Court Opinion

ID: 4524977
Source: CourtListenerOpinion
Date Created: 2020-04-14 13:06:30.2081+00
Date Added: 2024-06-11T08:42:21.727865
License: Public Domain

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.

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