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Florida Appeals Court Reverses Lower Court Ruling that Forced Two Divorcing Spouses to Remain in Business Together

Certainly, some divorcing spouses end their marriage under highly amicable and collegial circumstances. They may choose, even after divorcing, to live close to each other, or to maintain a friendship and an active role in each other’s lives. They may even choose to remain in business together. However, the law generally does not support forcing two divorcing spouses to remain in business together. Instead, a business that is a marital asset typically should be assessed a value and distributed as part of equitable distribution. Valuing and distributing a business is just one of many potentially complex elements of equitable distribution and a place where your case may benefit greatly from the knowledge and skill of an experienced Miami divorce attorney.

One less-than-amicable divorce that involved a business asset was the case of K.G. and C.G. At the end of the trial, the court entered a final judgment of dissolution that, among other things, declared the husband’s closely held business, a Miami Beach-based prosthetics company, to be a marital asset and gave each spouse a 50% ownership stake in the business. In making that ruling, the trial judge expressly stated that he was declining to assign a value to the prosthetics business.

The husband appealed that decision and he was able to get it reversed. The judge’s decision to make the divorcing spouses co-owners together of the prosthetics business was a legal error that was “apparent on the face” of the ruling. That’s because Florida law is very clear that “compelling former spouses to remain in business together ‘creates [an] intolerable situation’.” That’s because divorce should be about an opportunity for closure. Forcing two divorcing spouses to co-own a business is potentially bad for them personally, bad for their business and bad for something called “judicial economy,” as it raises one more circumstance under which the parties might decide to bring their disputes back into court (perhaps multiple times).

If two divorcing spouses should desire to continue running a business together, they are free to do that; the law simply says that two divorcing spouses should not be forced to do so. The appeals court in this couple’s case pointed out that the evidence provided to the trial court depicted an “acrimonious relationship” and two people who did not want to continue to be in business together. Specifically, during the course of the litigation, the wife accused the husband of firing her from her employment with the business, cutting off her access to all the business’ bank accounts and basically grabbing “complete control of the business.”

The decision not to assign a value to the prosthetics business was also an error that required reversal. The Florida statutes requires trial judges in all contested divorce litigation actions to identify, value and distribute all marital assets. This prosthetics business was a marital asset and the couple’s divorce was contested, so the business was required to receive a value assignment.

Whether your divorce issue is asset valuation, alimony calculation or another issue, Miami family law attorney Sara Saba is equipped to help. Attorney Saba has been providing strong representation for her clients for more than 13 years. Our team is dedicated solely to meeting your family law needs. Contact us online or by calling (305) 450-8009 to schedule your consultation. Hablamos Español.

More blog posts:

What it Means for Your Florida Divorce Case if There is Ambiguity in Your Marital Settlement Agreement, Miami Divorce Lawyer Blog, Sept. 17, 2018

Equitable Doesn’t Always Mean Equal: The Rules of Marital Property Division in Florida, Miami Divorce Lawyer Blog, Sept. 17, 2018