How do Florida courts determine what an equitable distribution of property between divorcing spouses is?

§ 61.075. Equitable distribution of marital assets and liabilities

(1) In a proceeding for dissolution of marriage, in addition to all other remedies available to a court to do equity between the parties, or in a proceeding for disposition of assets following a dissolution of marriage by a court which lacked jurisdiction over the absent spouse or lacked jurisdiction to dispose of the assets, the court shall set apart to each spouse that spouse's nonmarital assets and liabilities, and in distributing the marital assets and liabilities between the parties, the court must begin with the premise that the distribution should be equal, unless there is a justification for an unequal distribution based on all relevant factors, including:

(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 of, or the incurring of liabilities to, both the marital assets and the nonmarital assets of the parties.

(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 within 2 years prior to the filing of the petition.

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

(6) As used in this section:

(a)1. “Marital assets and liabilities” include:

a. Assets acquired and liabilities incurred during the marriage, individually by either spouse or jointly by them.

b. The enhancement in value and appreciation of nonmarital assets resulting from 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.

c. The paydown of principal of a note and mortgage secured by nonmarital real property and a portion of any passive appreciation in the property, if the note and mortgage secured by the property are paid down from marital funds during the marriage. The portion of passive appreciation in the property characterized as marital and subject to equitable distribution is determined by multiplying a coverture fraction by the passive appreciation in the property during the marriage.

(I) The passive appreciation is determined by subtracting the value of the property on the date of the marriage or the date of acquisition of the property, whichever is later, from the value of the property on the valuation date in the dissolution action, less any active appreciation of the property during the marriage as described in sub-subparagraph b., and less any additional encumbrances secured by the property during the marriage in excess of the first note and mortgage on which principal is paid from marital funds.

(II) The coverture fraction must consist of a numerator, defined as the total payment of principal from marital funds of all notes and mortgages secured by the property during the marriage, and a denominator, defined as the value of the subject real property on the date of the marriage, the date of acquisition of the property, or the date the property was encumbered by the first note and mortgage on which principal was paid from marital funds, whichever is later.

(III) The passive appreciation must be multiplied by the coverture fraction to determine the marital portion of the passive appreciation of the property.

(IV) The total marital portion of the property consists of the marital portion of the passive appreciation, the mortgage principal paid during the marriage from marital funds, and any active appreciation of the property during the marriage as described in sub-subparagraph b., not to exceed the total net equity in the property at the date of valuation.

(V) The court shall apply the formula specified in this subparagraph unless a party shows circumstances sufficient to establish that application of the formula would be inequitable under the facts presented.

d. Interspousal gifts during the marriage.

e. All vested and nonvested benefits, rights, and funds accrued during the marriage in retirement, pension, profit-sharing, annuity, deferred compensation, and insurance plans and programs.

2. All real property held by the parties as tenants by the entireties, whether acquired prior to or during the marriage, shall be presumed to be a marital asset. If, in any case, a party makes a claim to the contrary, the burden of proof shall be on the party asserting the claim that the subject property, or some portion thereof, is nonmarital.

3. All personal property titled jointly by the parties as tenants by the entireties, whether acquired prior to or during the marriage, shall be presumed to be a marital asset. In the event a party makes a claim to the contrary, the burden of proof shall be on the party asserting the claim that the subject property, or some portion thereof, is nonmarital.

4. The burden of proof to overcome the gift presumption shall be by clear and convincing evidence.

(b) “Nonmarital assets and liabilities” include:

1. Assets acquired and liabilities incurred by either party prior to the marriage, and assets acquired and liabilities incurred in exchange for such assets and liabilities;

2. Assets acquired separately by either party by noninterspousal gift, bequest, devise, or descent, and assets acquired in exchange for such assets;

3. All income derived from nonmarital assets during the marriage unless the income was treated, used, or relied upon by the parties as a marital asset;

4. Assets and liabilities excluded from marital assets and liabilities by valid written agreement of the parties, and assets acquired and liabilities incurred in exchange for such assets and liabilities; and

5. Any liability incurred by forgery or unauthorized signature of one spouse signing the name of the other spouse. Any such liability shall be a nonmarital liability only of the party having committed the forgery or having affixed the unauthorized signature. In determining an award of attorney’s fees and costs pursuant to s. 61.16, the court may consider forgery or an unauthorized signature by a party and may make a separate award for attorney’s fees and costs occasioned by the forgery or unauthorized signature. This subparagraph does not apply to any forged or unauthorized signature that was subsequently ratified by the other spouse.

A. Equitable Distribution in Florida

When a marriage is dissolved, Florida courts use equitable distribution to divide the marital property between the parties. § 61.075, Fla. Stat. (2016). As this Court previously explained:

Under [Florida's equitable distribution] statute, the parties' assets are to be divided into two categories: (1) marital assets and liabilities and (2) nonmarital assets and liabilities. The statute defines assets and liabilities falling within each of these categories and establishes certain presumptions to assist in categorizing each asset and liability. The court then divides the marital assets and liabilities between the spouses.

Robertson v. Robertson, 593 So.2d 491, 493 (Fla. 1991). While "the trial judge possesses the broad, discretionary authority to do equity between the parties," courts are to presume that an even division is equitable unless either party shows otherwise. Acker v. Acker, 904 So.2d 384, 388 (Fla. 2005) (citing Canakaris v. Canakaris, 382 So.2d 1197, 1202 (Fla. 1980) ); accord § 61.075(1), Fla. Stat. (2016). As the Fifth District Court of Appeal explained in Gardner v. Gardner:

Equitable distribution is a court evolved concept in Florida. It is used to achieve a fair division of marital assets, which are those assets acquired by the parties during their marriage from their work efforts, services, and earnings. In determining whether certain property is

[220 So.3d 403]

a marital asset, the question is not which party holds title to the asset.

452 So.2d 981, 983 (Fla. 5th DCA 1984).

The trial court should also reconsider the distribution of the parties' assets accumulated during the marriage. In Gardner v. Gardner, 452 So.2d 981 (Fla. 5th DCA 1984), this court described the concept of "equitable distribution" as follows:

Equitable distribution is a court evolved concept in Florida. It is used to achieve a fair division of marital assets, which are those assets acquired by the parties during their marriage from their work efforts, services, and earnings. In determining whether certain property is a marital asset, the question is not which party holds title to the asset. This approach is justified as a means to compensate the homemaker or non-earning partner for his or her contributions to the family unit. Through the mechanism of equitable distribution, assets are generally transferred from the earning spouse to the homemaker spouse since most of the marital assets commonly are in the earning spouse's name.

452 So.2d at 983. While the concept of equitable distribution has not been held to require an absolutely equal division of the marital assets, this court has indicated that is a good starting point. See Ente v. Ente, 442 So.2d 232 (Fla. 5th DCA 1983); Mahaffey v. Mahaffey, 401 So.2d 1372 (Fla. 5th DCA 1981).

Next, the husband contends that the final dissolution judgment must be reversed because the trial court erred in distributing the parties' marital property. The husband first argues that the trial court “lacked the jurisdiction” to enter an unequal distribution of the parties' assets and liabilities because the wife did not plead for unequal distribution in her counter-petition. However, the husband fails to cite any statutory or case law which supports this argument and, in fact, section 61.075(1) of the Florida Statutes (2007) expressly authorizes trial courts to enter an unequal distribution of marital assets and liabilities based upon relevant factors. As such, we reject this claim as meritless.

The husband also argues that the trial court abused its discretion in unequally dividing the marital credit card debt solely based upon the parties' relative incomes. We agree.

In the final dissolution judgment, the trial court explained that the wife presented evidence demonstrating that, at the time the parties married, she had credit card debt totaling $1,854.59, and that on the date of separation the debt had climbed to $81,928.60. The court then noted that the legal presumption is that debts incurred during the marriage are marital debts, and that the husband did not present any evidence to rebut this presumption. The court then ruled that, based on the parties' earning abilities, the husband was responsible for paying 91.6% of the marital debt on the wife's credit cards while the wife was responsible for paying 8.4% of the debt.

Section 61.075 of the Florida Statutes (2007) requires trial courts to either distribute marital liabilities equally or to make findings of fact justifying an unequal distribution. Our courts have approved unequal distribution when the evidence establishes misconduct, such as intentional waste or depletion of marital assets. See Belford v. Belford, 51 So.3d 1259 (Fla. 2d DCA 2011); Santiago v. Santiago, 51 So.3d 637 (Fla. 2d DCA 2011); Jonsson v. Jonsson, 715 So.2d 1064 (Fla. 5th DCA 1998). However, disparate earning abilities cannot, without more, justify unequal distribution of marital assets and liabilities. Dease v. Dease, 688 So.2d 454 (Fla. 5th DCA 1997). Accordingly, we reverse the trial court's distribution of the parties' marital credit card debt.

The sole issue on appeal concerns the trial court's decision to make an unequal distribution of the condominium property, which the trial court designated a "special equity" in the condominium. From what we can glean from the order, the trial court appears to have done this simply because Wife had owned the property at the time of the marriage and it was titled solely in her name until 2002. There is no doubt, however, that this property was a marital asset. Wife does not even dispute this point. She simply suggests that having sole title until 2002 gives her the right to a "special equity." We disagree and reverse.

Equitable distribution of a marital asset should be equal, unless legally sufficient justification for an unequal distribution is given based on the relevant statutory factors. § 61.075(1), Fla. Stat. (2007); see Hitchcock v. Hitchcock, 992 So.2d 436 (Fla. 4th DCA 2008). In this case, the trial court made numerous non-controversial factual findings and then offered only two reasons for the unequal distribution. First, the trial court said that it could treat the condominium as a non-marital asset of Wife, but we can envision no basis for that conclusion given the way this property was used. It lost any non-marital character early in the marriage. Second, the trial court said Wife was entitled to a "special equity" because she held sole record title until 2002, but title alone is insufficient to support a "special equity."² In this case,

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there is simply no fact or circumstance, such as improvements to the property with Wife's non-marital funds, that would warrant unequal distribution of the condominium, just as there are no facts that would warrant a special equity in the properties owned by Husband that were brought into the marriage and also became assets of the marriage.

An equitable distribution award is reviewed under the abuse of discretion standard. Feger v. Feger, 850 So.2d 611, 615 (Fla. 2d DCA 2003). "The final distribution of marital assets, whether equal or unequal, must be supported by factual findings based on substantial competent evidence." Guida v. Guida, 870 So.2d 222, 224 (Fla. 2d DCA 2004).

Under section 61.075, Florida Statutes (2020), a trial court "must begin with the premise that the distribution should be equal, unless there is a justification for an unequal distribution based on all relevant factors." Vilardi v. Vilardi, 225 So.3d 395, 396 (Fla. 5th DCA 2017) (quoting § 61.075(1), Fla. Stat. (2016)). "To justify unequal distribution, the trial court must include in the final judgment findings of fact supporting its determination." Id. (citing § 61.075(3), Fla. Stat. (2016)).

The failure of the trial court to make findings of fact to justify an unequal distribution of assets or liabilities generally requires reversal. See id. (reversing due to trial court's failure to make findings justifying an unequal distribution); Guobaitis v. Sherrer, 18 So.3d 28, 32 (Fla. 3d DCA 2009) (remanding for further proceedings because trial court failed to make sufficient findings to justify grossly disproportionate distribution of assets and liabilities); Franklin v. Franklin, 988 So.2d 125, 126 (Fla. 2d DCA 2008) (holding that "[a]n appellate court must reverse an unequal distribution if the trial court fails to make a specific finding of fact that justifies the unequal distribution" (citing Feger, 850 So.2d at 615 ("A court must provide a legally sufficient factual basis for its unequal distribution of marital assets [or liabilities]."))).

Here, Former Wife is correct that the trial court's distribution of liabilities mirrored Former Husband's proposed distribution of liabilities. However, Former Husband's proposed distribution was expressly premised upon his maintaining the marital home. The trial court deviated from Former Husband's proposed distribution by ordering the sale and equitable distribution of the proceeds from the marital home. Therefore, it cannot be said that Former Husband consented to any inequitable distribution of assets and liabilities.^[1] As the trial court made no findings of fact to justify an unequal distribution, we remand to the trial court to either make an equitable distribution or to set forth its findings of fact that might justify an inequitable distribution.