Opinion ID: 2186545
Heading Depth: 2
Heading Rank: 2

Heading: Value of Stock

Text: The parties' net worth is central to this appeal. They disagree on the value of their principal marital asset, 8,285 shares of Davis Marketing. These shares, standing in Pat's name, constitute more than eighty percent of Davis Marketing's outstanding stock. Pat's expert put their worth on December 31, 1978, at between $260,729 and $298,674. Necia's two experts valued this stock at $2,183,428.90. On cross-examination, rather effective attacks were made on the experts by counsel for both parties. The variety and complexity of the appraisal techniques the experts used in reaching their irreconcilable valuations prompted the trial court to find the appraisals serve to confuse as well as to inform. Consequently, the trial judge devised his own valuation method. In late December 1971, Davis Marketing contracted to pay $400,400 for eighty-two percent of its outstanding stock from then principal owner John W. Davis. This maneuver, guided by Pat, left over eighty percent of the outstanding stock in his name. Finding Pat to be an astute businessman, the court determined it was inconceivable Pat would agree or have his company agree to pay any more than was absolutely necessary for the John W. Davis stock. Using the buy-out figure as a base, the trial court allowed for growth and inflation and fixed the value of the Davis stock as of this date at $1,000,000. However, when summarizing the property division, the trial court listed the value of the Davis stock held by Pat at $800,000. Necia did not raise this inconsistency in trial court in her posttrial motions. In their appellate brief and at oral argument, counsel for Necia contended trial court incorrectly reduced the value of the Davis Marketing shares owned by Mr. Hitchcock by a 20% factor, even though it had previously taken the 80% ownership in the Company into consideration. We agree this was a mistake. The trial court apparently found the value of Pat's Davis Marketing stock to be $1,000,000 and meant to use that figure when calculating the total value of marital assets and when allocating the property division between the parties. The $1,000,000 valuation fixed by the trial court was fully justified and we independently so find it. Since 1970 Davis Marketing's gross brokerage commissions have grown 137 percent from $944,240 per year to $2,238,478 per year. Its staff has grown from forty in 1970 to eighty-three employees at the time of the 1979 trial. Although Pat's counsel argues a food brokerage firm is essentially a service organization with little or no tangible assets, Pat's expert testified Davis Marketing had tangible assets of $295,146 at the end of 1978. The record reveals that Davis Marketing is a stable, well-managed company with a good profit record. Finally, we note the uncontroverted testimony of Necia that in 1971, when the company redeemed the stock of John W. Davis for $400,400, her husband told her he had acquired a company worth a million dollars. Because we find the value of the Davis Marketing stock in Pat's name to be $1,000,000, we accordingly modify the property distribution award. Our review of the record persuades us the award also must be modified to reflect: (1) The award to Pat of life insurance with cash value of $12,204; (2) Pat's $5,000 equity in a new home, a down payment which was made in 1979 with cash subject to distribution; and (3) the award to Pat of the coin collection the trial court found worth $1,000, but which the court charged to Necia's share. We have considered all other challenges the parties make to the property distribution, but we are convinced the trial court's award should be affirmed in every instance. We are satisfied trial court carefully considered the Schantz criteria in concluding a property division of sixty percent to the petitioner and forty percent to the respondent was equitable, after first setting aside to Pat his profit sharing entitlement of $42,000 and the present value of his retirement benefits. In summary, we offer this restatement of the property division. Presently Presently Possessed Possessed Value By Pat By Necia Residence (Net Value) $ 72,000 ---- $ 72,000 Household Goods 12,000 $ 4,000 8,000 1968 Chevrolet 500 500 ---- 1973 Mustang and 1964 Olds 2,000 ----- 2,000 Cash Assets 6,000 6,000 ----- Benquet Stock 3,638 3,638 ----- AIMS (Net Value) ----- ----- ----- Coins (Remainder) 1,000 1,000 ----- Sailboat and Trailer 15,000 15,000 ----- Davis Marketing Stock 1,000,000 1,000,000 ----- Life Insurance 12,204 12,204 ----- New Home Equity 5,000 5,000 ----- __________ __________ _________ $1,129,342 $1,047,342 $ 82,000 Necia now has: $ 82,000 Necia received in property settlement before 1976 decree was reversed: 10,000 _________ $ 92,000 Total value of marital assets: $1,129,342 x .40 __________ Necia's forty percent share: $ 451,737 Necia has received: - 92,000 Balance due Necia: __________ $ 359,737 The trial court ordered Pat to pay the noncontingent lump sum property award in 120 equal monthly installments. It directed Pat to pay interest of eight percent per annum on the unpaid principal. Because we have increased the award to Necia, we extend the installment repayment period to twelve years. Pat shall pay Necia 144 equal monthly installments, to include principal and interest, in amortizing the above award. We affirm the other decree terms as to the property division, including the lien against Pat's Davis Marketing stock and the prepayment provisions.