Posted by Nydia Streets of Streets Law in Florida Divorce

In a Florida divorce case, there can be multiple issues regarding equitable distribution, including the chosen valuation date, dissipation and more. These were issues in the case Knott v. Knott, 6D2023-2519 (Fla. 6th DCA September 6, 2024).

In this divorce case, the former husband took issue with multiple decisions made by the trial court, including partition of the marital home, dissipation of assets, misclassification of assets, determination of income and failure to include a tax debt in the equitable distribution. The appellate court agreed with the former husband on all of these issues and reversed.

First, as to the partition, the trial court ruled it was without jurisdiction to partition the marital home because the former husband did not plead the quantity of each party’s interest in the home as required by statute. In his counterpetition, the former husband alleged the marital home was owned as “joint tenancy, tenancy in common, tenancy by the entirety, or some other form of co-ownership.” The appellate court held “Section 64.041, Florida Statutes (2019), requires that the party requesting partition allege ‘the quantity [of interest] held by each’ party. Former Husband did just that. Because parties may plead inconsistent facts or alternative theories in their pleadings, we see no issue with Former Husband’s alleging several forms of ownership in the alternative. [internal citations omitted]. If Former Husband proved that the marital residence was held by either tenancy by the entireties or joint tenancy, then the ‘quantity held by each’ would have been established. [. . .] We, therefore, reverse the award of the marital home to Former Wife and remand for the trial court to consider Former Husband’s request for partition.”

As to dissipation, the trial court made findings regarding the value of the former husband’s business at the time of divorce. The evidence showed the value of the business steadily declined over the years such that the value by the time of trial was significantly less than before. The trial court went with the higher value. The appellate court disapproved, holding “Although a trial court has discretion to choose the date of valuation for marital assets, its discretion is properly exercised only after consideration of the facts and circumstances presented. § 61.075(7), Fla. Stat. (2012). [. . .] Here, there was no finding that the value of NSS was dissipated due to spousal misconduct; in fact, Former Wife’s expert testified that NSS’s value had been steadily declining for several years, and there was no evidence the decline post-filing was attributable to any misconduct. Under these circumstances, the proper asset valuation date was the most recent date for which evidence was provided, and it was an abuse of discretion to find otherwise.” The court also found a bank account owned by the former husband which decreased in value during the proceedings was improperly classified as dissipated: “All the court had before it on this topic was Former Husband’s unrebutted testimony that the funds were generally used for living expenses, for his children, and for Former Wife, and Former Wife presented no evidence that such funds were used to the contrary. Although Former Husband could not recall precisely how he had used several large withdrawals, this memory failure is not, without more, competent substantial evidence supportive of a finding of intentional misconduct.”

Next, turning to the issue of post-filing acquired assets, the appellate court held “In this case, the trial court included the following post-petition assets in its equitable distribution: (1) two motorcycles valued at $32,000; (2) a $6,000 rental deposit; and (3) $35,600 in contributions to Former Husband’s retirement account. This was error. Accordingly, we reverse the equitable distribution award, and on remand, the trial court shall not consider these assets when reexamining its equitable distribution scheme.”

Moving to calculation of alimony, the appellate court held “Here, the trial court did not average Former Husband’s past income but appears to have chosen to use Former Husband’s 2019 income as his current income. There is competent, substantial evidence to find that Former Husband’s income was $297,800 in 2019. At trial, Former Husband admitted that NSS’s bank account had been reduced by $297,800, which represented his income in 2019. Regardless, the evidence showed that his income had decreased thereafter; Former Wife’s expert, Bastian, testified that NSS’s revenue decreased significantly from 2019 to 2020 and again in 2021. The decrease in NSS’s revenue translates to a decrease in Former Husband’s income. Accordingly, the trial court’s finding that Former Husband’s income at the time of trial was $297,800 was not supported by competent, substantial evidence.” Finally, the court held it was error for the trial court to fail to include over $70,000 in joint tax liability in the equitable distribution.

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