The ruling reverses a previous decision made this past May where Chancellor George Ellis refused Angel Chandler custody of her daughter because of the "paramour provision," the Tennessean reports.
According to state law, the provision requires single custodial parents to agree not to have overnight sexual partners. Because Tennessee does not legally recognize gay marriage, Chandler and her partner of 10 years would have been in violation of the provision.
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Chandler and her former husband Joseph Barker had reportedly made an arrangement where Barker and his new wife would have custody over the former couple's 16-year-old son, while Chandler would have custody of their daughter.
The appellate court found the "child's best interests override the law" and overturned the previous ruling.
Chandler, through the American Civil Liberties Union of Tennessee, said she was grateful for the change.
"To have to send the person I love and have built a life with away at the end of every day when the children were with us has been a terrible drain on our entire family," Chandler said.