February 5, 2014

Fourth DCA: Contempt Unavailable to Force Payment of Mortgage on Marital Home by Spouse Who Received Home in Dissolution of Marriage Proceeding

Fourth DCA: Contempt Unavailable to Force Payment of Mortgage on Marital Home by Spouse Who Received Home in Dissolution of Marriage Proceeding

A common problem we have seen spouses encounter following divorce involves responsibility for the mortgage on the marital home. Family courts often award one spouse the marital home in equitable distribution. However, the other spouse is frequently named on the note and mortgage for that home, either alone or jointly with their ex-spouse. Unfortunately for the spouse whose name is still on the note and mortgage, there is little the court can do to force the party awarded the home to stay current with the mortgage obligation. This holds true even if the family court specifically made the home the financial responsibility of the delinquent party, as that ruling does not bind the lender who still holds responsible the party whose signature is on the documents.

The Fourth District Court of Appeal (Fourth DCA) recently reaffirmed that a trial court may not use its contempt power to order an ex-spouse to pay the mortgage on which the other ex-spouse is liable. In Byrne v. Byrne, 4D13-1150 (Fla. 4th DCA Jan. 29, 2014) the parties’ marriage was dissolved and the former wife received the marital home (and financial responsibility for it) in the equitable distribution. Only the former husband’s name was on the note and mortgage documents for the marital home. The former husband later filed a contempt motion seeking to force the former wife to notify the bank that she was now financially responsible for the home. The trial court declined to award that relief, but ordered the former wife to use the rental income from the home to pay the mortgage and for her to bring the mortgages current. The former wife failed to comply with the trial court’s order and the trial court found her in contempt.

On appeal, the Fourth DCA reiterated that contempt is unavailable to enforce a property settlement arising out of a dissolution of marriage. See Simpson v. Simpson, 68 So. 3d 958, 961(Fla. 4th DCA 2011). The Fourth DCA acknowledged that a court may use contempt to force a party to take action such as the execution of documents. Riley v. Riley, 509 So. 2d 1366, 1369 (Fla. 5th DCA 1987). However, the Fourth DCA concluded that the former husband did not seek that kind of allowable remedy in the case before it. The Court also held that the trial court could not appoint a receiver to collect the rental payments from the tenants residing in the parties’ marital home. The court reversed the order in favor of the former husband in its entirety.

The parties to a divorce are usually anxious to extricate their financial affairs from one another and move on with their lives. An ex-spouse’s responsibility for a note and mortgage on a marital home awarded to the other spouse poses potential impediments to that goal, as it can negatively impact the credit and finances of the one whose name is on the note and can cause further litigation. A party to a divorce proceeding who is liable for the mortgage on the marital home must therefore pay close attention to the treatment of the home in the equitable distribution and attempt to foresee this problem. It will likely be too late to fix the problem once the equitable distribution in the divorce proceeding is final.