Tanking R/E Market, Fla Appeals Court Leave Ex-Hubby Holding The Bag On Marital Split-Up Deal After Failing To Complete Buyout Of Wife's Share Of Home

The following facts are taken from a recent ruling from a Florida appeals court:

• For reasons unspecified in the ruling, Husband (hereinafter referred to as "Hubby") & Wife are desirous of terminating a presumably unsatisfactory, unfulfilling marriage.

• The couple own a home with an approximate fair market value set at $950K, with an approximate mortgage balance of $603K.

• On August 8, 2008, the couple enter into a split-up agreement where, among other things, Hubby agrees to cough up $185K (with minor adjustments) to pay Wife in exchange for her entire share of the marital home, and further agrees to refinance the existing mortgage.

• Wife agrees to deed her share of the marital home to Hubby, and escrows a deed to him for that purpose, subject to Hubby following through with his end of the bargain.

• The object of the deal, according to the court, was "(1) to bring about an unconditional payment of $185,000 to the former wife; (2) achieve an ownership transfer of the property to the former husband; and (3) relieve the former wife of any further financial responsibility for the property contemporaneously with the transfer."

So far, so good. Pretty standard stuff. Buy her out and send her on her way. Then:

• Shortly after August 8, 2008, according to the court, "the Florida real estate market entered into one of its periodic downward adjustments, for which it has become famous since the time of the Great Depression."

• Because of this apparently forseen "downward adjustment" in the real estate market, Hubby decides to stiff Wife out of the entire $185K pile of cash he promised to fork over and 'forgets' to refinance the home to take her off the hook on the existing mortgage as promised.

• Instead, Hubby unilaterally tries to list the house for sale with a Realtor, but Wife, who still lived in the home with the couple's minor child, refused to cooperate, according to Hubby.

• Rather than amicably cooperate with Hubby, Wife opted to file a motion for contempt and enforcement of the buyout deal, specifically for the coughing-up of the $185,000 pile of cash she was expecting to pocket (and, at least psychologically, possibly may have already spent, maybe with a new boyfriend) and the refinancing of the house.

• Hubby then attempts to wiggle his way out of the deal, telling the trial judge that, because of the recent "downward adjustment" in the real estate market, he has not been able to refinance the marital home solely under his name and thus has not been able to pay the cash owed Wife pursuant to his deal with her.

• An apparently sympathetic trial judge essentially tells Hubby "'OK, my friend, you're off the hook & out of the deal!" - finding that there was (in these exact words) "an impossibility of performance due to changes in the economy" in declaring the deal void.

• Possibly in view of Wife's alleged lack of coperation with Hubby, the trial judge turns to Wife, who is still in the home with the couple's minor child, and proceeds to hammer her by giving her the boot, ordering the property be appraised and that it immediately be listed for sale with the net proceeds split between her & Hubby.

• Wife then responds, possibly by telling the judge, "No Way, Honey! - I got a binding contract with that miserable, good-for-nothing 'snake' and I won't let him slither out of it - I Shall Appeal!!!"

• If, in fact, she responded in this manner, she was certainly true to her word - she proceeded to file a timely appeal.

In short, the Florida appeals court agreed with Wife, reversing the first-class shtupping-over the trial judge imposed upon her. The three-judge panel possibly may have then turned to Hubby, smiled at him, and said (although not necessarily in these exact words), "Not so fast, Buster. That was a nice try, but guess what? You're back on the hook!"

For the appeals court's ruling, and its reasoning, see Ferguson v. Ferguson, No. 3D10-479 (Fla. App. 3d DCA, February 2, 2011).