DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
OTTO HANS VAN MAERSSEN,
Appellant,
v.
DIANA GERDTS,
Appellee.
No. 4D19-133
[May 6, 2020]
Appeal and cross-appeal from the Circuit Court for the Fifteenth
Judicial Circuit, Palm Beach County; Catherine M. Brunson, Judge; L.T.
Case No. 50-2014-DR-011731-XXXX-MB.
Otto Hans Van Maerssen, Walnut Creek, California, pro se.
Andrew S. Berman and Brian M. Karpf of Young, Berman, Karpf &
Gonzalez, P.A., Miami, for appellee.
CONNER, J.
Otto Hans Van Maerssen (“Husband”) appeals the final judgment of
dissolution of marriage asserting multiple errors by the trial court. Diana
Gerdts (“Wife”) cross-appeals, asserting additional errors. As to the errors
asserted by Husband, we reverse as to three of the issues raised and affirm
the trial court’s rulings as to the remainder of the issues without
discussion. We explain our reasons for reversing, based on our
determination that the trial court erred by: (1)(a) equitably distributing as
marital assets to Husband certain accounts, even though they had been
liquidated and spent prior to the final hearing, and (b) equitably
distributing to Wife a survivor benefit attached to Husband’s pension,
without determining the value of the survivor benefit and determining who
bears the cost of the benefit; (2) awarding Wife an amount of permanent
periodic alimony without determining the income she could receive from
her share of certain equitably distributed marital assets; and (3) failing to
make findings to support the ruling requiring Husband to secure Wife’s
alimony award with life insurance. As to the errors asserted by Wife on
cross-appeal, we affirm the trial court without discussion. Thus, we affirm
in part, reverse in part, and remand for further proceedings.
Background
The parties had been separated for several years prior to Husband filing
the dissolution action. At the time of the final hearing, they had been
married seventeen years. When the action was filed, Florida was
Husband’s primary residence, but he was living out of the country and
working as a diplomat employed by the federal government. Wife was
residing in Florida and had been a homemaker during most of the
marriage, caring for their minor child, who reached majority age during
the pendency of the proceedings. Having been admitted to practice law in
four bars, Husband represented himself throughout the majority of the
proceedings below. Husband was ordered to pay Wife temporary alimony,
child support, and temporary attorney’s fees during the proceedings.
Relevant to the issues raised in this appeal, the evidence at the final
hearing indicated the primary marital assets for equitable distribution
were: the marital home; Husband’s Thrift Savings’ Plan, a federal employee
retirement investment account (“TSP account”); and Husband’s federal
pension plan. Regarding alimony, Husband testified and argued at the
final hearing that he would be retiring from his State Department career
within two months after the hearing. According to Husband, his
retirement pension would provide a fraction of his salary. He asserted Wife
should not receive any alimony because after the division of the proceeds
from the pending sale of the marital home and his TSP account, Wife would
be getting just over half a million dollars, in addition to a share of his
pension. Husband also argued that the trial court should impute income
to Wife, asserting that despite her medical problems, she had been, and
was then, working.
Only three witnesses testified at the final hearing: Husband, Wife, and
Wife’s accountant.
Husband testified that as a foreign service officer, he was facing
involuntary retirement in the next two months. However, Husband did
not present admissible evidence to corroborate that contention. He
testified that after his retirement, he intended to obtain other employment
and that the State Department would provide him with a program to help
him obtain employment after retirement.
Husband attempted to testify concerning his investment funds, but
Wife’s objections to his testimony concerning performance of those funds
and rates of return were sustained. Notably, Husband did not enter an
updated financial affidavit into evidence. When asked about the earlier
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financial affidavit he filed, he maintained it had been accurate. However,
Husband was impeached by his deposition testimony in which he admitted
his financial affidavit was in fact inaccurate in terms of his income and
expenses and needed to be updated.
Regarding Wife’s request that her alimony award be secured by life
insurance, Husband testified that his federal employee group life
insurance policy would continue after his retirement if he so chose, but
that there was also the option to receive a survivor’s benefit under his
pension plan. He argued that it would not make sense to have both the
life insurance and the monthly survivorship benefit, since both would pay
out upon his death.
Wife’s accountant testified as a forensic accounting expert. He
prepared and presented schedules to support his testimony about Wife’s
proposal for equitable distribution. On cross examination, Husband
elicited testimony from the accountant that two of the accounts listed in
his equitable distribution schedule under Husband’s column had been
liquidated. When asked why he kept those values on the schedule of
proposed assets to be distributed to Husband when the accounts were
liquidated to pay temporary attorney’s fees awarded to Wife, the
accountant testified that, in his opinion, Husband did not need to liquidate
those accounts to pay Wife’s temporary attorney’s fees because Husband
had a monthly surplus of income from his nonmarital assets to pay the fee
awards.
The trial court issued its final judgment dissolving the marriage and
made numerous findings and determinations not relevant to the issues
discussed in this opinion. We focus on the findings and determinations
pertinent to our discussion.
Regarding equitable distribution, the trial court noted three primary
marital assets to be distributed: the marital home and Husband’s TSP
account, which the parties agreed made up the majority of the marital
estate, as well as Husband’s pension plan. The final judgment reflected
that after the conclusion of the final hearing, the trial court was advised
the marital residence was sold and the parties agreed as to the amount of
the net proceeds. The trial court ordered that the net proceeds be divided
equally between the parties.
Regarding Husband’s TSP account, the trial court determined a portion
of the account was nonmarital. The amount of Husband’s nonmarital
portion was determined by the trial court, and the remaining marital
portion was distributed equally between the parties.
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The trial court also determined that a portion of Husband’s pension
plan was nonmarital. After determining the amount of the nonmarital
portion, Wife was awarded one-half of the marital portion. The trial court
also awarded to Wife the monthly survivor benefit option under the plan.
The trial court noted that Husband did not object to Wife receiving the
survivor benefit option. However, the trial court made no findings as to
the value of the survivor benefit or the cost of the benefit and which party
was to bear the cost of the benefit.
The trial court awarded Wife permanent periodic alimony. In addition,
the trial court found that Husband admitted to having multiple life
insurance policies, including one in the amount of $162,000. The trial
court ordered Husband to secure his alimony obligation with life insurance
of at least $162,000 in death benefits or, if his existing life insurance
policies had a death benefit of more or less than that amount, then in the
full sum of the death benefit of the current policies up to a maximum of
$162,000.
After the final judgment was entered, both parties gave notice of appeal.
Appellate Analysis
Equitable Distribution
The standard of review for the equitable distribution of marital assets
and liabilities is abuse of discretion. Canakaris v. Canakaris,
382 So. 2d
1197, 1202-03 (Fla. 1980). Moreover, “any distribution of marital assets
or marital liabilities shall be supported by factual findings in the judgment
or order based on competent substantial evidence with reference to the
[statutory] factors.” § 61.075(3), Fla. Stat. (2015). Where “there is
substantial competent evidence to support the trial court’s finding[s], the
appellate court cannot” substitute its judgment for that of the trial court.
Schriefer v. Schriefer,
831 So. 2d 1284, 1286 (Fla. 5th DCA 2002); see also
Rowl v. Rowl,
864 So. 2d 1236, 1239 (Fla. 5th DCA 2004).
Husband makes various arguments that the trial court erred in its
equitable distribution of marital assets and liabilities. We affirm without
discussion all of the trial court’s rulings as to the various equitable
distributions contested by Husband, except for two of Husband’s
arguments, which we agree merit reversal. We address one of his
arguments in this section. We address the second argument in the third
section of our analysis because it relates to the trial court’s decision
regarding security for the alimony award.
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Husband contends that the trial court erroneously awarded him a
brokerage account and three retirement accounts as assets even though
they had been liquidated prior to the final hearing to pay marital debts.1
The evidence showed that Husband liquidated the brokerage account and
the retirement accounts a few months before the final hearing and used
the funds to pay two temporary attorney’s fees awards entered against him
in favor of Wife a month prior to the liquidation. There was no evidence
that Husband used the funds for any other purpose. Although Wife
contends on appeal that Husband did not need to liquidate those marital
assets, based on her accountant’s testimony that Husband was yielding a
monthly surplus of income from his nonmarital assets at the time,
Husband testified he did not have sufficient funds to comply with the
temporary fee awards. The trial court made no finding as to whether
Husband could have paid the temporary fee awards without liquidating
the marital accounts.
As a general rule, “‘it is error to include in the equitable distribution
scheme assets or sums that have been diminished or depleted during the
dissolution proceedings’ unless the depletion was the result of misconduct.”
Tillman v. Altunay,
44 So. 3d 1201, 1203 (Fla. 4th DCA 2010) (emphasis
added) (quoting Bush v. Bush,
824 So. 2d 293, 294 (Fla. 4th DCA 2002)).
“[W]hen misconduct during the dissolution proceedings results in the
dissipation of a marital asset . . . , the misconduct may serve as a basis
for assigning the dissipated asset to the spending spouse when calculating
equitable distribution.” Roth v. Roth,
973 So. 2d 580, 584-85 (Fla. 2d DCA
2008) (citing Levy v. Levy,
900 So. 2d 737, 746 (Fla. 2d DCA 2005)); see
also Romano v. Romano,
632 So. 2d 207, 210 (Fla. 4th DCA 1994).
When considering whether the dissipation of an asset resulted
from misconduct, the question for the trial court is whether
“one spouse use[d] marital funds for his or her own benefit
and for a purpose unrelated to the marriage at a time when
the marriage is undergoing an irreconcilable breakdown.”
Romano,
632 So. 2d at 210 (quoting Gentile v. Gentile,
565 So.
2d 820, 823 (Fla. 4th DCA 1990)). The misconduct necessary
to support inclusion of dissipated assets in an equitable
distribution scheme does not include mismanagement or
1 The brokerage account was identified on the equitable distribution schedule
attached to the final judgment as a Capital One Sharebuilder account, and the
three investment accounts were identified as federal credit union investment
retirement accounts.
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simple squandering of marital assets in a manner of which the
other spouse disapproves. Segall v. Segall,
708 So. 2d 983,
986 (Fla. 4th DCA 1998). Instead, to include a dissipated
asset in the equitable distribution scheme, there must be
evidence of the spending spouse’s intentional dissipation or
destruction of the asset, and the trial court must make a specific
finding that the dissipation resulted from intentional
misconduct.
Roth,
973 So. 2d at 585 (alteration in original) (emphasis added); see also
Levy,
900 So. 2d at 746 (reversing award of dissipated asset because the
wife’s testimony that she used the asset for attorney’s fees and living
expenses during the dissolution proceedings was unrebutted and the trial
court did not find the wife guilty of misconduct); Bush,
824 So. 2d at 294
(reversing award of dissipated asset when the evidence showed that the
husband exercised his stock options to pay the parties’ financial
obligations during the dissolution proceedings); Cooper v. Cooper,
639 So.
2d 153, 155 (Fla. 2d DCA 1994) (reversing award of dissipated asset when
the husband’s testimony that he used the IRA funds to pay temporary
support obligations and his own living expenses was unrebutted and there
was no finding of misconduct); Knecht v. Knecht,
629 So. 2d 883, 886 (Fla.
3d DCA 1993) (reversing award of dissipated asset when no evidence
contradicted the wife’s testimony that she expended the funds in her IRA
for support during the dissolution proceedings).
Because there was no determination by the trial court that Husband
wrongfully depleted the accounts through any misconduct or that the
liquidated funds were used for any purpose that would support crediting
the value of this depleted asset to him, it was error to distribute the value
of the depleted accounts to him as marital assets. Therefore, we reverse
the equitable distribution of the contested brokerage and investment
accounts which were depleted at the time of the final hearing due to a lack
of any finding of misconduct by Husband. Our reversal requires the trial
court to re-determine the equitable distribution of marital assets and
liabilities to make appropriate adjustments to conform to the evidence.
See Bush,
824 So. 2d at 294. “[T]he trial court should not include assets
depleted by either party.”
Id. As necessary, the trial court can entertain
additional evidence.
Alimony
“[T]he nature and amount of an award of alimony is a matter committed
to the sound discretion of the trial court.” Ryan v. Ryan,
927 So. 2d 109,
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112 (Fla. 4th DCA 2006) (alteration in original) (quoting Kovalchick v.
Kovalchick,
841 So. 2d 669, 670 (Fla. 4th DCA 2003)).
Husband and Wife make several different arguments contending the
trial court erred in the type and amount of alimony it awarded. We affirm
all the trial court rulings contested by Husband and Wife without
discussion, except for two contentions raised by Husband which we now
discuss.
Husband argues that the trial court erred in its computation of alimony
by failing to account for various sources of income in determining Wife’s
need. “Failing to attribute the income from property being distributed to
that party when determining need and ability to pay is reversible error.”
Hodge v. Hodge,
129 So. 3d 441, 444 (Fla. 5th DCA 2013). We have
acknowledged that:
Income includes “annuity and retirement benefits, pensions,
dividends, interest, royalties, trusts, and any other payments,
made by any person [or] private entity. . . .” § 61.046(8), Fla.
Stat. Florida courts have interpreted the statutory language
to mean that a court should impute income that could
reasonably be projected on a former spouse’s liquid assets.
Rosecan v. Springer,
985 So. 2d 607, 609 (Fla. 4th DCA 2008) (alterations
in original). We have further explained:
A court should not require a spouse in need of alimony to
deplete or invade capital assets to maintain his or her
standard of living. Hanks v. Hanks,
553 So. 2d 340, 343 (Fla.
4th DCA 1989). However, in ruling on a request for alimony,
a court must consider “all sources of income available to either
party, including income available to either party through
investments of any asset held by that party.” § 61.08(2)(i), Fla.
Stat. (2014).
Sherlock v. Sherlock,
199 So. 3d 1039, 1043 (Fla. 4th DCA 2016).
It appears from the evidence that the net proceeds of the sale of the
marital residence was a substantial sum, which the trial court equally
divided between the parties. The portion of the proceeds awarded to Wife
should be deemed available for generating investment income, absent
proof the money was used to purchase a new residence. See Hodge,
129
So. 3d at 444. Thus, we agree with Husband that the trial court reversibly
erred in its determination of the amount of alimony awarded to Wife
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without determining the income she could receive from her share of the
proceeds from the sale of the marital residence.
With respect to the portions of his TSP account, monthly pension, and
post-retirement survivors’ benefits awarded to Wife, Husband further
argues that the trial court failed to consider the income that could be
generated from those assets to support Wife after the marriage. However,
review of the transcript does not reflect any competent substantial
evidence concerning the rates of return on those assets or the revenue that
Wife could obtain from investing those assets. The transcript does reflect
that Husband began to testify concerning his investment funds, but Wife’s
objections to his testimony concerning performance of those funds and
rates of return were sustained. No expert witness testimony was presented
on this issue. Additionally, given that the trial court found that no
evidence was presented to corroborate Husband’s assertion that he would
be retiring soon, it appears that any potential income Wife could earn from
the portion of his retirement plan awarded to her would have been
speculative. Thus, we determine the trial court did not err in failing to
account for income from the investment account and the retirement plan.
However, because we are remanding for a redetermination as to equitable
distribution, which in turn requires a re-evaluation of the amount of
alimony to which Wife is entitled, and because during the pendency of this
appeal it appears Husband has retired, it is appropriate for the trial court
on remand to consider the amount of income Wife can be expected to
receive as to any investment accounts or retirement benefits awarded to
her, assuming proper and credible evidence of value is presented.
Insurance and Survivor Benefit to Protect Alimony
“We review a trial court’s imposition of a security requirement [to
protect alimony] for an abuse of discretion.” Galstyan v. Galstyan,
85 So.
3d 561, 566 (Fla. 4th DCA 2012).
Husband admitted at trial to having multiple life insurance policies,
including one in the amount of $162,000. The trial court ordered that
Husband would be required to secure his alimony obligations with life
insurance, determining that he should continue paying for the policy with
Wife being trustee and sole beneficiary of at least $162,000 in death
benefits or, if his existing life insurance policies had a death benefit of
more or less than that amount, then in the full sum of the death benefit of
the current policies up to a maximum of $162,000.
In addition, in the final judgment, Wife was awarded one-half of
Husband’s pension plan, including a survivor benefit option for Wife. The
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trial court noted that Husband did not object to Wife receiving the survivor
benefit option. However, Husband did argue to the trial court that it would
not make sense to have both the life insurance and the survivor benefit,
since both would pay money upon his death.
On appeal, Husband argues that, in the absence of special
circumstances, the trial court erred in requiring him to pay for both life
insurance and a survivor benefit under his pension plan to secure the
alimony award for Wife. In support of this position, Husband cites section
61.08(3), Florida Statutes, which provides:
To the extent necessary to protect an award of alimony, the
court may order any party who is ordered to pay alimony to
purchase or maintain a life insurance policy or a bond, or to
otherwise secure such alimony award with any other assets
which may be suitable for that purpose.
§ 61.08(3), Fla. Stat. (2015) (emphases added). We have determined that,
under the plain reading of this statute, “the trial court may choose to order
a paying spouse to obtain a life insurance policy or a bond, but not both”
to secure an award of alimony. Galstyan,
85 So. 3d at 565.
In this case, however, although the trial court awarded Wife both life
insurance and the survivor benefit under Husband’s pension plan, it did
not rule that both were for purposes of securing the alimony award. Rather,
the trial court explicitly found that the life insurance plan shall continue
in order to secure the alimony award. In contrast, the trial court’s
determination that Wife was entitled to half of the marital portion of
Husband’s pension and the survivor benefit thereof, was part of the trial
court’s equitable distribution. In other words, the trial court made no
finding that Wife’s entitlement to the survivor benefit was for the purpose
of securing her alimony award. As such, while it would be improper to
award a survivor benefit in addition to an insurance policy to secure an
alimony award, Husband’s particular argument in this appeal that the trial
court erroneously ordered both the life insurance and the survivor benefit
to secure the alimony award is not supported by the record.
However, we agree with another argument raised by Husband
concerning the award of the monthly survivor benefit attached to the
retirement plan. Husband argues that the trial court failed to determine
who should bear the cost of the survivor benefit, where the cost is a
percentage of the gross pension. The trial court ruled as follows:
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e. Husband further has an FSPS Pension with the State
Department. Wife is entitled to 50% of the marital portion
of that pension (accrued between the date of marriage
(December 23, 1997) and the date of filing for divorce
(December 19, 2014)) and shall include the survivor benefit
option for the Wife. Husband did not object to the Wife
receiving the survivor benefit option. Within thirty (30)
days of the execution of this Final Judgment, Husband
shall sign all forms necessary to ensure Wife’s share of
Husband’s pension is transferred to her and that the
survivor benefit option is elected.
We have explained that “[s]urvivor benefits in pensions are considered
marital property.” Diaz v. Diaz,
970 So. 2d 429, 431 (Fla. 4th DCA 2007)
(finding that the trial court erred in failing to include the value of the
pension survivor benefits). In Diaz, we determined that “[t]he survivor
benefits, which were assigned to the former wife . . . , were marital property
that should have been included in the valuation of assets and failure to do
so resulted in an inequitable distribution of assets.”
Id. Thus, Husband
argues that the trial court erred when it failed to value the survivor benefit
as an asset to Wife, and also failed to account for the cost thereof, and
determine which party should bear that cost.
Notably, the transcript reflects that Husband presented evidence
concerning this issue. Specifically, he testified that the defined survivor
benefit would be a specific amount per month, with an associated cost of
10% of the annuity amount. Based on such evidence, we conclude that
Husband is correct in that the trial court failed to account for the value
and cost of the survivor benefit. Thus, we reverse the portion of the final
judgment requiring Husband to pay the cost of the survivor benefit of his
retirement plan for failure to make appropriate findings. On remand, the
trial court shall make the appropriate determinations as to the value of
the survivor benefit, if awarded as equitable distribution, and determine
which party should bear that cost.
With regard to Husband’s argument that the trial court failed to make
any findings of special circumstances to justify the need to secure the
alimony award with life insurance, we have explained that:
A trial court may order life insurance to protect child support
and alimony. Sobelman v. Sobelman,
541 So. 2d 1153 (Fla.
1989). Such an award, however, is not automatic. It “is
justified only if there is a demonstrated need to protect the
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alimony recipient.” Privett v. Privett,
535 So. 2d 663, 665 (Fla.
4th DCA 1988).
Hedendal v. Hedendal,
695 So. 2d 391, 392 (Fla. 4th DCA 1997) (emphasis
added). “In the absence of special circumstances, a spouse cannot be
required to maintain life insurance for the purposes of securing support
obligations.” Baker v. Baker,
763 So. 2d 493, 494–95 (Fla. 4th DCA 2000).
Additionally,
if a trial court orders a spouse to obtain life insurance, then it
must make “specific findings as to the availability and cost of
the policies and the impact of such cost on the husband.”
Norman v. Norman,
939 So. 2d 240, 241 (Fla. 1st DCA 2006);
Davidson v. Davidson,
882 So. 2d 418, 421 (Fla. 4th DCA
2004) (reversing and remanding the portion of a final
judgment ordering the spouse to obtain life insurance because
the trial court failed to make factual findings concerning the
cost of the policy or the spouse’s ability to obtain or pay for it).
“An order requiring a spouse to maintain a life insurance
policy to secure alimony ‘is justified only if there is a
demonstrated need to protect the alimony recipient.’” Forgione
v. Forgione,
845 So. 2d 968, 969 (Fla. 4th DCA 2003) (quoting
Moorehead v. Moorehead,
745 So. 2d 549, 552 (Fla. 4th DCA
1999)). The “demonstrated need” must be supported by
competent, substantial evidence.
Id. at 969–70.
Galstyan,
85 So. 3d at 565–66 (emphases added).
Review of the trial court’s findings in this case does not reflect any
finding that there was a demonstrated need to protect Wife’s alimony
award. Notably, although Wife argues special circumstances did exist in
this case, namely, Husband’s prior contempt orders for failing to abide by
prior temporary support obligations and the fact that the insurance policy
was already in place and affordable to Husband, the trial court
nevertheless failed to make such findings in justifying its ruling. Absent
such a finding of special circumstances, Husband is correct that the trial
court failed to make the requisite findings to justify the requirement that
he secure the alimony award with a life insurance policy. We reverse on
this issue for the trial court to determine whether special circumstances
require that Wife’s award of alimony be secured by life insurance, and if
so, make the required findings under the caselaw.
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Conclusion
We affirm the trial court’s rulings, except for the following matters: (1)(a)
equitably distributing as marital assets to Husband a brokerage account
and three retirement accounts, even though they had been liquidated and
spent prior to the final hearing, and (b) equitably distributing to Wife a
survivor benefit attached to Husband’s pension, without determining the
value of the survivor benefit and who bears the cost of the benefit; (2)
awarding Wife an amount of permanent periodic alimony without
determining the income she could receive from her share of the proceeds
from the sale of the marital residence and liquid assets distributed to her;
and (3) failing to make findings to support the order requiring Husband to
maintain life insurance to secure the award of alimony to Wife. On
remand, the trial court may entertain additional evidence to resolve and
adjust the equitable distribution of marital assets and liabilities and to
make appropriate determinations as to the errors identified regarding the
amount of alimony awarded to Wife and the need to secure the alimony
award.
Affirmed in part, reversed in part, and remanded with instructions.
FORST, J. and GILLESPIE, KENNETH, Associate Judge, concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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