Linda Hubby Wife filed for divorce from Frank Hubby Husband, and sought an equitable division of property. Husband moved for partial summary judgment, asserting that the marital home was his separate property because he made the down payment on the residence with his own personal funds. The trial court granted the motion, concluding that Husband was entitled to all subsequent appreciation in value attributable to market forces. We granted Wife’s application for discretionary appeal and, by order, vacated and remanded “for the trial court to hold an evidentiary hearing to determine what role marital assets played in increasing the equity in the house and, therefore, what percentage of the appreciation in the house is subject to distribution as a marital asset.”
The purchase price of the home was $145,500, of which Husband contributed $80,500 and the remaining $65,000 was financed. On remand, the evidence showed that marital funds in the amount of $1983 were used to pay down the original mortgage to $63,017. The home was then refinanced and a new indebtedness of $68,500 incurred. Thereafter, $2585 in marital funds were used to reduced the balance on the new mortgage to $65,915. The home is now worth $183,000, of which $117,085 is net equity comprised of Husband’s initial down payment, subsequent mortgage pay-down from marital funds and market appreciation. On remand, however, the trial court concluded that, “under the facts of this case, marital assets played no role in increasing the equity in the house for the equity, in fact, decreased. . . . Hence, there is no appreciation in the house subject to equitable division as a marital asset.” Based upon this conclusion, the trial court again awarded the marital home to Husband. We again granted a discretionary appeal to determine whether the trial court correctly applied the “source of funds” rule in resolving the issue of the equitable division of the appreciation in the value of the marital home. We hold that the trial court misapplied the rule and, therefore, reverse the grant of partial summary judgment in favor of Husband.
