When a lower trial court arrived at a valuation of a marital asset by simply splitting the difference between the valuations submitted by both parties as to the value of such a marital asset is improper. A recent opinion from Florida’s First District Court of Appeal supported this position. The opinion from the case can be found here.
The court came to this conclusion when the former Husband in the matter appealed the amended final judgment of dissolution of marriage from the lower circuit court. On appeal, the former husband challenged, among other things, the trial court’s equitable distribution of the parties’ assets and liabilities. The issue on this specific issue on appeal was the court’s valuation of a marital liquor store business which the court found, in its final judgment, to be valued at $425,000.00 with no explanation as to how it arrived at that value. The court of appeal stated, “In the amended final judgment, the trial court does not explain how it arrived at the $425,000 valuation, and no evidence was presented to support this valuation.” It seemed, to the court of appeal, that the value arrived at was the result of splitting the difference between the valuations that the parties had separately offered in regards to the liquor store business. In fact, the court of appeal stated, “It appears that the trial court simply ‘split the difference’ between the values presented by the parties. This was error.” The details, as presented by the court of appeal, were that the former husband’s expert valued the business at $256,500; the former wife and her mother testified that they overheard the former husband state that the business was worth $600,000 and that he had received a purchase offer in that amount. The court then found that splitting the difference between these two values made the property worth $428,250 which the court of appeal found was “close to the value assigned by the trial court.”
So, how then can a trial court avoid such error when dealing with a marital asset that the parties have substantially different valuations of? Well, according to the opinion and the other relevant Florida Court of Appeal decisions that the court of appeal cited in the opinion, in order to arrive a proper valuation, the lower trial court needs to base the arrived at valuation on competent and substantial evidence. Therefore, trial courts cannot simply “split the difference” but must, in order to be proper, establish a value of a certain marital asset or any other valuation based upon competent and substantial evidence. Potential ways to do so include the use of experts, property appraisers, independent appraisers, and the like. It is likely something that the parties to a divorce and their Florida attorney would have to provide the court if they sought to have their valuation entered into the final judgment of dissolution of marriage by the court.
In all, this recent opinion, if nothing else, establishes that when there are marital assets involved in a divorce it is safer to have competent and substantial evidence supporting your particular property value if the value assigned to that property is substantially different from that of the other party. As always though, should you be either seeking to petition for dissolution of marriage or responding to being served with a petition for dissolution of marriage, finding a compassionate and competent Florida family law attorney will allow you to navigate the often confusing and emotionally draining divorce process.