JOHN HUSS PIMM JR V MARIE ALICE PIMM
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STATE OF MICHIGAN
COURT OF APPEALS
JOHN HUSS PIMM, JR.,
UNPUBLISHED
May 29, 2008
Plaintiff-Appellant,
v
No. 273355
Kent Circuit Court
LC No. 04-010231-DM
MARIE ALICE PIMM,
Defendant-Appellee.
Before: Bandstra, P.J., and Meter and Beckering, JJ.
PER CURIAM.
Plaintiff appeals as of right from a judgment of divorce entered following a bench trial.
We affirm.
On appeal, plaintiff challenges the trial court’s valuation of his two businesses: Marquis
Industries, Inc., and FEAT, LLC. There is not just one proper method to determine the value of
business assets for the purpose of distributing marital property. Kowalesky v Kowalesky, 148
Mich App 151, 155-156; 384 NW2d 112 (1986). “[W]here a trial court’s valuation of a marital
asset is within the range established by the proofs, no clear error is present.” Jansen v Jansen,
205 Mich App 169, 171; 517 NW2d 275 (1994).
At trial, defendant presented the testimony of a certified public accountant (CPA),
qualified as an expert in the area of business appraisals and valuations, to support her valuation
of Marquis Industries. The CPA originally valued Marquis Industries at approximately $855,000
as of February 28, 2005. However, based on new financial information following the end of the
company’s fiscal year on May 31, 2005, the CPA prepared an updated valuation report valuing
the company at $1,385,447. The trial court ultimately valued Marquis Industries at $1,129,793,
which made plaintiff’s interest, as a 50 percent owner, equal to $564,897. This amount was less
than the valuation of $692,723 (50 percent of $1,385,447) advanced by defendant. Plaintiff
nevertheless argues that, because sales revenues were less than the CPA had originally projected,
the trial court erred in using the valuation of the CPA, who calculated that the company
increased in value based on the 2005 fiscal year-end figures. We disagree.
First, the record reveals that the trial court did not accept the CPA’s revised valuation at
face value. The trial court noted that plaintiff was correct in questioning the impact of a
subsidiary company, P & D Sales, on the overall valuation of the business, and the record reveals
that the trial court eliminated the values associated with P & D Sales when calculating a value
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based on the market approach. The trial court’s valuation was within the range of proofs
presented at trial. Id. at 171.
It is also important to note that, while defendant presented a CPA as an expert witness,
plaintiff did not call anyone, aside from the company accountant, to testify. Plaintiff failed to
present evidence to rebut the CPA’s opinion that Marquis Industries increased in value as
evidenced by the 2005 fiscal year-end figures. Rather, plaintiff relied on the bare assertion that a
company with a loss of money and declining sales revenue in the most recent fiscal year cannot
increase in value. However, the CPA adequately explained how he arrived at the updated value,
and the trial court pointed out that part of the loss emphasized by defendant had already been
taken into account in the CPA’s initial valuation. The trial court had broad discretion to use the
figures from the end of the fiscal year on May 31, 2005, when arriving at a valuation, see, e.g.,
Byington v Byington, 224 Mich App 103, 114 n 4; 568 NW2d 141 (1997), and also had the
discretion to make its own determination of value. Jansen, supra at 171. Moreover, the court
acted within its discretion in rejecting plaintiff’s argument, which he also makes on appeal, that
the CPA erroneously considered the effect the elimination of officer bonuses had on the
valuation of the company. The trial court’s factual findings were supported by the record, and
the trial court did not clearly err in valuing plaintiff’s 50 percent ownership interest in Marquis
Industries at $564,897.
With respect to FEAT, LLC, plaintiff testified that he was the 100 percent owner, that the
company had been in existence for about one year, and that he had invested $70,000 or $80,000
of marital funds into it. Plaintiff testified that although he had not yet generated sales to recoup
his investment cost, he anticipated that the company would eventually produce revenue and that
he would not have made the investment otherwise. Plaintiff also testified that, although he did
not think the company had a value at the time of trial, he would sell it to someone for $70,000$80,000, or less. The trial court ultimately valued FEAT, LLC, at $50,000.
“Fair market value is the amount at which a willing buyer and a willing seller would
arrive in an open and competitive market.” Huron Ridge LP v Ypsilanti Twp, 275 Mich App 23,
41; 737 NW2d 187 (2007). The trial court exercised its discretion in selecting a value between
the holder’s interest and the likely fair market value. Although plaintiff invested $70,000 or
$80,000 into the company, he had not yet recouped that investment, because the business had
only been in existence for one year. Also, plaintiff testified that he would sell FEAT, LLC, for
less than that amount. The trial court did not clearly err in valuing FEAT, LLC, at $50,000. The
amount was within the range of proofs at trial. Jansen, supra at 171.
Plaintiff also argues that the trial court erred in failing to afford more weight to the
evidence presented regarding his decline in income from $27,500 to $17,500 a month when
determining the amounts of child support and spousal support to be awarded. We review
findings of fact (here, the amount of plaintiff’s income) for clear error. Beason v Beason, 435
Mich 791, 805; 460 NW2d 207 (1990). The trial court’s findings are presumptively correct, and
it is the appellant’s burden to show clear error. Olson v Olson, 256 Mich App 619, 629; 671
NW2d 64 (2003). “If the trial court’s findings are not clearly erroneous, this Court must then
decide whether the dispositional ruling was fair and equitable in light of the facts.” Id. at 629630. The trial court’s decision regarding support must be affirmed unless we are firmly
convinced that it was inequitable. Id. at 630.
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At trial, plaintiff testified that, although he was a 50 percent shareholder of Marquis
Industries, the decision to drastically reduce his salary in the year of the divorce was made by his
brother and the company manager. However, plaintiff also testified that he and his brother
normally set a base salary, which was the same for each, and then split the remainder of profits
equally in the form of bonuses. Further, the company accountant testified that plaintiff and his
brother had reduced their compensation to accommodate the cash flow of the business in the
past. Thus, there was evidence to support the trial court’s finding that plaintiff had a certain
degree of control over his income and ultimately the company’s fate, depending on the amount
of salary he elected to receive. At trial, plaintiff tried to minimize the extent of his involvement
in setting his own salary and bonuses, despite his 50 percent interest in the company. He wanted
spousal support and child support to be based on his severely reduced income. However, the
trial court’s findings are presumptively correct, and plaintiff has failed to meet his burden of
demonstrating clear error. Id. at 629. It is evident from the trial court’s opinion that it did not
attribute great weight to plaintiff’s professed lack of involvement in determining his own
income. This is a credibility argument, and we must “defer to the trial court’s superior position
to observe and evaluate witness credibility.” Marshall Lasser, PC v George, 252 Mich App 104,
110; 651 NW2d 158 (2002).
Additionally, we find that the trial court’s awards of child support in the amount of
$2,900 a month and spousal support in the amount of $8,000 a month were fair and equitable in
light of the facts. As noted by defendant, the trial court arrived at the child support award by
selecting a midpoint between the parties’ suggested amounts of child support. Further, the trial
court specifically provided that either party could petition for a child support review within six
months of the entry of the judgment of divorce to specifically examine the 2005 income figures
of both parties. The child support award was within the range of proofs at trial. Jansen, supra at
171.
Also, the trial court made extensive findings of fact in determining the award of spousal
support, and plaintiff does not challenge those findings here. The trial court correctly noted that
the main objective of spousal support is “to balance the incomes and the needs of the parties in a
way that will not impoverish either party.” Moore v Moore, 242 Mich App 652, 654; 619 NW2d
723 (2000). Focusing on the “economic reality” of the parties, the trial court found that
defendant would “not be in a position to earn the amounts available to Plaintiff via his
investments, entrepreneurships, or wages,” and it awarded defendant $8,000 a month in spousal
support. The trial court specifically provided that the award was modifiable based on new facts
or changed circumstances that may arise after entry of the judgment of divorce.
On the record before us, the trial court’s support awards were fair and equitable in light
of the facts available at the time the trial court made its decision, and plaintiff has the opportunity
to seek modification of those obligations in the event that his income remains at $17,500 a month
or further decreases in the future.
Plaintiff next argues that the trial court erred in finding him primarily at fault in the
breakdown of the marriage. Specifically, plaintiff argues that the trial court should not have
considered his extramarital relationship with a woman that began in April 2005, after the divorce
action was filed in October 2004; that the trial court erred in attributing weight to his decision to
have a vasectomy in 1991, years before the divorce proceedings; and that the trial court did not
attribute sufficient weight to the fact that the parties’ lack of communication led to the
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breakdown of the marriage. We review for clear error the trial court’s findings of fact, including
a finding of fault. See Olson, supra at 629, 631. As noted earlier, “[i]f the trial court’s findings
are not clearly erroneous, this Court must then decide whether the dispositional ruling was fair
and equitable in light of the facts.” Id. at 629-630. The trial court’s decision must be affirmed
unless we are convinced that it was inequitable. Id. at 630.
“[A] party’s fault in causing the divorce is a valid consideration in dividing the marital
assets or awarding alimony.” Kurz v Kurz, 178 Mich App 284, 295; 443 NW2d 782 (1989). “In
determining ‘fault’ as one of the factors to be considered when fashioning property settlements,
courts are to examine ‘the conduct of the parties during the marriage.’” Welling v Welling, 233
Mich App 708, 711; 592 NW2d 822 (1999), quoting Sparks v Sparks, 440 Mich 141, 157; 485
NW2d 893 (1992). The issue is whether “one of the parties to the marriage [wa]s more at fault,
in the sense that one of the parties’ conduct presented more of a reason for the breakdown of the
marital relationship than did the conduct of the other.” Welling, supra at 711. As in Welling,
supra at 711, the record herein supports that “[t]he effect of [plaintiff’s] conduct on [defendant]
and the marital relationship was highly detrimental . . . .” Plaintiff’s conduct “presented more of
a reason for the breakdown of the marital relationship than did the conduct of [defendant].” Id.
at 711. The trial court did not clearly err in finding that plaintiff’s affairs, both before and after
he filed for divorce, were relevant to his fault in the breakdown of the marriage.
Plaintiff also challenges the trial court’s characterization of his vasectomy as a “secret
and unilateral decision,” and argues that the trial court should not have given weight to it because
defendant forgave him. Plaintiff argues that his decision to have the vasectomy was not secret
and unilateral because defendant signed the consent form at the hospital to authorize the
procedure. However, defendant testified that plaintiff decided to have the surgery done without
first discussing it with her, went forward with plans for the surgery without her permission, and
made her sign the consent form at the hospital. Further, although defendant testified that she had
forgiven plaintiff for the vasectomy and that it was “no longer an issue,” she also testified that it
was a “devastating event” that altered the marriage. There was evidence that defendant blamed
plaintiff’s vasectomy (and subsequent reversal) for the miscarriage she suffered more than four
years later. The trial court did not clearly err in finding that the vasectomy constituted fault for
the breakdown of the marriage. Although it occurred many years before plaintiff filed for
divorce, the record is clear that it was an event that set in motion a rift between the parties,
ultimately contributing to problems leading to the breakdown of the marriage.
Plaintiff also argues that the trial court erred in failing to attribute sufficient weight to
evidence that the parties’ lack of communication led to the breakdown of the marriage. Plaintiff
attributed the failure of the marriage to the parties’ breakdown in communication. However,
plaintiff admitted that, even though defendant asked him to go to marriage counseling, they
never tried it and he did not really want to try it. Further, defendant testified that if plaintiff had
raised his concerns with her, they “could have gone and done something about it.” The trial
court noted that “[w]hile it is argued by [p]laintiff that the marriage was effectively over fifteen
(15) years before the filing, his reasoning of a lack of communication, indifferences to his
business interests and his unilateral decision for a 1991 vasectomy are neither convincing or
weighty when placed on the scales with his affair.” The trial court did not err in declining to
attribute significant weight in the breakdown of the marriage to the parties’ lack of
communication.
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Finally, plaintiff argues that the trial court erred in finding him at fault for the breakdown
of the marriage simply because “he wanted out of the marriage and [defendant] did not.”
However, the trial court did not make such a finding. Rather, it found that plaintiff was at fault
for the breakdown of the marriage due to his vasectomy and extramarital affairs, and those
findings are not clearly erroneous.
The question then becomes whether the trial court’s dispositive rulings regarding spousal
support and property division were fair and equitable in light of the trial court’s findings of fact.
Welling, supra at 712. The trial court’s role “is to achieve equity, not to ‘punish’ one of the
parties.” Sands v Sands, 442 Mich 30, 36; 497 NW2d 493 (1993). Contrary to plaintiff’s
argument, a review of the record does not support his contention that the trial court gave his fault
undue or disproportionate weight in dividing the marital estate and awarding spousal support.
The trial court properly considered the factors that are relevant to the disposition of marital assets
and an award of spousal support as set out in Sparks, supra at 159-160, and Ianitelli v Ianitelli,
199 Mich App 641, 643; 502 NW2d 691 (1993). While the trial court discussed plaintiff’s
infidelity and vasectomy, it did not place undue emphasis on the issue of plaintiff’s fault.
Rather, it was simply one of many factors contributing to the ultimate distribution of marital
assets and award of spousal support. The trial court found that the marriage was of a significant
duration; that both parties significantly contributed to the marriage, with plaintiff being the
primary income producer and defendant raising the parties’ three children; that both parties led
an affluent lifestyle; and that plaintiff’s earning ability and potential significantly exceeded that
of defendant. The trial court then determined that a roughly 50-50 property division would
enable both parties to live a comfortable and reasonably secure life for the foreseeable future,
and that spousal support was necessary and appropriate based on those factors. Plaintiff’s
contention that the trial court unfairly punished him for his conduct and placed undue or
disproportionate emphasis on his fault is simply not supported by the record. Rather, the record
reveals that the trial court properly considered all the relevant factors in dividing the marital
estate and awarding spousal support.
A division of marital property must be equitable and “roughly congruent.” Jansen, supra
at 171. A review of the record reveals that the trial court’s property division was roughly
congruent. The main objective of spousal support is “to balance the incomes and needs of the
parties in a way that will not impoverish either party,” and it is “to be based on what is just and
reasonable under the circumstances of the case.” Moore, supra at 654. A review of the record
reveals that the trial court’s award of spousal support to defendant in the amount of $8,000 a
month was just and reasonable under the circumstances of the case. The property division and
award of spousal support was not inequitable.
Plaintiff also argues that the trial court erred in retroactively modifying child support to
October 2005, contrary to MCL 552.603. Modification of a child support order is a matter
within the trial court’s discretion; however, whether the trial court committed a statutory
violation by ordering a retroactive modification of support is a question of law that is reviewed
de novo. See Burba v Burba (After Remand), 461 Mich 637, 647; 610 NW2d 873 (2000), and
Paulson v Paulson, 254 Mich App 568, 571; 657 NW2d 559 (2002). Generally, a child support
order cannot be retroactively modified. See MCL 552.603(2) (“a support order that is part of a
judgment or is an order in a domestic relations matter is a judgment on and after the date the
support amount is due as prescribed in section 5c . . . and is not, on and after the date it is due,
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subject to retroactive modification”); see also Harvey v Harvey, 237 Mich App 432, 437-438;
603 NW2d 302 (1999). However, the prohibition does not apply to ex parte interim support
orders or temporary support orders. See MCL 552.603(3) (“[t]his section does not apply to an ex
parte interim support order or a temporary support order entered under supreme court rule”); see
also Proudfit v O’Neal, 193 Mich App 608, 611; 484 NW2d 746 (1992) (“retroactive
modification of temporary child support orders . . . is permissible”). Further, MCR 3.207(C)(5)
provides that “[a] temporary order remains in effect until modified or until the entry of the final
judgment or order.”
On April 26, 2005, the trial court signed the parties’ stipulation that required plaintiff to
pay defendant $3,000 a month to use as support for herself and the parties’ minor child,
beginning April 1, 2005. The order was clearly a temporary support order to which the
prohibition on retroactive modification does not apply, pursuant to MCL 552.603. The trial
court properly exercised its discretion and did not err in awarding retroactive child support in this
case.
Finally, in affirming the judgment of divorce, we would be remiss if we ignored
defendant’s attorney fee request. In the “relief requested” section of her brief on appeal,
defendant asks this Court to grant her continuing attorney fees. Below, defendant requested
$25,098.09 in attorney fees, and the trial court awarded her $25,000. The trial court awarded
that sum but indicated that it could possibly be changed if defendant requested an evidentiary
hearing relating to those fees within 30 days after the entry of the judgment of divorce.
Defendant did not make such a request. The trial court later denied defendant’s motion for
reconsideration and motion for relief from judgment, which asserted in part that plaintiff should
continue to be held accountable for attorney fees that have accrued since October 3, 2005.
Defendant states that since that time, she has incurred additional attorney fees in the amount of
$27,029.25. However, “an appellee that has not sought to cross appeal cannot obtain a decision
more favorable than was rendered by the lower tribunal.” Middlebrooks v Wayne Co, 446 Mich
151, 166 n 41; 521 NW2d 774 (1994). Accordingly, we decline defendant’s request for
continuing attorney fees.
Affirmed.
/s/ Richard A. Bandstra
/s/ Patrick M. Meter
/s/ Jane M. Beckering
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