Sponsor Spotlight

Shannon McLin is a board certified appellate attorney with more than 30 years experience. McLin, and her firm, Florida Appeals (established January 1, 2019) are one of the Family Law Section’s Signature Annual Sponsors during this bar cycle. 

Florida Appeals has offices in Orlando, Tampa, Fort Lauderdale, and the Villages. Shannon and her team have litigated cases before all six Florida District Courts of Appeal, the Florida Supreme Court, the 11th Circuit Court of Appeals, and the U.S. Supreme Court. Florida Appeals restricts its practice to family and complex civil (primarily commercial litigation and probate) appeals. 

Additionally, they provide trial support as part of their pre-appellate processes. In addition to Shannon, two former 5th DCA judges and two appellate practitioners round out her team. 

Thank you, Shannon and Florida Appeals, for your continued support of the Section!

Equitable Distribution

By Sandra Perez, CPA/ABC/CFF, CFE and Dylan Stone, CPA, CVA

House Bill No. 521 (HB 521) became effective on July 1, 2024, adding Fla. Stat. §61.075(6)(a)1.f, which specifies how a court values marital interest in closely held businesses for the purposes of equitable distribution. 

Significantly, this legislation directs a court to value a closely held business using Fair Market Value. The law also recognizes a distinction between “enterprise goodwill”, a marital asset subject to equitable distribution, and the goodwill of the owner spouse -more commonly referred to as “personal goodwill” - a nonmarital asset. Finally, HB 521 requires the trial court to acknowledge the effect of restrictive covenants such as non-competes which may be required upon the sale of closely held businesses while clarifying that such covenants are not conclusive proof of personal goodwill.

Standard of Value: Fair Market Value

In business valuations, standard of value is the basis or measure for determining a business’s value. Different standards of value can impact the valuation of a business; each standard may consider different circumstances or perspective. HB 521 provides that the standard of value, for purposes of equitable distribution, is Fair Market Value, or:

“…the price at which property would change hands between a willing and able buyer and a willing and able seller, with neither party under compulsion to buy or sell, and when both parties have reasonable knowledge of the relevant facts.”

The statute’s definition of Fair Market Value suggests that a valuation should be conducted under the presumption that the buyer and seller have no special motivations, such as a synergy, to conduct the transaction, and that adequate quantitative and qualitative information necessary to finalize the transaction is available.

Personal Goodwill v. Enterprise Goodwill

“Goodwill”, in the valuation context, is the advantage or benefit a business has beyond the value of its property and capital. See Swann v Mitchell, 435 So. 2d 797 (Fla. 1983). A business can create goodwill from its name, reputation, customer loyalty, trained workforce, location, products, or similar factors.

The personal goodwill of an owner is not transferable and is unable to “change hands” in the event of a sale. For example, a skilled surgeon cannot transfer his or her training, experience, or reputation to a willing buyer.

Enterprise goodwill, on the other hand, is the intangible value that would remain in the business, even after the exit of a specific owner. This value is inherent in the entity as a whole and can arise from factors such as location, reputation, and workforce.

Summary

The addition of §61.075(6)(a)1. f outlines principles that assign separate values for personal and enterprise goodwill, bringing more fairness to the equitable distribution process. The use of valuation experts will be critical in aiding the trial court in understanding in the application of valuation techniques used to allocate goodwill.

International Day of the World's Indigenous Peoples

By Fritznie Jarbath, Esq.

Did you know that the International Day of the World’s Indigenous Peoples is observed each year on August 9th? It aims to raise awareness and protect the world’s indigenous population, safeguarding their families, customs, and ways of life. This day was first announced 30 years ago, in 1994, by the United Nations.

How does that relate to Family Law, you may ask?

Have you ever heard of the Uniform Child Custody Jurisdiction and Enforcement Act, affectionately known as the UCCJEA? While you may already know that it applies across the states in the U.S., some of you may not realize that Indian tribes are to be treated like another state. They have their own governing bodies and laws regarding their children, which are sovereign. These laws are to be respected and given full faith and credit, just like the laws of any other state.

The indigenous people in the United States have been described as “Indians,” “Native people” and “Indigenous Americans.” While all terms are correct and not considered pejorative, much of the federal law and regulation use the term “Indian.” 

For example, a law that affects family law attorneys who work in child protection and dependency courts is the Indian Child Welfare Act. The Bureau of Indian Affairs for the federal government monitors the states’ applications of ICWA. The purpose of the Indian Child Welfare Act (ICWA) is "...to protect the best interest of Indian Children and to promote the stability and security of Indian tribes and families by the establishment of minimum Federal standards for the removal of Indian children and placement of such children in homes which will reflect the unique values of Indian culture..."(25 U.S. C. 1902). This purpose goes beyond inclusion by preserving Native American culture, norms and customs. 

Because the Indian population is estimated to be a little over 1% in the state of Florida according to the American Community Survey conducted by the United States Census, this month of August should remind us that we may have more diverse individuals among those we represent. These individuals constantly have to fight to be included. However, the families we represent may not let us know that they are part of the Indian population.

So, if you have not already, I implore each family law practitioner to pledge that by August 9, you will add one line to your intake questionnaire, before filling out your UCCJEA, to ask if the child(ren) may be an Indian child as defined by the Indian Child Welfare Act. Have that statute ready if they have questions and might feel that they qualify, so they can seek the protections afforded to them by the Act.

This information may not be volunteered. There may be an urge to assimilate to avoid being different in an attempt to be included, or it could be that they did not tell us because we did not ask. It is important to know that we can still celebrate our diversity and be inclusive. It is crucial not to lose sight of the intent, ensuring that a family does not miss out on the protections afforded by the Act.

Rules and Forms Update

By Alex Bottone, Esq.

On June 27, 2024, the Supreme Court of Florida in Case No. SC2023-1472, styled In re: Amendments to Florida Family Law Rules of Procedure, 2024 Fla. LEXIS 974* (Fla. 2024) amended the following Florida Family Law Rules of Procedure: 12.400 (Confidentiality of Records and Proceedings); 12.470 (Exceptions); 12.490 (General Magistrates); 12.491 (Child Support Enforcement); and 12.740 (Family Mediation).

As part of these amendments, the Supreme Court unanimously accepted all of the changes proposed by The Florida Bar Family Law Section’s Rules and Forms Committee (“Committee”) in their December 29, 2023 Comment.

12.400(d): amended by deleting the reference to subdivision “(d)” of Florida Rule of General Practice and Judicial Administration 2.420.

12.470: amended by deleting an outdated reference to the Florida Supreme Court’s website.

12.490: as proposed by the Committee, the Court amended rule 12.490(3) by removing the word “recommended” from “recommended order” and by changing the “10” to “15” days in which a moving party has to file a motion to vacate an order from a support hearing officer. The language is now consistent with the change to rule 12.530.

Further, as proposed by the Committee, the Court amended rule 12.490(4) by adding the following language, “If applicable, a motion to vacate operates as a motion for rehearing under rule 12.530.”

12.491: as proposed by the Committee, and similar to the amendments to 12.490, the Court amended the bold language set forth in 12.491(e)(1)(A) to correctly reference the new 15 day timeframe in which a moving party has to file a motion to vacate an order from a support hearing officer.

Further, as proposed by the Committee, the Court amended the language set forth in 12.491(f) to require that the court reporter be required to provide their telephone number and “e-mail address” (instead of their “address”), consistent with the language set forth in 12.490(e)(2).

12.740: amended by dividing 12.740(c) to now include sub-sections (1) – (3); subsection (3) now includes the language previously included in 12.740(c). 

Specifically, a party must now advise the court if:

• There is a domestic violence injunction or a conviction of a crime of domestic violence between the parties, or
• If there has been a history of violence between the parties that would compromise the mediation process.

Further, rule 12.740 was amended to prohibit the following actions from being referred to mediation absent a finding of good cause by the court or consent of the parties:

• Title IV-D actions;
• Post-judgment contempt and enforcement actions; and
• Extensions or modifications of injunctions between the parties.

As proposed by the Committee, the Court accepted the proposed addition of the language, “between the parties” relating to extensions or modifications of injunctions.

We encourage anyone who may be interested in joining the Rules and Forms Committee to please reach out to us at rules@familylawfla.org.

Case Law Update

Macpherson v. Macpherson, 2024 WL 2097928 (Fla. 6th DCA 2024). By Reuben A. Doupé, Esq.

There are very few bright line rules in family law. The date of identification of assets for purposes of equitable distribution, however, is one of them. Florida Statutes §61.075(7), clearly states the cut-off date for the identification of assets and liabilities subject to equitable distribution. There is no discretion permitted by this statute and the Sixth District is not inclined to allow any such discretion.

The Macphersons have a home and had borrowed money from the husband’s parents to purchase the home. The parties separated approximately six years prior to filing for dissolution but did not enter into any separation agreement. After separation, but prior to filing a petition, the husband paid off the loan to his parents. The trial court exercised its discretion, properly, to value the home as of the date of separation; and in doing so, included the value of the loan as of the date of separation. The Sixth District reversed. “[W]hile a trial court has discretion as to the date it uses to value marital assets and liabilities …, the trial court does not have discretion as to the date used to determine the existence of martial assets and liabilities and whether they are subject to equitable distribution. § 61.075(7), Fla. Stat. (2018). If an asset or liability does not exist as of the applicable cut-off date mandated by Section 61.075(7), then the asset or liability cannot be distributed in equitable distribution.” (emphasis added).

This case reverses on another interesting issue. The court distributed a necklace to the husband, but there was no evidence presented about a necklace. “Because there was no evidence in the record to establish the existence of the necklace, the trial court erred by requiring former wife to return the necklace to former husband.” If your client wants to receive something, it is their burden to prove to the Court that the thing actually exists.

Malley v. Malley, 2024 WL 3057573 (Fla. 4th DCA 2024).

By Cash A. Eaton, Esq.

The trial court’s statutory authority to determine and resolve timesharing issues cannot be delegated. The former husband appealed a final judgment dissolving his marriage to the former wife and adopting a parenting plan. The subject parenting plan awarded the former wife sole parental responsibility and limited the former husband's contact with his daughter to two-and-a-half hours of supervised visitation every Sunday. Moreover, the parenting plan provided that the former husband could petition for a modification of the plan after completing treatment for his personal issues.

However, the subject parenting plan delegated the trial court’s authority as to when the former husband could petition the court for modification. The parenting plan provided that the former husband would be required to submit his proof of treatment to a court-appointed doctor. The doctor would then apprise the court of whether the treatment was sufficient for the former husband to petition the court to modify his current parenting plan. Essentially, the former husband could only petition for a modification of the parenting plan only if the doctor opined that the completed treatment was sufficient.

The decision of whether a party has met their legal and/or evidentiary burden to modify a parenting plan is within the trial court’s statutory authority. The subject parenting plan clearly placed that decision within the authority of an unappointed doctor. This is an impermissible delegation of the trial court’s duty. Accordingly, the final judgment was overturned and remanded to the trial court.

Ware v. Ware, 2024 WL 2981076 (Fla. 5th DCA 2024).

By Ronald H. Kauffman, Esq.

The recent case of Ware v. Ware is a cautionary tale on drafting settlement agreements. In a pretrial stipulation, the parties agreed each would keep their own vehicle, but the stipulation was not specific as to what type of vehicle each party owned and would keep. The final judgment incorporated the parties’ pretrial stipulation, awarding former husband a 2010 Mercedes and former wife a 2005 Mercedes.

Six weeks later, former wife filed a motion to correct final judgment, arguing, in part, that the 2010 Mercedes was hers, they no longer had the 2005 Mercedes, and they now owned a 2015 Mercedes. former husband argued the 2010 Mercedes was his and there was no error.

The trial court found there was a mutual mistake in the pretrial stipulation and final judgment, entered a Consent Order Equitably Distributing Vehicles giving former wife the 2015 Mercedes and a half interest in the 2010 Mercedes.

On appeal, former husband argued there was a unilateral mistake on behalf of former wife, which is insufficient grounds to set aside the final judgment. Florida Family Law Rule of Procedure 12.540(b) allows a court to relieve a party from a final judgment for mistake, inadvertence, surprise, or excusable neglect among other reasons. The Fifth DCA agreed. A mutual mistake occurs when “the parties agree to one thing and then, due to either a scrivener's error or inadvertence, express something different in the written instrument.”

Here, the parties’ stipulation provided that “each party shall keep their own vehicle.” There was no evidence regarding who owned what cars and the parties’ testimonies contradicted each other. The court reversed the Consent Order Equitably Distributing Vehicles and remanded to reinstate the original disposition of the cars pursuant to the parties’ pretrial stipulation.