WILLIAM M. STOUGH v. LAUREL L. STOUGH
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IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA WILLIAM M. STOUGH, Appellant, v. NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED CASE NO. 1D05-3658 LAUREL L. STOUGH, Appellee. _____________________________/ Opinion filed April 21, 2006. An appeal from the Circuit Court for Duval County. Richard G. Weinberg, Senior Judge. John S. Mills and Tracy S. Carlin of Mills & Carlin, P.A., Jacksonville, for Appellant. Hal Castillo and William S. Graessle of William S. Graessle & Associates, P.A., Jacksonville, for Appellee. ERVIN, J. William M. Stough (former husband or husband) appeals from a final judgment of marital dissolution, claiming that the trial court erred (1) in declaring certain real property purchased in Alabama during the marriage and titled in both parties names to be a non-marital asset of Laurel L. Stough (former wife or wife), (2) in awarding the former wife a special equity in the $30,000 down payment used to purchase the property, (3) in authorizing the former wife a special equity for advances made to purchase the marital home located in Florida and titled in the names of both parties, (4) in determining the amount of alimony allowed the former husband, (5) in denying the former husband an award of attorney s fees, (6) in failing to specify values with respect to the distribution of personal property, and (7) in ordering visitation below the guidelines established in the Fourth Judicial Circuit. We affirm as a proper exercise of the lower court s discretion the part of the final judgment directing visitation. We reverse the judgment as it relates to the issues pertaining to the equitable distribution of the two parcels of property and remand the case with directions. Because of our disposition of the property issues, we also remand the case to the trial court with directions to revisit the remaining undisposed issues for the purpose of considering all pertinent factors necessary to do equity and justice between the parties. § 61.075(1)(j), Fla. Stat. (2001). We first agree with appellant that the lower court erred in concluding that the real property situated in Alabama and held by both parties jointly was a non-marital asset. The basis for the court s determination was that the proceeds used to acquire the property were derived from the income of the wife s separate property, an 2 irrevocable trust that had been established for the wife by her father during the marriage. In so deciding, the court apparently overlooked the fact that the wife had placed the income into a joint checking account from which practically all of the parties living expenses were paid during the course of the 19-year marriage. The wife s monthly income from the trust was in excess of $8,000, while the former husband s sole source of income was from Social Security disability payments in the monthly amount of $569.1 Section 61.075(5)(a)1 designates as a marital asset an asset acquired . . . during the marriage, individually by either spouse or jointly by them. (Emphasis added.) Florida case law interprets the statute as placing the burden on the party claiming jointly held property is not a marital asset to present proof establishing such status by the preponderance of the evidence. See Knecht v. Knecht, 629 So. 2d 883 (Fla. 3d DCA 1993). The former wife argues she satisfied her burden by offering evidence showing that nearly all, if not all, of the funds used to purchase the Alabama property were traceable to her separate trust income; therefore, she contends, it remained a nonmarital asset, because property, even in joint names, can still be deemed non-marital if it can be traced to a non-marital source. As support for her argument, the wife relies 1 The husband was permanently, totally injured as a result of an automobile accident that occurred before the marriage, and, as described by the lower court, was unemployable. 3 upon Farrior v. Farrior, 736 So. 2d 1177 (Fla. 1999), in which the supreme court approved a decision of the Second District holding that stock inherited by one of the parties to a marriage remained the wife's separate property, despite the fact that the stock had been pledged as collateral for marital loans. The court's ruling was based upon evidence disclosing that the stock had been placed in a safe deposit box, rather than a brokerage account, and had never been sold or intermingled with other marital assets. Thus, the status of the stock as the wife s separate property had never changed during the marriage. Id. at 1178-79. The motivating factor influencing the court s decision in Farrior appears to be that the property had maintained its separate identity throughout the parties marriage, unlike the facts in Adams v. Adams, 604 So. 2d 494 (Fla. 3d DCA 1992), which the supreme court in Farrior considered distinguishable. In Adams, stocks and bonds of the former husband had been placed in portfolio and margin accounts, and not only were the assets of the margin account used as security for the portfolio account, but they became intermingled with one another, as well as with marital assets, and were used as funds for the payment of marital expenses. Farrior, 736 So. 2d at 1178. The problem with appellee s argument at bar is that the funds used to purchase the Alabama property came from the same source used to pay nearly all of the family s expenses -- the trust income, which had been placed by the wife in the 4 parties joint checking account during the marriage. In fact, the husband testified without contradiction that he expended funds far in excess of those that he had placed in the account from his own limited resources, such as the purchase of fishing boats. Such evidence is clearly consistent with the presumption of a marital gift made by the wife from her separate funds. The analysis of the Fifth District in Archer v. Archer, 712 So. 2d 1198 (Fla. 5th DCA 1998), provides further insight into the resolution of the question of whether a spouse s separate, non-marital property is entitled to retain such status by reason of the actions undertaken by the spouse during the course of the marriage. In Archer, the former wife had transferred her separate personal property, consisting of a money fund, certificates of deposit, mortgage securities and stocks, into a joint account. The parties used certain assets in the account for the purpose of purchasing items to satisfy their marital living expenses. The court noted that because the mortgage securities and the stock had remained intact since the wife brought them with her into the marriage, they remained traceable as the former wife s separate property. The court continued, however, that the remaining assets became untraceable due to their being commingled with marital assets and used for the purchase of marital items during the course of the marriage. Id. at 1200. The court reached its conclusion by interpreting section 61.075 as creating a presumption of a gift to a spouse of one-half of jointly 5 held property if the separate property of the other spouse is commingled with nonmarital property, and it decided that because the wife had not rebutted the presumption in regard to the assets that were commingled, they became transformed into marital property. Id. In the present case, the burden was on the wife to rebut the presumption that the funds used in the joint account to purchase the Alabama property were not a gift of one-half of the jointly held funds, which were commingled with those of the husband, and used to pay both the ordinary and extraordinary expenses of the marriage. She failed to meet her burden because she was unable to show that the trust income remained identifiable as her separate property and could be traced to a non-marital source. For the same reasons, we conclude that the former wife is not entitled to a special equity in the $30,000 down payment used to acquire the property, because she failed to meet her burden of proof to show that she did not intend a marital gift by placing trust income into a joint account used to advance funds for the property s purchase. As further support for our conclusion, we note that the Alabama property was sold during the pendency of the divorce proceedings, and evidence was presented that each party obtained $105,000 from the proceeds of the sale, with the consent of both. 6 We reach the same conclusion as to both of the two advances the former wife used to purchase the marital home, which the parties acquired in 1994, during the marriage and which was held by them as tenants by the entireties. The trial court determined that the wife was entitled to a special equity by reason of two down payments for the purchase of the property in the amounts of $10,000, and $95,000, the latter amount financed from the trust established by the wife's father. The remaining balance of the purchase price was obtained through a conventional mortgage. Because the marital property was titled in the names of both parties as tenants by the entireties, a statutory presumption arose that such property was a marital asset, and the party making any claim to the contrary has the burden of proof. § 61.075(5)(a)5. Because it appears that the $10,000 advance was made solely from the parties' joint checking account, the wife has failed to sustain her claim to a special equity. See Zangari v. Cunningham, 839 So. 2d 918 (Fla. 2d DCA 2003). As for the $95,000 advance, although the record discloses that it was traceable to the wife s separate property, the irrevocable trust, because such sum was paid directly from the trust corpus by the trustee to the mortgage company for the purchase of the marital home, we agree that the wife nonetheless failed in her burden to overcome her statutory burden of showing that no gift to the couple was intended. See Knecht (former husband failed to establish special equity in $10,000 of $13,000 down 7 payment given to him by his mother during the marriage for purchase of jointly held real property). Because of our disposition of the issues relating to the distribution of the real property, we do not reach the remaining issues raised by appellant pertaining to the amounts of alimony and attorney s fees awarded the husband. As in McMonagle v. McMonagle, 617 So. 2d 373 (Fla. 5th DCA 1993), we remand the case to the trial court so that it may revisit the monetary awards in their totality. In so doing, we note that nothing in the equitable distribution statute requires an even split of marital assets between the parties. Section 61.075(1), while directing the trial court to begin with the premise that the distribution should be equal, permits an unequal distribution if there is a justification for an unequal distribution based on all relevant factors. 2 AFFIRMED in part, REVERSED in part, and REMANDED. PADOVANO and HAWKES, JJ., CONCUR. 2 In equitably distributing the parties assets, the lower court should determine the value of all property to be distributed, both real and personal. 8
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