Opinion ID: 2821956
Heading Depth: 3
Heading Rank: 2

Heading: Power Equipment Plus

Text: [¶25] Christine argues that the court clearly erred when it found that Power Equipment Plus was an entirely nonmarital asset because, she alleges, (1) the company increased in value during the marriage, and (2) marital debts were incurred to support the business. [¶26] An increase in value of nonmarital property is marital if it resulted “from the investment of marital funds . . . in the nonmarital property[,] . . . from marital labor[,] . . . [or] from reinvested income and capital gain if either or both spouses had a substantial active role during the marriage in managing, preserving or improving the property.” 19-A M.R.S. § 953(2)(E) (2014). In addition, property has marital and nonmarital components if both marital and nonmarital funds were invested in it. Hedges v. Pitcher, 2008 ME 55, ¶ 8, 942 A.2d 1217 (“Employing this approach, known as the ‘source of funds’ rule, we regard[] acquisition as an ongoing process through which some marital and some 14 nonmarital funds might be invested in certain property, thereby rendering property partially marital and partially nonmarital.”). [¶27] Again turning to the shifting burdens, Randy has met his burden of showing that he acquired Power Equipment Plus prior to the marriage by incorporating it and owning all of the stock before he and Christine married. The burden then shifted to Christine to show that some portion of this otherwise nonmarital property is marital. The first way she sought to meet her burden was by attempting to prove that the asset had increased in value over the course of the marriage. However, Christine offered no evidence of the value of Power Equipment Plus before or at the start of the marriage. Further, as to Power Equipment Plus’s current value, the court’s finding that the asset is worth $0 is supported by record evidence that the business’s debts outweigh its assets, as well as evidence that Power Equipment Plus was losing money in recent years. See Peters v. Peters, 1997 ME 134, ¶ 15 & n.5, 697 A.2d 1254 (concluding that the record supported the trial court’s finding that a party’s share in a corporation had no value when the corporation’s liabilities exceeded its assets). [¶28] The second way that Christine sought to meet her burden was to show that the parties invested marital funds in the asset. Christine testified to no specific details regarding the money invested in the business from the home equity line of credit, and the only evidence the court heard regarding the $100,000 loan Randy 15 borrowed from his family was that he used it to pay off a premarital debt he owed to his uncle. Therefore, Christine offered no competent evidence that would permit the court to find that a quantifiable amount of marital funds was invested in Power Equipment Plus, and thus the court did not clearly err by finding that the asset was wholly nonmarital. See Miliano, 2012 ME 100, ¶ 13, 50 A.3d 534.