Opinion ID: 545523
Heading Depth: 3
Heading Rank: 1

Heading: $140,414.61 in Accounts Receivable from BIRA

Text: 31 The defendant argues that inclusion in the net worth calculation of $140,414.61 in accounts receivable from BIRA is an arbitrary figure that is flatly contradicted by the only relevant evidence in the record--BIRA's general journal entry for 1977. 4 The journal for 1977 indicates that the only account payable to Walton in 1977 was in the amount of $24,000. We agree that, on the record now before us, the figure appears arbitrary. The government did not come forward with any foundation for the figure at trial and, on appeal, contends only that [t]he record is inconsistent and inconclusive with regard to the amounts the Academy owed Walton. Simply because a figure in a net worth analysis appears arbitrary on appeal, however, is not sufficient to merit reversal. 32 As set out at length above, an assessment is presumed correct, and the plaintiff bears the initial burden of producing evidence at trial to show that an assessment is arbitrary or excessive. We do not doubt that this burden may be met by the defendant pointing out that an element of a net worth calculation is wholly without foundation or is flatly contradicted by another of the government's exhibits. The government would then bear the burden of coming forward with a minimal evidentiary foundation for the assessment. In this case, however, the defendant never met his minimal burden of production. Walton's attorney never cross-examined Agent Backaitis to determine how he arrived at the figure of $140,414.61 in accounts receivable from BIRA. Nor did he bring the conflict between the assessment and the journal entries to the attention of the court or the government, which would have afforded the government an opportunity to explain or reconcile the difference. In fact, the only challenge to this figure appearing in the record is a colloquy between the defendant and his attorney on direct-examination occurring after Backaitis had been called and cross-examined: 33 Q. Do you have any additional objections to the net worth assessment made by Mr. Algis A. Backaitis with respect to yourself with respect to the years 1976 and 1977? 34 A. 1977, as I stated, the $132,000 was not correct, the accounts receivable, Belle Isle Riding Academy he has an amount of $140,414.61 owed me and I don't know what that's for. I know they don't owe me nothing. 35 This vague denial, which was modified moments later when Walton acknowledged that BIRA did owe him $24,000, was certainly not sufficient to meet the defendant's burden of production on the issue of arbitrariness. Had BIRA's general journal entry for 1977 been brought to the attention of the court on this particular issue at trial, and had Agent Backaitis been unable to explain how he had arrived at the figure of $140,414.61 in accounts receivable, we would agree with Walton's contention that the figure is arbitrary and excessive. As the case stands, however, the defendant did not meet his initial burden, and the court properly found in favor of the government on this issue.