Gulbrandsen v. Gulbrandsen

• Decision Date: 14 October 2009
• Docket Number: No. 3D07-3043.,3D07-3043.
• Citation: 22 So.3d 640
• Parties: Terje GULBRANDSEN, Appellant, v. Lorraine GULBRANDSEN, Appellee.
• Court: Florida District Court of Appeals

22 So.3d 640

Terje GULBRANDSEN, Appellant, v. Lorraine GULBRANDSEN, Appellee.

No. 3D07-3043.

District Court of Appeal of Florida, Third District.

October 14, 2009.

DeVane & Dorl, and William N. DeVane, Jr., Marathon; Greene Smith, and Cynthia L. Greene, Miami, for appellant.

Joel Lee Sherman, Tampa, for appellee.

Before SHEPHERD and SALTER, JJ., and SCHWARTZ, Senior Judge.

SALTER, J.

The former husband in a dissolution of marriage action, Terje Gulbrandsen, appeals an amended final judgment of dissolution of marriage. The former husband raises seven alleged errors by the trial court, although four of these relate to the valuation of specific assets. We reverse on issues relating to an equitable distribution of rights in a patent application and related corporation, and as to both alimony awards; we affirm as to all other points.

Background

At the time the former wife filed the petition below, the parties had been married 23 years. She was 56 years old, and the former husband was 55 years old. The parties' two children had attained the age of majority before the filing date.

Although the former wife had worked as a professional in the financial industry before marrying, and early in the marriage, she devoted most of the years of the marriage to the care of the parties' children and home. Her doctor testified at trial that she presently suffers from activity-limiting back and neck conditions.

The former husband worked as an engineer and inventor and has enjoyed good health. He had successfully started and sold a company in his area of specialty, industrial controls. The parties prospered, owning a home in Maryland that sold for $1,800,000 (yielding net proceeds of $1,400,000), a condominium in Marathon, Florida, found by the trial court to be worth $675,000, a retirement account of $1,187,000, and other assets.

During the later years of the marriage, the former husband had devoted his efforts to an invention known as the "Singulator," a component intended to improve the manner in which paper inserts are collated with newspapers and other periodicals. Working on a fifty-fifty basis with a partner who had worked for a major metropolitan newspaper, the former husband and his partner filed a provisional patent application for the Singulator in 2004.¹ The former husband and his business partner also formed a limited liability company, "RT Solutions," to handle the contractual and accounting matters relating to their efforts. RT Solutions was capitalized with "sweat equity," and it entered into agreements with a Dutch company whereby RT Solutions was to be paid $17,000 per month for two years for the joint development of the Singulator. After ten months, however, the former husband's partner stopped invoicing the Dutch company for the monthly payments.

Although the former husband characterized his work on the Singulator as a "hobby," he and his co-applicant spent tens of thousands of dollars on their patent applications for the Singulator, and they travelled extensively to Amsterdam, Chicago, Atlanta, and other locations in connection with the device and its prospective use by newspapers.

The Amended Final Judgment

The trial court entered its judgment of dissolution in substantially the same form as the proposed judgment submitted by the former wife.² The equitable distribution provisions were largely unremarkable. Each party retained her or his remaining proceeds from the sale of the Maryland home,³ the Marathon condominium was valued at $675,000 (each party's share, $337,500), the retirement account was divided equally ($587,000 per party), the parties retained their Jaguar and Infiniti automobiles, and certain accounts receivable of RT Solutions were split as well.

With regard to the Singulator patent application and RT Solutions, the trial court found that these assets were approximately 50% developed at the time of the dissolution, such that the former husband's share of each was 25% and the former wife's equitable distribution should be 12.5% of each. The language of the amended final judgment regarding these assets (and various future contingencies) was sweeping:

The Wife's entitlement to a 12.5% interest includes a 12.5% interest in any and all prospective future revenue streams that may be derived from the prospective patent, patent application, or amended patent application, future income streams associated with the Singulator or any of its component application(s), and future income streams associated with the Singulator process, its component applications, or transferrable integrations. Further, the Wife is entitled to a 12.5% interest in RT Solutions, LLC, and any successor entities, successor corporations, successor business entities, successor LLC's, patents, successor patents, and amended patents.

Am. Final J. of Dissolution of Marriage, ¶ 22, p. 16.

The trial court also found that a $40,000 payment by the former wife's mother— paid $10,000 to custodial accounts for each child and $20,000 to them, but also deposited by the parties into the children's custodial accounts—was made with a condition. That condition, which the court found had been accepted by the parties, was that the former wife's mother be paid 6% interest on the payment, or $2,400 per year. Accordingly, the trial court specified that the parties would be required to continue to pay one-half of that obligation, at $300 per calendar quarter each.

The amended final judgment also awarded the former wife periodic permanent alimony and lump sum alimony. The periodic permanent alimony was computed as the present value of the former wife's monthly cash flow shortfall ($2,250) from the date of the petition through the former husband's estimated retirement date. This value, $237,000, was directed by the court to be paid by the former husband within ten days of entry of the final judgment from his remaining proceeds of sale of the Maryland residence.

The trial court then awarded the former wife the former husband's one-half share of the Marathon condominium (each half valued at $337,500) as lump sum alimony in addition to the lump sum cash award of permanent period alimony. Without addressing the nearly-offsetting distribution of smaller assets (a boat, a Rolex watch, the automobiles, and the accounts receivable) the bottom line on the three major assets (Maryland home proceeds, retirement account, and Marathon condominium, totaling $2,991,000) as adjusted by these alimony awards, was an allocation of $2,081,000 to the former wife (70%) and $910,000 to the former husband (30%).⁴

Analysis

We find no error in the values assigned by the trial court to the boat or the Rolex watch. These values were based on cost and the sparse testimony by the parties. The appellant, former husband, did not present expert valuation testimony that might have been more probative, and chances are that this might have cost more than any indicated reduction in fair market value.

Nor do we find merit in the former husband's arguments that the former wife should not have been awarded one-half of an RT Solutions receivable and one-half of an amount distributed by RT to the former husband's business partner. The receivable award was subject to a "pay on pay" provision; "the Wife shall receive her share of the receivable, up to the total of $29,750, at the same time as the Husband and [the former husband's business partner] receive any amount of the receivable." This provision made this distribution to the former wife subject to the inherent collection risk in any receivable. The former wife's half of an amount that had been paid by RT to the former husband's partner ($44,000), but not to the former husband, reflects a finding based on competent substantial evidence—other amounts were distributed equally between the two partners, and it was reasonable to conclude that the former husband deferred receipt of the income for attempted tactical advantage in the dissolution proceeding.⁵

Similarly, the record supports the trial court's analysis and conclusions regarding the $40,000 paid to the parties by the former wife's mother during the marriage. It was undisputed that the proceeds were invested for the benefit of the children of the marriage (providing an equal benefit to both parties to the marriage) and that the parties agreed to pay 6% interest to the former wife's mother upon her request. The interest, $2,400 per year, was then apportioned equitably for payment in equal shares by each party.

More detailed assessment is warranted for the three remaining issues raised by the former husband: the broadly-crafted interests in the Singulator patent application and in RT Solutions awarded to the former wife; the permanent periodic alimony; and the lump sum alimony (the former husband's half interest in the Marathon condominium). The first of these— equitable distribution of an interest in a pending patent application and thus in any later royalties or other proceeds of the patent (if issued)—is apparently a question of first impression in Florida.

The Patent Application and RT Solutions

There is ample record and legal support for the trial judge's conclusion that the former husband's personal 50% interests in the patent application and in RT Solutions were marital assets that were subject to equitable distribution. The former husband invested huge amounts of his own professional time and marital funds in the design, marketing, and patent applications relating to the Singulator. His testimony that his work on the project was a "hobby" is flatly contradicted by the record and the extent of international interest in the device.

Florida law is clear that a trial court may award one spouse one-half of the other spouse's ownership interest in a closely held corporation. Although such awards are not favored and may well produce friction or additional litigation between the former spouses, one of whom essentially becomes a shareholder in the other spouse's...