Opinion ID: 4156734
Heading Depth: 2
Heading Rank: 2

Heading: Proper Standard of Review on Appeal

Text: In a dissolution of marriage, the appropriate standard of review when an appellate court reviews a trial court’s determination of whether property was an interspousal gift and, therefore, subject to equitable distribution is competent, substantial evidence. Applying this standard to these findings is consistent with our long-standing precedent, especially in cases involving dissolution of marriage. In Shaw, this Court reviewed the Third District Court of Appeal’s decision applying the “abuse of discretion” standard and ultimately “modif[ying] the amended final [trial] judgment” with respect to alimony obligations and childrelated expenses. 334 So. 2d at 16. On appeal, this Court determined that the Third District’s application of the abuse of discretion standard was erroneous, stating: It is clear that the function of the trial court is to evaluate and weigh the testimony and evidence based upon its observation of the bearing, demeanor and credibility of the witnesses appearing in the cause. It is not the function of the appellate court to substitute its judgment for that of the trial court through re-evaluation of the testimony and evidence from the record on appeal before it. The test . . . is whether the judgment of the trial court is supported by competent evidence. Id. Ultimately, this Court quashed the Third District’s modified judgment and remanded to the trial court to reinstate its final judgment, concluding that even though appellate courts “might honestly strike the financial balance and division of assets between the parties in a different fashion, [it was not] error or an abuse of - 12 - discretion for the trial court to arrive at the result it reached.” Id. at 17. Similarly, in Merrill, the First District stated, “[At trial, the] question of donative intent is one of a preponderance of the credible evidence; and that question is for the chancellor, not for [the appellate court].” 357 So. 2d at 793 (emphasis added). In contrast to Shaw and the conflict cases, the Fourth District erred in Hooker in its approach to reviewing the trial court’s findings of donative intent to establish an interspousal gift. Rather than deferring to the trial court’s findings and simply determining whether they were sufficiently supported by the record, as would have been appropriate under the “competent, substantial evidence” standard, the Fourth District reevaluated whether the evidence satisfied the preponderance of the evidence standard, which applied at trial. In other words, the Fourth District substituted its own judgment and findings of fact regarding whether an interspousal gift existed. See § 61.075, Fla. Stat. After reviewing Florida’s statutory equitable distribution framework and case law, we reiterate that the appropriate standard of review on appeal for reviewing whether a trial court was correct in determining whether donative intent existed to render an asset an interspousal gift and part of the marital estate is “competent, substantial evidence.” It is clear, due to the trial court’s “superior vantage point” in reviewing and weighing testimony and evidence presented at trial, that appellate courts are to defer to trial courts’ findings of whether disputed - 13 - property is marital or nonmarital. See Van v. Schmidt, 122 So. 3d 243, 258 (Fla. 2013). Thus, the trial court’s factual findings must not be disturbed on appeal unless unsupported by competent, substantial evidence.6 Accordingly, we turn now to review the Fourth District’s decision in Hooker to determine whether the trial court’s findings in this case—that Husband had donative intent with respect to Hickstead and Lake George, rendering these properties marital assets—were supported by competent, substantial evidence. THIS CASE Having determined the correct standard of review, we now address whether competent, substantial evidence exists to support the trial court’s findings that Husband had the requisite donative intent with respect to both Hickstead and Lake George to render these properties interspousal gifts and, therefore, marital property subject to equitable distribution. We discuss each property below. A. Hickstead 6. Abreu, 534 So. 2d at 772; Shaw, 334 So. 2d at 16; see also Robertson, 593 So. 2d at 494 (“Clearly, there is ample support in this record for the conclusion that the husband did not meet his statutory burden of proving a special equity.”); Laws, 364 So. 2d at 801 (“ ‘The question of donative intent is one of a preponderance of the credible evidence . . .’; but the finding of the chancellor as to donative intent is not binding on the appellate court where ‘ . . . there is no credible evidence of such intent below.’ ” (quoting Merrill, 357 So. 2d at 793) (citing Bickerstaff v. Bickerstaff, 358 So. 2d 590 (Fla. 1st DCA 1978)). - 14 - Hickstead, the Hookers’ “working horse farm and home,” is the first disputed property, which was the subject of the Fourth District’s opinion. Hooker, 174 So. 3d at 510. Wife argues that the trial court correctly concluded that Hickstead was marital property through interspousal gift. Husband argues that the trial court was incorrect and Hickstead is, instead, a product of Husband’s premarital assets, which were excluded from equitable distribution by the parties’ prenuptial agreement. We conclude that the Fourth District erred in reversing the trial court’s finding that Hickstead was marital property. Pursuant to section 61.075(6)(a)1.c, Florida Statutes, the trial court concluded that “the Husband made an interspousal gift during the marriage to the Wife of an interest in Hickstead.” On rehearing, the trial court determined that competent, substantial evidence existed to support this finding. In making this determination, the trial court reasoned that although Husband “purchased, financed and primarily paid for” Hickstead with his nonmarital assets, it “nonetheless should be considered marital assets.” Similarly, although Hickstead was “titled primarily in the name of the Husband alone, that is not dispositive of whether [it] should be considered [a] marital asset[].” “Wife and Husband both signed the mortgage on . . . Hickstead.” And, the trial court found that Hickstead was the parties’ “marital residence[] throughout the vast majority of the marriage and where the parties raised their children and lived as a family.” Indeed, “Wife was - 15 - extremely and directly involved in all aspects of the Hickstead . . . residence . . . which was the family’s primary home for approximately twenty years.” In 1997, Husband formed Hooker Hollow.7 Hooker, 174 So. 3d at 510. As the Fourth District explained, Husband’s purpose for creating Hooker Hollow was “to turn [Hickstead] into a corporation and transfer part of the title to another entity. Only . . . Husband was listed as the seller, but both parties signed the warranty deed transferring title of [Hickstead] to [Hooker Hollow].” Id. Likewise, the trial court explained that Hooker Hollow “was an entity created during the marriage to hold the asset which is the Hickstead . . . marital home in Wellington, Florida.” As to this transfer, the trial court explained: There was evidence that . . . the Wife actually signed the deed to that property when changing title to Hooker Hollow . . ., and the Wife signed closing documents/sale documents . . . . The Wife testified that she trusted the Husband with regard to documenting title to this property and transfer of title to this property, but she always understood from the actions of the Husband and the family that she had an interest in the Hickstead . . . residence and property. That same year, Husband sold a half interest [in Hooker Hollow] for a million dollars to Trelawny Farm. The Raether Family was the principal of Trelawny Farm. Through Hooker Hollow, the Raethers had a buyout option on Hickstead that they exercised in 7. Only Husband’s name was listed in the Articles of Incorporation document for Hooker Hollow. Hooker, 174 So. 3d at 510. - 16 - 2010. When Wife learned that Husband had no intention of sharing with her any of the proceeds from selling Hickstead to the Raethers, she immediately “filed for dissolution of marriage.” Hooker, 174 So. 3d at 510.8 Just after Wife filed for dissolution, the Raethers purchased Hickstead from Hooker Hollow for $4.5 million. Reviewing all of the evidence related to Hickstead, the trial court stated: The totality of the testimony was that the Wife could and did treat [Hickstead] as her own. Although the living expenses of these properties were paid for from the Husband’s assets, the Wife was not limited or restricted in any way from incurring the costs and expenses of maintaining and operating a family home at [Hickstead]. . . . Additionally, [Hickstead] provided the Wife unfettered access and use of the stables and horses to pursue her lifelong passion. . . . [I]t was clear from the evidence and testimony that while the horse business always lost money, the Husband and Wife centered their personal and social life around their love of horses. . . . [Hickstead] [was] more than [a] mere line item asset[] in the name of the Husband during their marriage. [This] propert[y] [was] and should be considered [a] joint marital asset[] of the Husband and Wife in equitable distribution by this Court, the way [it was] considered [a] joint marital asset[] by the parties as they lived and raised a family in [this] “asset[].” Ultimately, the trial court concluded: The Husband through his actions, or relative inaction, over the many years the family lived in [Hickstead] confirmed an interspousal gift to 8. Wife also filed a lis pendens on Hickstead and a motion to freeze the proceeds of the sale pending the outcome of the dissolution. Hooker, 174 So. 3d at 510. To relieve the lis pendens and freeze on the proceeds from the sale, the parties agreed that Wife would receive $1,000,000 from the sale of Hickstead up front without prejudice, which would later be either returned or supplemented after equitable distribution was determined in the dissolution of marriage. Id. - 17 - the Wife. The Court finds that the conduct of the parties, including the conduct of the Husband, demonstrates and establishes a donative intent of the Husband, delivery or possession of an interest in [Hickstead] . . . as a gift to the Wife and surrender of dominion and control of those properties to the Wife. When Husband purchased Hickstead in 1989, after the parties were married, it was vacant land. When Hooker Hollow sold Hickstead to the Raethers in 2010, Hickstead was a fully functional horse farm worth $4.5 million. Husband recognized that Wife “was very active in the design and the construction, taking care of the barn.” The transfer of Hickstead through Hooker Hollow is the most significant indication of donative intent. Hooker Hollow was formed during the marriage on June 30, 1997. Accordingly, the trial court found that Hooker Hollow was a marital asset because it was “created during the marriage to hold the asset which is the marital home in Wellington, Florida,” as testified to by Wife’s forensic accountant. See § 61.075(6)(a)1.a., Fla. Stat. (2016). Before selling Hickstead, Husband told Wife that it was in their best interests to convey Hickstead to Hooker Hollow. Further, after transferring Hickstead to Hooker Hollow and continuing to use Hickstead as the marital home for another decade, Husband authorized the sale of Hickstead from Hooker Hollow to the Raethers. At that time, Husband owned 50% of Hooker Hollow, and the Raethers owned the other 50% through their - 18 - company, Trelawny Farm. Hooker, 174 So. 3d at 510. In 2010, when Hooker Hollow sold Hickstead to the Raethers, Hooker Hollow was marital property, as the trial court found. Thus, Hickstead is marital property subject to equitable distribution as an asset of Hooker Hollow.9 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 Hickstead—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 Hickstead was an interspousal gift, of which Husband intended to divest himself of complete dominion and control to his Wife. B. Lake George The second property at issue is Lake George. Wife argues that Lake George falls squarely within the statutory definition of “interspousal gift” as an anniversary gift from Husband to Wife. Husband argues that Lake George is excluded from the marital estate under the parties’ prenuptial agreement because it was acquired 9. Of course, the value of Hickstead would be distributed rather than possession of the property since Husband sold Hickstead to the Raethers. Thus, the dispute is over Wife’s interest in the proceeds from the 2010 sale of Hickstead. - 19 - solely by his premarital assets. We agree with the Fourth District that the record contains competent, substantial evidence to support the trial court’s finding that Lake George is marital property subject to equitable distribution. Lake George was “the family’s summer residence throughout the vast majority of the marriage.” Hooker, 174 So. 3d at 514. Like Hickstead, Husband purchased Lake George “with funds that can be traced to his pre-marital assets kept separate by the parties’ prenuptial agreement.” Id. at 511. Likewise, Husband was the only signatory on the title and promissory note for the mortgage on Lake George through CitiBank. However, as the trial court recognized, title is not dispositive in this inquiry. Gardner, 452 So. 2d at 983. As the Fourth District explained: The Husband’s “clear and unmistakable” intention with the Lake George property was, at least in part, as a gift to the Wife, which was established through the Wife’s testimony about the Husband sending her a card for their tenth wedding anniversary with a picture of the property. This was after the Wife had expressed her desire to have a home up north and both parties searched for a suitable property. Additionally, the Wife purchased some furnishings and incidentals for the home from her separate funds. .... Because there is evidence of donative intent with regards to the Lake George property, we turn to the remaining two elements of a gift: delivery or possession and surrender of dominion and control. . . . In regards to delivery or possession, we hold the trial court did not abuse its discretion in finding that delivery was made at the time the Wife obtained keys to the property and began to possess the property as her summer home according to the intention of the Husband. Also, . . . the evidence is uncontroverted that the Wife had unfettered access to the home and made decisions on care and maintenance of the - 20 - property with the ability to incur expenses on behalf of the Husband, evidencing the Husband’s surrender of control to her, at least in part. Because the evidence supports the trial court’s determination that an interspousal gift of an interest in the Lake George property occurred, the property was subject to equitable distribution as a marital asset. Hooker, 174 So. 3d at 514. Accordingly, the Fourth District affirmed the trial court’s distribution of Lake George. Id. In light of the trial court’s findings of fact, the evidence in the record, and the Fourth District’s analysis, we agree with the Fourth District that competent, substantial evidence supports the trial court’s determination that Lake George was marital property subject to equitable distribution.