DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA

FOURTH DISTRICT

ARICA MATYJASZEK,

Appellant,

v.

KEVIN R. MATYJASZEK,

Appellee.

No. 4D17-3575

[ September 12, 2018 ]

Appeal from the Circuit Court for the Nineteenth Judicial Circuit, 

Martin County; Sherwood Bauer, Judge; L.T. Case No. 562015DR000733.

L. Lisa Batts of Stuart Law Group, P.A., Stuart, for appellant.

Troy W. Klein of Troy W. Klein, P.A., West Palm Beach, for appellee.

ARTAU, EDWARD L., Associate Judge.

The wife appeals from an Amended Final Judgment of Dissolution of 

Marriage, arguing that the trial court erred in using an improper fraction 

to measure the marital portion of passive appreciation of the wife’s 

nonmarital real property. We agree and reverse.

Factual Background

The parties married in October 2011. When the parties married, the 

wife owned a home that she had acquired before the marriage. At the 

inception of the marriage, the wife’s home was worth $126,000 and was 

encumbered by two mortgages: a first mortgage with a balance of 

$166,732.38, and a second mortgage with an unspecified balance.

The second mortgage was taken at some point before the marriage. The 

record is conflicting as to whether the original balance of the second 

mortgage was $25,000 or $40,000. However, there was no evidence as to 

the balance of the second mortgage on the date the parties married.

During the marriage, the parties lived in the wife’s home and used 

marital funds to make payments on the first mortgage, but never made 
2

payments toward the second mortgage. Additionally, the husband made 

renovations to the house, but the value of those renovations was not 

quantified.

The wife petitioned for dissolution of marriage in March 2015. As of a 

July 2015 valuation date, the wife’s home had a market value of $170,000, 

the first mortgage had a balance of $143,253, and the second mortgage 

had a balance of $57,095.

The case proceeded to a final hearing, where the evidence established 

the facts set forth above. The trial court then entered a Final Judgment of 

Dissolution of Marriage. The wife moved for rehearing of the Final 

Judgment, raising the same argument she raises in this appeal.1 The trial 

court denied the wife’s motion for rehearing, but simultaneously entered 

an Amended Final Judgment to correct a numerical error. 

In the Amended Final Judgment, the trial court purported to apply the 

formula set forth in Kaaa v. Kaaa, 58 So. 3d 867 (Fla. 2010), and Viscito 

v. Viscito, 214 So. 3d 736 (Fla. 3d DCA 2017), to determine the marital 

portion of the passive appreciation of the home. The trial court found that 

the marital portion of the passive appreciation of the home was $81,657. 

In reaching this figure, the trial court did not account for the second 

mortgage and calculated the debt-to-value ratio at the time of the marriage 

to be $166,732.38/$126,000 or 1.323. The trial court next multiplied 

1.323 by the $170,000 value of the property at the time of the divorce, and 

then subtracted the $143,253 balance of the first mortgage at the time of 

the divorce, which yielded $81,657. The trial court then assigned this 

$81,657 value to the wife’s column for equitable distribution purposes, 

resulting in the wife having to make a $53,911.93 equalizing payment to 

the husband.

This appeal ensued.

Analysis

The wife argues, as she did below, that the Kaaa fraction cannot be 

applied to measure the passive appreciation of nonmarital property on 

1 Because the error appeared for the first time on the face of the Final Judgment, 

the wife’s motion for rehearing was a proper vehicle for preserving the issue for 

appellate review. See Williams v. Williams, 152 So. 3d 702, 704 (Fla. 1st DCA 

2014) (“[W]here an error by the court appears for the first time on the face of a 

final order, a party must alert the court of the error via a motion for rehearing or 

some other appropriate motion in order to preserve it for appeal.”).
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which more was owed than it was worth at the time of marriage. The wife 

points out that this creates an improper fraction—that is, a fraction in 

which the numerator is larger than the denominator. The wife maintains 

that an improper fraction is not a mathematically valid measurement of 

the marital portion of the passive appreciation of the home.

“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). Likewise, a trial court’s “calculation of passive 

appreciation is subject to a de novo review.” Hodge v. Hodge, 129 So. 3d 

441, 445 (Fla. 5th DCA 2013).

Section 61.075(6)(a)1.b., Florida Statutes (2014),2 defines “marital 

assets and liabilities” as including the following: “The enhancement in 

value and appreciation of nonmarital assets resulting either from the 

efforts of either party during the marriage or from the contribution to or 

expenditure thereon of marital funds or other forms of marital assets, or 

both.”

In Kaaa, the Florida Supreme Court held that “when a marital home 

constitutes nonmarital real property, but is encumbered by a mortgage 

that marital funds service, the value of the passive, market-driven 

appreciation of the property that accrues during the course of the marriage 

is a marital asset subject to equitable distribution” under section 61.075, 

Florida Statutes. 58 So. 3d at 872–73.

The Kaaa opinion sets forth a five-step method that a trial court should 

employ in determining a non-owner spouse’s share, if any, of the passive 

appreciation of the home: (1) the court must determine the overall current 

fair market value of the home; (2) the court must determine whether there 

has been a passive appreciation in the property’s value; (3) the court must 

determine whether the passive appreciation is a marital asset; (4) the court 

must determine the value of the passive appreciation that accrued during 

the marriage and is subject to equitable distribution; and (5) after the court 

determines the value of the passive appreciation to be equitably 

distributed, the court’s next step is to determine how the value is allocated. 

Id. at 872.

2 The 2014 version of the statute applies because it was the version in effect when 

the wife filed the dissolution petition in March 2015. See Busby v. Busby, 671 

So. 2d 162, 163 (Fla. 4th DCA 1996) (finding that the applicable version of the 

equitable distribution statute is the one in effect when the petition for dissolution 

was filed); see also § 11.2421, Fla. Stat. (2014) (adopting the 2014 Florida 

Statutes, which remained in effect through June 29, 2015).
4

Based on the circumstances of the case before it, the Kaaa court 

approved the following language from Stevens v. Stevens, 651 So. 2d 1306 

(Fla. 1st DCA 1995), for determining how the appreciated value is to be 

allocated:

If a separate asset is unencumbered and no marital funds are 

used to finance its acquisition, improvement, or maintenance, 

no portion of its value should ordinarily be included in the 

marital estate, absent improvements effected by marital labor. 

If an asset is financed entirely by borrowed money which 

marital funds repay, the entire asset should be included in the 

marital estate. In general, in the absence of improvements, 

the portion of the appreciated value of a separate asset which 

should be treated as a marital asset will be the same as the 

fraction calculated by dividing the indebtedness with which the 

asset was encumbered at the time of the marriage by the value 

of the asset at the time of the marriage. If, for example, one 

party brings to the marriage an asset in which he or she has 

an equity of fifty percent, the other half of which is financed 

by marital funds, half the appreciated value at the time of the 

petition for dissolution was filed, § 61.075(5)(a) 2, Fla. Stat. 

(1993), should be included as a marital asset. The value of 

this marital asset should be reduced, however, by the unpaid 

indebtedness marital funds were used to service.

Kaaa, 58 So. 3d at 872 (quoting Stevens, 651 So. 2d at 1307–08) 

(emphasis in Kaaa).3

Thus, reading step five of Kaaa in conjunction with the italicized 

language of Stevens, we conclude that the Florida Supreme Court 

3 In response to Kaaa, the legislature recently amended section 61.075 to 

establish a new statutory formula—based on the total reduction of mortgage 

principal by marital funds—for determining the marital share of passive 

appreciation of nonmarital property during the marriage. See Laws of Fla. 2018, 

c. 2018-56, § 1, eff. July 1, 2018. The new formula also caps the total marital 

portion of the property at “the total net equity in the property at the date of 

valuation,” and allows a party to argue that application of the formula would be 

inequitable under the particular facts of the case. § 61.075(6)(a)1.c.(IV), (V), Fla. 

Stat. (2018). If the new statutory formula were applied to this case, the husband 

would not be entitled to any portion of the value of the wife’s home because the 

total net equity in the property is negative. However, the new version of the 

statute does not apply to this case.
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established the following general formula4 for allocating the value of 

passive appreciation to be equitably distributed:

Mortgage Debt at Marriage

Property Value at Marriage × Value of Passive Appreciation

Turning to the facts of this case, we conclude that the trial court erred 

in using an improper fraction to calculate the portion of passive 

appreciation of the wife’s nonmarital property that was subject to equitable 

distribution.

Under step four of Kaaa, the trial court should have determined that 

the value of passive appreciation that accrued during the marriage and 

was subject to equitable distribution was $44,000, which was the 

difference between the $170,000 value of the wife’s nonmarital property at 

the time of the divorce and the $126,000 value of the wife’s nonmarital 

property at the time the parties married.5 Then, under step five of Kaaa, 

the trial court should have determined that, because the property had no 

equity when the parties married, 100% of the value of the passive 

appreciation was to be allocated as a marital asset.

The purpose of step five of Kaaa is to determine how much of the value 

of passive appreciation to allocate as marital property and how much to 

allocate as the owner spouse’s nonmarital property. Notably, the Kaaa

decision recognized that the debt-to-value ratio was merely a rule to be 

applied “in general.” The Kaaa court did not address a situation where 

the property started with negative equity, nor did the court hold that the 

debt-to-value ratio is to be applied even when it leads to a mathematically 

absurd result. Under step five of Kaaa, it is mathematically impossible to 

allocate more than 100% of the value of the passive appreciation of the 

property.

4 Our interpretation of the Kaaa formula differs somewhat from the Third 

District’s interpretation of Kaaa in Viscito v. Viscito, 214 So. 3d 736, 738 (Fla. 3d 

DCA 2017). There, the Third District used the following formula to calculate the 

marital portion of passive appreciation: the current market value of the property, 

multiplied by the loan-to-value ratio at the time of the marriage, minus the 

current mortgage balance. Id.

5 To the extent that the $170,000 value at the time of the divorce was attributable 

to renovations in the home, this value was never quantified. Thus, our analysis 

will treat the entire amount of appreciation as passive appreciation.
6

In this case, the answer to the allocation question is set forth in the 

following language from Kaaa: “If an asset is financed entirely by borrowed 

money which marital funds repay, the entire asset should be included in 

the marital estate.” Id. at 872 (quoting Stevens, 651 So. 2d at 1307). In 

such a situation, a trial court need not reach the debt-to-value fraction

under Kaaa to calculate the marital portion of passive appreciation. Here, 

because the wife entered the marriage with a property encumbered entirely 

by a mortgage which marital funds repaid, the entire value—or 100%—of 

passive appreciation should be included in the marital estate. Thus, the 

trial court erred in using a debt-to-value fraction of 1.323, which had the 

effect of falsely inflating the value of the passive appreciation to be 

allocated.

Therefore, under a correct application of the principles of Kaaa, the 

entire $44,000 value of the passive appreciation of the home was a marital 

asset subject to equitable distribution.6

Furthermore, although the husband argued below that the paydown of 

the first mortgage should be treated as a marital asset in addition to the 

passive appreciation on the property, we note that the husband has not 

cross-appealed the Amended Final Judgment. And, even if he had, we find 

that the husband offered no proof below that the total mortgage 

indebtedness on the property decreased during the marriage.7

For the foregoing reasons, we reverse the Amended Final Judgment and 

remand with instructions for the trial court to value the marital portion of 

6 We disagree, however, with the wife’s argument that the marital value of the 

passive appreciation of the property is $26,747. The wife reached this figure by 

multiplying $170,000 by 100%, and then subtracting the $143,253 balance on 

the first mortgage. In other words, the wife’s analysis relies upon the Viscito

formula, using a coverture fraction of one and considering only the first mortgage.

7 Although the parties reduced the first mortgage balance by $23,479 during the 

marriage, the second mortgage balance simultaneously increased by an 

unspecified amount. We find that it would have been improper to look at the

paydown of the first mortgage in isolation, which is what the husband urged the 

trial court to do. Under section 61.075(6)(a)1.b., the husband was required to 

show that there was an “enhancement in value” of the wife’s nonmarital property 

“resulting . . . from the contribution to or expenditure thereon of marital funds.”

§ 61.075(6)(a)1.b., Fla. Stat. (2014). Thus, absent proof that the parties reduced 

the total mortgage indebtedness on the property during the marriage, the 

husband failed to make a showing that the parties’ marital funds created any 

enhancement in the value of the home apart from passive appreciation.
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passive appreciation of the wife’s property at $44,000 and to adjust the 

equitable distribution scheme accordingly.

Reversed and Remanded.

LEVINE and FORST, JJ., concur.

* * *

Not final until disposition of timely filed motion for rehearing.