Dividing a couple’s assets as part of a divorce case is often a challenging task in many situations. This can be especially so in cases involving spouses who own businesses. The case may present issues of high-value assets, debts, or both, depending on the business’ success or failure. In one long-running South Florida case involving a dentist and his wife, the husband lost his effort to increase the negative-value calculation of his business because, according to a 4th District Court of Appeal ruling, he was not entitled to offer new evidence about the value of his practice when the case went back before the trial court after an appeal. The value of the couple’s assets was not one of the issues sent back to the trial court by the appeals court, so the admission of that evidence and the resulting change in the couple’s equitable distribution should never have happened.
The couple’s divorce case actually began several years ago. In the original case, the husband put forward evidence that his dental practice was actually deeply in the red. After the trial court issued its order of dissolution, the husband pursued an appeal on several grounds, including the way in which the court treated the couple’s home in the equitable distribution and the requirement that the husband obtain and maintain a $2 million life insurance policy to protect the alimony and child support awards. The husband also argued that the trial court failed to account for the negative value of his dental practice.
The appeals court agreed with some of the husband’s arguments and sent the case back to the trial court. Back in front of the trial judge, the husband presented testimony from an appraiser and a vocation expert to flesh out the true value of the dental business. The husband claimed that, at the time the divorce petition was filed, his dental practice was $1.1 million in debt. In this last ruling, the trial court set the value of the husband’s dental practice at -$240,000. The court also created a new equitable distribution schedule.
This time, the wife appealed and won. The problem centered around the trial court’s taking evidence about the value of the husband’s dental practice. That issue had been litigated, and a finding made, in the trial court’s previous order. The previous order by the appeals court only sent the case back down to the trial court for further hearings on certain specific issues. The value of the husband’s dental practice was not one of those issues. When the trial court allowed the husband to re-litigate that issue, the trial court went beyond the range of the issues it was supposed to be addressing. The only part of the couple’s equitable distribution that the trial court was supposed to deal with was the partition of the couple’s marital home and any changes to the equitable distribution scheme necessary as a result of that partition. The trial court was not allowed to reconsider the already established values of the couple’s assets, including the husband’s dental practice. The husband had already made his argument to the 4th DCA that the trial court improperly failed to account for the negative value of the dental practice and had already lost on that issue.
Divorce cases in which the spouses own businesses often present unique challenges, whether those businesses are worth millions of dollars or are millions of dollars in the red. When dealing with these high-value assets and debts in a divorce situation, it helps to have legal counsel familiar and experienced with these matters. The knowledgeable Florida divorce attorneys at Stok Folk + Kon are here to help. Our attorneys have many years of aiding clients in these circumstances in working to achieve successful results.
Contact us online or by calling (954) 237-1777 to schedule your consultation.
More blog posts:
New Florida Supreme Court Decision Offers Beneficial Information for High-Asset Individuals Contemplating Prenuptial Agreements, Florida Business Lawyers Blog, Jan. 14, 2016
South Florida Wife Loses Claim Based Upon Increased Value of Husband’s Auto Dealership, Florida Business Lawyers Blog, Dec. 18, 2015