Opinion ID: 2276677
Heading Depth: 2
Heading Rank: 2

Heading: Barnes' Testimony Regarding the Value of AutoBody

Text: Barnes argues that the trial court's refusal to credit her valuation testimony in effect disallowed the testimony and that there was no requirement that she testify to the underlying facts or data because she was testifying as an expert. Barnes further argues that the trial court committed legal error by refusing to credit her valuation of AutoBody, finding it unreliable because it was not based on any recognized valuation method. Barnes testified that the net profit per month of AutoBody was $30,000 to $34,000 (approximately $400,000 per year), and that based on such net profit, the quality of the AutoBody newspaper, the loyalty of its customer base, and its anticipated revenue, the company had a total present value of $1.75 million to $2 million. Barnes' figures for AutoBody were culled from bank statements and cancelled checks for July, August, and September 1996. Barnes tallied the expenses of AutoBody using checks from Sherman's subpoenaed bank records; on the revenue side, she relied on invoices, and, where no invoice was produced, by counting the ads in the AutoBody newspaper and computing the amount of billables using the official AutoBody rate card. Barnes turned her $400,000 annual projected net profit figures for AutoBody to a present value of the going concern of $1.75 to $2 million based on the amount of sales and the percentage of net profit recouped over a period of years. Barnes argues that the trial court disallowed her testimony. We disagree. The trial court in fact overruled a motion to strike her testimony. [8] Barnes' valuation testimony was accepted into evidence by the trial court, which deemed it consistent with well-settled precedent that an owner is competent to testify as to his opinion of the value of his or her own company. See, e.g., Independence Fed. Sav. Bank v. Huntley, 573 A.2d 787, 788 (D.C.) (per curiam), cert. denied, 498 U.S. 853, 111 S.Ct. 148, 112 L.Ed.2d 114 (1990); Hartford Accident and Indem. Co. v. Dikomey Mfg. Jewelers, Inc., 409 A.2d 1076, 1079 (D.C.1979). Cf. BRETT R. TURNER, EQUITABLE DISTRIBUTION OF PROPERTY, § 7.05, at 513 (2d ed. 1994) (The nonowning spouse may testify to the value of an asset if he or she has had some exposure to the asset during the marriage. Such testimony is similar to the testimony of the owning spouse . . . . (footnote omitted)). Rather than disallow Barnes' testimony, the trial court simply did not credit her valuation, stating that the Court agrees with [Barnes] that she is qualified to assess the value of AutoBody, but does not credit the validity or the accuracy of her valuation method. [9] The trial court noted specifically that, in calculating net profit, Barnes failed to consider any salary for Sherman, did not factor in taxes, and did not account for the significant drop in accounts receivable after September 1996. The trial court also rejected Barnes' valuation because her simplistic analysis does not comport with the requirements of the earnings or market value approach, noting that Barnes provided no objective basis on which she capitalized gross revenue as a multiple of two (or five times net earnings) to arrive at her valuation of AutoBody. Cf. TURNER, supra, § 7.08, at 542 (number by which earnings capitalized generally determined by an expert accountant). [10] Given these deficiencies, the trial court, as the arbiter of the credibility of witnesses, could reasonably reject Barnes' nonexpert valuation. See Hawkins v. United States, 663 A.2d 1221, 1230 (D.C.1995) ([W]hen it comes to assessing the credibility of witnesses, we are particularly deferential to trial courts.); see also Preston v. Preston, 767 S.W.2d 618, 620 (Mo.Ct.App.1989) (The trial court is free to believe all, part or none of the testimony of a witness even if such testimony is uncontroverted.). Accordingly, the trial court did not abuse its discretion in refusing to credit Barnes' valuation testimony.