MAINE SUPREME JUDICIAL COURT Reporter of Decisions

Decision: 2014 ME 112

Docket: Kno-13-251

Argued: April 7, 2014

Decided: September 18, 2014

Panel: SAUFLEY, C.J., and ALEXANDER, SILVER, MEAD, GORMAN, and JABAR, JJ.

CHRISTINE M. STARRETT

v.

IRVEN G. STARRETT

SAUFLEY, C.J.

[¶1] Christine M. Starrett appeals from a divorce judgment entered in the 

District Court (Rockland, Worth, J.) and from an order granting in part and 

denying in part her post-judgment motion for additional or amended findings of 

fact and conclusions of law and to amend the divorce judgment. Christine’s

primary contention is that the court erred or abused its discretion in its valuation of 

the parties’ privately owned business, Irv’s Drywall. Christine also challenges the 

court’s estimate of each party’s income and its decision related to the sale of the 

parties’ marital real estate. We affirm the judgment.

I. BACKGROUND

[¶2] The following facts are drawn from the trial court’s findings and from 

the record. Irven and Christine were married on December 6, 1980. They are both 

in their fifties. They have two children who are now adults and are not the subject 
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of any dispute. The court found that the parties are “intelligent, hard-working 

individuals with many skills [who] have contributed equally to the acquisition of 

assets and debts.” After nearly thirty years of marriage, they separated in May 

2010, and Christine filed a complaint for divorce in June 2010. 

[¶3] The parties had a difficult separation. Christine obtained a protection

from abuse order against Irven, and she was served with a protection from 

harassment notice or order. Nonetheless, the parties, with the assistance of 

counsel, made efforts in advance of trial to resolve many of their disputes. Before 

the trial in November 2012, they agreed to sell some of their personal and real 

property, both marital and nonmarital, and to divide the proceeds. Additionally, 

from the time of their separation in May 2010 until March 2012, Irven paid

Christine support ranging from $400 to $1,000 per week, totaling $93,000 by the 

time of trial.

[¶4] A significant portion of the remaining dispute centered on the value of 

Irv’s Drywall, a closely held corporation owned by the parties that Irven started 

and has operated since 1990 or 1991. Throughout their marriage, both Irven and 

Christine derived personal benefit from Irv’s Drywall, including payments for 

gasoline and cell phone bills for themselves and their children, use of the 

business’s supplies and equipment, and use of employees’ labor on their property. 

At its peak, during 2007 and 2008, the company was quite successful, employing
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thirty to forty employees and subcontractors, and recording gross annual receipts 

of over $2 million in each of those years. By the time of trial, Irv’s Drywall, 

affected like many businesses by the economic downturn, had reduced its staff to 

approximately sixteen employees and showed average annual gross receipts of just 

over $1.6 million from 2010 to 2012. The court determined that “[t]he evidence 

does not support optimism now that the corporation business will return to its 

pre-downturn profitability.” 

[¶5] In preparation for trial, the parties jointly hired an expert to calculate

the value of Irv’s Drywall. The expert testified at trial that, as of March 31, 2012, 

the fair market value of the company was approximately $392,000 based on the 

capitalization-of-earnings method. Both parties disagreed with the expert’s 

opinion. Christine testified that Irv’s Drywall was worth at least $450,000, and

Irven testified that he would sell it if offered $200,000.

[¶6] The court entered a divorce judgment on February 28, 2013. It rejected 

the expert’s opinion, finding that “his testimony on the value of an owner-operated 

small sheetrock corporation in rural Maine was sufficiently qualified that the 

[c]ourt does not rely on it for value proof here.” The court also rejected Christine’s 

estimate of $450,000 because it “appeared to be strategic rather than supported by 

the evidence.” Noting the company’s large amount of debt, the court found that 

“[t]he persuasive evidence does not support a conclusion that, in this economy, the 
4

business has sale value or fair market value.” The court then undertook an 

abbreviated liquidity assessment and found that the company’s “business debt 

appears, thus, to be equal to or more than the value of business assets including

accounts receivable and equipment as of the date of the expert’s report.” 

Ultimately, the court found, “the evidence shows that the value of Irv’s Drywall, 

Inc., is Defendant’s continued ability and willingness to work as he has.” It 

awarded Irven all of the parties’ interest in the business, including its assets and

real property, and made Irven solely responsible for the company’s debt.

[¶7] The divorce judgment also ordered the sale of the parties’ marital

residence and camp, with any proceeds and debts equally divided between the 

parties. Irven was ordered to pay the mortgages on both properties, totaling over 

$5,000 monthly,1 until they are sold. The court also granted to Irven the sole 

authority to choose the listing realtor for both properties and ordered that, in the 

event that the parties could not agree on the listing and sale prices, Irven and the 

listing broker were to determine the prices based upon prevailing market 

conditions.

[¶8] With regard to the parties’ incomes, the court did not find credible

Christine’s testimony that she was completely disabled and therefore unable to 

 1

 The parties’ mortgage payments include $3,300 per month for their marital home and $1,900 per 

month for their camp.
5

work. It found instead that, notwithstanding her short-term disability, Christine 

would be able to “regain her equilibrium” once the trauma of the divorce has 

passed and that she is capable of earning $50,000 annually. The court found that 

Irven is capable of continuing to operate Irv’s Drywall, through which he can earn 

$93,000 annually. It awarded Christine general spousal support in the amount of 

$1,000 per month until the sale of the residence, and $2,000 per month thereafter 

until the death of either party or until Christine’s remarriage or cohabitation that is 

equivalent to marriage. It declined to award transitional support because Christine 

had already received substantial amounts during the separation.

[¶9] Christine moved for findings of fact and conclusions of law, and to 

amend the judgment. See M.R. Civ. P. 52(b), 59(e). The court denied the motion

except to clarify that its independent valuation of Irv’s Drywall took into account

the business’s assets and accounts receivable as identified by the expert. Christine 

timely appealed.

II. DISCUSSION

[¶10] Because a review of the record demonstrates that the court’s factual 

determinations regarding the parties’ earning capacities are fully supported by 

competent evidence, we do not disturb those findings. See Bond v. Bond, 2011 ME 

54, ¶¶ 10, 15, 17 A.3d 1219. We further conclude that the court did not abuse its 

discretion in granting to Irven the authority to facilitate the sale of the marital real 
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estate. See St. Hilaire v. St. Hilaire, 526 A.2d 28, 29 (Me. 1987); see also Levy, 

Maine Family Law § 7.7[1] at 7-52 (8th ed. 2013). We address here only the 

court’s factual findings and exercise of discretion in its valuation and distribution

of Irv’s Drywall.

A. Valuation of Irv’s Drywall

[¶11] There is no dispute that Irv’s Drywall, which was founded and 

incorporated after the parties were married, is marital property. See 19-A M.R.S. 

§ 953(2) (2013) (defining “marital property,” except for certain exceptions not 

applicable here, as “all property acquired by either spouse subsequent to the 

marriage”). Rather, the dispute centers on the value of that marital asset. Valuing 

a closely held corporation for purposes of property division in a divorce

proceeding when there is no actual intent to sell the business is, at best, a difficult 

task. Nonetheless, as with any factual finding, we review the court’s determination 

of an asset’s value for clear error. Bond, 2011 ME 54, ¶ 10, 17 A.3d 1219 (citing 

Wandishin v. Wandishin, 2009 ME 73, ¶ 12, 976 A.2d 949). A trial court’s factual 

finding is not clearly erroneous if there is any competent evidence in the record to 

support it. See Bond, 2011 ME 54, ¶ 15, 17 A.3d 1219. We review the court’s 

overall distribution of property for an abuse of discretion. Id. ¶¶ 10, 15.

[¶12] As with all other testimony or evidence, the court was authorized, 

indeed required, to evaluate the credibility of the evidence offered on the value of 
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Irv’s Drywall. See Wandishin, 2009 ME 73, ¶ 13, 976 A.2d 949. Accordingly, it 

could reject the expert witness’s opinion that the business had a fair market value 

of $392,000. Similarly, the court acted well within its authority in rejecting 

Christine’s estimate of the company’s value at $450,000. See id. The court was 

also free to reach a differing valuation based on its independent review of the 

evidence, as long as that determination was supported by competent evidence in 

the record. See id.; see also Levy, Maine Family Law § 7.8[1] at 7-65. 

[¶13] The court’s conclusion that Irv’s Drywall had no “sale value or fair 

market value” is supported by the record. Indeed, the business appraiser struggled 

to find a way to value the company and acknowledged that his appraisal was for 

purposes of the divorce, not necessarily for purposes of a sale of the company. 

The record contains ample evidence from which the court could determine that this 

relatively small business, which had taken a hit in the economic downturn, owed 

its existence to Irven’s ability and willingness to continue the work; that it was not 

likely at that time to garner nearly $400,000 in an arm’s-length sale; and that the 

business’s highest value to the parties is its continued ability to generate an income 

of $93,000 each year for Irven, through which he can continue to pay spousal 

support to Christine.

[¶14] The court’s findings went astray, however, when the court determined 

on its own, through the use of an abbreviated liquidation calculation, that the 
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company’s debts exceeded its assets. The court explicitly noted that it drew the 

facts for that analysis from the appraiser’s report. However, a review of the 

business assets and debts described in the expert report shows that a basic 

liquidation calculation would result in a net positive value of over $47,000:

Irv’s Drywall Assets

as of 3/31/2012

Irv’s Drywall Debts

as of 3/31/2012

Real estate value (current)2 $265,000 Mortgage (current)3 $173,966

Cash 42,417 Lien from other sale 10,000

Equipment4 Not 

available

Accounts payable to 

supplier

123,630

Accounts receivable 49,889 Customer deposits 2,000

Inventory 5,000 Line of credit with Camden 

National Bank

33,860

Prepaid assets 14,606 Debt owed to Ally Bank 1,517

Stockholder advances 15,100

Total assets $392,012 Total debts $344,973

Net Value: $47,039

[¶15] Thus, the court’s brief liquidation analysis reflects factual error 

because the business still had, at that time, a small but not insubstantial positive 

liquidation value. 

 2

 The value of Irv’s Drywall’s premises was not separated from the expert’s calculation of the 

business’s fair market value of invested capital. We therefore use the fair market value found by the court 

after trial: $265,000. 

3

 The expert report stated that the amount owed on the mortgage was $177,137 as of March 31, 2012. 

Because we use the fair market value of the Irv’s Drywall premises as of the end of the trial as determined 

by the court, we use the amount due on the mortgage at the same time: $173,966.

4

 The expert report did not separately estimate the value of Irv’s Drywall’s equipment. Any positive 

value of the equipment would further increase the liquidation value of the business.
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B. Harmless Error Analysis

[¶16] The question before us is whether that factual error affected 

Christine’s substantial rights in the ultimate division of the marital property. A 

trial court finding, even if in error, does not require us to vacate the judgment if the 

error did not result in substantial injustice or affect substantial rights. M.R. 

Civ. P. 61; M.R. Evid. 103(a). To obtain relief on appeal, a party claiming error 

must demonstrate prejudice resulting from the error. In re Joshua B., 2001 ME 

115, ¶ 10, 776 A.2d 1240; see Field & Murray, Maine Evidence § 103.5 at 18 (6th 

ed. 2007).

[¶17] There is no indication that Christine suffered substantial injustice or 

was prejudiced by the court’s award of Irv’s Drywall in its entirety to Irven. 

Although the liquidation value of the business was a positive, rather than a 

negative, value at the time of the divorce hearing, it was a relatively small value. 

Further, as noted above, on this record, we discern no error in the court’s finding

that there is no realistic market value for this closely held business, or in its finding 

that the best value of Irv’s Drywall is its ability to generate a substantial income for 

Irven, which will allow him to pay the significant amount of spousal support that 

the court ordered. Should Irv’s Drywall rebound more thoroughly than the court 

expected, it will provide Irven with sufficient resources to address any substantial 

change in Christine’s need for spousal support. Thus, although the court erred in 
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finding that the company had no positive liquidation value, that error had little 

effect on the property distribution to both parties.

[¶18] Accordingly, the court did not abuse its discretion in determining that 

the business’s payment of Irven’s salary constitutes its primary source of value to 

both parties and therefore awarding the business to Irven. Any cash that Christine 

might have received from a share of the liquidation proceeds of Irv’s Drywall was 

more than offset by the court’s order that Irven pay the parties’ entire mortgages

totaling over $5,000 per month and spousal support of $1,000 per month—

payments that, when annualized, constitute nearly 80% of Irven’s pretax wages. 

Once the parties’ real properties are sold, Christine’s spousal support will increase 

to $2,000 per month, which is over 25% of Irven’s pretax wages.

[¶19] Because the court’s small factual error in the calculation of the 

liquidation value of Irv’s Drywall did not affect Christine’s substantial rights or 

otherwise prejudice her, we affirm the judgment. We are not persuaded by and do 

not separately address Christine’s other contentions.

The entry is:

Judgment affirmed.
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On the briefs:

David M. Lipman, Esq., and James T. Lawley, Esq., Lipman & 

Katz, P.A., Augusta, for appellant Christine M. Starrett

Steven C. Peterson, Esq., West Rockport, for appellee Irven G. 

Starrett

At oral argument:

David M. Lipman, Esq., for appellant Christine M. Starrett

Steven C. Peterson, Esq., for appellee Irven G. Starrett

Rockland District Court docket number FM-2010-163

FOR CLERK REFERENCE ONLY