SCOTT CAMPBELL PEAK V DEBRA JANE PEAK
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STATE OF MICHIGAN
COURT OF APPEALS
SCOTT CAMPBELL PEAK,
UNPUBLISHED
November 24, 1998
Plaintiff-Appellant,
v
No. 205717
Kalamazoo Circuit
LC No. 93-000300-DM
DEBRA JANE PEAK,
Defendant-Appellee.
Before: Corrigan, C.J., and Doctoroff and Fitzgerald, JJ.
PER CURIAM.
Plaintiff appeals as of right from an order modifying the judgment of divorce with respect to
alimony in favor of defendant. On appeal, plaintiff argues that the trial court erred in awarding defendant
an equal, but inequitable, share of the Peak Technical, Inc. stock. We affirm.
The trial court entered the judgment of divorce on March 3, 1994, concluding that the shares in
Peak Technical, Inc., which the trial court valued at $108,000, were not marital assets, but were
plaintiff’s separate property. Defendant appealed, and this Court reversed, ruling that defendant’s
contribution to the marriage had facilitated plaintiff’s involvement in the corporation to the extent that the
shares had been rendered marital assets. Peak v Peak, unpublished opinion per curiam of the Court of
Appeals, issued June 25, 1996 (Docket No. 174247). The case was remanded to the trial court for an
equitable distribution of the shares. On remand, plaintiff’s counsel noted that, after the judgment of
divorce was entered, Peak Technical, Inc. had merged with Active, Inc., resulting in a tax consequence
of $34,000. Plaintiff's counsel suggested that the trial court consider the tax consequence in
apportioning the Peak Technical, Inc. stock. Plaintiff also sought to discount from the stock’s value the
initial capital investment of $60,000, which was attributable to the funds he inherited from his great
aunt’s estate. The trial court concluded that, based on this Court’s opinion, the stock and the $60,000
initial investment were to be treated as marital property. The trial court further ruled that “the tax paid
as a result of . . . plaintiff’s disposition of the stock should not be considered in its award, since the court
would not have actually awarded the defendant one half of the stock, but would have given it to the
plaintiff with a provision to compensate . . . defendant for her interest.” The trial court then divided the
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Peak Technical, Inc. stock equally. However, because the stock no longer existed due to the merger
with Active, Inc., it awarded defendant $54,000, representing one half of the value of the stock, as
alimony in gross, to be paid at the rate of $1,000 per month.
Plaintiff contends that the trial court erred in awarding defendant fifty percent of the value of the
Peak Technical, Inc. stock. We disagree. On appeal, a trial court’s dispositional ruling will be affirmed
unless this Court is left with a firm conviction that it was inequitable. McDougal v McDougal, 451
Mich 80, 87; 545 NW2d 357 (1996).
When dividing marital assets, the goal of the court is to reach an equitable division in light of all
the circumstances. Byington v Byington, 224 Mich App 103, 114; 568 NW2d 141 (1997). When
dividing the estate, the court should consider the duration of the marriage, the contribution of each party
to the marital estate, each party’s station in life, each party’s earning ability, each party’s age, health,
and needs, fault or past misconduct, and any other equitable circumstance. Byington, supra, 224 Mich
App 115.
Here, it is undisputed that plaintiff used funds from his inheritance to start Peak Technical, Inc.
However, we note that the source of property is but one of the equitable factors to be considered in
dividing marital assets. The facts indicate that the parties were married for nearly twenty years, that
defendant does not possess the same earning abilities as plaintiff, and that defendant assumed the
primary responsibility for taking care of the parties’ daughter while plaintiff was involved with Peak
Technical, Inc. In addition, defendant testified that she performed bookkeeping for Peak Technical,
Inc. for three years, making entries several times per week. She also claimed that she had been
involved in advertising job openings, interviewing prospective employees, and hiring for the corporation.
Defendant also assisted plaintiff in setting up a restaurant franchise in order to develop another
investment for the family, leaving plaintiff more time to spend at Peak Technical, Inc. During Peak
Technical Inc.’s less profitable periods, defendant earned a real estate license in order to supplement the
family’s earnings. Under these circumstances, we are not firmly convinced that the trial court’s ruling as
to the equal split of the value of the stock was inequitable.
Furthermore, we do not believe the trial court erred in failing to consider the tax consequences
of the merger between Peak Technical, Inc. and Active, Inc. A trial court’s failure to consider tax
consequences in a distribution of marital assets is not a per se abuse of discretion. Nalevayko v
Nalevayko, 198 Mich App 163, 164; 497 NW2d 533 (1993). However, the trial court may consider
tax consequences when it would not be speculating in doing so. Nalevayko, supra, 198 Mich App
164. Here, Peak Technical, Inc.’s stock was valued at $108,000. The trial court intended to award
defendant fifty percent of the value of the stock, or $54,000, as alimony in gross. Plaintiff represents
that there was a $34,000 tax consequence when Peak Technical, Inc. merged with Active, Inc., which
should reduce the amount awarded to defendant by $17,000, to $37,000. However, we believe the
trial court’s property division was equitable despite the trial court’s failure to consider the tax
consequences. The $54,000 awarded to defendant is payable by plaintiff in fifty-four monthly
installments of one thousand dollars, with no interest. Accordingly, the present value of the amount
defendant will receive is substantially less than $54,000. Furthermore, as alimony, the payments are tax
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deductible for plaintiff, but will be taxed as income to defendant. Under these circumstances, we
conclude that the property division was equitable regardless of whether the trial court considered the tax
consequences of the merger. Nalevayko, supra, 198 Mich App 165.
Affirmed.
/s/ Maura D. Corrigan
/s/ Martin M. Doctoroff
/s/ E. Thomas Fitzgerald
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