DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
RICHARD LAWRENCE BERNSTEIN,
Appellant,
v.
CYNTHIA JUDITH BERNSTEIN,
Appellee.
No. 4D21-2480
[April 19, 2023]
Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Scott Ryan Kerner, Judge; L.T. Case No. 50-2019-DR-
010056-XXXX-SB.
Steven M. Pesso of Steven M. Pesso, P.A., Boca Raton, for appellant.
Keith W. Meisel of Keith W. Meisel, P.A., North Palm Beach, for appellee.
FORST, J.
Appellant Richard Lawrence Bernstein (“Former Husband”) appeals the
trial court’s amended final judgment of dissolution of marriage between
him and Appellee Cynthia Judith Bernstein (“Former Wife”). The Husband
argues on appeal that the trial court erred in (A) classifying the parties’
residence as a marital asset for purposes of equitable distribution; (B)
awarding Former Wife more than a 50/50 split of the proceeds from
Former Husband’s trade-in of his Corvette; and (C) awarding an excessive
permanent alimony award.
We affirm the trial court on issue (A), writing to explain that the court
reached a correct result on the equitable distribution with respect to the
marital home notwithstanding a flawed analysis of the issue. We agree
with Former Husband on issue (B) that the trial court’s decision to give
Former Wife a greater than 50/50 credit for the Corvette’s trade-in
proceeds was unsupported by competent substantial evidence and thus
remand for the trial court to modify its final judgment on this issue.
Finally, we affirm the trial court’s alimony award without discussion,
noting Former Husband failed to identify an error clearly appearing on the
record.
Background
The parties were married for more than twenty years, until Former
Husband petitioned for dissolution of marriage in 2019. In 1994,
approximately three years prior to the marriage, Former Husband and his
mother purchased a home in Boca Raton, where the parties resided as
husband and wife for twenty-two years (“the marital home”). Former
Husband paid $445,000 in cash for the marital home, and it was and
remains titled in his and his mother’s names.
Based on testimony from, primarily, Former Husband’s witnesses, the
trial court set the current value of the marital home at $1.25 million. The
witnesses attributed the significant increase to “passive appreciation,” as
the home was waterfront property, in a neighborhood where many of the
original homes had been torn down and replaced by new homes. Former
Wife argued that the marital home was not a “tear-down,” and the $1.25
million appraisal was attributable in large part to active appreciation. She
presented evidence of her efforts to maintain and improve the home—she
personally climbed on the roof and fixed it, cleaned the gutters, fixed the
pavers, took out 500 feet of tile with a chisel and hammer, performed
garden work and cleaned the pools. Former Husband listed her on
renovation permits for the property. Additionally, Former Wife contributed
significant personal money in improving the marital home. Specifically,
Former Wife used $75,000 from a personal injury settlement to renovate
the marital home. The home and surrounding grounds were also generally
maintained with marital funds.
In its final judgment of dissolution, the trial court made several findings
challenged in the instant appeal. First, it determined that the marital
home was worth $1.25 million and that it was a marital asset subject to
equitable distribution. The court found that “[i]t is disingenuous for
[Former Husband] to reap the benefits of [Former Wife’s] 25 years of toils,
work and financial contribution for the upkeep and improvement of the
marital home, including money from her personal injury lawsuit, yet be
able to avoid equitable distribution of the asset.” The court determined
there was “donative intent” to make the marital home a marital asset. The
trial court alternatively concluded that, “[e]ven if there was no donative
intent, the nonmarital nature became lost during the 20 plus years of
marriage based upon the parties’ actions and inaction.” Finally, the trial
court gave Former Husband a $445,000 credit for the marital home in
acknowledgment of Former Husband’s pre-marriage purchase of the home
for that amount.
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The trial court equitably distributed the remaining $805,000 of the
value of the marital home and other marital assets. One such asset was
Former Husband’s Corvette that he had traded in for $15,150 in cash.
Specifically, the trial court awarded Former Wife a $9,000 credit for Former
Husband’s Corvette trade-in. The court did not provide an explanation for
the $9,000 figure. This timely appeal followed. 1
Analysis
On appeal, Former Husband challenges (A) the trial court’s
classification of the marital home as a marital asset and its inclusion in
the equitable distribution scheme, and (B) the trial court’s award of a
$9,000 credit to Former Wife with respect to the Corvette’s trade-in value.
He also contests the amount of the trial court’s alimony award. As noted
above, we affirm the trial court’s alimony award without further
discussion.
A. The Marital Home
Former Husband argues that the trial court erroneously classified the
home as a marital asset, because he purchased it with premarital funds,
it was titled in his and his mother’s names, and it was not a gift. He further
argues that the trial court erred by attributing $805,000 to equitable
distribution, because Former Wife did not present evidence that
improvements to/money spent on the home increased its value.
We review a trial court’s determination of equitable
distribution for an abuse of discretion. Kovalchick v.
Kovalchick,
841 So. 2d 669, 670 (Fla. 4th DCA 2003).
“Distribution of marital assets and liabilities must be
supported by factual findings in the judgment or order based
on competent substantial evidence.” Bardowell v. Bardowell,
975 So. 2d 628, 629 (Fla. 4th DCA 2008) (citing § 61.075(3),
Fla. Stat.). “A trial court’s legal conclusion that an asset is
marital or nonmarital is subject to de novo review.” Mondello
v. Torres,
47 So. 3d 389, 392 (Fla. 4th DCA 2010).
Higgins v. Higgins,
226 So. 3d 901, 903–04 (Fla. 4th DCA 2017).
The standard of review as to “whether donative intent existed to render
an asset an interspousal gift and part of the marital estate is ‘competent,
1Despite filing a notice of cross-appeal, Former Wife never filed a cross-initial
brief.
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substantial evidence.’” Hooker v. Hooker,
220 So. 3d 397, 404 (Fla. 2017).
“[A]ppellate courts are to defer to trial courts’ findings of whether disputed
property is marital or nonmarital.”
Id.
In dissolution of marriage cases, section 61.075(1), Florida Statutes
(2019), requires a trial court to equitably distribute the parties’ marital
assets and to start by determining whether an asset is marital or
nonmarital. We begin by acknowledging that Former Husband (1)
purchased the marital home with his own funds prior to the parties’
marriage, and (2) titled it solely in his and his mother’s names. Clearly,
the marital home was not a marital asset under section 61.075 when the
parties married in 1997. See Young v. Young,
606 So. 2d 1267, 1270 (Fla.
1st DCA 1992).
The trial court found that the marital home became marital property
because of an interspousal gift, citing Hooker in support. Alternatively,
the trial court found that even if no donative intent supported an
interspousal gift finding, the marital home lost its nonmarital character
due to the passage of time and the commingling of marital funds and
efforts. Recognizing Former Husband’s initial pre-marriage purchase of
the property, the trial court gave him credit for the purchase price.
Hooker involved whether a husband had donative intent to make two
properties marital assets. The husband and wife “had independent
sources of income from family inheritances, and they maintained
independent finances throughout the marriage.” Hooker,
220 So. 3d at
399. The husband purchased the two properties at issue with his own
funds during the marriage, and both were titled solely in his name.
Id. at
400–01. However, the trial court determined that both properties “were
and should be considered joint marital assets of the Husband and Wife in
equitable distribution by [the trial court], the way they were considered
joint marital assets by the parties as they lived and raised a family in these
‘assets.’”
Id. at 400. The trial court found that the husband made
interspousal gifts of interests in the properties to the wife and that their
actions showed joint ownership.
Id. at 401.
However, in recognition of the husband’s significant financial
contributions, the trial court found that an unequal distribution was
warranted.
Id. Thus, the trial court awarded the husband with 66% and
75% interest in the two properties.
Id. The Florida Supreme Court
determined that competent, substantial evidence “existed to support the
trial judge’s conclusion that both properties at issue were marital assets
under section 61.075, Florida Statutes.”
Id. at 407.
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The trial court in the instant case reached a similar conclusion,
determining the marital home was considered and treated as a marital
asset during the parties’ marriage. However, no evidence supports a
finding that Former Husband had donative intent regarding the home’s
pre-marriage value. “[I]mprovements or expenditures of marital funds to
a nonmarital asset does not transform the entire asset into a marital asset;
rather, it is only the ‘enhancement in value and appreciation’ which
becomes a marital asset.” Martin v. Martin,
923 So. 2d 1236, 1238–39 (Fla.
1st DCA 2006) (quoting Strickland v. Strickland,
670 So. 2d 142, 143 (Fla.
1st DCA 1996) (Joanos, J., concurring in part and dissenting in part)).
To the extent that the trial court found otherwise, such a determination
was neutralized by the trial court providing Former Husband with a
“credit” for the $445,000 which he had paid for the property. Like the trial
court in Hooker, the trial court here found that an unequal distribution
was warranted. Ultimately, Former Husband was credited with 67.8
percent of the $1.25 million appraised value of the home ($445,000, his
purchase price, plus half of the $805,000 appreciation).
This leaves the issue of whether the appreciation in the home’s value
during the twenty-two-year marriage can be considered a “marital asset”
for purposes of equitable distribution.
[A] trial court errs in refusing to distribute equitably the
appreciated value of the marital home caused by inflation,
market conditions, or improvements made on a residence
during the marriage, even though the home may itself be the
separate property of one spouse.
....
. . . Once the wife established that marital funds or labor were
used to make the improvements to the home, it was the
husband’s burden to show whether any part of the enhanced
value was exempt from distribution because [it was]
“unrelated to either marital party’s management, oversight, or
other contribution, but instead due solely to purely passive
appreciation of the original asset.”
Young,
606 So. 2d at 1270 (quoting Sanders v. Sanders,
547 So. 2d 1014,
1016 (Fla. 1st DCA 1989)).
Section 61.075(1), Florida Statutes (2019), provides that “in
distributing the marital assets and liabilities between the parties, [absent
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a justification for an unequal distribution,] the court must begin with the
premise that the distribution should be equal.” Kaaa v. Kaaa,
58 So. 3d
867, 870 (Fla. 2010) (quoting § 61.075(1), Fla. Stat. (2007)), superseded
by statute on other grounds, Ch. 2018-56, Laws of Fla., as recognized in
Matyjaszek v. Matyjaszek,
255 So. 3d 372, 374 (Fla. 4th DCA 2018). “[T]he
passive appreciation of a nonmarital asset, such as [a] marital home, is
properly considered a marital asset where marital funds or the efforts of
either party [during the marriage] contributed to the appreciation.”
Id.
“While these contributions need not be strictly monetary and may include
marital funds or the efforts of either party, they must enhance the value
of the property.” Id. at 871. “Such findings are to be made by the trial
court based on evidence presented by the parties.” Id. at 870.
Here, Former Husband essentially argued that the appreciation in the
appraised value of the marital home was due solely to purely passive
appreciation of the original asset. The trial court rejected this argument,
which was premised on the contention that the home would be torn down,
and the court noted that Former Husband planned to continue living in
the home. The court further found Former Wife “was maintaining the
home, raising a family . . . paying for the upkeep of the home from marital
funds and [Former Husband was] benefitting from her $75,000 in
settlement money to improve the home.” Because Former Husband
argued that Former Wife made no contribution to the marital home’s
enhanced value, he put all his eggs in the “house will be torn down” basket,
and failed to meet the burden under Young to show any part of the home’s
enhanced value was exempt from distribution. We thus affirm the trial
court with respect to its determination that Former Wife receive equitable
distribution credit for half of the estimated appreciation of the marital
home’s value.
B. The Corvette
We agree with Former Husband that the trial court erred when it
awarded Former Wife more than fifty percent of the $15,150 which Former
Husband received for the trade-in of his Corvette. The trial court erred
when it awarded Former Wife a $9,000 credit, rather than fifty percent of
$15,150 ($7,575). On remand, the trial court shall award each party an
equal split of the Corvette’s trade-in proceeds.
Conclusion
For the foregoing reasons, we affirm the trial court’s equitable
distribution award and its alimony award. However, we remand with
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instructions for the trial court to award each party an equal split of the
Corvette’s trade-in proceeds.
Affirmed in part, reversed in part, and remanded with instructions.
CIKLIN, J., concurs in part and dissents in part with opinion.
WARNER, J., concurs in part and dissents in part with opinion.
CIKLIN, J., concurring in part and dissenting in part.
I concur with the entirety of the majority opinion save for that portion
pertaining to “B. The Corvette.” I would affirm the trial court as to any
findings pertaining to the Corvette, specifically including part IV (e) of the
Final Judgment entitled “Automobiles.”
WARNER, J., concurring in part and dissenting in part.
While I concur in the affirmance of the alimony award and reversal of
the Corvette credit, I dissent from the majority’s affirmance of the equitable
distribution of the marital residence. In my view, the majority opinion
misapplies Hooker v. Hooker,
220 So. 3d 397 (Fla. 2017). The length of
time during which the married parties lived, maintained and improved the
residence cannot alone establish donative intent to convey to a spouse an
interest in a marital residence titled in the name of the other spouse, and
purchased prior to the marriage. See
id. at 406. Further, neither Hooker
nor any other case which I can find concludes that donative intent can be
found only for the value of a passive appreciation of the property, as the
majority does in this case in finding that no donative intent can be found
for the initial purchase funds made prior to marriage.
The majority’s analysis fits more closely to a finding under section
61.075(6)(a)1.b., Florida Statutes (2019), of an enhancement in value of a
non-marital asset. However, no evidence here demonstrates any enhanced
value from improvements made to the property to which the former wife
may have contributed. Even if the trial court could find some
enhancement, the court must apply the statutory formula from section
61.075(6)(a)1.c., Florida Statutes (2019), to determine the marital portion
of the appreciation.
The majority correctly notes Hooker held that the standard for reviewing
a trial court’s finding of donative intent of a spouse to gift property to the
other spouse is whether it is supported by competent substantial evidence.
220 So. 3d at 399. However, the majority overlooks that standard’s
application in Hooker, and ignores Hooker’s acknowledgment that a
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spouse’s mere access to the marital residence and “autonomy in residing,
maintaining, and improving [the marital residence]” is insufficient to prove
donative intent of an interspousal gift for purposes of equitable
distribution in a dissolution of marriage.
Id. at 406.
Hooker’s facts shows how it supports reversal in this case. In 1989
during the marriage, the husband in Hooker had purchased vacant land
with nonmarital funds, based upon a recommendation from the former
wife’s father that the property would be a good investment.
Id. at 400. The
wife and husband took out a mortgage to build on the property, and twenty
years later the property consisted of a working horse farm with sixteen
stalls, riding rings, and two wings on the barn, one of which was the
marital residence and the other were staff apartments.
Id. In 1997, the
husband transferred the property by warranty deed into a corporation to
hold title to the entire property.
Id. at 405. He then sold a half interest in
the corporation to another family who exercised an option to purchase the
other half in 2010. The wife filed for divorce when she discovered that the
husband did not intend to share any of the proceeds with her.
Id.
The Florida Supreme Court determined that the totality of the evidence
supported a donative intent of the husband. The Court pointed to the
transfer of the property to the corporation as the most significant
indication of intent because the corporation, formed during the marriage,
became a marital asset.
220 So. 3d at 406. Therefore, when the property
was transferred into the corporation, the property too became a marital
asset. Also, “[b]efore selling [the horse farm residence], Husband told Wife
that it was in their best interests to convey [the property] to [the
corporation.].”
Id.
The Court concluded its analysis by showing that a combination of
factors created the competent substantial evidence of donative intent:
While one factor independently—such as Wife signing the
Warranty Deed or being listed on the mortgage, or Wife’s
unfettered access to and autonomy in residing,
maintaining, and improving [the marital residence]—does
not establish an interspousal gift for purposes of equitable
distribution in a dissolution of marriage, viewing
Husband’s actions comprehensively leads us to conclude that
competent, substantial evidence supports the trial court’s
finding that [the marital residence] was an interspousal gift,
of which Husband intended to divest himself of complete
dominion and control to his Wife.
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Id. (Emphasis added.)
As to a second piece of property which served as the family’s summer
home, also purchased in the husband’s name with nonmarital funds, the
Hooker court found that the husband established donative intent when he
sent the wife a “Happy Anniversary” card with a picture of the house on it.
Id. at 407.
In this case, the trial court relied only on the wife’s use of the home and
her contribution to it as establishing donative intent. The court found:
[T]he Wife was maintaining the home, raising a family, and
paying money for the improvement of the marital residence[,]
entitl[ing] her to an interest in the property upon Equitable
Distribution. Moreover, the Husband’s actions, such as giving
Wife keys to the home, placing her on permits for
improvements, paying for the upkeep of the home from marital
funds and benefiting from her $75,000 in settlement money
to improve the home, indicates an intent for the real property
to be their marital home, and therefore subject to
equitable distribution.
(Emphasis in original). The trial court relied on the “Wife’s unfettered
access to and autonomy in residing, maintaining, and improving [the
marital residence],” which Hooker stated was insufficient to show donative
intent. See
id. at 406. In addition, the court here seemed to equate
donative intent with an intent that the property be the marital residence—
a belief that a marital residence is always a marital asset. That is not what
Hooker, or any other case, holds.
We have previously held that the improvement of nonmarital property
with marital funds does not make the property a marital asset:
[T]he act of maintaining or expending marital assets to
maintain or improve the cottage did not result in a conversion.
See Martin v. Martin,
923 So. 2d 1236, 1238–39 (Fla. 1st DCA
2006) (“[I]mprovements or expenditures of marital funds to a
nonmarital asset does not transform the entire asset into a
marital asset; rather, it is only the ‘enhancement in value and
appreciation’ which becomes a marital asset.”) (citing
Strickland v. Strickland,
670 So. 2d 142, 143 (Fla. 1st DCA
1996)).
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Macleod v. Macleod,
82 So. 3d 147, 149 (Fla. 4th DCA 2012). Similarly, a
spouse’s contribution to the marital residence does not make the residence
a marital asset. See Belmont v. Belmont,
761 So. 2d 406, 408 (Fla. 2d DCA
2000) (reversing award of home to wife where home was owned by husband
prior to marriage and undisputed evidence showed that vast majority of
appreciation of property was passive and only minor amount was
attributable to marital efforts, and directing that only amount of
nonpassive appreciation should be treated as a marital asset on remand).
As Hooker stated, “[the] [w]ife’s unfettered access to and autonomy in
residing, maintaining, and improving [the marital residence]—does not
establish an interspousal gift for purposes of equitable distribution in a
dissolution of marriage.”
220 So. 3d at 406 (emphasis added).
The majority’s other reasons do not provide competent, substantial
evidence of donative intent either. No evidence in the record supports the
trial court’s finding that the husband placed the wife’s name on permits,
as the record contains neither permits nor any testimony showing that
both names were on the permits. While the trial court credited the wife’s
testimony that she used a $75,000 settlement to make improvements on
the home, that does not show the husband’s donative intent, but merely
shows her contribution to a nonmarital asset.
Instead of treating the home as marital as a result of a gift, the court
was required to consider whether the wife was entitled to a share of the
enhancement of value pursuant to section 61.075(6)(a)1.b., based upon
her contributions. Unlike the majority, I conclude that the husband did
not put “all his eggs in one basket.” The husband claimed that the
property was nonmarital and he was entitled to all the appreciation of the
property, because none of the improvements enhanced its value, as his
real estate expert testified that the property value was in the land because
the house was a “tear down.” As an alternative, he claimed that the wife
would only be entitled to the appreciation to the property from the
application of marital funds as set forth in the statute.
Section 61.075(6)(a)1.c.(V), Florida Statutes (2019), requires a court to
apply a specific formula for determining what portion of appreciation by
contribution of marital funds to nonmarital assets constitutes a marital
asset. The formula first calculates “passive appreciation” by deducting the
property’s value at the date of marriage or its later acquisition from its
valuation date in the dissolution action and less any active appreciation,
which is defined as any contribution of marital funds by either party.
§ 61.075(6)(a)1.c.(I), Fla. Stat. (2019). A “coverture fraction” is then
calculated using the amount of mortgage payments on the property during
the marriage as the numerator and the property’s value on the date of the
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marriage as a denominator. § 61.075(6)(a)1.c.(II), Fla. Stat. (2019). In this
case, the coverture fraction is zero, because no mortgages were placed on
the property and thus no coverture passive appreciation. The total marital
appreciation is then calculated as the sum of the passive appreciation plus
the active appreciation. § 61.075(6)(a)1.c.(IV), Fla. Stat. (2019).
While the husband’s primary contention at trial was that the property
value had no appreciation due to any improvements during the marriage,
he also provided testimony of an alternative method of determining the
marital portion of appreciation. Applying the statutory formula, his real
estate expert testified that the property’s value was $1.25 million. The
husband’s CPA expert valued the home as of date of marriage at $500,000,
and the parties made improvements costing $51,826 during the marriage.
By following the statutory formula, the husband’s expert determined that
the passive appreciation attributable to the coverture fraction was zero.
Thus, the property’s marital portion was the active appreciation’s value, or
$51,826, and each spouse would receive half as their share of active
appreciation. The husband did, therefore, provide an alternative
calculation based upon the statute. The court did not make this
calculation, because it found that the entire property was marital.
Despite minimal support in the record, the court apparently believed
the wife’s claim that she contributed $75,000 to the improvements in the
home, thus rejecting the husband’s expert’s documented active
appreciation figure of $51,826. As the settlement proceeds were received
during marriage, those funds would be a marital asset. See Roth v. Roth,
312 So. 3d 1021 (Fla. 2d DCA 2021). The parties do not dispute this, and
the wife’s CPA treated the settlement funds as marital funds. Therefore, if
the court credited the improvements at $75,000 as the active appreciation
instead of the husband’s figure, then the formula would require that each
spouse receive credit for half of it, or $37,500.
In any event, I conclude that no competent, substantial evidence shows
the husband’s donative intent regarding the marital residence. The wife
may be entitled to a share of the active appreciation in the residence, but
the court erred in distributing fifty percent of the passive appreciation to
the wife. I would reverse and remand for the court to follow the statute.
* * *
Not final until disposition of timely filed motion for rehearing.
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