the
Florida property on November 2, 1995 using money from this Dean Witter account for the down
payment. It is further undisputed that Goulet has not lived in this property, has not made any
mortgage payments on this property, and was unaware of even when the property was purchased.
Goulet admitted that the only contact that he had with the Florida property was more than four
months after its purchase following a vacation he took with Heede. At that time, Heede showed him
the home, and he performed some minor repairs to the property while he was there.

         Other than the post-vacation visit to the Florida property by Goulet over four months after
Heede left Tennessee and his signature on the mortgage, Goulet presented no evidence that the
parties intended this property to be marital. Furthermore, there is overwhelming evidence that Heede
intended this property to be her separate property and treated it as such.

        She purchased this property using her separate funds; it was thus “acquired in exchange for
property acquired before the marriage.” She moved to Florida alone and lived in the property for
more than four months before Goulet even visited, and even after this visit, Goulet admits that the
parties only spoke once and did not speak again for approximately three years. Further, the property
was titled in her name alone, and, although Goulet did sign the mortgage, it is undisputed that
Florida law requires a wife purchasing property to obtain the signature of her husband on these
documents. The judge saw both parties testify and determined Heede’s testimony to be more
credible. When we review her testimony in connection with the other evidence presented, we find
that the evidence does not preponderate against the judge’s determination, and we must uphold the
judge’s decision to classify this property as separate property.

            ALLOCATION OF THE BALANCE OF THE SECOND MORTGAGE

        In December 1995 Goulet took out a second mortgage on the Tennessee home in the amount
of $11,125.00 and paid a total of $11,500.00 over to Heede. The trial judge found the balance of this
loan to be Goulet’s personal debt, determining that the money was given to Heede in exchange for
household furnishings and personal property left at the Tennessee residence after she moved to
Florida.

        In Tennessee, a distinction is made between marital and separate debts, just as a distinction
is made between marital and separate property. See McCaffey v. McCaffey, 775 S.W.2d 618, 623
(Tenn. Ct. App. 1989). “Marital debts are those debts incurred during the marriage for the joint
benefit of the parties, or those directly traceable to the acquisition of marital property.” Mandelli
v. Howard, 780 S.W.2d 769, 773 (Tenn. Ct. App. 1989) (citations omitted). Further, “[t]rial courts
have the authority to apportion marital debts in the same way they divide the marital estate.”
McCaffey, 775 S.W.2d at 625.

       Once again, we have a “he said, she said” situation wherein the court determined that
Heede’s testimony was more credible, and the evidence does not preponderate against this
determination. Goulet claims that $11,500.00 was paid to Heede as part of the down payment on

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the Florida residence and that most of that money came from the second mortgage on the Tennessee
residence. However, the facts do not support this assertion as Heede purchased the property a month
and a half prior to being given this money by Goulet. Further, Heede never signed the second
mortgage. Goulet signed these documents as her attorney in fact, but no evidence or testimony was
presented showing that she gave him permission or authority to act as her attorney in fact. Although
$11,500.00, an amount close to the amount of the second mortgage, was paid to Heede in December
1995, Heede testified that she left over $15,000.00 worth of marital and separate property at the
home in Tennessee when she moved out in November of 1995, which remains the property of Mr.
Goulet, taking with her only a few items of personal property and $1,200.00 worth of marital
property. As such, the evidence does not preponderate against the judge’s determination that this
second mortgage is Goulet’s debt alone taken out for his benefit in order to purchase Heede’s
personal property left at the Tennessee home.

       The judgment of the trial court is in all respects affirmed with costs assessed to Appellant.
The case is remanded to the trial court for such further proceedings as may be necessary.



                                                      ___________________________________
                                                      WILLIAM B. CAIN, JUDGE




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