Florida Court Issues Opinion in Complex Asset Distribution Case
Recently, Florida’s Fifth Circuit Court of Appeal issued a decision in the case of Mills v. Mills. The case involved a divorcing couple’s dispute over a $245,000 investment loss. Asset, and liability, distribution is a critical part of any Florida divorce case. If you are considering divorce, and you have any questions about the division of assets or debts, please contact an experienced Orlando property distribution attorney for immediate legal assistance.
The Distribution of Liabilities
Mr. Mills sat on the board of Florida State Bank, a startup company that was created in 2007. As a director, he was required to make a large investment in the company. His wife was aware of his status on the board of the bank, but was not aware of the size of the investment that he made. Mr. Mills took out a home equity loan, on the couple’s marital property, to secure the final $100,000 that was needed to make the investment. However, Mr. Mills never told his wife about the loan, and, in fact, he admitted to forging his wife’s signature on the home loan documents. Ultimately, that money, along with an additional $145,000 investment in the start up company, was lost. Mrs. Mills argued that the investment loss should be considered a nonmarital liability, because of the fact that her signature was forged on the loan, and because she had no knowledge of the investment. The trial court disagreed, stating that Mr. Mills had also made several successful investments on behalf of the couple, and now the fruits of those successful investments were subject to Florida’s equitable distribution process. Therefore, according to the trial court, equitable distribution required dividing up the investment losses as well. However, on appeal, the Fifth Circuit court reversed that decision.
Fraud Related Losses are Nonmarital Liabilities
When reversing the decision, the court cited Florida law, which states that a liability incurred by using an unauthorized signature, which was not later ratified by the other spouse, will always be deemed a nonmarital liability. Therefore, while the $145,000 investment, which was not obtained using an unauthorized signature, qualified as a marital liability, the remaining $100,000 from the home equity loan must be counted solely as a liability for the husband.
A Statute Will Supersede ‘Equitability’ Considerations
The court implicitly acknowledged the logic behind the trial court’s decision. The trial court was simply taking the forgery into their greater equitable distribution calculation. However, in Florida divorce cases, statutory language will supersede notions of equitability. The court cites Prest v. Tracy, an asset distribution case from 2000, which concluded that appeals courts must reverse any decision that purports to divide assets or liabilities ‘equitably’ but fails to remain consistent with statutory language.
Contact An Experienced Orlando Divorce Lawyer
This case shows how complicated property distribution disputes can become. At the office of Steve W. Marsee, P.A., our Florida divorce team has extensive experience handling complex asset distribution cases. You deserve your fair share of the marital assets, and you should not get stuck with a disproportionate share of the marital liabilities. If you have any questions about property distribution, or Florida divorce in general, please do not hesitate to contact our Orlando office today at (407) 521-7171.