Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision shall not be regarded as precedent or cited before any court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case.
ATTORNEY FOR APPELLANT: MARK SMALL Indianapolis, Indiana
ATTORNEY FOR APPELLEE: DAWN E. WELLMAN Allen Wellman McNew, LLP Greenfield, Indiana
FILED
of the supreme court, court of appeals and tax court
Jul 22 2009, 10:10 am
IN THE COURT OF APPEALS OF INDIANA
IN RE THE MARRIAGE OF: DIANNA LYNN GEYER,1 Appellant-Respondent, vs. ROBERT G. GEYER, JR., Appellee-Petitioner. ) ) ) ) ) ) ) ) ) )
CLERK
No. 33A01-0902-CV-95
APPEAL FROM THE HENRY SUPERIOR COURT The Honorable Michael D. Peyton, Judge Cause No. 33D01-0705-DR-88
July 22, 2009
MEMORANDUM DECISION - NOT FOR PUBLICATION
CRONE, Judge
The documents before us contain a discrepancy regarding the spelling of Appellant’s name. We have chosen to use Dianna, based upon her name as it appears on her income tax return. Appellee’s App. at 29.
1
Case Summary Dianna Lynn Geyer (“Wife”) appeals the trial court’s property settlement order entered as part of the dissolution of her marriage to Robert G. Geyer, Jr. (“Husband”). We affirm. Issues Wife raises the following issues for review: I. Did the trial court err in accepting Husband’s expert’s valuation of the personal and enterprise goodwill of Husband’s business? Did the trial court abuse its discretion in dividing the marital estate equally? Facts and Procedural History Husband and Wife were married on July 19, 1974. They had one son, Glynn, born in 1989. They separated on May 18, 2007. On May 22, 2007, Husband filed a dissolution petition. At the May 5, 2008 final hearing, the trial court noted the issues upon which the parties agreed, and the parties presented evidence on the disputed issues. On November 10, 2008, the trial court issued findings of fact, conclusions thereon, and a final decree of dissolution. On December 5, 2008, Wife filed a motion to correct error or, in the alternative, a motion to reconsider. The trial court denied Wife’s motion on January 7, 2009. This appeal ensued. Additional facts will be provided as necessary. Discussion and Decision I. Valuation of Husband’s Business
II.
2
Wife asserts that the trial court erred in valuing Husband’s business. The trial court entered extensive findings of facts and conclusions thereon. In such cases, we first “determine whether evidence supports the findings and then whether the findings support the judgment.” Carpenter v. Carpenter, 891 N.E.2d 587, 592 (Ind. Ct. App. 2008). We will reverse only if the findings or judgment are clearly erroneous, meaning that a review of the record “leaves us firmly convinced that a mistake has been made.” Id. (citation and quotation marks omitted). Specifically, Wife contends that the trial court erred by accepting Husband’s expert’s figures on the goodwill value of Husband’s tax preparation business. “A trial court has broad discretion in ascertaining the value of property in a dissolution action, and its valuation will not be disturbed absent an abuse of that discretion.” Nowels v. Nowels, 836 N.E.2d 481, 485 (Ind. Ct. App. 2005). The trial court has not abused its discretion if its chosen valuation is supported by sufficient evidence and the reasonable inferences drawn from it. Id. Even when the circumstances would support a different award, we will not substitute our judgment for that of the trial court. Id. Here, the trial court decreed that “Husband shall have as his sole and separate property … [a]ll interest he has in [the] H & R Block/Geyer Tax Practice, Inc.” Appellant’s App. at 18. After hearing evidence from each party’s expert regarding the valuation of Husband’s business, the trial court made the following findings: 20. Husband purchased the [H & R Block] tax practice in 1994 for $100,000.00. The seller of the company worked for Husband for a period of one (1) year after the purchase.
3
21. Robert Schlegel of Houlihan Valuations did a summary report of the value of H & R Block Tax Services owned by [Husband] and found personal goodwill, current assets, fixed assets and liabilities to total approximately $110,000.00. 22. Troy Patton, CPA, testified as Wife’s expert and placed a value of $242,000.00 on Husband’s business. xx. [sic] The Court finds that the testimony of Robert Schlegel is more credible than that of Troy Patton and that the valuation of [Husband’s] business should be based upon the appraisal of Robert Schlegel. Id. at 13. Essentially, Wife’s challenge involves the distinction between personal goodwill and enterprise goodwill. The portion of a business’s goodwill attributable to the skill, training, or reputation of the owner as an individual—the personal goodwill—is not includable as a divisible marital asset. Yoon v. Yoon, 711 N.E.2d 1265, 1268-70 (Ind. 1999). Conversely, the portion of the goodwill attributable to the name recognition, location, and reputation of the business itself—the enterprise goodwill—is properly includable as a divisible marital asset. Id. Husband’s expert testified that the goodwill value of the business was approximately $144,000.00. Appellee’s App. at 11. He attributed roughly half to personal goodwill and half to the H & R Block enterprise. Id. Thus, he reduced the business valuation by approximately $72,000.00. Id. Wife challenges the expert’s valuation based on: (1) the strong name recognition of H & R Block as an enterprise; and (2) the existence of a noncompete contract between Husband and H & R Block. See McCart v. H & R Block, 470 N.E.2d 756, 763 (Ind. Ct. App. 1984) (noting that strong customer recognition of Block name
4
gave Block a protectable property interest justifying a reasonable covenant not to compete), trans. denied (1985). In support of her argument that Husband’s expert attributed excessive value to Husband’s personal goodwill, Wife also cites the transient nature of the community and the ensuing higher than normal client turnover rate. In doing so, Wife essentially asks that we reweigh evidence, which we may not do. The trial court heard extensive testimony regarding the experience, certification, and methods of each expert. The record supports the trial court’s findings. Husband’s expert is employed with a national business valuation firm and has authored publications and taught workshops in the field. Appellee’s App. at 1, 50-52. He has received distinguished designations in his field, being accredited as a senior appraiser and master certified business appraiser. Id. He personally met with Husband twice, toured the facilities, and used comparisons of Husband’s four-year distributionary earnings with those of sixty-seven similarly situated tax businesses in arriving at his assessment of personal and enterprise goodwill. Id. at 5-15, 53-55, 60-65. In apportioning goodwill, he considered seven factors, including fixed business assets, Husband’s personal skills and relationships, and the extent to which sales depended on his skills and relationships. Id. at 11. Of the seven factors, he found five to weigh in favor of personal goodwill. Id. Interestingly, the record indicates that Wife had initially agreed to hire him as her own expert but sought another expert when his valuation proved too low. Tr. at 118-19. In contrast, the record indicates that Wife’s expert enjoys no such specific certifications as a business appraiser. Id. at 109. Instead, he is a CPA with only eighteen
5
percent of his business consisting of business valuations. Id. In reaching his conclusions, he neither went to the business location nor met with Husband. Id. at 109-10. In sum, the record supports the trial court’s findings regarding the relative credibility of these experts. As such, we find no abuse of discretion in its decision to accept Husband’s expert’s figures in valuing Husband’s business. II. Equal Division of Property Wife contends that the trial court abused its discretion by dividing the marital estate equally. We review a challenge to the trial court’s division of marital property for abuse of discretion. Goodman v. Goodman, 754 N.E.2d 595, 599 (Ind. Ct. App. 2001). We will reverse only if its judgment is clearly against the logic and effect of the facts and the reasonable inferences to be drawn from those facts. Id. We neither reweigh evidence nor judge witness credibility; rather, we consider only the evidence favorable to the trial court’s disposition of the property. Hendricks v. Hendricks, 784 N.E.2d 1024, 1027 (Ind. Ct. App. 2003). Even if facts and reasonable inferences might allow for a different conclusion, we will not substitute our judgment for that of the trial court. Id. Indiana Code Section 31-15-7-4 provides that the trial court shall divide the property in a just and reasonable manner. An equal division of marital property is presumed to be just and reasonable. Ind. Code § 31-15-7-5. However, this presumption may be rebutted by a party who presents relevant evidence, including evidence concerning the following factors, that an equal division would not be just and reasonable: (1) The contribution of each spouse to the acquisition of the property, regardless of whether the contribution was income producing. (2) The extent to which the property was acquired by each spouse:
6
(A) before the marriage; or (B) through inheritance or gift. (3) The economic circumstances of each spouse at the time the disposition of the property is to become effective, including the desirability of awarding the family residence or the right to dwell in the family residence for such periods as the court considers just to the spouse having custody of any children. (4) The conduct of the parties during the marriage as related to the disposition or dissipation of their property. (5) The earnings or earning ability of the parties as related to: (A) a final division of property; and (B) a final determination of the property rights of the parties. Id. The party challenging the trial court’s property division order “must overcome a strong presumption that the court considered and complied with the applicable statute, and that presumption is one of the strongest presumptions applicable to our consideration on appeal.” Hendricks, 784 N.E.2d at 1027. Here, the trial court concluded “[t]hat an equal division of the assets is called for under the statute and that there is insufficient evidence to justify a deviation from such equal division.” Appellant’s App. at 15. Wife first argues that the disparity in the parties’ incomes and earning potential is sufficient to overcome the presumption in favor of equal distribution. We disagree. The trial court’s findings indicate that both parties were gainfully employed. Husband had a weekly adjusted gross income of $1693.98, and Wife had a weekly adjusted gross income of $1163.47. Id. at 12. The findings indicate that the trial court took into account the statutory factors and that the difference in income is reflected in areas such as the parties’ relative responsibility for medical expenses and child support. Id. Moreover, although less educated than Husband, Wife’s thirty-year tenure in her position at Allstate
7
indicates a steady earning potential. In sum, Wife has failed to establish an abuse of discretion in the trial court’s application of the statutory factors. The second aspect of Wife’s argument involves the change in value in her Allstate profit sharing account. Wife filed a motion to correct error, alleging that Husband’s equal share in the account was now excessive due to the gross change in circumstances stemming from the financial crisis. Appellant’s App. at 24. The trial court denied her motion. We review the denial of a motion to correct error for an abuse of discretion. Scales v. Scales, 891 N.E.2d 1116, 1120 (Ind. Ct. App. 2008). Wife argues that the trial court abused its discretion in failing to consider the decrease in value of her Allstate profit sharing fund between the May 5, 2008 hearing and the November 10, 2008 final decree. “The marital pot generally closes on the date the dissolution petition is filed.” Smith v. Smith, 854 N.E.2d 1, 6 (Ind. Ct. App. 2006). “However, a trial court has broad discretion in determining the date upon which to value the marital assets, and the trial court may select any date between the date of filing the petition of dissolution and the date of the final hearing.” Id. At the final hearing, Wife testified that the account’s value on May 23, 2007 was approximately $202,400.00, Tr. at 146, and the trial court valued it at $202,599.00 as of that same date. Appellant’s App. at 15. Based on this evidence, the trial court chose May 23, 2007 as the valuation date and decreed that “[t]o equalize the division of property, Husband shall receive $102,807.56 from the Allstate Profit Sharing account.” Id. at 19.
8
We find no indication that Wife objected to the trial court’s choice of valuation date. However, because the account decreased in value after that date, she now challenges what she perceives to be an inequitable division of the account. During the proceedings, the only evidence Wife produced regarding a change in the account’s value was that, after Husband filed the dissolution petition, she withdrew $20,000.00 from the account. Tr. at 143. The first time she addressed any other decrease was in her motion to correct error, to which she attached an unverified online account summary indicating a loss of over $30,000.00 in value from January 1, 2008 to November 19, 2008. Appellant’s App. at 26. Essentially, she
claims that the decrease occurred between the May 2008 hearing and the November 2008 final decree. By awarding Husband a specific sum rather than a percentage of the value of the account, the trial court imposed on Wife the risk of any depreciation that might have occurred from the date of valuation to the date of the decree. This is permissible because Wife was in a better position than Husband to control the account, given her ability to withdraw from it or reconfigure the portfolio. Unfortunately for Wife, market forces caused her account to decrease rather than increase in value in the interim. Such is the risk of the market. Conversely, if the value of Wife’s account had increased in the interim, she would have been the sole beneficiary of the increase in value. Finally, we note that Wife’s motion to correct error was not supported by affidavits. See Ind. Trial Rule 59(H)(1) (“When a motion to correct error is based upon evidence outside the record, the motion shall be supported by affidavits showing the truth of the grounds set out in the motion and the affidavits shall be served with the motion”). Moreover, the
9
attached account summary includes Allstate’s disclaimer that it “does not give any warranty or other assurance as to the content of the material appearing on the site, its accuracy, completeness, timelessness or fitness for any particular purpose.” Appellant’s App. at 26. In sum, Wife failed to meet her burden of establishing that newly discovered evidence rendered Husband’s property award excessive. Ind. Trial Rule 59(A)(1), -(2).2 As such, the trial court acted within its discretion in denying Wife’s motion to correct error and in dividing the marital estate in accordance with the statutory presumption favoring equal distribution. Accordingly, we affirm. Affirmed. BRADFORD, J., and BROWN, J., concur.
To the extent Wife challenges Husband’s failure to object to the attached document, we note that Trial Rule 59(E) states that “a party who opposes the motion may file a statement in opposition.” (Emphasis added.) Moreover, we presume that the trial judge disregards inadmissible evidence and renders its decision solely on the basis of relative and probative evidence. In re A.J., 877 N.E.2d 805, 814 (Ind. Ct. App. 2007), trans. denied (2008).
2
10
