Posted by Nydia Streets of Streets Law in Florida Child Support

A party who hides income or assets to avoid paying support or splitting assets in a Florida divorce may find themselves on the losing end of assets later. For example, someone who purchases property in the name of a third party to avoid legal obligations runs the risk that the property will ultimately belong to the third party despite proof of payment. This was an issue in the case Perry v. Turner, 2D22-119 (Fla. 2d DCA June 30, 2023).

The parties to this case were in a relationship for more than 10 years. They never married. During their relationship, the boyfriend transferred large sums of cash to the girlfriend which she used to purchase properties in her name or in the name of an entity of which she was the sole shareholder. When their relationship ended, the girlfriend sued the boyfriend for eviction. He counter-sued for a constructive trust, equitable lien, unjust enrichment and accounting. Ultimately, the trial court found in favor of the girlfriend, applying the doctrines of unclean hands and in pari delicto after evidence was presented that the boyfriend transferred funds to the girlfriend for the purpose of reducing his child support obligation to his ex-wife. The boyfriend appealed, arguing there was insufficient evidence to rely on the doctrines of unclean hands and in pari delicto.

As to unclean hands, the appellate court noted “Consistent with this principle, the unclean hands doctrine ‘may be asserted by a defendant who claims that the plaintiff acted toward a third party with unclean hands with respect to the matter in litigation.’ [internal citation omitted]. This is precisely what [the girlfriend] did in this case. She alleged that [the boyfriend] acted toward his creditors— and particularly toward his ex-wife—with unclean hands as to the properties and assets [the boyfriend] sought to recover in the litigation. [. . .] The other doctrine the trial court applied—in pari delicto—is a corollary to the unclean hands doctrine. O'Halloran v. PricewaterhouseCoopers LLP, 969 So. 2d 1039, 1044 n.3 (Fla. 2d DCA 2007). The in pari delicto defense ‘refers to '[t]he principle that a plaintiff who has participated in wrongdoing may not recover damages resulting from the wrongdoing.’ [citation omitted].”

The court went on “This case falls squarely within the principle and purpose of in pari delicto. The trial court found that both parties knowingly and willfully participated in wrongdoing. They schemed to transfer [the boyfriend’s] money and assets to [the girlfriend] to conceal them from [the boyfriend’s] ex-wife to whom [the boyfriend] owed child support. [. . .] [the boyfriend] argues that this is not enough; he contends that proof of illegal—and not just wrongful—conduct is required for the doctrine of in pari delicto to apply. Nothing in the case law or the doctrine's definition requires evidence of illegality or criminality. Further, Florida courts have long held that an agreement ‘offensive to public policy is void and unenforceable’ if ‘the parties to such an agreement are in pari delicto.’”

The court concluded “In this case, the trial court left [the boyfriend] and [the girlfriend] where it found them. It refused to ‘aid [Mr. Perry] in extricating himself from the situation he has created.’ [internal citations omitted]. We conclude that the trial court appropriately applied the doctrines of unclean hands and in pari delicto, and we affirm the final judgment on [the boyfriend’s] counterclaim.”

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