Posted by Nydia Streets of Streets Law in Florida Divorce

After a final judgment is entered in a Florida divorce case, parties probably expect to ride off into the sunset and be finished with a former spouse. However, it is common that parties will still have issues post-judgment, even if no children are involved. The case Lapciuc v. Lapciuc, 3D18-1804 (Fla. 3d DCA July 3, 2019) shows us how a dispute concerning a business owned by former spouses mushroomed into what was likely expensive post-judgment litigation.

The parties entered a marital settlement agreement in which the former husband was deemed to be the majority shareholder of a corporation and the former wife a minority shareholder. The parties’ settlement agreement stated the former husband was not allowed to incur certain debts on behalf of the corporation “[e]xcept for commercially reasonable and prudent expenditures on behalf of the New Business.” In 2018, the former husband sought a line of credit on the corporation in order to expand to keep up with new demands for products. The former wife objected to the line of credit, arguing the terms were not commercially reasonable.

The former husband filed a motion to enforce the settlement agreement because the bank declined to approve the line of credit without the former wife’s approval or a court order. At a non-evidentiary hearing, the trial court concluded the corporation was authorized to obtain the line of credit and the former wife appealed. The appellate court sided with the former wife, holding, “The crux of [the former wife’s] objection to the increased LOC - and indeed, the salient issue at the hearing - was whether that additional indebtedness was "commercially reasonable and prudent," as provision 2(c)iii of the Settlement Agreement required. The determination of that question, however, necessitated a full evidentiary hearing. Nevertheless, over [the former wife’s] counsel's strenuous objection, and without any documentary or testimonial evidence that the increased LOC was a ‘commercially reasonable and prudent’ expenditure, the trial court implicitly found that the LOC was commercially appropriate by authorizing Del Valle and Precision to proceed with the LOC. The trial court should not have decided the merits of the motion to enforce the Settlement Agreement without any evidentiary support in the record to evaluate the commercial reasonableness, or not, of the increased LOC.”

When former spouses are current business partners, complications can arise which may require the assistance of a Miami divorce attorney. Schedule a consultation to understand how disputes may be handled in court.