Best v. Staton, (unpublished).
Equitable Distribution is one of the mechanisms by which former spouses separate their personal and real property. It requires the right timing and, since not all property can be easily split, the right kind of appraisal. Real property is especially valuable, and sometimes difficult to assess. In the case below, we discuss why you should consult an expert in Equitable Distribution.
(a) Facts: Plaintiff Wife filed a claim for Divorce from Bed and Board, and the couple subsequently separated in 2016. Three months before separation, Plaintiff Wife filed a claim for Equitable Distribution. In Defendant’s responsive pleading to Plaintiff’s claim, he included an intent to file for Equitable Distribution. One month after separation, Defendant filed his claim. On cross motions to dismiss those claims, the trial court granted the Defendant’s and denied Plaintiff’s, holding that the court lacked subject matter jurisdiction because she filed her claim before separation. Later, the trial court entered judgment based on Defendant’s claim. At trial, the court took judicial notice that the marital property had passively increased in value since date of separation based upon publicly available tax values. Plaintiff Wife appealed that judgment and we discuss two of her issues on appeal.
(b) Issue: First, did the trial court err on holding that they had subject matter jurisdiction on Defendant Husband’s claim? Second, did the trial court abuse its discretion when took judicial notice that the marital residence increased in value from date of separation to date of hearing based on tax value?
(c) Holding: First, no. Second, yes.
(d) Rationale: In the analysis of the first issue, the Court relied on cases that consistently found that a court has subject matter jurisdiction only after parties have separated. Plaintiff Wife next argued that the responsive pleading stating that Defendant intended to file a claim for Equitable Distribution, was his filed claim. The Court did not find this persuasive, and distinguished this case because Defendant never requested Equitable Distribution, only stated his intention to later file a claim. On the second issue, the Court reiterated that tax values from the county are not competent evidence of a property’s value because owners are not consulted during the assessment, and assessors fix uniform values over actual value. Although the tax value can be considered if offered into evidence and not objected to. Here, since no party offered the tax value to show passive increase, and tax values from the county are not competent evidence, the reliance on such was an abuse of discretion. The Court remanded for further findings.
(e) Lessons and Observations:
a. First, do not file your claim for Equitable Distribution before separation. Here, it led to the reliance on the Defendant’s claim rather than the Plaintiff’s. This error could have cost the Plaintiff in the end.
b. Second, a court may not by itself rely on tax values. They must always be introduced by a party, and without objection. Better practice would have been having appraisers make a valuation on the property.