Lopez v. Lopez
135 So. 3d 326
| Fla. Dist. Ct. App. | 2013Background
- Married ~38 years; Former Wife filed for dissolution. Former Husband worked for Waste Management during marriage and later as a garbage collector; Former Wife had little income.
- Former Husband liquidated a marital 401(k) in December 2010 when its balance was $76,718.68, incurring $15,343.74 in taxes and netting $61,374.94.
- He spent roughly $9,500 of the proceeds on Former Wife’s attorney fees and about $30,500 on his own attorney fees and on taxes, insurance, and maintenance for marital properties; $21,401.68 remained.
- Trial court found Husband intentionally dissipated the 401(k), fixed the asset’s valuation at the liquidation date, and assigned the entire pre-liquidation 401(k) value and all tax consequences to Husband.
- The equitable distribution award allocated $101,728.21 in marital assets to each party, but assigned the full $76,718.68 401(k) (including tax burden and ~ $40,000 in attorney’s fees) to Husband.
- Appellate court reversed that portion of the judgment: it held the trial court erred in allocating the full depleted asset and all tax consequences to Husband because much of the liquidation paid necessary attorney’s fees.
Issues
| Issue | Lopez (Former Husband) argument | Lopez (Former Wife) argument | Held |
|---|---|---|---|
| Whether court may include a depleted asset’s pre-dissipation value in distribution | Court erred; cannot charge husband with full pre-liquidation value because asset was depleted and used for legitimate expenses | Court treated liquidation as wrongful dissipation and deprived Wife of QDRO option; assigned value at liquidation and charged Husband | Reversed in part: depleted asset should not be fully imputed; only intentionally dissipated portion assigned to Husband |
| Whether attorney’s fees paid from liquidated asset justify allocating tax burden to Husband | Husband argues fees were necessary and reasonable; he lacked income/assets to pay them, so tax burden should be shared/not entirely his | Wife argued liquidation was wrongful and Husband should bear full tax consequence | Held: trial court erred assigning full tax burden to Husband because liquidation was primarily to pay legitimate attorney’s fees; tax consequences should not be imposed wholly on him |
| Whether misconduct (spending on girlfriend) justified assigning entire depleted asset to Husband | Husband: some expenditures were legitimate necessities (attorney’s fees, property costs) | Wife: misconduct (payments to girlfriend) shows intentional dissipation warranting full allocation to Husband | Held: misconduct finding limited scope — only the portion spent on girlfriend can be attributed to Husband; legitimate expenditures (attorney’s fees) cannot be used to justify assigning full depleted asset |
| Standard of review for equitable distribution | — Husband urges correction of error rather than reweighing evidence | Wife sought appellate affirmance of trial allocation | Held: abuse-of-discretion standard; appellate court reverses where trial court misapplies law by including diminished assets and allocating inevitable tax burden wholly to one party |
Key Cases Cited
- Vitalis v. Vitalis, 799 So.2d 1127 (trial court has broad discretion in dissolution)
- Canakaris v. Canakaris, 382 So.2d 1197 (equitable distribution principles and appellate scope)
- Deakyne v. Deakyne, 460 So.2d 582 (appellate review limited to competent, substantial evidence)
- Roth v. Roth, 973 So.2d 580 (error to include diminished/dissipated assets in distribution)
- Cooper v. Cooper, 639 So.2d 153 (distinguishing necessity use from misconduct)
- Bush v. Bush, 824 So.2d 293 (improper spending on paramour does not justify attributing unrelated depleted assets)
- Knecht v. Knecht, 629 So.2d 883 (limits on awarding depleted assets when used for necessities)
- Karimi v. Karimi, 867 So.2d 471 (dissipation permits unequal distribution or assignment of asset to dissipator)
- Romano v. Romano, 632 So.2d 207 (dissipation principles in equitable distribution)
- Akers v. Akers, 582 So.2d 1212 (necessity and reasonable expenses doctrine)
- Levy v. Levy, 900 So.2d 737 (attorney’s fees are considered reasonable living expenses; depleted asset should not be assigned for such fees)
- Segall v. Segall, 708 So.2d 983 (misconduct must be intentional dissipation for personal benefit unrelated to marriage)
- Vaccaro v. Vaccaro, 677 So.2d 918 (one party should not be charged full value of asset burdened with inevitable tax payment)