April 25, 2023*
SSRGA recently secured the affirmance of a final judgment of divorce that distributed to a former husband the full amount of the marital debt secured by property he owned prior to the marriage. The final judgment occurred following trial in a proceeding to dissolve a long-term marriage.
The former husband owned several pieces of real property in another state prior to the marriage. The former husband took out a line of credit prior to the marriage and used those properties as collateral. During the parties’ marriage, the former husband borrowed money from the line of credit to acquire and maintain the parties’ marital Florida properties. In the divorce, the former husband argued that the debt on the line of credit secured by the premarital properties was marital debt for which the former wife should also be responsible. The former wife argued that she should receive a portion of the premarital properties in equitable distribution because the parties had used marital income derived from her business to maintain and improve the properties during the marriage.
In the Final Judgment, the trial court concluded that the three pieces of real estate valued at $3,900,000 that the former husband owned prior to the marriage were his non-marital property. The trial court rejected the former wife’s argument that the properties should be considered marital or have a marital component. However, the trial court also found that the full amount of the approximately $1,500,000 in debt secured by the three properties was the former husband’s non-marital debt and assigned him that debt. The trial court found that the former husband had essentially liquidated the equity in his premarital property and chose to use those non-marital funds for marital purposes. The trial court concluded that the former husband’s actions did not create marital debt for which the former wife would be responsible.
The former husband appealed the Final Judgment to the Sixth District Court of Appeal (“Sixth DCA”). SSRGA represented the former wife in the appeal in the Sixth DCA. The former husband argued that his use of the funds from the line of credit to purchase marital property made the debt on the line of credit marital debt for which the former wife was partially responsible. We argued in response that the debt the former husband had incurred on the line of credit was a liability in exchange for a nonmarital asset (his equity in properties he owned prior to marriage) and so the debt remained nonmarital under Florida law.
The Sixth DCA held oral argument in the appeal by Zoom, at which the parties’ attorneys presented their arguments to a three-judge panel. Shortly thereafter, the Sixth DCA issued a per curiam affirmance (“PCA”) affirming the final judgment without a written explanation. The Sixth DCA also granted our client’s motion for appellate attorney’s fees conditioned upon findings by the trial court of need and ability to pay and an analysis of the factors set forth in Rosen v. Rosen, 696 So.2d 697 (Fla. 1997). This favorable result for our client preserves the trial court’s ruling in her favor regarding the debt incurred by the former husband secured by his premarital property and enables her to seek an award of appellate attorney’s fees in the trial court.
* Not final until disposition of timely filed motion for rehearing.