Opinion
No. 4D2021-2480
11-01-2023
Richard Lawrence BERNSTEIN, Appellant, v. Cynthia Judith BERNSTEIN, Appellee.
Nancy A. Hass of Nancy A. Hass, P.A., Fort Lauderdale, and Steven M. Pesso of Steven M. Pesso, P.A., Boca Raton, for appellant. Mysha F. Browning of PurLaw, LLC, Boynton Beach, for appellee.
Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm Beach County; Scott Ryan Kerner, Judge; L.T. Case No. 50-2019-DR-010056-XXXX-SB.
Nancy A. Hass of Nancy A. Hass, P.A., Fort Lauderdale, and Steven M. Pesso of Steven M. Pesso, P.A., Boca Raton, for appellant.
Mysha F. Browning of PurLaw, LLC, Boynton Beach, for appellee.
ON MOTION FOR REHEARING EN BANC, AND MOTION FOR REHEARING AND CERTIFICATION
Per Curiam.
We deny Appellant’s motions for rehearing en banc and certification, grant his motion for rehearing in part, withdraw our opinion dated April 19, 2023, and issue the following opinion in its place.
Appellant Richard Lawrence Bernstein ("Former Husband") appeals the trial court’s amended final judgment of dissolution of marriage between him and Appellee Cynthia Judith Bernstein ("Former Wife"). Former Husband argues on appeal that the trial court erred in (A) awarding an excessive permanent alimony award; (B) classifying the parties’ residence as a marital asset for purposes of equitable distribution; and (C) awarding Former Wife more than a 50/50 split of the proceeds from Former Husband’s trade-in of his Corvette.
On issue (A), we affirm the trial court’s alimony award without discussion, noting Former Husband failed to identify an error clearly appearing on the record. On issue (B), Judges Ciklin and Forst agree with the trial court’s awarding Former Wife fifty percent of the enhanced value of the marital home. Finally, on issue (C), Judge Warner and Judge Forst agree to a reversal, agreeing with Former Husband that the trial court’s decision to give Former Wife a greater than 50/50 credit for the Corvette’s trade-in proceeds was unsupported by competent substantial evidence. Thus, this case is remanded for the trial court to modify its final judgment on this issue. Otherwise, the trial court’s final judgment is affirmed.
Affirmed in part, reversed in part, and remanded with instructions.
Ciklin, J., concurs in part and dissents in part with opinion.
Forst, J., concurs with opinion.
Warner, J., concurs in part and dissents in part with opinion.
Ciklin, J., concurring in part and dissenting in part.
I would affirm the trial court in all respects.
Forst, J., concurring.
I join Judge Warner in remanding the Corvette valuation issue. I otherwise concur in the affirmance of the final judgment and take this opportunity to explain my reasoning.
Background
The parties were married for more than twenty years, until Former Husband petitioned for dissolution of marriage in 2019. In 1994, approximately three years prior to the marriage, Former Husband and his mother purchased a home in Boca Raton, where the parties resided as husband and wife for twenty-two years ("the marital home"). Former Husband paid $445,000 in cash for the marital home, and it was and remains titled in his and his mother’s names.
Based on testimony from, primarily, Former Husband’s witnesses, the trial court set the current value of the marital home at $1.25 million. The witnesses attributed the significant increase to "passive appreciation," as the home was waterfront property, in a neighborhood where many of the original homes had been tom down and replaced by new homes. Former Wife argued that the marital home was not a "tear-down," and the $1.25 million appraisal was attributable in large part to active appreciation. She presented evidence of her efforts to maintain and improve the home—she personally climbed on the roof and fixed it, cleaned the gutters, fixed the pavers, took out 500 feet of tile with a chisel and hammer, performed garden work, and cleaned the pools. Former Husband listed her on renovation permits for the property. Additionally, Former Wife contributed significant personal money in improving the marital home. Specifically, Former Wife used $75,000 from a personal injury settlement to renovate the marital home. Former Husband also testified that, during the marriage, the parties completed updates to the home such as replacing cabinets and countertops and installing hurricane windows and sliders. The home and surrounding grounds were also generally maintained with marital funds.
In its final judgment of dissolution, the trial court made several findings challenged in the instant appeal. First, the trial court determined that the marital home was worth $1.25 million and was a marital asset subject to equitable distribution, The court found that "[i]t is disingenuous for [Former Husband] to reap the benefits of [Former Wife’s] 25 years of toils, work and financial contribution for the upkeep and improvement of the marital home, including money from her personal injury lawsuit, yet be able to avoid equitable distribution of the asset." The court determined there was "donative intent" to make the marital home a marital asset. The trial court alternatively concluded, "[e]ven if there was no donative intent, the nonmarital nature became lost during the 20 plus years of marriage based upon the parties’ actions and inaction." The trial court added:
In Hooker, like in this case, the Wife was maintaining the home, raising a family, and paying money for the improvement of the marital residence [and this] entitles her to an interest in the property upon Equitable Distribution. Moreover, the Husband’s actions, such as giving Wife keys to the home, placing her on permits for improvements, paying for the upkeep of the home from marital funds and benefitting from her $75,000 in settlement money to improve the home, indicates an intent for the real property to be their marital home, and therefore subject to equitable distribution.
The trial court gave Former Husband a $445,000 credit for the marital home in acknowledgment of Former Husband’s pre-marriage purchase of the home for that amount. The trial court equitably distributed the remaining $805,000 of the value of the marital home, and other marital assets. One such asset was Former Husband’s Corvette that he had traded in for $15,150 in cash. Specifically, the trial court awarded Former Wife a $9,000 credit for Former Husband’s Corvette trade-in. The court did not provide an explanation for the $9,000 figure. This timely appeal followed.
Despita filing a notice of cross-appeal, Former Wife never filed a cross-initial brief.
Analysis
On appeal, Former Husband challenges (A) the trial court’s alimony ruling; (B) the classification of the marital home as a marital asset and its inclusion in the equitable distribution scheme, and (C) the trial court’s award of a $9,000 credit to Former Wife with respect to the Corvette’s trade-in value.
A. The Alimony Award
As noted above, the panel unanimously affirms the trial court’s alimony award without further discussion.
B. The Marital Home
Former Husband argues that the trial court erroneously classified the home as a marital asset, because he purchased it with premarital funds, it was titled in his and his mother’s names, and it was not a gift. He further argues that the trial court erred by attributing $805,000 to equitable distribution, because Former Wife did not present evidence that improvements to/money spent on the home increased its value.
We review a trial court’s determination of equitable distribution for an abuse of discretion. Kovalchick v. Kovalchick, 841 So. 2d 669, 670 (Fla. 4th DCA 2003). "Distribution of marital assets and liabilities must be supported by factual findings in the judgment or order based on competent substantial evidence." Bardowell v. Bardowell, 975 So. 2d 628, 629 (Fla. 4th DCA 2008) (citing § 61.075(3), Fla. Stat.). "A trial court’s legal conclusion that an asset is marital or nonmarital is subject to da novo review." Mondello v. Torres, 47 So. 3d 389, 392 (Fla. 4th DCA 2010).
Higgins v. Higgins, 226 So. 3d 901, 903–04 (Fla. 4th DCA 2017); see also Gromet v. Jensen, 201 So. 3d 132, 133 (Fla. 3d DCA 2015) ("A trial court’s determination that an asset is marital or nonmarital involves mixed questions of law and fact. Although we defer to the trial court’s factual findings if they are supported by competent, substantial evidence, we review the trial court’s legal conclusions de novo."). "[A]ppellate courts are to defer to trial courts’ findings of whether disputed property is marital or nonmarital." Hooker v. Hooker, 220 So. 3d 397, 404 (Fla. 2017) (emphasis added).
In dissolution of marriage cases, section 61.075(1), Florida Statutes (2019), requires a trial court to equitably distribute the parties’ marital assets and to start by determining whether an asset is marital or nonmarital. Absent a justification otherwise, "the court must begin with the premise that the distribution should be equal." Kaaa v. Kaaa, 58 So. 3d 867, 870 (Fla. 2010) (quoting § 61.075(1), Fla. Stat. (2007)), superseded by statute on other grounds, Ch. 2018-56, Laws of Fla., as recognized in Matyjaszek v. Matyjaszek, 255 So. 3d 372, 374 (Fla. 4th DCA 2018).
In a situation such as we face here, where an asset, was acquired pre-marriage or during the marriage with one spouse’s funds, two threshold issues require our adjudication: (i) whether the asset itself was a marital asset, and/or (ii) whether the enhancement in value during the marriage was a marital asset.
i. Whether the Marital Home was a Marital Asset
I begin, by acknowledging that Former Husband (1) purchased the marital home with his own funds prior to the parties’ marriage, and (2) titled it solely in his and his mother’s names. Clearly, the marital home was not a marital asset under section 61.075 when the parties married in 1997. See Young v. Young, 606 So. 2d 1267, 1270 (Fla. 1st DCA 1992).
The trial court erred insofar as it found that the marital home became marital property because of an interspousal gift.
"An interspousal gift during the marriage is a marital asset." Hooker, 220 So. 3d at 403 (quoting Maddox v. Maddox, 750 So. 2d 693, 694 (Fla. 1st DCA 2000)). An interspousal gift "is made when a donor, intending to make a gift, delivers the gift to the donee, and relinquishes all possession and control of the gift." Id. (quoting Mills v. Mills, 845 So. 2d 230, 233 (Fla. 3d DCA 2003)).
Hooker clarified that an appellate court’s job is not to second guess factual determinations when reviewing the trial court’s characterization of marital assets. However, Hooker involved circumstances quite different than the instant case, starting with the fact that the properties at issue in Hooker were purchased during the marriage, one was used as part of the parties’ business, and the other was introduced by the husband as a "gift." Hooker, 220 So. 3d at 400–01; see also Pardes v. Pardes, 335 So. 3d 1241, 1248 (Fla. 3d DCA 2021) ("Hooker did not establish any bright-line rule for when property must be designated as marital or nonmarital. Such a determination was (before Hooker) and remains (after Hooker) a fact-intensive determination.").
The evidence below demonstrated that, although Former Wife lived in and enjoyed some dominion over the home, dominion and control never was "surrendered" to her. In other words, no competent, substantial evidence showed that Former Husband "intended to divest himself of complete dominion and control to his Wife." Hooker, 220 So. 3d at 406. Nor did any testimony or other evidence support an intention to gift the property to Former Wife during the marriage, such as the addition of her name to the deed. Thus, in the absence of such "donative intent" evidence, the marital home itself is not a marital asset.
ii Whether the Enhancement in Value was a Marital Asset
"[I]mprovements or expenditures of marital funds to a nonmarital asset does not transform the entire asset into a marital asset; rather, it is only the ‘enhancement in value and appreciation’ which becomes a marital asset." Martin v. Martin, 923 So. 2d 1236, 1238–39 (Fla. 1st DCA 2006) (quoting Strickland v. Strickland, 670 So. 2d 142, 143 (Fla. 1st DCA 1996) (Joanos, J., concurring in part and dissenting in part)); see also § 61.075(6)(a)1.b., Fla. Stat. (2019) (" ‘Marital assets and liabilities’ include: … [t]he enhancement in value and appreciation of nonmarital assets resulting from the efforts of either party during the marriage or from the contribution to or expenditure thereon of marital funds or other forms of marital assets, or both."); Eager v. Eager, 696 So. 2d 1235, 1236 (Fla. 3d DCA 1997) ("[T]he enhancement in value of a non-marital asset due to marital labor or effort is a [marital] asset subject to equitable distribution").
As discussed above, the parties’ marital home itself is not a marital asset—it was purchased prior to the marriage and Former Wife was never added to the deed. However, the enhancement in value of the marital home during the twenty-two-year marriage can be considered a "marital asset". for purposes of equitable distribution. See § 61.075(a)1.b., Fla. Stat. (2019).
"[T]he passive appreciation of a nonmarital asset, such as [a] marital home, is properly considered a marital asset where marital funds or the efforts of either party [during the marriage] contributed to the appreciation." Kaaa, 58 So. 3d at 870. "While these contributions need not be strictly monetary and may include marital funds or the efforts of either party, they must enhance the value of the property." Id. at 871. "Such findings are to be made by the trial court based on evidence presented by the parties." Id. at 870 (emphasis added).
To determine whether the marital home’s appreciation was a marital asset, we must answer two questions. First, was the value of an originally nonmarital asset "enhanced" during the marriage? Second, was this enhanced value, the appreciation, attributable in some measure to marital funds or the efforts of either party during the marriage?
Where a party seeks entitlement to an increase in value of the other’s non-marital property, that party has the burden of proof as "the party alleging entitlement to an asset." See Pereboom v. Pereboom, 959 So. 2d 1205, 1206 (Fla. 4th DCA 2007) ("Consistent with the general rule that the party alleging entitlement to an asset has the burden of proof, the burden was on the wife to establish any enhancement in value of the non-marital asset which would bring it within the requirements of section 61.075(5)(a).").
Thus, Former Wife, as the party seeking entitlement to a non-marital asset, bore the initial burdens of proof as to (1) whether the marital home enhanced in value during the marriage and (2) whether the enhancement was attributable in some measure to marital funds or the efforts of either party during the marriage. As discussed below, if Former Wife met her initial burdens, the burden of proof then shifted to Former Husband to show what portions of the enhanced value are exempt.
Here, Former Wife met her initial burdens. First, there is no dispute that the marital home had enhanced in value since the marriage. Former Wife did not challenge Former Husband’s real estate expert’s testimony that the marital home had enhanced in value to $1.25 million.
Second, Former Wife presented competent substantial evidence that the increase in value was attributable in some measure to marital funds and efforts. The trial court found that "[s]ignificantly, the home was maintained and improved with the use of marital funds, which includes payment for the upkeep and repair of the home." Moreover, the court noted that Former Wife "was maintaining the home, raising a family … paying for the upkeep of the home from marital funds and [Former Husband was] benefitting from her $75,000 in settlement money to improve the home."
Accordingly, Former Wife satisfied her initial burdens of proof as to whether the marital home enhanced in value during the marriage and that this enhancement was attributable in some measure to marital funds or the efforts of either party during the marriage. The burden of proof then shifted to Former Husband.
iii. Whether Former Husband met his Burden to Show a Portion of the Enhanced Value was Exempt from Equitable Distribution
As detailed in Yitzhari v. Yitzhari, 906 So. 2d 1250 (Fla. 3d DCA 2005):
Once it was established that marital labor or funds were used to improve these assets, the burden then shifted to the husband to show that some, if any, portion of the enhanced value was exempt from equitable distribution. Gaetanir–Slade v. Slade, 852 So. 2d 343, 347 (Fla. 1st DCA 2003) (stating that "once a non-owner spouse establishes that marital labor or funds were used to improve [an asset] that was nonmarital, the owner-spouse has the burden to show which parts [of the enhanced value] are exempt ") (emphasis added) (citing Adkins v. Adkins, 650 So. 2d 61, 68 (Fla. 3d DCA 1994) (on rehearing)); O’Neill v. O’Neill, 868 So. 2d 3, 5 (Fla. 4th DCA 2004) (stating that "once it is established that marital labor was used, the burden falls to the party claiming that the increase is nonmarital to establish whether any part of the increase was the result of passive market conditions and, thus, is exempt from equitable distribution"); Young v. Young, 606 So. 2d 1267, 1270 (Fla. 1st DCA 1992) (confirming that a trial court cannot refuse to distribute the appreciated value of a nonmarital asset improved by marital labor or funds "because the [non-owner spouse] ha[s] not established how much the improvements enhanced the value of the property," and that the burden is on the owner spouse to prove whether any part of the enhanced value is exempt from distribution). The trial court, therefore, clearly erred when it concluded that the wife was entitled to no equitable distribution of any of these assets because she had failed to pin-point the dates and times of the parties’ contributions of labor or funds to these assets. It was the husband’s burden to show what portion, if any, of the enhanced value was exempt from distribution.
Yitzhari, 906 So. 2d at 1254 (alterations in original); see also Higgins, 226 So. 3d at 906 ("Once [the "party asserting entitlement to an increase in the value of nonmarital property"] establishes that marital labor or funds were used to enhance the nonmarital property’s value, the burden shifts to the other party to show that some, if any, portion of the enhanced value is exempt from equitable distribution,").
Judge Warner's dissent criticizes Yitzhari and Young without acknowledging that our O'Neill and Higgins opinions also shift the burden to the property's original owner.
Section 61.075 begins with the mandate that "in distributing the marital assets and liabilities between the parties, the court must begin with the premise that the distribution should be equal .… " § 61.075(1), Fla. Stat. (2019). Additionally, the court may consider "[a]ny other factors necessary to do equity and justice between the parties." § 61.075(1)(j), Fla, Stat. (2019). Thus, Former Husband had the burden to show what portions of the marital home were exempt from equitable distribution and justified an exception to the "premise that the distribution should be equal."
Once the wife established that marital funds or labor were used to make the improvements to the home, it was the husband's burden to show whether any part of the enhanced value was exempt from distribution because [it was] "unrelated to either marital party's management, oversight, or other contribution, but instead due solely to purely passive appreciation of the original asset."
Young, 606 So. 2d at 1270 (emphasis added) (quoting Sanders v. Sanders, 547 So. 2d 1014, 1016 (Fla. 1st DCA1989)).
To meet this burden, Former Husband sought to establish that the increase in the marital home was "due solely to purely passive appreciation" of the property, or alternatively, that only a fraction of the improvements made by Former Wife contributed to the increase in the marital home's value. The trial court rejected these arguments, reasoning that both were premised on the contention that the home would be torn down and that Former Husband's plan to continue living in the marital home negated these arguments.
The trial court found that marital funds and labor of both parties contributed, to the enhanced value of the property. See § 61.075(6)(a)1.b., Fla. Stat. (2019) ("Marital assets and liabilities include … [t]he enhancement in value and appreciation of nonmarital assets resulting from the efforts of either party during the marriage or from the contribution to or expenditure thereon of marital funds or other forms of marital assets, or both."). As noted above, the trial court found Former Wife "was maintaining the home, raising a family … paying for the upkeep of the home from marital funds and [Former Husband was] benefitting from her $75,000 in settlement money to improve the home." We must defer to the trial court's factual findings on this issue, and competent substantial evidence supports the trial court's rejection. See Hooker, 220 So. 3d at 404
Therefore, the trial court properly distributed "equitably the appreciated value of the marital home caused by inflation, market conditions, or improvements made on a residence during the marriage, even though the home may itself [have been] the separate property of one spouse." See Young, 606 So. 2d at 1270.
I thus join Judge Ciklin in affirming the trial court’s determination that Former Wife receive equitable distribution credit for half of the estimated appreciation of the marital home's value during the marriage.
It appears that the trial court erred in valuing the marital home at the time of purchase instead of at the time of marriage, for purposes of crediting Former Husband for the home's premarital value. Former Husband should receive full credit for any enhancement in the home's value during the period between the date of purchase (he paid $445,000) and the date when the home became a marital asset (Former Husband's expert forensic accountant testified that the marital home's value as of the date of the parties' marriage was $500,000.) Although Former Husband raised this issue in his motion for rehearing of the final judgment, he failed to do so in his initial brief to this Court, thus waiving the issue.
C. The Corvette
I agree with Judge Warner that the trial court erred when it awarded Former Wife more than fifty percent of the $15,150 that Former Husband received for the trade-in of his Corvette. The trial court erroneously awarded Former Wife a $9,000 credit, rather than fifty percent of $15,150 ($7,575). On remand, the trial court shall award each party an equal split of the Corvette’s trade-in proceeds.
Conclusion
The panel agrees with respect to affirmance of the trial court’s alimony award. For the foregoing reasons, I agree with Judge Ciklin to affirm the trial court’s equitable distribution award. I further agree with Judge Warner on a remand with instructions for the trial court to award each party an equal split of the Corvette’s trade-in proceeds.
Warner, J., concurring in part and dissenting in part.
While I concur in the affirmance of the alimony award and reversal of the Corvette credit, I dissent from the majority’s affirmance of the equitable distribution of the marital residence.
Facts
The husband purchased the home in which the parties resided three years prior to the marriage and titled the home in his and his mother’s names. The purchase price of $445,000 was paid for entirely with the husband’s funds. When the parties married, they moved into the home and lived in it until the dissolution of marriage proceedings.
An expert real estate appraiser valued the home at $1.25 million based solely on the land. He testified that the home, constructed in 1977, was on deep water in a boating community where many smaller homes had been torn down to build much larger mansions. As to the house itself, his report stated:
No functional or external inadequacies observed from interior and exterior inspection of the subject. The subject has been adequately maintained and was in ' average condition at time of inspection. The subject does not conform to the surrounding neighborhood due to the ranch design, dated elevation, ceiling heights and small gross living area and has reached the end of its economic life. As a result, the subject’s improvements have no contributory value.
The expert opined that the house actually decreased the lot’s value because of the tear-down cost. Thus, his testimony was not that the home was uninhabitable but that the fair market value of the property was in the land, not the building.
The husband testified that they had maintained the home over the years, but most of the replacement fixtures were done with less expensive materials and were now nine to ten years old. Although he was planning on living in the home, he testified that a tear-down valuation reflected what its value would be to a purchaser. A neighbor, who had knocked down his home and rebuilt it, testified that most of the houses in the neighborhood were knocked down or substantially renovated. He testified that the marital home was "absolutely" a tear-down.
The wife testified that she fixed things in the house when needed and maintained it. She used a settlement of a personal injury action ($75,000) to pay for fixing up the house. Contrary to the majority opinion, the wife did not testify or present any evidence that the valuation of $1.25 million was the result of active appreciation. Neither in her opening argument nor in her closing argument did she even argue that the house was worth more because of improvements that she contributed. She simply stated that she helped maintain the property, including replacing brick pavers in the driveway, doing file work, and fixing the roof after a hurricane. There were improvements made to the house, but no one testified that the fair market value of the home had been enhanced as a result of those improvements.
A CPA testified as to the amount of marital funds which the parties had expended on the home. Based upon her review of the records, she determined that the parties had spent $51,000 on improvements. While noting that Kaaa v. Kaaa, 58 So. 3d 867 (Fla. 2010), provided a method for determining a spouse’s share of appreciation in non-marital assets which increased due to the contribution of marital funds or efforts, the CPA did not apply that formula, because there was no evidence that the improvements increased the property's value. Instead, she determined that each party should receive credit for the marital funds used to improve the property.
In the amended final judgment, the trial court determined that the home was a marital asset, because the wife had treated it as her home for the duration of the marriage and had access to it. She cooked, cleaned, and took care of the husband and the children. She also worked to maintain the property by doing repairs. Marital funds were used for "living expenses, operating expenses, and taxes." The wife also used $75,000 of a personal injury settlement to help pay for new windows, cabinets, flooring, and patio area. Due to these contributions, the court relied on Hooker v. Hooker, 220 So. 3d 397 (Fla. 2017), and determined that a gift of the property to the wife had occurred, and the property was a marital asset. Alternatively, the court stated that "even if there was no donative intent, the nonmarital nature became lost during the 20 plus years of marriage based upon the parties' actions and inaction."
The court then valued the property, accepting the real estate expert's appraisal of $1.25 million, but the court did not consider the property as a "tear down" because the husband testified that he would continue to live in the home. "Therefore, the Court does not have to consider the hypothetical situation of the property being sold as a ‘teardown property’ since there is nothing compelling the home from being torn down." The court then gave the husband credit for his purchase price, resulting in $805,000 which it divided equally between the parties in equitable distribution.
Gift
I agree with Judge Forst that the court erred in determining that the wife was entitled to an interest in the property as a gift. Hooker does not support this result as the trial court stated. The length of time during which the married parties live in, maintain, and improve the residence cannot alone establish donative intent to convey to a spouse an interest in a marital residence titled in the name of the other spouse, and purchased prior to the marriage. See Hooker, 220 So. 3d at 406.
We have previously held that the improvement of nonmarital property with marital funds does not make the property a marital asset.
[T]he act of maintaining or expending marital assets to maintain or improve the cottage did not result in a conversion. See Martin v. Martin, 923 So. 2d 1236, 1238–39 (Fla. 1st DCA 2006) ("[I]mprovements or expenditures of marital funds to a nonmarital asset does not transform the entire asset into a marital asset; rather, it is only the ‘enhancement in value and appreciation’ which becomes a marital asset.") (citing Strickland v. Strickland, 670 So. 2d 142, 143 (Fla. 1st DCA 1996)).
Macleod v. Macleod, 82 So. 3d 147, 149 (Fla. 4th DCA 2012). Similarly, a spouse's contribution to the marital residence does not make the residence a marital asset. See Belmont v. Belmont, 761 So. 2d 406, 408 (Fla. 2d DCA 2000) (reversing award of home to wife where home was owned by husband prior to marriage and undisputed evidence showed that vast majority of appreciation of property was passive and only minor amount was attributable to marital efforts, and directing that only amount of nonpassive appreciation should be treated as a marital asset on remand). As Hooker stated, "[the] [w]ife’s unfettered access to and autonomy in residing, maintaining, and improving [the marital residence][] does not [independently] establish an interspousal gift for purposes of equitable distribution in a dissolution of marriage." 220 So. 3d at 406. Thus, there was no proof of any gift of the marital residence to the wife.
Enhancement in Value of Nonmarital Property
Section 61.075(6)(a)1.b., Florida Statutes (2019), provides that marital assets can include "[t]he enhancement in value and appreciation of nonmarital assets resulting from the efforts of either party during the marriage or from the contribution to or expenditure thereon of marital funds or other forms of marital assets, or both." Judge Forst’s opinion recognizes that the statute applies and requires a determination of whether there is an enhancement in value due to marital funds or effort. I disagree, however, with his placement of the burden of proof. I also disagree with the conclusion that competent substantial evidence supported an equal division of the passive appreciation of the property. Based upon the statute, as well as our prior case law, the burden of proof is on the proponent of the claim to put on evidence both to show an enhancement in value and to demonstrate that the enhancement resulted from marital funds or effort. The wife failed to present any evidence that marital effort or funds accounted for any enhancement in value.
As we noted in Pereboom v. Pereboom, 959 So. 2d 1205 (Fla. 4th DCA 2007), in evaluating whether the value of a nonmarital asset included appreciation which was enhanced by marital funds or effort, "the burden generally is on the party alleging entitlement to an asset." Id. at 1206. Further, "[c]onsistent with the general rule that the party alleging entitlement to an asset has the burden of proof, the burden was on the wife to establish any enhancement in value of the non-marital asset which would bring it within the requirements of section 61.075(5)(a)." Id. (emphasis added). Similarly, in Robertson v. Robertson, 78 So 3d 76 (Fla. 5th DCA 2012), the court held "[s]ince the Former Wife is the one asserting her entitlement to the enhanced value of the [nonmarital asset], she has the burden of proving that value." Id. at 77 (emphasis added).
As Judge Tanenbaum explained in his concurring opinion in Silvia v. Castle Key Insurance Co., 362 So. 3d 324 (Fla. 1st DCA 2023):
It is well-established in Florida that the proponent of a proposition has the burden of establishing the truth of it. See In re Ziy’s Estate, 223 So. 2d 42, 43 (Fla. 1969); cf. Bourne v. State Bank of Orlando & Tr. Co., 106 Fla. 46, 142 So. 810, 816 (1932) ("When an affirmative or pure plea is interposed to a bill of complaint, the burden of proof is on him who files it."); Dep’t of Banking & Fin., Div. of Sec. & Inv. Prot. v. Osborne Stern & Co., 670 So. 2d 932, 934 (Fla. 1996) (agreeing that "[t]he general rule is that a party asserting the affirmative of an issue has the burden of presenting evidence as to that issue" (quoting Osborne Stern & Co., Inc. v. Dep’t of Banking & Fin., Div. of Sec. & Inv. Prot., 647 So. 2d 245, 250 (Fla. 1st DCA 1994) (Booth,
J., concurring and dissenting))); Nash v. Wells Fargo Guard Servs., Inc., 678 So. 2d 1262, 1264 n.1 (Fla, 1996) (quoting approvingly "the general rule that the burden of proof on any point is upon the party asserting it" (internal quotations and citation omitted); Balino v. Dep’t of Health & Rehab. Servs., 348 So. 2d 349, 350 (Fla. 1st DCA 1977) ("The general rule is, that as in court proceedings, the burden of proof, apart from statute, is on the party asserting the affirmative of an issue before an administrative tribunal."); Martyn v. Amold, 36 Fla. 446, 18 So. 791, 794 (1895) ("The burden of proof, however, is upon the party impeaching the account stated to exhibit such fraud, mistake, or error.").
Id. at 330 (Tanenbaum, J., concurring). Thus, a claim that an enhancement of a non-marital asset constitutes a marital asset requires the proponent to provide proof both that there is an enhancement in value and that enhancement in value resulted from marital effort or funds. In other words, the proponent must provide proof of some amount of value which can be attributed to marital effort.
Judge Forst’s opinion, however, requires the proponent to prove only an enhancement in value and that marital effort was made, thus not requiring the proponent to prove that the enhancement of value was the result of marital effort. His opinion relies on Yitzhari v. Yitzhari, 906 So. 2d 1250 (Fla. 3d DCA 2005), for the proposition first espoused in Young v. Young, 606 So. 2d 1267, 1270 (Fla. 1st DCA 1992), that ‘[o]nce it was established that marital labor or funds were used to improve these assets, the burden then shifted to the husband to show that some, if any, portion of the enhanced value was exempt from equitable distribution." Id. at 1254. In other words, the onus is on the owner of the non-marital property to prove no enhancement in value resulted from marital funds or effort, rather than the non-owning spouse to prove that enhancement in value was due to marital effort.
Young does not follow the statutory language. Instead, Young creates a presumption that the enhancement in value of a non-marital asset is the result of marital effort when the spouse claiming it as a marital asset shows the enhancement and that some marital effort was made. Then, the burden shifts to the other spouse to show that the enhancement in value was not due to marital effort. The statute, however, does not include a presumption, and shifting the burden of proof to the opposing party is contrary to historical precedent as explained by Judge Tanenbaum in Silvia, supra.
Application of Kaaa v. Kaaa
I find this misallocation of the burden of proof is also inconsistent with Kaaa v. Kaaa, 58 So. 3d 867 (Fla. 2010). In Kaaa, the supreme court considered whether passive appreciation of a non-marital asset could be considered a marital asset. There, the husband purchased a home prior to marriage with a mortgage on the home. Id. at 869. After marriage, the parties lived in the home for the duration of the twenty-seven year marriage. Id. Marital funds were used to pay down the mortgage and to improve the home with a carport. Id. The property increased in value over the years from the purchase price of $36,500 to a fair market value of $225,000. Id. The trial court determined that only the amount of the marital contributions constituted an enhanced value subject to treatment as a marital asset. Id. On appeal, the Second District agreed that the wife was not entitled to any passive appreciation. Id.
On review by the supreme court, however, the court concluded that passive appreciation of a non-marital asset may consti- tute a marital asset, depending on a fact intensive determination by the trial court. In examining the statute, the court stated:
This language clearly provides that under certain circumstances, the appreciation of a. nonmarital asset is indeed a marital asset … [W]e conclude that the passive appreciation of a nonmarital asset, such as the Kaaa’s marital home, is properly considered a marital asset where marital funds or the efforts of either party contributed to the appreciation. Such findings are to be made by the trial court based on evidence presented by the parties.
….
[W]e emphasize that the trial court must make a finding of fact that the non-owner spouse made contributions to the nonmarital property during, the course of the marriage. While these contributions need not be strictly monetary and may include marital funds or the efforts of either party, they must enhance the value of the property.
Id. at 870, 871(emphasis added).
The court then established a methodology for the trial court to follow in order to arrive at a proper determination of whether a non-owning spouse is entitled to passive appreciation of a non-marital asset.
We note that the trial court’s task in this regard is an extremely fact-intensive one, and there are certain steps that each court must take. First, the court must determine the overall current fair market value of the home. Second, the court must determine whether there has been a passive appreciation in the home’s value. Third, the court must determine whether the passive appreciation is a marital asset under section 61.075(5)(a)(2). This step must include findings of fact by the trial court that marital funds were used to pay the mortgage and that the nonowner spouse made contributions to the property. Moreover, the trial court must determine to what extent the contributions of the nonowner spouse affected the appreciation of the property. Fourth, the trial court must determine the value of the passive appreciation that accrued during the marriage and is subject to equitable distribution. Fifth, after the court determines the value of the passive appreciation to be equitably distributed, the court’s next step is to determine how the value is allocated.
Id. at 872. The court cited with approval the allocation formula espoused in Stevens v. Stevens, 651 So. 2d 1806 (Fla. 1st DCA 1995):
If a separate asset is unencumbered and no marital funds are used to finance its acquisition, improvement, or maintenance, no portion of its value should ordinarily be included in the marital estate, absent improvements effected by marital labor. If an asset is financed entirely by borrowed money which marital funds repay, the entire asset should be included in the marital estate. In general, in the absence of improvements, the portion of the appreciated value of a separate asset which should be treated as a marital asset will be the same as the fraction calculated by dividing the indebtedness with which the asset was encumbered at the, time of the marriage by the value of the asset at the time of the marriage. If, for example, one party brings to the marriage an asset in which he or she has an equity of fifty percent, the other half of which is financed by marital funds, half the appreciated value at the time of the petition for dissolution was filed, § 61.075(5)(a) 2, Fla. Stat. (1993), should be included as a marital asset. The value of this marital asset should be reduced, however, by the un
paid indebtedness marital funds were used to service.
Id. (emphasis omitted) (quoting Stevens, 651 So. 2d at 1307–08). Although not quoted in Kaaa, the Stevens court also provided for the assessment of marital funds for improvements, "[o]n remand, the trial court should require the former husband to pay the former wife one-half the amount by which either party's management, oversight, or other contribution during the marriage enhanced the value of the Robbie Road parcel …." Stevens, 651 So. 2d at 1308 (emphasis added).
While the Kaaa opinion focused on non-marital property encumbered by a mortgage paid with marital funds, its methodology is not limited to mortgages. One of the facts which the trial court must find is "to what extent the contributions of the nonowner spouse affected the appreciation of the property." Kaaa, 58 So. 3d at 872 (emphasis added.) Thus, Kaaa does not rely on a presumption that marital funds spent on non-marital property created all the appreciation in the property. Instead, the trial court's duty is to make a factual determination of the extent that contributions affected the appreciation of the property.
The trial court's findings do not come close to meeting the method required in Kaaa. The court relied on the real estate appraisal of $1.25 million, thus an appreciation of $805,000. The court did not value the contributions of the wife, except for the $75,000 from the personal injury settlement, which is a marital asset. See Roth v. Roth, 312 So. 3d 1021, 1025–26 (Fla. 2d DCA 2021). Nor did the trial court determine to what extent the appreciation was due to marital contributions. The court simply had no evidence on which to make that determination. The real estate expert, the husband, and the neighbor all testified that the house itself had no value; it was at the end of its economic life and would be torn down by a prospective purchaser. The trial court rejected consideration of that testimony because the husband testified that he would continue living in the home. But that consideration does not affect the home's fair market value, which is the standard to be used in valuing assets. See Smith v. Smith, 896 So. 2d 818, 823 (Fla. 5th DCA 2005). In short, the trial court had no evidence from which to conclude that the marital contributions and effort resulted in any appreciation of the property, as the entire appreciation was in the value of the land, not the home.
Conclusion
I would hold that the trial court erred in determining that the property was a marital asset, and the wife presented no evidence to satisfy her burden of proof that the value of any appreciation was the result of marital funds or labor. Thus, I would reverse the equitable distribution and direct that the entire value of the home be treated as a non-marital asset. Section 61.075(1)(g) does permit the trial court to consider an unequal distribution of marital assets based upon "[t]he contribution of each spouse to the acquisition, enhancement, and production of income or the improvement of, or the incurring of liabilities to, both the marital assets and the nonmarital assets of the parties." The court should be allowed to consider whether the wife’s contributions to the home merited an unequal distribution of marital assets. But the evidence in this case does not justify treating the $805,000 of passive appreciation as a marital asset subject to equal distribution between the parties.