Nancy Smith Schroll, Former Wife v. Stephen B. Schroll, Former Husband , 2017 Fla. App. LEXIS 14024 ( 2017 )

IN THE DISTRICT COURT OF APPEAL
FIRST DISTRICT, STATE OF FLORIDA
NANCY SMITH SCHROLL, NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
Appellant/Cross-Appellee, DISPOSITION THEREOF IF FILED
v. CASE NO. 1D16-3590
STEPHEN B. SCHROLL,
Appellee/Cross-Appellant.
_____________________________/
Opinion filed October 6, 2017.
An appeal and cross-appeal from the Circuit Court for Santa Rosa County.
David Rimmer, Judge.
Laura E. Keene of Beroset & Keene, Pensacola, for Appellant/Cross-Appellee.
Therese A. Felth of McKenzie Law Firm, P.A., Pensacola, for Appellee/Cross-
Appellant.
PER CURIAM.
This appeal and cross appeal are taken from a final judgment of dissolution of
marriage. The former wife, Nancy Smith Schroll, challenges the trial court’s failure
to award her sufficient permanent periodic alimony and attorney’s fees and costs.
The former husband, Stephen B. Schroll, attacks the trial court’s valuation and
distribution of marital assets and liabilities. For the reasons that follow, we reverse
in part and remand for further proceedings. In all other respects, the judgment is
affirmed.
I. Relevant Facts
After thirty-two years of marriage, Ms. Schroll petitioned for dissolution of
the parties’ marriage. The primary issues before the trial court were equitable
distribution of the marital assets and liabilities, alimony, and attorney’s fees and
costs. At the time of the dissolution of marriage, the parties had acquired slightly
more than $2,000,000 in assets from profits generated by their business, Storkland,
a retail store specializing in the sale of baby items. The parties’ assets consisted of
the commercial building housing Storkland, the inventory of Storkland, multiple
retirement and investment accounts, and various personalty.
Mr. Schroll was responsible for managing Storkland while Ms. Schroll would
assist as a sales clerk. Mr. Schroll claimed that Storkland’s sales had been steadily
decreasing since 2012 due to competition from large chain stores and online
retailers. He testified that during the pendency of the dissolution action, he used
marital funds to pay for his and Ms. Schroll’s living expenses, the cost of both
parties’ relocation, both parties’ temporary attorneys’ fees, new vehicles for both
parties, and paying off the mortgage on the marital home before it was sold. He
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further testified that he gave significant funds to one mutual daughter for her
wedding and another mutual daughter for her purchase of a house.
The trial court entered a final judgment dissolving the parties’ marriage and
setting forth the distribution of the parties’ assets. The court adopted Ms. Schroll’s
proposed equitable distribution schedule, which valued the marital assets as of the
date of filing. Ms. Schroll was awarded assets purportedly totaling $1,222,120, and
Mr. Schroll was awarded assets worth $1,274,752. The parties’ marital liabilities
were valued at $22,147 and attributed to Mr. Schroll. According to the equitable
distribution schedule adopted by the court and incorporated into the final judgment,
the parties were each awarded $1,210,015 in assets.
The court further found that there was no dissipation or waste of marital assets
by Mr. Schroll. The court noted that Ms. Schroll was awarded over $1,000,000 in
assets in the equitable distribution and concluded, “Although the
Respondent/Husband may have the ability to pay alimony, the Court does not
believe the Petitioner/Wife has a need for the same and denies the Petitioner/Wife’s
request for alimony.” The court ordered both parties to pay their own attorneys’ fees
and costs.
Both parties moved for rehearing, raising each of the issues addressed in this
opinion. The trial court subsequently entered an “Amendment to Final Judgment of
Dissolution of Marriage,” ordering Mr. Schroll to pay nominal permanent alimony
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of $1.00 per month and vacating the equitable distribution schedule previously
incorporated into the final judgment because it contained “mathematical errors.” The
court stated that all other provisions in the final judgment were to remain in full force
and effect. The court adopted a new attached equitable distribution schedule, which
indicated Ms. Schroll was awarded assets worth $1,231,633.50 and Mr. Schroll was
awarded assets worth $1,253,780.50. The marital liabilities of $22,147 were again
attributed to Mr. Schroll, which resulted in both parties being awarded
$1,231,633.50 in assets. This appeal and cross-appeal follow.
II. Equitable Distribution
We first turn to the challenges to the trial court’s equitable distribution
scheme. A court's rulings on equitable distribution are reviewed for abuse of
discretion. Boutwell v. Adams, 920 So. 2d 151, 153 (Fla. 1st DCA 2006). When
distributing the marital assets and liabilities between parties, courts 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 the factors set forth in
section 61.075(1)(a)-(j), Florida Statutes (2016). See Watson v. Watson, 124 So. 3d
340, 342-43 (Fla. 1st DCA 2013). The date for determining the value of marital
assets and the amount of marital liabilities is the date or dates as the court determines
is “just and equitable under the circumstances.” § 61.075(7), Fla. Stat. (2016).
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Should it be necessary for the court to craft an unequal distribution, it must include
findings to substantiate the disparity. Watson, 124 So. 3d at 342.
A. Valuation of Money Market Accounts
Mr. Schroll argues the trial court erred when it valued the parties’ BBVA
money market account and Vanguard brokerage account as of the filing date of the
petition for dissolution, as those funds had been depleted for marital purposes from
the date of filing, and there was no finding of intentional waste or dissipation of
those assets by Mr. Schroll during the divorce proceedings. Based on the record
before us, we agree.
This Court has previously held that “[s]ums that have been diminished during
dissolution proceedings for purposes reasonably related to the marriage . . . should
not be included in an equitable distribution scheme unless there is evidence that one
spouse intentionally dissipated the asset for his or her own benefit and for a purpose
unrelated to the marriage.” Ballard v. Ballard, 158 So. 3d 641, 642-43 (Fla. 1st DCA
2014) (citing Zvida v. Zvida, 103 So. 3d 1052 (Fla. 4th DCA 2013)); see also Winder
v. Winder, 152 So. 3d 836, 838 (Fla. 1st DCA 2014) (trial court abused its discretion
by including dissipated funds in the equitable distribution scheme where “[t]he
uncontradicted evidence shows that the dissipated funds were used to pay marital
expenses while the dissolution was pending, including temporary support for the
Wife”). To include dissipated assets in an equitable distribution scheme, the court
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must make a “specific finding that the dissipation resulted from intentional
misconduct.” Bateh v. Bateh, 98 So. 3d 750, 753 (Fla. 1st DCA 2012); see also
Ballard, 158 So. 3d at 643; Walker v. Walker, 85 So. 3d 553, 555 (Fla. 1st DCA
2012).
Here, the unrefuted evidence shows that during the course of the dissolution
proceedings below, Mr. Shroll used funds from the parties’ BBVA money market
account and the Vanguard brokerage account to pay for the parties’ living expenses,
including attorneys’ fees and costs, new vehicles for both parties, moving expenses,
and paying off the mortgage on the former marital residence before it sold. By the
time of the final hearing, the funds in the BBVA account had been exhausted. The
Vanguard account had been reduced from $451,146, as of the date of filing, to
$381,220, around the time of the final hearing. Yet, the court valued these accounts
as of the date the petition for dissolution was filed. Because the court did not find
any misconduct by Mr. Schroll in the dissipation of these two assets, it was an abuse
of discretion to value these accounts as of the date of filing. On remand, the court
should revisit the equitable distribution scheme and exclude the funds dissipated for
marital purposes.
B. Valuation of Investment Accounts
Mr. Schroll further argues that the trial court reversibly erred when it valued
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certain investment assets 1 as of the date of commencement of the dissolution action
instead of a date closer to the final hearing because those assets had significantly
declined in value during the course of litigation due to passive market forces, outside
of the control of either party. While the court has the discretion to decide the
valuation date of marital assets as the court determines is “just and equitable under
the circumstances,” without an explanation as to why the court valued these assets
as of the date of filing, we are not able to determine from this record whether the
court considered the decrease in value of these assets in fashioning the equitable
distribution. See Byers v. Byers, 910 So. 2d 336 (Fla. 4th DCA 2005) (trial court
abused its discretion in allocating parties’ assets without accounting for passive
appreciation of 401(k) account where court gave no explanation as to why it settled
on date of filing as valuation date). On remand, the court should address the propriety
of the valuation date of these investment assets and account for the passive changes
in value in fashioning an equitable distribution award.
C. Valuation/Distribution of Business Assets
Mr. Schroll additionally alleges that the trial court abused its discretion when
it awarded him the value of Storkland’s inventory and the Storkland business
account in the absence of evidence regarding Storkland’s fair market value. In so
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These assets include the Prudential Annuity #8841, the Stifel/Protective Life
#7663, Stifel /Transamerica IRA #8706, and the Stifel/Transamerica IRA #8763.
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doing, Mr. Schroll contends that the court completely ignored the costs of doing
business and debts belonging to Storkland. We agree to the extent that the trial court
should have included Storkland’s accounts payable as a marital liability as part of
the equitable distribution. But we assign no fault to the court for failing to take into
account the fair market value of the Storkland business in constructing the equitable
distribution scheme when neither party squarely presented evidence regarding that
issue to the court. See Simmons v. Simmons, 979 So. 2d 1063, 1066 (Fla. 1st DCA
2008) (Benton, J., dissenting) (“I agree with the majority opinion that a party who
adduces no proof as to the value of property should not be heard on appeal to
complain about the final judgment's failure to pluck a value out of thin air to assign
to the property.”). The court should revisit this issue on remand and revise the
equitable distribution accordingly.
III. Alimony
Turning to Ms. Schroll’s arguments on appeal, she first contends that the trial
court abused its discretion in refusing to award her more than a nominal permanent
alimony award and in not adequately addressing the presumption favoring the award
of permanent periodic alimony in relation to the parties’ long-term marriage.
In determining whether to award alimony, the trial court must make specific
factual determinations with regard to the needs of the spouse requesting alimony and
the ability of the other spouse to provide the necessary funds. § 61.08(2), Fla. Stat.
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(2016); Canakaris v. Canakaris, 382 So. 2d 1197, 1201 (Fla. 1980). If the court finds
that one spouse has an actual need for alimony and the other spouse has the ability
to pay, the court must then consider “all relevant factors,” including those listed in
section 61.08(2), in determining the proper type and amount of alimony. Permanent
alimony is designed to provide for the needs and necessities of life for a former
spouse as they were established during the marriage. § 61.08(8), Fla. Stat. (2016).
In Broemer v. Broemer, 109 So. 3d 284 (Fla. 1st DCA 2013), this Court
recognized that there is a rebuttable presumption of entitlement to permanent
periodic alimony in marriages of longer than seventeen years and found that the trial
court “failed to address the initial rebuttable presumption or explain why it does not
apply in this case.” Id. at 290. We concluded that remand was necessary because the
lack of required findings of fact prevented us from reviewing the alimony issue in a
meaningful way. Id. at 289.
As to the propriety of awarding nominal permanent periodic alimony, this
Court has instructed, “should the trial court find it is faced with a situation where the
Wife has a clear need for permanent alimony, but it is established that the Husband
does not have the current ability to pay . . . a nominal award of permanent alimony
would preserve the trial court's jurisdiction to revisit this matter, until there is a
substantial change in the parties’ respective financial circumstances.” Winder, 152
So. 3d at 841-42 (citations omitted).
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Here, the trial court awarded Ms. Schroll nearly $600,000 in liquid assets and
approximately $600,000 worth of retirement investments. On this basis, the court
concluded in the final judgment that Ms. Schroll had no need for alimony. The
court’s subsequent award of nominal permanent periodic alimony to Ms. Schroll in
the amendment to the final judgment, without any additional findings, appears
inconsistent with its earlier conclusion that she had no need for alimony and fails to
address Mr. Schroll’s ability – or lack thereof – to pay.
On remand, the trial court should revisit the issue of alimony and assess Ms.
Schroll’s potential need for permanent alimony as this Court instructed in Broemer,
109 So. 3d at 290, in light of any substantial alteration of the parties’ financial
positions upon the recalculation of the equitable distribution of assets and liabilities
based on this opinion. Additionally, the court should make explicit findings
regarding the Ms. Schroll’s need and Mr. Schroll’s ability to pay, and if the court
determines that an award of alimony is proper, it should consider all relevant factors,
including those set forth in section 61.08(2), when determining the proper type and
amount of the award.
IV. Attorney’s Fees
Ms. Schroll next contends that the trial court abused its discretion in failing to
award her attorney’s fees. The issue of whether Ms. Schroll is entitled to attorney’s
fees and costs hinges upon the reallocation of the equitable distribution and whether
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she is awarded permanent periodic alimony on remand. Thus, the trial court should
revisit the issue of Ms. Schroll’s potential entitlement to attorney’s fees pursuant to
section 61.16(1), Florida Statutes, based on the extent to which the parties’
respective financial circumstances are altered on remand.
AFFIRMED in part; REVERSED and REMANDED in part.
WOLF, RAY, and BILBREY, JJ., CONCUR.
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