Stephanie J. Pate v. Samuel D. Pate

This is a divorce involving the classification of property as “marital” or “separate.” The parties were married in 1986. In 1998, the wife received a substantial inheritance. She used a portion of the inheritance to pay off the mortgage on the marital home, to purchase undeveloped property adjacent to the marital home, and to purchase a vehicle. Later, the parties separated and the marital home was sold. From the proceeds of the sale, the wife received her separate contribution to the property, as well as half of the profit earned on the property. She used her proceeds to purchase another home.  The husband’s name was on the title of the new home, but he was not an obligor on the mortgage.  The parties made an unsuccessful attempt to reconcile, and subsequently filed cross petitions for divorce. They resolved all issues, except for the classification and division of certain property that was titled in both parties’ names but purchased with the wife’s inheritance. After a hearing, the trial court found that the wife did not intend to transmute any of her inheritance into marital property.  Based on this finding, the trial court determined that the parties had already equitably divided their interest in the marital property, and that there was no property left to divide. From this order, the husband now appeals. We affirm in part, reverse in part, and remand for further proceedings.