Gromet v. Jensen , 201 So. 3d 132 ( 2015 )

Third District Court of Appeal
State of Florida
Opinion filed October 14, 2015.
Not final until disposition of timely filed motion for rehearing.
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No. 3D14-3077
Lower Tribunal No. 14-5314
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Gary Robert Gromet,
Appellant,
vs.
Kirsten Lisbeth Jensen,
Appellee.
An Appeal from the Circuit Court for Miami-Dade County, Pedro P.
Echarte, Jr., Judge.
Crabtree & Associates, P.A., and John G. Crabtree, George R. Baise Jr., and
Brian C. Tackenberg, for appellant.
Buckner, Shifrin, Etter, Dugan, Bradfute & Kohlman, P.A., and Robin
Buckner and Robert F. Kohlman, for appellee.
Before ROTHENBERG, LAGOA, and SCALES, JJ.
ROTHENBERG, J.
Gary Robert Gromet (“the husband”) appeals from the final judgment
dissolving his marriage to Kirsten Lisbeth Jensen (“the wife”). Because the trial
court erred by treating the husband’s accounts as marital assets subject to equitable
distribution, we reverse the equitable distribution portion of the final judgment and
remand for entry of a final judgment consistent with this opinion.
FACTUAL BACKGROUND
After seventeen years of marriage, the parties, who were both retired,
separated when the wife moved out of the marital home. The wife petitioned to
dissolve the marriage and requested that the trial court partition the marital home
and equitably distribute their marital assets and liabilities after setting aside each
party’s nonmarital assets. The wife did not seek alimony.
At the hearing, the husband expressed his desire to remain in the marital
home. The wife agreed to not pursue her request to partition the marital home if
the husband was ordered to buy out her interest. In addition to the marital home,
the wife had three accounts titled in her name—an IRA account and two Schwab
accounts—that were opened during the marriage and funded with marital assets. It
was undisputed that the wife’s three accounts were marital assets subject to
equitable distribution and that the value of the wife’s three retirement accounts
totaled $163,559.55.
The primary contention at the hearing was whether the husband’s three
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accounts—an Interactive Brokers account, a Schwab IRA account, and a Schwab
One account—were marital or nonmarital assets. The evidence at trial showed that
the Schwab IRA account was opened prior to the marriage, whereas the Schwab
One account and Interactive Brokers account were opened during the marriage.
However, it was undisputed that all three accounts were entirely funded with
$400,000 the husband inherited from his mother in 1999.
As to the husband’s three accounts, the wife testified that the husband placed
his entire inheritance “in his brokerage account,” but failed to clarify which
account she was referring to.1 Although the wife did not clarify which account she
was referring to, the evidence showed that the husband initially placed his entire
inheritance into his Schwab One account, and thereafter, he transferred funds from
the Schwab One account to his Schwab IRA account and Interactive Brokers
account. The wife had no access or control over any of the husband’s accounts.
Although the wife conceded that the husband’s three accounts contained
funds solely from his inheritance, she asserted that all or a portion of the accounts
lost their character as nonmarital assets based on two grounds. First, the husband
commingled marital funds—$1100 from the liquidation of a marital business—into
his “brokerage account,” and therefore, the three accounts (not just the “brokerage
1During closing argument, the wife’s counsel referred to the husband’s “brokerage
account,” and thereafter, stated that she was referring to the husband’s Interactive
Brokers account. Closing argument, however, does not equate to testimony.
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account”) were transformed into marital assets. Second, because the husband
personally managed his accounts during the marriage, any enhancement in value of
the accounts was due to the husband’s marital efforts and labor, and therefore, the
enhancement in value was a marital asset.
The husband conceded that he used marital efforts to manage his accounts,
but testified that the accounts actually decreased in value due to trading losses and
because he used funds from an account to maintain the household. Thus, the
husband argued that because his marital efforts did not result in an enhancement in
value of his three accounts, the entire accounts remained nonmarital. Next, the
husband testified that he deposited the $1100 from the liquidation of the marital
business into the parties’ marital account at Bank of America,2 and therefore, no
marital funds were ever commingled with his three accounts.
Following the hearing, the trial court entered its final judgment of
dissolution of marriage. As agreed to by the parties, the trial court awarded the
marital home to the husband. Further, the trial court awarded the wife her three
retirement accounts and awarded the husband his three accounts. The trial court
found that all six accounts were marital assets subject to equitable distribution. In
concluding that the husband’s accounts were marital assets, the trial court made the
2 After the parties’ separation, the Bank of America account was retitled solely in
the wife’s name, and thereafter, the husband did not have access to that account.
During the hearing, neither party introduced documentation showing which
account, if any, the $1100 was deposited into.
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following determinations: (1) the parties do not dispute that the husband’s
investment accounts were entirely funded during the marriage with the husband’s
inheritance; (2) the husband solely and actively managed his accounts; (3) the
value of the Interactive Brokers account fluctuated over the years and, at times,
decreased considerably, but due to the husband’s marital labor and effort, the
account had increased in value by the time the petition for dissolution of marriage
was filed; (4) marital funds—$1100 from the liquidation of the marital business—
were deposited into/commingled with the husband’s Interactive Brokers accounts
and other accounts; (5) the wife established that marital labor and funds enhanced
the value of the husband’s accounts, and therefore, the burden then shifted to the
husband to show what portion of the increase was nonmarital; (6) the husband,
however, failed to meet this burden, and therefore, the entire value of the
husband’s three accounts are marital assets; and (7) the Interactive Brokers account
has a net value of $161,069.18, the Schwab IRA account is valued at $42,782.70,
and the Schwab One account is valued at $61.24.
After considering the equity in the marital home ($265,000), the value of the
husband’s investment accounts ($203,913.12), and the value of the wife’s
retirement accounts ($163,559.55), the trial court ordered the husband to pay the
wife $152,676.79 as a cash equalizer. The trial court denied the husband’s motion
to set aside the final judgment, and the husband’s appeal followed.
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ANALYSIS
Classification of the Husband’s Three Accounts as Marital Assets Subject to
Equitable Distribution
The husband contends that the trial court erred by classifying his three
accounts as marital assets subject to equitable distribution where these accounts
were entirely funded with his inheritance, the wife failed to present competent,
substantial evidence that marital funds were deposited into or commingled with
any of the husband’s accounts, and the evidence showed that, despite actively
managing his accounts, the accounts decreased in value. For the reasons that
follow, we agree with the husband.
A trial court’s determination that an asset is marital or nonmarital involves
mixed questions of law and fact. Although we defer to the trial court’s factual
findings if they are supported by competent, substantial evidence, we review the
trial court’s legal conclusions de novo. Valladares v. Junco-Valladares, 30 So. 3d
519, 523 (Fla. 3d DCA 2010); Puskar v. Puskar, 29 So. 3d 1201, 1201 (Fla. 1st
DCA 2010).
When the husband initially funded his accounts, the accounts were
nonmarital assets because they were exclusively funded with the husband’s
inheritance from his mother. See § 61.075(6)(b)2., Fla. Stat. (2014) (providing that
nonmarital assets include “[a]ssets acquired separately by either party by
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noninterspousal gift, bequest, devise, or descent, and asset acquired in exchange
for such assets”). We address the trial court’s determination that the husband’s
accounts or portion of the accounts lost their character as nonmarital assets because
marital funds were deposited into or commingled with the husband’s accounts
and/or the accounts increased in value due to the husband’s marital efforts and
labor in actively managing these accounts.
A. Alleged Commingling of Marital Funds into Husband’s Accounts
“Nonmarital assets may lose their nonmarital character and become marital
assets where . . . they have been commingled with marital assets. This is especially
true with respect to money because ‘[m]oney is fungible, and once commingled it
loses its separate character.’” Dravis v. Dravis, 170 So. 3d 849, 851 (Fla. 2d DCA
2015) (quoting Pfrengle v. Pfrengle, 976 So. 2d 1134, 1136 (Fla. 2d DCA 2008))
(citation omitted); see also Crockett v. Crockett, 708 So. 2d 329, 330 (Fla. 1st
DCA 1998) (holding that nonmarital funds “lost any arguable separate identity
when the wife commingled them with her overtime earnings made during the
marriage”).
In the instant case, the wife asserted that funds ($1100) from the liquidation
of a marital business were deposited into the husband’s “brokerage account,” and
therefore, the husband’s three accounts were transformed into marital accounts. At
the hearing, the wife did not suggest that portions of the $1100 were deposited into
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each of the husband’s three accounts, but only that the entire $1100 was deposited
into the husband’s “brokerage account.” Therefore, the trial court’s finding that
marital funds were deposited into the Interactive Brokers account and the
husband’s other two accounts is not supported by competent, substantial evidence.
Although we have concluded that there was no substantial, competent
evidence to support the claim that portions of the $1100 were deposited into each
of the husband’s three accounts, we must still address whether the wife presented
competent, substantial evidence that the $1100 was deposited in any of the
accounts, and if so, which specific account. As stated earlier, the wife merely
testified that the $1100 was deposited into the husband’s “brokerage account.”
The wife did not specify whether her reference to the “brokerage account” was to
the husband’s Interactive Brokers account, Schwab IRA account, or Schwab One
account. We do know, however, that when the wife testified that the husband’s
inheritance was initially deposited into the husband’s account, the wife referred to
the account it was initially placed in as the husband’s “brokerage account.”
However, the evidence reflects and the wife’s counsel at oral argument agreed that
the husband initially deposited his entire inheritance into his Schwab One account.
The trial court has valued that account at only $61.24.
Importantly, with regard to whether the wife presented competent,
substantial evidence as to whether the husband deposited the $1100 into any of his
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nonmarital accounts, the record reflects that it was undisputed that the wife had no
access to the business account or any of the husband’s three accounts and she had
no specific knowledge as to the husband’s management of these accounts.
Because the wife failed to introduce any evidence to support her vague statement
that the $1100 was deposited into one of the husband’s unspecified nonmarital
accounts, there was no competent, substantial evidence as to where the marital
funds were allegedly deposited. Accordingly, we reverse the portion of the final
judgment finding that the husband’s three accounts lost their character as
nonmarital assets due to commingling.3
B. Alleged Enhancement in Value of Husband’s Accounts due to Husband’s
Marital Efforts and Labor
Section 61.075(6)(a)1.b., Florida Statutes (2014), provides that marital assets
includes “[t]he enhancement in value and appreciation of nonmarital assets
resulting . . . from the efforts of either party during the marriage.” See Eager v.
Eager, 696 So. 2d 1235, 1236 (Fla. 3d DCA 1997) (providing that “the
enhancement in value of a non-marital asset due to marital labor or effort is a
[marital] asset subject to equitable distribution”). As the wife was the party
3 Even if the wife had met her burden of establishing that the $1100 was deposited
into one of the husband’s three accounts, which we do not so conclude, only that
one account would have lost its nonmarital character, not all three accounts, and,
based on her testimony, the account it appears she was referring to was the Schwab
One Account, which the trial court valued at $61.24.
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asserting that the husband’s marital efforts enhanced the value of his nonmarital
accounts, the burden of proof was on the wife to establish: (1) the husband
actively managed his accounts during the marriage; (2) as a result of the husband’s
marital efforts, his accounts enhanced in value; and (3) the actual value of the
enhancement. See Robertson v. Robertson, 78 So. 3d 76, 77 (Fla. 5th DCA 2012)
(holding that where the wife established that marital efforts were utilized to
enhance the value of the husband’s nonmarital business, the wife also had “the
burden of proving that value”); Pereboom v. Pereboom, 959 So. 2d 1205, 1206
(Fla. 4th DCA 2007) (holding that the burden of proof was on the wife as she
asserted that the husband’s nonmarital accounting practice enhanced in value
during the marriage).
In the instant case, the trial court’s finding that the husband actively
managed his accounts is supported by competent, substantial evidence. However,
the trial court’s finding that the accounts had increased in value by the time the
petition for dissolution of marriage was filed is not supported by competent,
substantial evidence. The record actually reflects that the husband’s accounts had
decreased in value by the time the wife filed the petition for dissolution of
marriage. Notably, the sum total of these three accounts, which were initially
funded by the $400,000 inheritance, was substantially lower than $400,000, and
during the hearing, the trial court actually noted that the evidence demonstrated
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that the accounts had not increased in value. Because the wife failed to establish
that the husband’s accounts enhanced in value due to marital efforts, we conclude
that the trial court erred as a matter of law by finding that the husband’s accounts
were transformed into marital assets based on this ground.4
CONCLUSION
Based on our determination that the wife failed to establish that marital
funds were commingled with the husband’s accounts or that the husband’s
accounts increased in value as a result of the husband’s marital labor, we reverse
the portion of the final judgment finding that the husband’s accounts are marital
assets and remand for entry of a final judgment consistent with this opinion,
including a recalculation of the cash equalizer due to the wife from the husband.
We decline to separately address the remaining issues raised by the husband
as we find no error and because these issues do not merit discussion.
Affirmed in part, reversed in part, and remanded.
4 If the wife had met her burden of proof, including her burden to establish the
value of the enhancement, the burden would then have shifted to the husband to
“establish whether any part of the increase was the result of passive market
conditions and, thus, is exempt from equitable distribution.” O’Neill v. O’Neill,
868 So. 2d 3, 5 (Fla. 4th DCA 2004).
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