Summary
Wife was denied her due process right to be heard as a defaulted party at the final hearing. The equitable distribution table did not include any of the funds Husband withdrew and charged to the business account. Those funds were attributable to him. It also did not include the most valuable asset of all – the family business, [Name of Family Business] – which Husband had diverted for his own benefit in the early weeks after his arrest. Husband not only committed fraud in not including the aforementioned funds and business, but also perjured himself on the stand claiming that Wife withdrew the funds from a joint account, that she was still in possession of the funds, and that the distribution of assets gave each party an equal share of the assets. The trial court was aware of the family business from the onset of proceedings, but never inquired as to why it was not included in the distribution of assets. This was clearly an abuse of discretion.
Argument
1. Wife had a right to be heard at the final hearing
It is well settled in Florida case law that a defaulted party has a due process entitlement to notice and an opportunity to be heard as to the presentation and evaluation of evidence necessary to a judicial determination of the amount of unliquidated damages. Pierce v. Anglin, 721 So.2d 781 (Fla. 1st DCA 1998). A party must be afforded an opportunity to defend. Wife was provided no such opportunity. Pursuant to Rules 1.500(e) and 1.440 of the Florida Rules of Civil Procedure, if claims are “unliquidated,” a trial is required with at least thirty days’ notice to the defaulted party, at which time the party must prove his/her specific claims.
After Wife’s pleadings were stricken, she was defaulted. However, Wife was never served with any notice of the final default hearing. The hearing occurred on the original trial date – which had been set before her pleadings were stricken – but could have been set by Husband at any time after Wife's pleadings were stricken. Wife was not aware the default hearing would proceed on the date set before her pleadings had been stricken. In fact, she received no notice of any date on which the default hearing would occur. Both her attorney and Husband's attorney informed Wife that she was prohibited from attending. During the hearing, the trial court stated “So there’s really no other voice here, anyway.” (2 Tr. 4, lines 18-19) and did not even inquire as to whether Wife had been noticed about the hearing occurring. The trial court should not have proceeded without ensuring that Wife had received notice.
2. The Valuation Date, the Business
The family business, [Name of Family Business], was discussed during hearings, for example, the motion for contempt hearing (4 Tr. 4, lines 16-19) and business checking statements were hotly contested during discovery pleadings. Husband testified that the parties separated on March 13, 2011 (2 Tr. 7, line 21)[1]. The valuation date of the assets was March 22, 2011, barely nine days after they separated. Husband did not establish his own business until March 29, 2011 (1 R. 38-39 & 139). Therefore, the business, [Name of Family Business], should have been included in the distribution of assets.
The trial court erred in not inquiring about the business or asking if there were any other assets of the marriage, and erred in denying Former Wife’s Motion for Reconsideration ((2 R. 256-313) which clearly demonstrated that the business was omitted from Husband’s schedule of assets, and, as such, fraud had been committed during the final hearing (2 R. 256-313).
3. Funds Wife withdrew were no longer in existence
Wife’s financial affidavit dated February 22, 2012 (1 R. 63-69), demonstrated that the funds withdrawn from her personal business checking account no longer existed and had been used, both by Husband, without her consent, or for Wife’s reasonable living and relocation expenses.
Dissolution was pending for sixteen months prior to the final hearing, and Wife was unemployed and without income from April through November of 2011, and again, from January through February of 2012. Additionally, Wife had incurred additional expenses in relocating to the state of Maryland after Husband shut off water in her home, making it impossible for her to continue living therein.
Husband filed a Motion for Return of Status Quo of Marital Funds on March 22, 2011 (1 R. 29-30), regarding Wife’s withdrawal of the funds the trial court attributed to her. Wife responded, stating:
“At no time during the parties’ ten (10) year marriage did the parties have a joint business checking account. The account from which Wife removed funds was an account established by Wife in 1999, prior to the marriage, under the name “[Name of Wife's Business].” (1 R. 76)As demonstrated in Wife's Motion for Reconsideration, Husband withdrew from and charged to Wife’s personal business checking account in substantial amounts without her consent, between the date of his arrest on March 14, 2011 and May 6, 2011, the date on which Wife closed the account. On three separate occasions, Husband charged his legal fees to the "Law Office of [Asshat Rat Lawyer]" to Wife’s personal business checking account in the total amount of $7,500 (1 R. 140 & 2 R. 258). Husband charged substantial business expenses to Wife’s personal business checking account (1 R. 140) after he had diverted the marital business for his own benefit (1 R. 38-43 & 139). Husband instructed the customers of the marital business “[Name of Family Business]” to pay his new business “[Husband's New Business]” and to place stop payments on checks issued to “[Name of Family Business]” and to place charge backs on payments made by credit card.
Florida appellate court decisions are clear that marital assets depleted to pay for reasonable living expenses, absent a finding of misconduct or intentional dissipation, cannot be attributed to Wife in the schedule of equitable distribution of assets. Tillman v. Altunay, 44 So.3d 1201, 1203 (Fla. 4th DCA 2010); Sheehan v. Sheehan, 943 So. 2d 818, 822 (Fla. 4th DCA 2006); Roth v. Roth, 973 So.2d 580, 585 (Fla. 2nd DCA 2008); Segall v. Segall, 708 So.2d 983, 986 (Fla. 4th DCA 1998).
Indeed, Husband’s misconduct in diverting income from the family business “[Name of Family Business]” to his new similarly named business “[Husband's New Business]” should have been considered by the trial court, and would have been raised by Wife, if her pleadings had not been stricken and/or she had been allowed to participate in the final hearing. Husband’s withdrawals should also have been considered and attributed to him.
4. Husband committed fraud
The trial court should have granted Wife’s motion for reconsideration (2 R. 256-313), and, in light of Husband’s fraud which permeated the entire proceeding of the final hearing and resulted in Wife being ordered to pay even more of Husband’s attorney’s fees than she had already paid, and an “equalizing” sum which granted Husband all the assets plus more, the trial court should actually have stricken his pleadings. Cox v. Burke, 706 So.2d 43 (Fla. 5th DCA 1998); Kornblum v. Schneider, 609 So. 2d 138 (Fla. 4th 1992); Desimone v. Old Dominion Insurance Co., 740 So. 2d 1233 (Fla. 4th 1999); Savino v. Florida Drive In Theatre Management, Inc., 697 So. 2d 1011 (Fla. 4th 1995)
[1] The parties actually separated on March 14, 2011, the date of Husband’s arrest for domestic violence against his Wife, wherein he was charged with aggravated assault with a deadly weapon.
