Shelbie Torres v. Alejandro Raul Torres ( 2020 )


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  •               IN THE MISSOURI COURT OF APPEALS
    WESTERN DISTRICT
    SHELBIE TORRES,                                        )
    )
    Respondent,       )
    WD82498
    v.                                                     )
    )
    OPINION FILED:
    )
    April 14, 2020
    ALEJANDRO RAUL TORRES,                                 )
    )
    Appellant.      )
    Appeal from the Circuit Court of Jackson County, Missouri
    The Honorable Susan E. Long, Judge
    Before Division Four: Karen King Mitchell, Chief Judge, and
    Cynthia L. Martin and Edward R. Ardini, Jr., Judges
    Alejandro Torres (Husband) appeals the property distribution portion of the amended
    judgment dissolving his marriage to Shelbie Torres (Wife).1 Husband raises three points on
    appeal, all pertaining to the trial court’s order that Husband pay Wife $302,300.50 to equalize the
    distribution of marital property. Husband argues that the court erred in ordering the equalization
    payment because the court (1) misapplied Missouri law governing when equity in a spouse’s
    non-marital company can be deemed marital property; (2) lacked substantial evidence to support
    1
    Husband does not challenge the trial court’s award of custody, child support, spousal maintenance, or
    professional fees.
    its finding that Husband’s business has a marital value of $348,965.00; and (3) failed to subtract
    the $234,554.00 mortgage on the marital home from the calculation of the net marital estate before
    calculating the equalization payment. We affirm the trial court’s holding that the increase in the
    value of Husband’s non-marital company during the marriage is marital property, but we reverse
    and remand for the court to clarify the effect of the $234,554.00 marital liability on the calculation
    of the equalization payment.
    Background2
    The parties were married on October 12, 2013, in Las Vegas, Clark County, Nevada, where
    the marriage is registered. Three children were adopted or born during the marriage. The parties
    separated after Wife discovered that Husband was involved in an extramarital relationship. Wife
    petitioned for dissolution on April 4, 2017, and Husband filed a counter petition for dissolution on
    May 1, 2017. On September 10 and 17, 2018, the matter came to trial.
    In 2005, Husband opened a plumbing business as a sole proprietorship. In May 2013,
    shortly before he married Wife, Husband converted his business to a single-member limited
    liability company, Alex’s Plumbing, LLC (the Business), with Husband as the sole member. Wife
    retained Michael McLain, a business appraiser and certified public accountant specializing in
    business valuations, to calculate the value of the Business as of December 31, 2017. McLain
    testified that he used both the asset-based method and the market-based method to value the
    Business, which he opined was worth $475,506.00 under the asset-based approach (including
    inventory) and $466,722.00 under the market-based approach. Based on the information available
    to him, McLain concluded that the latter figure represented the fair market value of the Business.
    2
    “We view the evidence and reasonable inferences therefrom in the light most favorable to the decree and
    disregard all evidence to the contrary.” Selby v. Selby, 
    149 S.W.3d 472
    , 482 (Mo. App. W.D. 2004).
    2
    McLain also testified that the value of the Business as of the date of the parties’ marriage was
    $117,757.00.
    Wife testified that she worked for the Business throughout the marriage, using an office in
    the marital home where Husband worked and stored his business records.3 Wife kept all licenses
    for the Business current. She assisted the Business in obtaining a federal tax identification number
    in 2013 and a U.S. Department of Transportation (DOT) number in 2016.4 She typed all bids and
    invoices and kept all insurance current. She also provided administrative assistance in connection
    with the Business’s bid for its most lucrative contract. Wife did not receive compensation for the
    work she performed for the Business, and she otherwise did not earn any income during the
    marriage; she was the homemaker and primary childcare provider.
    Husband testified that Wife spent “[p]robably 10 to 12” hours per week performing
    “clerical work” for the Business. Wife continued to perform those duties for the Business until
    August 2017 when Husband removed her from company emails and hired a full-time employee to
    do the work previously performed by Wife; Husband pays that employee $400.00 per week or
    $20,800.00 per year.
    Husband further testified that, during the marriage, he withdrew money from a marital
    savings account at his sole discretion to pay the Business’s bills when necessary to keep the
    Business afloat. He stated,
    Sometimes we’re on 30-day payouts, 60-day payouts, 90-day payouts, 180-day
    payouts. So we might not—I’m not going to receive a check for 180 days. And
    bills come due every 30 days. There’s mortgage, gas, lights, everything else, and
    if there’s no money in Alex’s Plumbing account, I take it from this [marital savings]
    3
    Wife also worked for the Business, without compensation, before the parties were married, but we are
    concerned with only the services Wife performed during the marriage. See Meservey v. Meservey, 
    841 S.W.2d 240
    ,
    246 n.4 (Mo. App. W.D. 1992).
    4
    Wife testified that she obtained the DOT number because the Business was incurring tickets in the amount
    of “at least $2,000 a time” for operating vehicles over a certain weight.
    3
    account. And I move it to Alex’s Plumbing account to pay my bills. I’ve always
    done that, and I continue—that’s how I run my business.
    (Emphasis added.) There was no evidence that Husband reimbursed the marital savings account
    for the withdrawals he made to cover the Business’s expenses.5
    Husband also testified about an office/warehouse building located at 2625 East 9th Street
    in Kansas City. The building, valued at $115,000.00, was purchased during the marriage, using
    marital assets, and was used by the Business as a warehouse to store equipment and materials and
    later as an office as well. Husband never claimed the building as a business asset for tax purposes,
    and when Husband performed his own valuation of the Business’s assets, he did not include the
    building. There was no evidence that the Business paid rent or otherwise compensated the marital
    partnership for the Business’s use of the building.
    The parties did not request specific findings of fact. On November 20, 2018, the court
    entered its judgment, which included findings of fact and conclusions of law. Husband filed a
    timely motion to vacate, amend, or set aside the judgment or in the alternative grant a new trial.
    On December 18, 2018, the trial court entered its amended judgment denying Husband’s motion.
    In its amended judgment, the court valued the “net marital estate” at $1,067,555.00, with
    the assets assigned to Husband valued at $601,524.00 and the assets assigned to Wife valued at
    $466,031.00. The only marital liability listed by the court was a $234,554.00 mortgage on the
    marital home.6 The court assigned the marital home and the outstanding mortgage to Wife,7
    5
    For example, according to Husband’s testimony, during the months of May, June, and July 2018, he
    transferred approximately $100,000.00 from the marital savings account to the Business’s account and used an
    unspecified portion of that money to cover expenses of the Business.
    6
    The court concluded that the home was clearly a marital asset. Husband “did not present any evidence to
    rebut the presumption that the entire value of the house was marital.” The court also concluded that the mortgage “is
    a marital liability although the note is in [Husband’s] sole name.”
    7
    The court ordered Wife to “be 100% responsible for payment on the mortgage note in the approximate
    amount of $230,000.00 beginning December 1, 2018 and . . . indemnify and hold [Husband] harmless for her failure
    to do so.”
    4
    thereby reducing the value of Wife’s assigned assets to $231,477.00 (the value of the assets
    assigned to Wife including the marital home ($466,031.00) minus the outstanding mortgage
    ($234,554.00)). The judgment then states, “Each party to receive 50%: $533,777.50. Husband
    pays to Wife to equalize division: $302,300.50.”
    The court awarded Husband the Business, along with the vehicles, machinery, inventory,
    and supplies, valued at $466,722.00, as calculated by McLain. But the court determined that the
    Business had a marital value of $348,965.00 ($466,722.00 minus $117,757.00, the value of the
    Business at the time of the marriage). The court found that Wife worked for the Business
    ten-to-twelve hours per week and that “she was instrumental in obtaining DOT tags and other
    licenses necessary to operate the business.” The court also found that the office/warehouse
    building used by the Business to store equipment and supplies was a marital asset. And the court
    concluded that the marital savings account, which had a balance of $250,000.00 when Wife filed
    her petition for dissolution, had been dissipated by Husband, in violation of an earlier restraining
    order entered by the court. The court found that Husband
    justified the use of nearly $215,000.00 from the [marital] account under the “usual
    course of business” or “necessities of life” exceptions[, but Husband] did not notify
    [Wife] of the proposed extraordinary expenditures or show an accounting to the
    Court for all [such] expenditures [he] made.
    The Court included the marital value of the Business ($348,965.00) in the property division
    to form the basis of Husband’s equalization payment to Wife. The court stated, “In consideration
    of the equitable division of the parties’ marital estate, the Court finds that to equalize the division
    of property set forth above [Husband] shall pay to [Wife] the sum of $302,300.50.” The court
    found its division of assets and debts to be “fair and equitable under the circumstances and . . . not
    unconscionable.”
    5
    Following issuance of the amended judgment, Husband timely filed a motion to vacate,
    amend, or set aside the amended judgment or in the alternative grant a new trial; the court denied
    the motion “[a]fter careful consideration and for good cause shown,” offering no further
    explanation for its division of marital assets and liabilities. This appeal follows.
    Standard of Review
    In a dissolution proceeding, we will affirm the trial court’s decision “unless it is not
    supported by substantial evidence, it is against the weight of the evidence, or it erroneously
    declares or applies the law.” Selby v. Selby, 
    149 S.W.3d 472
    , 482 (Mo. App. W.D. 2004). “We
    defer to the trial court’s superior ability to view the witnesses and determine credibility; the court
    is free to believe or disbelieve all, part or none of the testimony given by any of the witnesses.”
    Klockow v. Klockow, 
    979 S.W.2d 482
    , 487 (Mo. App. W.D. 1998). “Consequently, we accept the
    evidence and inferences favorable to the trial court’s ruling and disregard contrary evidence.”
    Id. And, where
    the parties do not request specific findings of fact on an issue, we presume the trial
    court entered its judgment on that issue in accordance with the applicable statutes. Krepps v.
    Krepps, 
    234 S.W.3d 605
    , 615-16 (Mo. App. W.D. 2007).
    “The trial court has substantial discretion in dividing marital property, and appellate courts
    will not interfere unless the division is so heavily weighted in favor of one party to amount to an
    abuse of discretion.” Russum v. Russum, 
    214 S.W.3d 376
    , 384 (Mo. App. W.D. 2007). “We
    presume that the trial court’s division is correct and the party challenging it bears the burden of
    overcoming that presumption.” 
    Klockow, 979 S.W.2d at 488
    . “We will affirm the division of
    property unless it is unduly weighted in favor of one party.” 
    Selby, 149 S.W.3d at 482
    .
    6
    However, we will reverse where a judgment is based on inconsistent or ambiguous findings
    that do not permit appellate review. Finest Place, Inc. v. Skidmore, 
    477 S.W.3d 745
    , 749 (Mo.
    App. S.D. 2016).
    Analysis
    Husband raises three points on appeal.8 He argues that the trial court erred in ordering him
    to pay Wife $302,300.50 to equalize the distribution of marital assets because (1) the order is based
    on a misapplication of Missouri law governing when equity in a spouse’s non-marital company
    can be deemed marital property (Point I); (2) there was insufficient evidence to support a finding
    that the Business has a marital value of $348,965.00 (Point II);9 and (3) the court failed to subtract
    the $234,554.00 mortgage on the marital home awarded to Wife from the calculation of the net
    marital estate (identified in Husband’s opening brief as Point IV). Because Husband’s first two
    points are so closely intertwined, we discuss them together.
    In a dissolution proceeding, “the court shall set apart to each spouse such spouse’s
    non[-]marital property and shall divide the marital property and marital debts in such proportions
    as the court deems just.” § 452.330.1.10 Thus, “[a]n equitable division of property is predicated
    on the proper classification of the parties’ property as either non-marital or marital.” Moore v.
    Moore, 
    189 S.W.3d 627
    , 632 (Mo. App. W.D. 2006).
    “As a general principle, property owned by one spouse prior to the marriage will remain
    non-marital property and will be awarded to the owner of that property.” Collins v. Collins, 
    586 S.W.3d 282
    , 294 (Mo. App. W.D. 2019) (quoting Fox v. Fox, 
    552 S.W.3d 777
    , 788 (Mo. App.
    8
    In his opening brief, Husband raises four points, but in his reply brief, he asserts that his third point is now
    moot, so we do not address Husband’s Point III on appeal.
    9
    Husband does not challenge the valuation of the Business per se; instead, he argues that the court erred in
    calculating the portion of his ownership interest in the Business that is a marital asset.
    10
    All statutory references are to the Revised Statutes of Missouri (2017), unless otherwise noted.
    7
    E.D. 2018)). “Thus, the property is usually considered non-marital if a spouse owned it before the
    marriage and retained title to it.”
    Id. (quoting Fox,
    552 S.W.3d at 788).
    Marital property is all property acquired by either spouse after the marriage except, among
    other exceptions not relevant here, “[t]he increase in value of property acquired prior to the
    marriage . . . , unless marital assets including labor[] have contributed to such increases and then
    only to the extent of such contributions.” § 452.330.2(5). Thus, “non-marital property may be
    characterized as marital property if evidence is presented that under the source[-]of[-]funds rule, a
    party is entitled to a portion of the non-marital property.” 
    Collins, 586 S.W.3d at 294
    ; see also
    Beckham v. Beckham, 
    41 S.W.3d 908
    , 912 (Mo. App. W.D. 2001) (discussing the
    “source[-]of[-]funds” doctrine). “Under the source[-]of[-]funds rule, ‘any increase in the value of
    separate property is marital property if marital assets or marital labor contributed to acquiring that
    increase.’” 
    Collins, 586 S.W.3d at 294
    (quoting 
    Selby, 149 S.W.3d at 484
    ). At trial, the spouse
    advocating application of the source-of-funds rule to characterize non-marital property as marital
    property bears the burden of proving that there was an increase in value of the non-marital property
    due to marital labor or other marital assets. Brooks v. Brooks, 
    911 S.W.2d 631
    , 633-34 (Mo. App.
    E.D. 1995) (“non-owning spouse must show that her contributions were a causal factor in the
    increase in value”).
    Here, the Business is separate property because it was started by Husband before the
    marriage. § 452.330.2. Substantial evidence supported the trial court’s finding that the value of
    Husband’s ownership interest in the Business increased during the marriage; there was also
    substantial evidence to support the court’s determination of the amount of that increase. At issue
    is whether there is substantial evidence to support the court’s finding that the entire increase in
    value ($348,965.00) is marital property because marital effort and marital property contributed to
    8
    the increase. Husband argues that the evidence is insufficient to support the court’s finding
    because (1) the reasonable inference is that the value of Wife’s services to the Business during the
    marriage is only $83,200.00; (2) there is no evidence of the rental value of the office/warehouse
    building at 2625 East 9th Street; and (3) there is no evidence of the amount of marital funds used
    by the Business.
    With respect to marital labor,
    Marital labor, effort, or services will entitle a spouse to a proportionate share of the
    increase in value of the other spouse’s separate property only after comprehensive
    substantiation. Entitlement to a share of the increased value based on marital effort
    requires proof of (A) a contribution of substantial services;[] (B) a direct correlation
    between those services and the increase in value;[] (C) the amount of the increase
    in value;[] (D) performance of the services during the marriage;[] and (E) the value
    of the services,[] the lack of compensation,[] or inadequate compensation.[]
    Meservey v. Meservey, 
    841 S.W.2d 240
    , 245-46 (Mo. App. W.D. 1992). “The law refuses to
    recognize services as substantial marital effort sufficient to create a marital interest in property in
    the absence of proof of the value of the services and the connection between their performance
    and any increased value of the property.” 
    Moore, 189 S.W.3d at 634
    (quoting In re Marriage of
    Patroske, 
    888 S.W.2d 374
    , 379 (Mo. App. S.D. 1994)).
    In Moore, the wife appealed the trial court’s classification of the increased value of
    corporate stock separately gifted to her by her parents.
    Id. at 631.
    During the marriage, the net
    stock value had increased substantially while the husband was president of the corporation, a
    position for which he was undercompensated.
    Id. at 631-32.
        We found that husband’s
    undercompensation had denied the marital partnership income, which was marital property.
    Id. at 634.
    “Husband diverted income from the marriage for the purpose of increasing the value of
    non-marital assets . . . . In dividing the property, therefore, the trial court must consider whether
    a proportionate share of the increase in value of the non-marital property resulted from Husband’s
    9
    contribution.”
    Id. (internal citation
    omitted). We concluded that “the marital portion of the
    increased value should constitute the amount that Husband was inadequately paid for his thirteen
    years as president.”
    Id. at 635.
    Here, the trial court found that Wife worked for the Business doing uncompensated
    “clerical work” ten-to-twelve hours per week and that “she was instrumental in obtaining DOT
    tags and other licenses necessary to operate the business.” Wife did not offer evidence regarding
    the value of her services. But Husband testified that Wife spent “[p]robably 10 to 12” hours per
    week performing “clerical work” for the Business and that he had hired a full-time employee at a
    salary of $400.00 per week or $20,800.00 per year to do the work previously performed by Wife.
    Thus, there was substantial evidence to support a finding that, at a minimum, the value of Wife’s
    work for the Business during the course of the marriage (October 2013 to August 2017, inclusive)
    was approximately $83,200.00.11 Based on Wife’s testimony, which the court found credible,
    there was substantial evidence to assign a higher value to Wife’s services for the Business because
    she was instrumental in obtaining various licenses necessary to operate the Business. Specifically,
    Wife assisted the Business in obtaining a required federal tax identification number and DOT
    number, which the Business needed to avoid significant fines. Wife also kept all the Business’s
    licenses and insurance current. Thus, the record supports a finding that Wife’s services added
    considerable value to the Business, yet she did not receive any compensation for her services.12
    Under the source-of-funds rule, courts also consider whether marital assets, other than
    marital labor, contributed to the increase in the value of non-marital property. “While a marital
    11
    In his reply brief, Husband admits, “Indeed a reasonable inference can be made that the value of [Wife’s]
    effort to the Business was $20,800 per year” or $83,200.00 during the marriage.
    12
    Neither party argues that Husband’s labor on behalf of the Business was marital property, presumably
    because, during the marriage, Husband was well compensated by the Business and his compensation was treated as
    marital property.
    10
    interest in separate property can require proof that a spouse contributed substantial services
    towards the property which led to an increased value of that property, this type of proof is not
    needed . . . when the marital partners sacrifice marital funds . . . in acquiring the increase.” In re
    Marriage of Rogers, 
    300 S.W.3d 567
    , 577 (Mo. App. S.D. 2009) (quoting McKown v. McKown,
    
    108 S.W.3d 180
    , 184 (Mo. App. W.D. 2003) (emphasis in original) (internal citation and
    quotations omitted)). In Rogers, the Southern District of this court found that marital contributions
    made by expending marital funds for improvements to separate property and to reduce debt on the
    property provided a causal connection between an increase in the net worth of the property during
    the marriage and a substantial marital contribution. Id.; see also 
    McKown, 108 S.W.3d at 184-85
    (finding husband was obligated to give wife a portion of the increased equity in property he
    acquired before the marriage where the mortgage on the property was paid out of the parties’ joint
    checking account using marital funds); Rhodus v. McKinley, 
    16 S.W.3d 615
    , 618-19 (Mo. App.
    W.D. 2000) (where husband sold marital property and used the proceeds to pay off a $53,500
    business debt, the trial court properly applied the source-of-funds rule to find that the $53,500
    increase in the value of the business was marital property).
    Here, there was evidence that, during the marriage, the parties purchased the building
    located at 2625 East 9th Street, which the Business used to store equipment and materials and later
    as an office as well. There was no evidence that the Business compensated the marital partnership
    for use of that building, however. Although there was no evidence of the exact rental value of the
    building, we know that the building was valued at $115,000.00 and that the parties purchased it in
    November 2013, so the reasonable inference is that the Business used the building for at least five
    years. In addition, Husband testified that he had “always” withdrawn money from the parties’
    savings account at his sole discretion to pay the Business’s bills when necessary to keep the
    11
    Business afloat. Husband argued that neither party offered evidence regarding the specific amount
    of money Husband withdrew from the marital account to run the Business.13 But, based on
    Husband’s testimony regarding his long-standing practice of using marital funds in that manner
    without Wife’s approval or knowledge and his testimony about the amount he transferred from the
    marital account to the Business’s account from May through July 2018 (approximately
    $100,000.00), the reasonable inference is that Husband withdrew significant amounts of money
    from the marital savings account to support the Business and that access to such funds was
    instrumental to the success of the Business. Thus, the evidence supports a finding that, during the
    marriage, Husband also withdrew significant amounts from the marital account to run the
    Business.
    Because neither Husband nor Wife asked the trial court to make specific findings of fact,
    we presume the trial court correctly applied § 452.330.2(5) (the source-of-funds rule) in entering
    its judgment. 
    Krepps, 234 S.W.3d at 615-16
    . The trial court accepted McLain’s testimony that
    Husband’s ownership interest in the Business had increased by $348,965.00 during the marriage,
    and Husband does not challenge this on appeal. And, based on the evidence, the court classified
    the entire increase as marital property. Under Krepps, we presume the court did so because it
    found that the increase was due to marital effort and other marital contributions.
    Based on the evidence of Wife’s work for the Business, the Business’s rent-free use of
    marital property, and Husband’s indiscriminate use of marital funds to pay the Business’s bills, we
    find there was substantial evidence to support the court’s classification of the entire $348,965.00
    increase in Husband’s ownership interest in the Business as marital property. And, as the
    appellant, Husband has the burden on appeal to show that the evidence and reasonable inferences
    13
    There was testimony that Husband did not maintain detailed financial records for the Business.
    12
    drawn therefrom are insufficient to support the trial court’s finding—a burden that Husband did
    not meet.
    Having found that there was substantial evidence to support the trial court’s conclusion
    under § 452.330.2(5) that the Business had a marital value of $348,965.00, we also find that the
    court did not misinterpret or misapply that statute.
    Points I and II are denied.14
    For his third point (identified in Husband’s opening brief as Point IV), Husband argues that
    the court erred by failing to subtract the $234,554.00 mortgage on the marital home, which the
    court awarded to Wife, from the calculation of the net marital estate, resulting in an excessive
    equalization payment from Husband to Wife in the amount of $302,300.50. Husband’s argument
    is based on language in the judgment that references the “net marital estate” valued at
    $1,067,555.00 and the court’s intention that “[e]ach party . . . receive 50%: $533,777.50.”
    Husband argues that use of the term “net marital estate” reflects the court’s intention to divide the
    marital assets minus the marital debt equally between the parties. But, instead of subtracting the
    marital debt (the mortgage) from the sum of the marital assets to calculate the net estate, the court
    split the assets equally and then subtracted the entire mortgage from Wife’s half before calculating
    Husband’s equalization payment.              Had the amount of the marital debt ($234,554.00) been
    subtracted from the gross marital estate to determine the value of the net marital estate
    ($832,996.00) and had the court still given each spouse 50% of the net marital estate, Husband’s
    equalization payment to Wife would have been reduced by $117,277.00 (one half of the amount
    of the mortgage) and each spouse would have received $416,498.00.15
    14
    In view of our disposition of Points I and II, we need not address Wife’s argument, raised for the first time
    on appeal, that the Business is Husband’s alter ego.
    15
    Although the judgment states that each party is to receive $533,777.50, with the equalization payment,
    Wife receives that amount but Husband receives only $299,224.50.
    13
    “The division of marital property need not be equal, but must only be fair and equitable
    given the circumstances of the case.” Nelson v. Nelson, 
    25 S.W.3d 511
    , 517 (Mo. App. W.D.
    2000). And the trial court has substantial discretion in dividing marital property and marital debt.
    
    Russum, 214 S.W.3d at 384
    .
    The problem this court faces on appeal is that, while the trial court had the discretion to
    divide the marital estate unequally, that is not what the trial court said that it was doing. The court
    stated that each party was to receive fifty percent of the net marital estate, meaning each spouse
    would receive half of the marital assets and half of the marital debt. But, after assigning each
    spouse an equal share of the marital assets, the court assigned the entire amount of the mortgage
    (the only marital debt) to Wife, thereby reducing the value of the assets distributed to her and
    increasing the amount of the equalization payment due from Husband.
    On appeal, Wife argues that the trial court is not required to divide the net marital estate
    equally, that the court elected to give Wife the greater share of the net assets, and that, in choosing
    such a distribution, the court did not abuse its discretion. While we agree that the trial court has
    the discretion to divide the marital estate unequally, it is not clear that is what the court intended
    to do. In support of her argument that the trial court intended to make an unequal distribution,
    Wife notes that the amended judgment “specifically laid out, paragraph-by-paragraph . . . [what]
    each piece of property was worth and to whom it was being given, and then ordered Husband to
    make an equalization payment of $302,300.50.” While that is true, the amount of the equalization
    payment and the resulting unequal distribution of marital assets is solely the product of the trial
    court’s calculation of the “net marital estate.”
    In paragraph 56 of the amended judgment, the trial court includes two charts: the first sets
    out the value of marital assets ($1,067,555.00), and the second that sets out a marital liability of
    14
    $234,554.00. Immediately below the charts, the judgment states that the “net marital estate” is
    $1,067,555.00, and that it is the intent of the court to divide the estate equally with each party
    receiving $533,777.50. The “net” assets of an entity is the excess of its assets over its liabilities.
    Net           Assets,     Merriam-Webster               Online         Dictionary,          https://www.merriam-
    webster.com/dictionary/net assets (last visited March 9, 2020). But the $1,067,555.00 amount
    identified by the trial court as the net marital estate does not take into consideration the marital
    liability. Rather $1,067,555.00 is the number in the first chart that represents the total value of the
    marital assets ($601,524.00 awarded to Husband and $466,031.00 awarded to Wife).
    After concluding that half of the net marital estate is valued at $533,777.50, the court
    reduced the value of the assets awarded to Wife by the total amount of marital liability
    ($466,031.00 - $234,554.00 = $231,477.00) and ordered Husband to pay $302,300.50 to equalize
    the distribution of assets ($533,777.50 - $231,477.00 = $302,300.50). This would have resulted
    in an equal distribution of marital assets if the mortgage was not a marital liability. But, in the
    judgment, the court concluded that the mortgage is a marital liability even though the note was in
    Husband’s name only. Failing to factor the mortgage into the net marital estate and instead
    reducing the amount of the assets awarded Wife by the full amount of the mortgage, resulted in an
    unequal division of marital assets by increasing the amount of the equalization payment by
    $117,277.00 (one half of the amount of the mortgage). While the trial court certainly had the
    discretion to divide the property unequally and could have done so without abusing its discretion,
    the fact that the unequal distribution is one half of the amount of the marital liability and is a result
    of the net marital assets being calculated without taking the marital liability into consideration,
    leaves us unable to determine whether the trial court actually intended this unequal distribution.16
    16
    Wife argues that, although the amended judgment does not expressly state the intent to divide the net
    marital estate unequally, the trial court’s intent to do so is evidenced by its denial of Husband’s post-trial Motion to
    15
    Because it is unclear which approach the court intended—an equal distribution of the net
    marital estate or an unequal distribution favoring Wife—we remand this case for further
    clarification on this issue from the trial court. Finest Place, 
    Inc., 477 S.W.3d at 749
    .
    Point IV is granted.
    Conclusion
    In light of the foregoing, we affirm the trial court’s holding that the increase in the value
    of Husband’s non-marital company during the marriage is marital property, but we reverse the trial
    court’s judgment and remand the cause for the trial court to clarify its treatment of the marital
    liability in calculating the net marital estate and the amount of the equalization payment owed by
    Husband.
    Karen King Mitchell, Chief Judge
    Cynthia L. Martin and Edward R. Ardini, Jr., Judges, concur.
    Vacate, Amend, or Set Aside the Amended Judgment. Although Husband raised the issue in his motion, in denying
    the motion, the trial court simply stated that, “[a]fter careful consideration and for good cause shown, said Motion is
    DENIED.” In denying the motion, the trial court did not state that its intent was to divide the assets unequally or
    otherwise explain the inconsistencies in the amended judgment.
    16