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Sturms v. Sturms

Florida Court of Appeals, First District

August 21, 2017



         An appeal from the Circuit Court for Duval County. Elizabeth A. Senterfitt, Judge.

          Rebecca Bowen Creed of Creed & Gowdy, P.A., Jacksonville, for Appellants.

          Michael J. Korn of Korn & Zehmer, P.A., Jacksonville and S. Denise Watson of the Law Office of Denise Watson, Jacksonville, for Appellee.

          PER CURIAM.

         Michael Larry Sturms ("Husband") appeals the trial court's final judgment of dissolution of his marriage to Catherine Elizabeth Sturms ("Wife"), raising four issues. We find merit in his arguments that the trial court erred in including the value of the 2014 Jaguar F-Type as both a stand-alone asset and in the adjusted cash amount, and in its allocation of assets owned by Continental Financial Services, LLC ("Financial Services"), in devising the equitable distribution scheme. We reverse the final judgment and remand for the trial court to correct the equitable distribution schedule consistent with this opinion. In all other respects, we affirm the final judgment.

         Wife filed the petition for dissolution in March 2013, after almost fourteen years of marriage. Husband is the sole shareholder and owner of three companies: Worldwide Financials, LLC ("Worldwide"); Continental Development, LLC ("Development"); and Crude Oil & Gas, Inc. ("Crude Oil"). Financial Services is a partnership between William Pierce and Worldwide, a company wholly owned by Husband. Wife asked the trial court to designate the property and assets held by Worldwide, Development, Crude Oil, and Financial Services as marital.

         The parties owned various properties, vehicles, and businesses they acquired during the marriage. Husband disputes the equitable distribution of Crude Oil's assets, including the 2014 Jaguar F-Type and the assets of Financial Services, due to his status as a fifty-percent shareholder. The equitable distribution schedule incorporated into the final judgment assigned to Husband an adjusted cash amount of $776, 752. The value of adjusted cash included $578, 000 earned by Crude Oil. In addition to the adjusted cash amount, the 2014 Jaguar F-Type, purchased with Crude Oil funds, was credited against Husband in the amount of $75, 750. The equitable distribution assigned to Wife the Tortuga Lot and the Ameritrade Account, which are assets of Financial Services.

         Crude Oil as Marital Asset

         Husband contends that the trial court erred in valuing Crude Oil as a marital asset when calculating the adjusted cash amount. "We review a trial court's characterization of an asset as marital or nonmarital de novo and any factual findings necessary to make this legal conclusion for competent, substantial evidence." Dravis v. Dravis, 170 So.3d 849, 852 (Fla. 2d DCA 2015) (citing Tradler v. Tradler, 100 So.3d 735, 738 (Fla. 2d DCA 2012)).

         A. Alleged Commingling of Crude Oil Funds into Marital Accounts

         Husband argues that the value of Crude Oil, and its primary asset, the drilling rights, is premarital because he acquired the business and drilling rights long before the parties married. "Nonmarital assets may lose their nonmarital character and become marital assets where, as here, they have been commingled with marital assets." Id. (citing Abdnour v. Abdnour, 19 So.3d 357, 364 (Fla. 2d DCA 2009)). "Money is fungible, and once commingled it loses its separate character." Pfrengle v. Pfrengle, 976 So.2d 1134, 1136 (Fla. 2d DCA 2008) (citing Belmont v. Belmont, 761 So.2d 406, 408 (Fla. 2d DCA 2000)). When nonmarital funds are commingled with marital funds, the nonmarital funds become marital funds and therefore are subject to equitable distribution. See Heinrich v. Heinrich, 609 So.2d 94 (Fla. 3d DCA 1992) (holding that funds from nonmarital sources are treated as marital funds for the purposes of equitable distribution when they are placed in a trust along with a family checking account in which the husband deposits his income).

         Although Husband is correct that Crude Oil's primary asset, the deep-oil drilling rights, originated as a nonmarital asset, the record evidence supports the trial court's factual finding that the proceeds from the sale of the drilling rights were commingled when Crude Oil funds were loaned to Development, causing them to lose their nonmarital character, despite the eventual return of the funds to a Crude Oil account. The earnings of Crude Oil are therefore marital assets. Thus, the trial court correctly assigned to Husband the $578, 000 earned by Crude Oil in the adjusted cash amount.

         B. 2014 ...

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