Eddie W. Wilson v. Suzanne L. Wilson

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REL: 11/18/2011 Notice: T h i s o p i n i o n i s s u b j e c t t o formal r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e Reporter o f Decisions, Alabama A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ((334) 2 2 9 - 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may b e made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . ALABAMA COURT OF CIVIL APPEALS OCTOBER TERM, 2011-2012 2100540 Eddie W. W i l s o n v. Suzanne L. Wilson Appeal PER from M o b i l e C i r c u i t Court (DR-07-500998) CURIAM. Eddie ("the W. W i l s o n wife") separated. After a trial ("the husband") were m a r r i e d i n 1977. The h u s b a n d filed a n d Suzanne InA p r i l L. Wilson 2007, t h e p a r t i e s f o r a divorce i n July i n O c t o b e r 2010, a t w h i c h t h e o n l y 2007. issues f o r 2100540 the trial stock court's held in p r o p e r t y and, entered and the wife's i f so, name the value awarding the court had whether be 158 wife the shares considered of t h a t stock, the husband $120,000 10 y e a r s . husband were could a judgment awarding the p a i d over the determination 158 i n alimony marital trial shares the improperly judgment, admitted certain evidence was valuation at t r i a l , testimony, arguing that certain the the based i n alimony be denied, trial testimony, that, award of $120,000 to had relied on in the gross inequitable. The parties record r e f l e c t s the f o l l o w i n g f a c t s . married, Works. the husband H o w e v e r , he h a d S e a f o o d Company, I n c . time, by the wife's parents. employment with s t e a l i n g money and was employed At the time at worked f o r a s h o r t time Pearl his and stock in gross, i m p r o p e r l y r e s t r i c t e d c r o s s - e x a m i n a t i o n , had i m p r o p e r l y on court of A f t e r h i s p o s t j u d g m e n t m o t i o n was appealed of SPS in Landry's i n 1976 Boat at ("SPS"), a company owned, a t The 1976 s h r i m p f r o m SPS. h u s b a n d was after he dismissed was Apparently accused at the the Sea that from of wife's request, her f a t h e r , Joseph L a d n i e r , h i r e d the husband to work at SPS a g a i n i n 1985. Since that time, 2 t h e h u s b a n d has worked 2100540 at SPS; he freezes has shrimp, $100,000 p e r SPS. run As the since year part I.Q.F. p l a n t , w h i c h i n d i v i d u a l l y and of approximately has his June 2010, The husband f u r t h e r t e s t i f i e d had charged wife a l s o works year. The c a s e was wife the she husband that had had however, her the him apparently on the affair i n w h i c h he with moved a f t e r also paid she earns a the was first had on prompted, the the o f $40 having references of the separation of to per 3 family divorce SPS. The to and month. The adultery; infidelity o r a more parties. that husband infidelity into the finances per the he $74,000 committed admitted the fuel. his belief family a The at in priority. a allowance from SPS. according and b e e n i n v o l v e d i n 1990 friend to approximately handled admitted few for his r e f l e c t e d t h a t , once the whether had over t h e summer o f 2010 c o n t r o l l i n g nature wife earns i s provided certain restaurant family i t i s unclear had a separation trial, relationship SPS husband husband would l o s e h i s j o b placed based the that u n t i l at t r i a l his wife's placed testified at f o r SPS; parties' husband, by that lunch testimony over, The the his He c o n s i s t e n t l y r e c e i v e d bonuses compensation, company v e h i c l e ; u n t i l 1995. quick was at an recent w h o s e home he 2100540 In 1990, Joseph stock to She a executed i n annual shares promissory o f SPS note for i n s t a l l m e n t s o f $21,347.35 over i n favor of Joseph Ladnier. Joseph Ladnier to t r a n s f e r r e d 137 the wife. $137,000, payable years Ladnier testified, At t r i a l , however, both 10 t h e w i f e and t h a t t h e s t o c k was a gift t h e w i f e a n d t h a t t h e w i f e h a d n e v e r p a i d a n y money f o r t h e stock. had Bruce Vest, not paid despite SPS's a c c o u n t a n t , Joseph the fact Ladnier that f o r t h e 137 Joseph 2000, Joseph L a d n i e r year, SPS t r a n s f e r r e d 21 a d d i t i o n a l that stock account, o f $4,000 a check drawn the wife t e s t i f i e d the annual shares from at t r i a l the 21 s h a r e s for t h e 21 s h a r e s w i t h a check but, had been concern." returned also Vest testified Vest That of stock of same to the that the wife paid f o r their joint checking t h a t she had n o t p a i d f o r to the wife. Vest of stock. stock, p e r share. the husband t e s t i f i e d with of and h i s w i f e s o l d t h e i r shares t o SPS f o r t h e p r i c e Although shares tax returns. stock wife. that the wife had l i s t e d Ladnier p a y m e n t s a s i n c o m e on h i s a n n u a l In testified testified about that the w i f e had p a i d as he r e c a l l e d , SPS's viability as the check a "going s t a t e d t h a t he h a d h a d c o n c e r n s as t o w h e t h e r 4 2100540 SPS was a g o i n g c o n c e r n w h e n he p r e p a r e d t h e m o s t r e c e n t t a x r e t u r n f o r the company. of t r i a l , SPS determined the was that next tax The several H o w e v e r , he t e s t i f i e d , a s o f t h e a " g o i n g c o n c e r n " b e c a u s e , he SPS had adequate to established disbursements from i n 2006. that SPS the the parties' off a home-equity joint the after I n December i t 2006, expenses. that wife she paid and i t through 2007, She t e s t i f i e d a the college to the an parties' the to wife of of her pay remaining funds, regular family pay received a $325,000 used I n December 2007, $ 5 0 , 0 0 0 ; she children. wife occurred i n January 5 a home testified $50,000 t o h e r p a r e n t s b e c a u s e expenses "S" she had p l a c e d i n t h a t t h e e n t i r e $ 3 2 5 , 0 0 0 was disbursement gave the e n t i r e became she u s e d t o used the received and w h i c h that were had owed t o t h e a debt testified April received distribution had the w i f e r e c e i v e d pay b o t h s t a t e and f e d e r a l income t a x e s . the had debt $20,000, In disbursement. checking account wife approximately to carry wife $100,000 d i s b u r s e m e n t , w h i c h , she t e s t i f i e d , builder; s a i d , he year. evidence corporation equity date The 2008; the they final wife 2100540 t e s t i f i e d t h a t she u s e d t h e e n t i r e $85,000 d i s b u r s e d that time t o pay The of state and federal p a r t i e s b o t h employed SPS and i t s Both experts The experts stock. significantly. husband's income valuations testified Mark taxes. to determine the Their expert, to her at at value differed trial. Pawlowski, is a certified p u b l i c a c c o u n t a n t ("CPA") s p e c i a l i z i n g i n b u s i n e s s v a l u a t i o n . He has CVA, two certifications or c e r t i f i c a t i o n relating to business valuation: a as a v a l u a t i o n a n a l y s t , accreditation i n business valuation. there are three approaches the market explained t h a t he h a d c h o s e n , income approach explained, required used the approach, when a based million o f December However, decreasing deteriorating. the Pawlowski since the income 2004 of the asset He i n December 2007, t o u t i l i z e the SPS. That approach, capitalization-of-earnings Pawlowski, as a business: that approach. valuing projection on and o r an Pawlowski t e s t i f i e d to valuing approach, a n d a ABV, future income earnings. approach, SPS method According was worth he that to $6.4 2007. explained and that that SPS's SPS's sales had been profits had also been P a w l o w s k i q u e s t i o n e d how 6 SPS could h a v e made 2100540 such significant 2008 when SPS disbursements i tposted had o f f s e t an $800,000 l o s s . i t s production $550,000 p e r y e a r to i t s three losses Pawlowski by i n " B y r d " money, w h i c h i m p o s e d on i m p o r t e d seafood that shareholders noted refers to a Byrd money ongoing the and cash asset determine subtract cash-flow the "near flow, method. The a s s e t asset worth that approximately producers. Because o f by the l o s s task of estimating reevaluated SPS of the assets that date, of S P S was w o r t h using sum i t s l i a b i l i t i e s . o f SPS a n d t o As o f December 31, SPS was w o r t h $2.8 m i l l i o n b a s e d o n Each share o f SPS s t o c k $8,860 b a s e d on P a w l o w s k i ' s Pawlowski adjusted SPS was w o r t h h i s v a l u a t i o n as o f J u l y $3.3 m i l l i o n $10,541. 7 was December 31, 2010, b a s e d on u p d a t e d i n f o r m a t i o n ; he t e s t i f i e d of of the method, he s a i d , r e q u i r e d h i m t o method o f v a l u a t i o n . 2009, v a l u a t i o n . 31, s a i d , he t h e sum o f t h e v a l u e from created impossible" Pawlowski 2009, P a w l o w s k i t e s t i f i e d , the issues tariff i s c o l l e c t e d by the f e d e r a l I n 2 0 0 8 , h o w e v e r , SPS h a d r e c e i v e d n o B y r d m o n e y . significant that receiving at least government and then d i s t r i b u t e d t o domestic seafood the in and t h a t t h a t , as each share 2100540 The wife's submitted expert, two r e p o r t s D. Carney, v a l u i n g SPS. a CPA. Carney t e s t i f i e d had i n t e r v i e w e d V e s t and SPS's p r e s i d e n t , G r e g L a d n i e r , the wife's he had climate Ladnier Ficarino. decline shrimp loss a n d a n SPS discussed business the and shrimp Vest, as and t a x r e t u r n s stockholder. business i n Bayou L a B a t r e , well Carney boats, of with someone of shrimp, the increase investors the loss i n the cost for rebuilding i n t h e economy, due and t h e a s s e t s of and the with named Mr. suppliers and of d i e s e l fuel, the to the hurricanes, o f t h e company. on t h e i n f o r m a t i o n h e g a t h e r e d , C a r n e y t e s t i f i e d , that that w h e r e SPS i s l o c a t e d , as and who i s said i n general he S p e c i f i c a l l y , C a r n e y s a i d t h a t he h a d d i s c u s s e d t h e i n the p r i c e decline statements He that reviewed brother financial is had Greg SPS's Jack SPS was worth $1,719,000 as o f December explained t h a t he b a s e d h i s c o n c l u s i o n not anyone w o u l d want think he 31, Based concluded 2007. He on t h e f a c t t h a t he d i d t o b u y t h e company. He updated h i s v a l u a t i o n a s o f J u l y 3 1 , 2 0 1 0 , a n d d e t e r m i n e d t h a t SPS was worth the $1,206,400 negative the as of that date, e f f e c t s of a large o i l s p i l l shrimp industry. 8 i n part because i n the Gulf of o f M e x i c o on 2100540 At worth trial, had been explained believe be testified affected that, based t h a t the items, "going by the on that the concern" that possibility company had opinion at he the him, suffered and losses the trial, Carney lowered h i s v a l u a t i o n of SPS he the He did company not could market w o u l d no that SPS's heard. trial, l a c k of that of had equipment of the because of troubled his testimony testimony b u i l d i n g s and sold for t h e i r value those a Carney the for longer be significant were p r o b l e m a t i c . Thus, at a final time to $1 that SPS 1 applied a million. Carney's "fast sale value as value. asset valuation discount" o f J u l y 31, Pawlowski approach to valuing Pawlowski explained, the fair that SPS; SPS's v a l u e on resulted market His indicated that testified basing indicate SPS's a s s e t s . 2010, C a r n e y was reducing to reports value he estimate i t was Carney was however, he of SPS's a liquidated also using explained an that "liquidation value," in Carney's "significantly of the assets." which, Pawlowski I n t e r e s t i n g l y , we n o t e t h a t C a r n e y s h o u l d h a v e b e e n w e l l aware of the losses s u f f e r e d by SPS after reviewing the company's financial statements and tax returns, as he t e s t i f i e d he h a d d o n e . 1 9 2100540 t e s t i f i e d t h a t t h e r e e x i s t e d no for example, the done t o a r r i v e no inventory that Pawlowski said, that SPS SPS concern. In f a c t , plans to As noted above, the alimony of SPS in c l o s e or stock gross, marital assets. and had The awarded c o u r t was gift to the wife alone assigned § the had the his approximately presented and, i f the husband testified of a l l 158 $120,000 the property remaining $120,000, b e f o r e w i t h the issues In a d d i t i o n , the of v a l u i n g the 10 gift the whether been a property, common b e n e f i t o f t h e p a r t i e s c o n s i d e r e d by t h e t r i a l 30-2-51(a). task was in parties' divided i t s stock were existed. share and had t r e a t e d i t -¬ Greg L a d n i e r SPS of, liquidation, divided a l lpersonal been used f o r the s u c h t h a t i t c o u l d be 1975, of been p u r c h a s e d w i t h m a r i t a l funds or had whether i t had Code Because there c o u r t awarded the w i f e m a r i t a l residence trial. which Carney verge liquidate p a r t i e s had totaled trial the at t r i a l , to and w h i c h had s t o c k had 50%, t r e a t e d a s he representing The s o l d the on trial equity, the hand by was s h o u l d be no shares on to reduce the value at i t s " l i q u i d a t e d value." indications as a g o i n g reason stock. court under A l a . trial court was 2100540 In that r e v i e w i n g any the trial property and necessary v. c o u r t has be reversed be unjust a use m u s t be over the 545 So. 2d w h a t e v e r means a r e r e a s o n a b l e 75, 77 (Ala. Civ. j u d g m e n t i s p r e s u m e d t o be unless and Grimsley, division, the App. the 545 trial and 1989). The will evidence So. not as 2d a t 76. court may i n c l u d i n g the p a r t i e s ' r e s p e c t i v e present future capacities, conduct, of the d u r a t i o n of the marital property. (Ala. their C i v . App. particular reviewed. App. the value v. 485 So. Lutz, Because the Murphy v. and f a c t s and 624 So. 2d and type 1176 circumstances of 620, the of consider case 623 and their 1174, t h i s c o u r t must a l s o circumstances Murphy, 2d In being (Ala. Civ. 19 9 3 ) . On erred facts health, and each d i v o r c e case are d i f f e r e n t , the and marriage, Lutz 1986). ages to consider several factors, earning of Grimsley c o r r e c t and i t i s so u n s u p p o r t e d b y p a l p a b l y wrong. property mindful division to e q u i t a b l y d i v i d e the p a r t i e s ' p r o p e r t y . court's making wide d i s c r e t i o n t h a t i t may Grimsley, trial d i v i s i o n o f p r o p e r t y , we appeal, by regarding the admitting the husband f i r s t and valuation argues t h a t the by considering of SPS. 11 He trial Carney's argues that court testimony Carney's 2100540 testimony in should not p a r t , on used an thus, hearsay. Carney's the court 44 determined purposes value So. court was explained f u r t h e r argues to value precluded cannot 44 use that "fair 1092, value" 1097 3d the that based, Carney company from and, relying of of the court on 1097. As we a i s not to e n t i t y but, entity. artificially instead, Grelier 2009). court valuing a business that valuing a divorce ( A l a . C i v . App. discounts at trial of the company b e c a u s e s u c h an So. a context market value" the 3d i n the that a t r i a l of the Grelier, has "fair determine Grelier, trial held business determine the to husband b e c a u s e i t was opinion. This is The i n a p p r o p r i a t e methodology that closely have been a d m i t t e d for We have divorce deflate the approach i s i n e q u i t a b l e . explained: "Alabama law has n o t a d o p t e d a ' f a i r m a r k e t v a l u e ' standard for assessing marital property. Rather, under Alabama law, a t r i a l c o u r t must d e t e r m i n e the value of p r o p e r t y w i t h the o n l y l i m i t a t i o n being that the value must be equitable under the c i r c u m s t a n c e s o f t h e p a r t i c u l a r c a s e . See g e n e r a l l y Y o h e y v . Y o h e y , 890 So. 2 d 160 (Ala. Civ. App. 2004). That s t a n d a r d i m p l i e s t h a t the v a l u a t i o n must be fair t o a l l p a r t i e s c o n c e r n e d . See generally B l a c k ' s Law D i c t i o n a r y 578 ( 8 t h ed. 2004) ( d e f i n i n g 'equitable distribution' as the 'fair ... a l l o c a t i o n ' of m a r i t a l p r o p e r t y ) . In cases i n which a d i v o r c e c o u r t does not contemplate the s a l e of a business i n which one of the spouses holds a 12 v. 2100540 m i n o r i t y i n t e r e s t but, instead, intends that the business shall remain a going concern, i t makes little sense to determine fair value by the measuring s t i c k of a h y p o t h e t i c a l s a l e s p r i c e . That methodology would a r t i f i c i a l l y reduce the value of the m a r i t a l asset i n almost every case, which would be u n f a i r , i . e . , i n e q u i t a b l e , t o t h e p a r t y r e c e i v i n g only a p o r t i o n of the reduced value or the property equivalent to that reduced value but would be advantageous to the p a r t y r e t a i n i n g the business i n t e r e s t , i n c l u d i n g i t s a c t u a l v a l u e t o him or her as t h e holder." Id. (emphasis The added). husband entirely on reduced his indicating and a i s correct liquidation valuation that the stated he in valuations t h a t he company. However, liquidated at a p p r o a c h and court did trial apply would would of the than require the merely said testimony equipment regarding not for sale trial. and Using otherwise figures that a his was by r e v e r s a l of the Carney, market, earlier harmless 13 and being resulted in a If the trial that error i f those figures would the liquidation judgment, but error in admitting he trial not the obtain. used be based at lacked "fast sale discounts" would the and is t h i n k anyone w o u l d want t o buy was time court d i d not, evidence SPS Carney hearing testimony d i d not the valuation after his Carney's v a l u a t i o n approach. buildings applying lower obviously that not the into require 2100540 reversal of the j u d g m e n t may be the improper opinion judgment. Rule 45, r e v e r s e d or set a s i d e admission of See the ... to court of which A l a . R. ... it should appear injuriously we explain The b e c a u s e we remanding how are rights unable the i t valued cause the the number of alimony-in-gross The alimony husband i n gross in the or of has the cause, probably parties."). whether i n v a l u i n g the trial court the shares, i t to court erred shares trial shares for to o f SPS cannot address some i n d i c a t i o n property subject to d i v i s i o n i f in fact of ... shares. H o w e v e r , we contention without shares, the ("No taken is to determine i t f a i l e d t o i n c l u d e a l l 158 the m a r i t a l e s t a t e . to to unless of the e n t i r e complained husband f u r t h e r argues t h a t the the extent as error c o u r t r e l i e d on C a r n e y ' s f i g u r e s are that the affected substantial Consequently, trial that ... appeal a p p l i c a t i o n i s made, a f t e r a n e x a m i n a t i o n P. on t h e g r o u n d o f evidence, the App. i t and the m e r i t s from the considered i t s reason i t d i d , when d e t e r m i n i n g stock i n to trial be of court marital for excluding any the the amount o f award. additionally awarded to contends him 14 i s not that the fair and amount of equitable. 2100540 This court cannot give that issue knowing t h e f a c t u a l determinations s e t o u t above and w i t h o u t discounted this court findings Fann, i n t h e absence will assume necessary c o u r t as court reasons. of specific findings of fact, the t r i a l court that t o support the record without made b y t h e t r i a l i t s judgment. 810 S o . 2 d 6 3 1 , 636 ( A l a . 2 0 0 1 ) . reviewing review a l s o knowing whether t h e t r i a l t h e award f o re q u i t a b l e Generally, any s e r i o u s and the language made those See Ex parte However, when, after o f t h e judgment, this court i sunable t o determine the p r e c i s e nature of the factual findings of the t r i a l c o u r t as t o t h e c l a s s i f i c a t i o n and v a l u e of m a r i t a l property, thereby to a property determine court the should trial 308-09 So. whether inhibiting (Ala. Civ. stock; from 897 S o . 2 d 3 0 3 , v. G i a r d i n a , ( A l a . C i v . App. 2008). a s t o (1) t h e f a i r the t r i a l value (2) t h e n u m b e r o f s h a r e s as m a r i t a l p r o p e r t y ; v. W i l h o i t e , and G i a r d i n a remand t h e cause and i n s t r u c t findings this App. 2004); 2d 606, 622-23 ability i s equitable, See W i l h o i t e division court's f o rfurther clarification remand t h e cause court. this court Accordingly, we to specify i t s o f t h e 158 s h a r e s i t d e t e r m i n e d t o be (3) t h e r e a s o n s f o r e x c l u d i n g 15 987 o f SPS divisible any shares 2100540 from i t s property considered husband. court i f i t did; i n d i v i d i n g the shares; used i n reaching the division, (4) t h e f a c t o r s i t a n d (5) t h e c a l c u l a t i o n s i t i t s award o f $120,000 i n a l i m o n y i n g r o s s t o The t r i a l court shall make a return to this c o n t a i n i n g t h e a b o v e - m e n t i o n e d f i n d i n g s w i t h i n 42 d a y s . B e c a u s e we a r e r e m a n d i n g t h e c a u s e a s o u t l i n e d a b o v e , need n o t address t h e husband's other If, after maintains clarification that the t r i a l examination o f Bruce Vest to the p r i o r termination may a d d r e s s The those wife's issues motion issues o f t h e judgment, court erred at this and i n admitting juncture. t h e husband i n limiting to still h i s cross- evidence relating o f h i s employment a t SPS, t h i s at that we court time. strike t h e husband's brief i s denied. REMANDED WITH Thompson, JJ., INSTRUCTIONS. P . J . , and Pittman, concur. 16 Bryan, Thomas, and Moore,

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