Background
Andrew and Kelly Rottinghaus married in 2012 and separated in March 2022. Andrew formed Sky Magic, LLC before the marriage, and Kelly never became an LLC member. During the marriage, Sky Magic bought a 1975 Piper Seneca aircraft using $72,000 from Kelly’s account containing proceeds from marital real estate and $8,000 charged to a credit card. Improvements later increased the aircraft’s value.
In April 2022, after separation and before Andrew filed for dissolution, he sold all of Sky Magic to a friend for an asserted $60,000. The trial court found that Andrew had received none of the asserted purchase price by trial and had reason to believe the LLC might be transferred back to him after the dissolution. Kelly had separately registered the aircraft with the FAA in her name to protect what she believed was a marital interest.
The Court’s Holding
The court affirmed the dissolution judgment, including its order requiring Andrew to pay Kelly $60,000. Although Sky Magic and its aircraft were no longer available for division at trial, the evidence supported an implied finding that Andrew had secreted or squandered the marital interest in Sky Magic in anticipation of divorce. The court could therefore hold him responsible for that value.
The court also held that marital funds and efforts could make the increase in value of Andrew’s premarital LLC a marital asset. Sky Magic’s sole asset, the aircraft, was acquired with marital funds and improved during the marriage. The trial court’s $120,000 valuation, based on Andrew’s insurance valuation and within the parties’ valuation range, supported awarding Kelly half, or $60,000.
The court further rejected Andrew’s challenge to the registration-transfer order. Andrew had requested at trial and in his proposed judgment that Kelly be ordered to transfer the aircraft’s registration to Buyer or Sky Magic. He could not complain on appeal that the court lacked authority to direct a transfer, and he could not assert the rights of Buyer or Sky Magic, neither of whom was a party.
Key Takeaways
- A court may account for a marital asset disposed of before trial when evidence supports an implied finding that it was secreted or squandered in anticipation of divorce.
- Marital contributions to a spouse’s premarital LLC can create a divisible marital interest in the LLC’s increased value.
- A party generally cannot challenge on appeal relief that the party requested below, or litigate absent third parties’ rights.
Why It Matters
The decision illustrates that using a separate business entity does not prevent a dissolution court from recognizing the marital value created through marital money and labor. A pretrial sale to an associate, particularly one that is unpaid or below value, may support treating the transferred value as available for equitable allocation.