KNECHT

v.

PALMER

IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA

FIFTH DISTRICT

NOT FINAL UNTIL TIME EXPIRES TO

FILE MOTION FOR REHEARING AND

DISPOSITION THEREOF IF FILED

JOSEPH S. KNECHT,

Appellant,

v. Case No. 5D17-553

EVANGELINA PALMER,

Appellee. ________________________________/

Opinion filed August³, 2018

Appeal from the Circuit Court for St. Johns County, John M. Alexander, Judge.

Michael M. Giel, of Giel Family Law, P.A., Jacksonville, for Appellant.

Michael J. Korn, of Korn & Zehmer, P.A., Jacksonville, and Dennis E. Guidi, of Harris Guidi Rosner, P.A., Jacksonville, for Appellee.

COHEN, C.J.

Joseph Knecht (“Former Husband”) appeals the final judgment dissolving his three-year marriage to Evangelina Palmer (“Former Wife”), arguing that the trial court erred in its classification of certain assets as marital or nonmarital, its equitable distribution of the marital property, and its denial of his request for attorney’s fees. He also challenges certain language in the final judgment retaining jurisdiction to modify the final judgment. We affirm in part, reverse in part, and remand for reconsideration of

2 Former Husband’s request for attorney’s fees and to strike the language in the final judgment retaining jurisdiction. Both parties were previously married. Former Wife, a self-employed realtor, entered this marriage with significant assets, while Former Husband, a Certified Public Accountant (“CPA”), entered with significant debt. The primary issue on appeal is the characterization of appreciation in a home purchased during the marriage for $412,000. The down payment for the home came exclusively from Former Wife’s premarital assets, the title to the home and accompanying debt were exclusively in Former Wife’s name, and during the marriage, all the mortgage payments were made from Former Wife’s premarital assets. The parties remodeled the home, spending more than $500,000 on the project. Despite having over $912,000 invested in the home, the parties agreed that its value at the time of the divorce was $575,000. Former Husband claimed entitlement to one-half of the $163,000 appreciated value of the home, the difference between the agreed value and the purchase price. Even though he acknowledged that virtually all the money used for the renovations came from Former Wife’s nonmarital assets, Former Husband argued that those monies had been commingled into a joint account before being used on the renovations. Specifically, the funds used to pay for the renovations were taken from Former Wife’s premarital trust and deposited into a business account that she owned individually but on which Former Husband was an authorized signer. The funds were then transferred from the business account into a joint checking account, from which the funds were used to pay for the renovations. Former Wife testified that she transferred the funds in that manner at Former Husband’s direction. Furthermore, the evidence is undisputed

3 that Former Husband deposited some monies into the joint checking account, albeit a relatively small amount.¹ Another issue on appeal is the classification of what was termed the “Church Art Note.” Former Wife’s first husband, who passed away, had accumulated a substantial art collection. Before the parties in this case married, Former Wife had negotiated with a church to purchase certain artwork. The negotiations resulted in Former Wife holding a note for monthly payments from the church. Former Husband claimed that he assisted in negotiating the terms of the note, and that, in return, Former Wife agreed to pay him twenty percent of the value of the note.² The trial court entered a final judgment dissolving the marriage and rejecting Former Husband’s claims for additional alimony, one-half of the appreciated value in the home, a percentage of monies owed to Former Wife on the note, and request for attorney’s fees.³ In doing so, the court found that: Former Wife entered the marriage with substantial nonmarital assets; Former Husband entered the marriage with substantial nonmarital debt; the marriage was short term; Former Wife purchased the home and funded the renovations with her premarital assets; and it would be inequitable to award Former Husband one-half of the appreciation in the home.

4 In the interest of brevity, we do not enumerate all of Former Husband’s financial misdeeds. However, the facts underlying the purchase of a $115,000 Mercedes-Benz vehicle are illustrative. After Former Husband’s application for a loan was denied at one bank (even using Former Wife’s credit information), Former Husband, without Former Wife’s knowledge, went to another bank, applied for a loan in Former Wife’s name, and obtained the loan by significantly exaggerating her income on the application.

(a) The contribution to the marriage by each spouse, including contributions to the care and education of the children and services as homemaker.

(b) The economic circumstances of the parties.

(c) The duration of the marriage.

(d) Any interruption of personal careers or educational opportunities of either party.

(e) The contribution of one spouse to the personal career or educational opportunity of the other spouse.

(f) The desirability of retaining any asset, including an interest in a business, corporation, or professional practice, intact and free from any claim or interference by the other party.

(g) The contribution of each spouse to the acquisition, enhancement, and production of income or the improvement

5 “‘Marital assets and liabilities’ include . . . [t]he enhancement in value and appreciation of nonmarital assets resulting from either 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.” § 61.075(6)(a)1.b., Fla. Stat. (2015). The spouse asserting a marital claim to the appreciation in value of the other spouse’s separate, nonmarital property bears the initial burden of proving “that marital labor or funds were used to improve [the] asset[],” but once that burden is met, “the burden [shifts] to the [owner-spouse] to show that some, if any, portion of the enhanced value [is] exempt from equitable distribution.” Yitzhari v. Yitzhari, 906 So. 2d 1250, 1254 (Fla. 3d DCA 2005). In totality, Former Wife’s testimony supports Former Husband’s argument as to the commingling of funds.

(h) The desirability of retaining the marital home as a residence for any dependent child of the marriage, or any other party, when it would be equitable to do so, it is in the best interest of the child or that party, and it is financially feasible for the parties to maintain the residence until the child is emancipated or until exclusive possession is otherwise terminated by a court of competent jurisdiction. In making this determination, the court shall first determine if it would be in the best interest of the dependent child to remain in the marital home; and, if not, whether other equities would be served by giving any other party exclusive use and possession of the marital home.

(i) The intentional dissipation, waste, depletion, or destruction of marital assets after the filing of the petition or within² years prior to the filing of the petition.

(j) Any other factors necessary to do equity and justice between the parties.

When a trial court orders an unequal distribution of marital assets, “it is required to justify such an award based on all relevant factors listed in section 61.075(1)(a)‒(j),” which “serves to advise the reviewing court of the trial court’s rationale.” Gilliard v. Gilliard, 162 So. 3d 1147, 1151 (Fla. 5th DCA 2015) (citing Staton v. Staton, 710 So. 2d 744, 745 (Fla. 2d DCA 1998)). The better practice is for trial courts to specifically address the statutory criteria and make findings of fact as to each element. The trial court’s failure to do so here has made our review that much more difficult. However, it is clear enough that the trial court believed an unequal distribution of the marital assets was required to do equity in this case, and the court’s findings are sufficient to justify an unequal equitable distribution of the parties’ assets. Likewise, we find no abuse of discretion in the trial court’s characterization of the proceeds due on the “Church Art Note” as Former Wife’s nonmarital asset. Former

6 We recognize that the court’s findings regarding the note in the final judgment and the order on rehearing are inconsistent. While the order on rehearing attempted to clarify the court’s rationale for distributing the proceeds of the note, it did the opposite. However, the court did not enter an amended final judgment, and our review on appeal concludes that the court correctly classified the note as Former Wife’s nonmarital asset.

The trial court’s blanket reservation of jurisdiction for any modification of the final judgment is erroneous as a matter of law and legally unnecessary. See Encarnacion v. Encarnacion, 877 So. 2d 960, 963 (Fla. 5th DCA 2004) (“At the time a judgment of dissolution of marriage becomes final, the parties’ property rights, if determined by the judgment, are fixed as a matter of law . . . [and] a trial court lacks jurisdiction . . . to determine property rights, unless the final judgment reserves jurisdiction for a specific purpose regarding identified property.” (citations omitted)). On remand, the trial court is directed to strike the entirety of the above provision from the final judgment. AFFIRMED IN PART, REVERSED IN PART, and REMANDED. LAMBERT and EDWARDS, JJ., concur.