Brock v. Brock

• Decision Date: 02 April 1997
• Docket Number: No. 95-1798,95-1798
• Citation: 690 So.2d 737
• Parties: 22 Fla. L. Weekly D869 Sandra BROCK, Appellant, v. Newman BROCK, Appellee.
• Court: Florida District Court of Appeals

Page 737

690 So.2d 737

22 Fla. L. Weekly D869

Sandra BROCK, Appellant, v. Newman BROCK, Appellee.

No. 95-1798.

District Court of Appeal of Florida Fifth District.

April 2, 1997.

Lawrence J. Nixon, Daytona Beach, and Edna Caruso and Barbara J. Compiani of Caruso, Burlington, Bohn & Compiani, P.A., West Palm Beach, for Appellant.

William H. Morrison of Baldwin & Morrison, P.A., Fern Park, for Appellee.

W. SHARP, Judge.

Sandra Brock, the former wife, appeals from a final judgment of dissolution which terminated her twenty-five year marriage to Newman Brock, the former husband. She argues that the trial judge erred in making equitable distribution of the parties' marital assets because the judgment failed to identify the marital assets, failed to value the assets, and failed to dispose of all of the marital assets and liabilities. She also argues the trial court breached its discretion in making the equitable distribution award and the alimony award because it failed to consider the tax consequences of the awards and it unfairly imputed a high income to her from her inherited investments. Finally, she argues the trial court erred in denying her an award of costs and attorney's fees, in view of her former husband's superior income-earning capacity and financial resources. We agree in part, and reverse.

This was a long term marriage, during the course of which two children were born. At the time of the final hearing, both had attained 18 years of age. The son had just entered college and the daughter had just graduated, and was contemplating entering law school. For the former wife, this had been an old fashioned kind of marriage, during which she devoted herself to raising the children, being a housewife, and assisting her husband in his law career, which culminated in his election as a circuit judge in 1991. The trial court found that both parties contributed equally to the marriage, and it felt it should equally distribute the marital assets, and seek to "equalize" the parties' incomes, because there was not enough income or income earning potential to allow both parties to afford the same standard of living they enjoyed while they were married.

I. Equitable Distribution of the Parties' Marital Assets

In the final judgment, the trial court simply allocated a list of assets to the former wife, and a list to the former husband. No values are found for many of the assets distributed. Specifically, no values are given by the court for the marital residence and furnishings, and the Mazda automobile, which were awarded to the wife; and no values were given for the rental property, the Lexus automobile, and office equipment, which were awarded to the husband. And there is no provision in the judgment to allocate the marital liabilities to one party or the other.

One obvious inequity resulting from this over-sight is the apparent allocation of the Lexus finance debt to the former wife. The Lexus had been financed through a home equity loan placed on the marital residence. The Lexus was distributed to the former husband, while the residence was distributed to the wife, thereby reducing the value of the distribution to her by the debt owed on the Lexus.

Another defect in the equitable distribution plan created by the final judgment is its failure to identify as a marital asset, and equitably distribute a $58,000.00 legal fee earned by the former husband during the marriage. He testified the fee had been earned as a result of his work as an attorney during the marriage, but he received it after the parties separated. It was not a contingency fee. He admitted he deposited the $58,000.00 in his sole bank account. At the time of the final hearing, he testified there remained only $48,000.00, and that some of the fee had been spent on taxes. Whether or not the $10,000.00 expenditure discharged a marital liability of the parties, or just the former husband's, ¹ clearly the legal fee was a marital asset, ² which should have been so identified and distributed as part of the marital assets. Because that asset is substantial, it alone could make the distribution of marital assets unequal, a result not intended by the trial court, nor sought to be justified.

The former wife also argues that the trial court erred in not valuing or making an immediate award to her of a portion of her former husband's state retirement pension earned as a judge, during the parties' marriage. Since the former husband only became a judge in 1991, and the wife filed the petition for dissolution in 1994, this marital asset would not have been very substantial. Nevertheless, it clearly was a marital asset. ³

The trial judge refused to make any ruling on the retirement pension, because as he explained at the hearing, it was not yet "vested." However, that is no reason not to recognize it as a marital asset. If determining a present value of the marital portion of the pension at the time of the final hearing was too expensive or speculative, the court could have made an award of a portion of the future payments when and if received by the former husband. ⁴ The provision in the judgment which retains jurisdiction to conduct post-judgment proceedings on the former wife's "claim" to an interest in the pension does not give her a clear interest nor an effective remedy. ⁵

Section 61.075(3) requires that any distribution of marital assets or liabilities be supported by written fact findings in the judgment. These findings should include identifying all the parties' substantial marital assets, and valuing the marital assets and liabilities, as of an appropriate date. ⁶ The court should distribute all marital property and liabilities. ⁷ The court should articulate reasons for any unequal distribution of the marital assets and liabilities, as well as an equal one. ⁸

The court made findings sufficient to justify a close to equal distribution of the parties' marital assets. The problem in this case is that we cannot determine from a review of the judgment, whether or not there was a close to equal distribution of marital assets and liabilities because there are insufficient value findings, and identification of marital assets and debts. This constitutes reversible error. See Lavelle v. Lavelle, 634 So.2d 1111 (Fla. 2d DCA 1994); Carroll v. Carroll, 471 So.2d 1358 (Fla. 3d DCA), rev. denied, 482 So.2d 347 (Fla.1985).

Further, the record on appeal is lacking as to evidence to support findings on valuation for some of the marital assets, since none was presented at the final hearing. Behind the statute's requirement of fact findings, which burdens both trial counsel and trial judges in dissolution cases, is the concomitant requirement that there be competent substantial evidence in the record to support those findings. ⁹ This is the attorneys' or pro-se parties' burden. A trial judge cannot create findings out of thin air.

The recourse in such cases is to reverse and remand for the purpose of reconsidering and reconstituting the final judgment. ¹⁰ If necessary, and appropriate, the trial judge may take additional testimony to determine proper valuation of assets, and liabilities. See Cortez-Williams v. Douglass, 659 So.2d 1250 (Fla. 1st DCA 1995); Saare v. Saare, 610 So.2d 628 (Fla. 1st DCA 1992); Nicewonder v. Nicewonder, 602 So.2d 1354 (Fla. 1st DCA 1992). In addition, the trial court may reconsider the alimony award and its denial of attorney fees and costs to the former wife, since these awards are necessarily part of the total scheme of achieving equity between divorcing parties. ¹¹ However, we note infra some additional problems with the judgment under review regarding the determination of the amount of alimony and denial of an attorney's fee award to the former wife, in order to provide guidance on remand.

II. Amount of Permanent Alimony Award; Denial of Award of Attorney Fees to The Former Wife

One problem with reviewing the propriety of the permanent alimony award of $1,300 per month to the former wife, and the trial court's denial of any attorney's fee or cost award to her, is that the trial judge used gross income figures to compute the former wife's projected future income, and net figures in computing the former husband's. The trial court found that the former wife's "potential income" (without alimony) was $44,000 to $47,000 per year. This sum was calculated by imputing a gross income to the former wife of $12,000 to $15,000 per year, working at a minimum wage-earning job as she had no current work or job skills, and $32,000 per year from "prudent investment of her liquid assets." She had inherited approximately $444,000.00 in stocks and bonds from her family. These projected incomes are all gross figures.

However, the trial court found that the former husband's income as a circuit judge was $72,000 "net," plus $3,500 from other assets. Computation of the former husband's net earnings as a circuit judge was achieved by deducting amounts for life insurance, health insurance, social security, retirement, medicare, and income tax from his gross earnings. Comparing net incomes with gross incomes is like comparing "apples to oranges," to use a grossly over-worked metaphor. Net figures should be used for both parties. ¹²

Further, in projecting a $32,000 per year gross income to the former wife to be earned by her inherited assets, it appears the trial judge took the most optimistic figure postulated by the investment expert witness, without discounting or considering the cost of moving the former wife's investment portfolio into high-income, low growth-type of investments, from the mix of nontaxable and taxable, growth and moderate-income investments in which the wife's portfolio was currently invested. This transformation would be costly to her, the investment witness testified, because she would have to pay commissions, capital gains taxes, and penalties to prematurely move assets out of her IRA. The tax consequences of such mandated...