Opinion ID: 2625856
Heading Depth: 2
Heading Rank: 2

Heading: Value of the Business

Text: [¶ 11] The husband failed to persuade the trial court that the pathology business was worth substantially more than the purchase price plus the value of the hard assets. In this appeal, he asks this court to substitute its judgment for that of the trial court. To do so, we must be convinced the trial court abused its broad discretion in dividing the marital property. After a careful review of the record, we are not convinced any such abuse of discretion occurred. The husband alleges the trial court's findings do not provide sufficient detail concerning the court's reasoning regarding the value of the pathology business. This argument lacks merit because the record does not reflect a request for special findings pursuant to W.R.C.P. 52(a) [2] was ever made. Without such a request, we presume the trial court made all appropriate findings supported by the evidence. A failure of a court to mention the specific factors does not mean that they were not considered. In the absence of special findings of fact, this court considers that the judgment of the trial court carries with it every finding of fact necessary to support the judgment and decree. It is not a function of this court to divide property in the first instance. Barney v. Barney, 705 P.2d 342, 345 (Wyo. 1985) (citations omitted & emphasis added); see also Parsons, 2001 WY 62, ¶ 11, 27 P.3d 270. [¶ 12] We agree the record must contain sufficient evidence to support the court's distribution of property. Bricker v. Bricker, 877 P.2d 747, 751 (Wyo.1994). We have held the trial court does not abuse its discretion when it values contested property within the range of both parties' appraisals. McLoughlin v. McLoughlin, 996 P.2d 5, 7 (Wyo.2000). We have also held, when the value of the parties' business property is questioned, even though an appraisal may be helpful, it is not absolutely necessary. Bricker, 877 P.2d at 751; Klatt v. Klatt, 654 P.2d 733, 737 (Wyo.1982). In this instance, the trial court's value of $50,000 was reasonable when considered in light of the evidence. [¶ 13] Approximately one month after the divorce action was filed, the husband signed a loan application in which he and the wife listed the value of the pathology stock at $30,000. The mortgage application form provided, immediately preceding the parties' signatures: I/We certify that the information provided in this application is true and correct as of the date set forth opposite my/our signature(s) on this application and acknowledge my/our understanding that any intentional or negligent misrepresentation(s) of the information contained in this application may result in civil liability and/or criminal penalties ... and liability for monetary damages to the Lender, its agents, ... and any other person who may suffer any loss due to reliance upon any misrepresentation which I/we have made on this application. (Emphasis added.) The parties made this application in order to purchase the residence the husband was living in at the time of the divorce trial. The husband contends the wife completed the application, and he did not read it. However, he did certify the information was correct and directly benefited from the loan which funded the purchase of his personal residence. [¶ 14] The wife contended the value of the business should be determined by adding the accounts receivable, properly discounted for expenses, to the value of the hard assets. She testified outstanding accounts receivable were approximately $72,000, the acquisition price was $30,000, and assets purchased after acquisition were not of significant value. While arguing expenses must be considered and deducted from the accounts receivable, the wife did not provide the court with the amount of those expenses. [¶ 15] The husband's expert, Richard Holdren, took an entirely different tack contending industry data supported a much higher value based upon the business' gross annual income, which was over $500,000 in 1999 and over $750,000 in 2000, and the good will. While Mr. Holdren was certainly qualified to perform an appraisal of a pathology business, having performed approximately 1,500 such appraisals nationwide, he had no knowledge of the business climate for a pathology business in Wyoming in general, or specifically in the Big Horn Basin. He admitted he did not have all the financial information he usually relied on to value such a business, such as accurate records of accounts receivable and expenses, and he had to estimate certain figures from trade sources. In addition, he admitted his evaluations usually exceeded the actual sales price for the businesses by twenty percent and were usually inflated by twelve percent for a sales commission. Despite his lack of knowledge of the local market conditions for a pathology practice, he calculated a good will value for the business of $206,243.33 and incorporated this figure with his other computations to conclude the business was worth $394,772. The trial court discounted Mr. Holdren's opinion as follows: The Big Horn Basin Pathology business is awarded to [the wife]. It has a reasonable fair market value of $50,000. [The wife] shall pay [the husband] $25,000 for his share. I do not find that there is any goodwill value to this business. Its income is solely dependent upon the work and skills of [the wife]. These are not assets that can be sold to another physician. For the most part, the business contracts can be terminated by either party on short notice. Their value cannot be transferred but depends upon the efforts and skills of the physician in charge of the business. [ The husband's ] expert did not have sufficient information to deliver a persuasive opinion as to [ the ] value of the business. He did not consider the purchase price paid by [ the wife ]. He did not have any comparable sales figures nor any offers to purchase this business. When the parties applied for a loan in October of 1999, they valued the business at $30,000. (Emphasis added.) [¶ 16] A failure of proof by a party upon whom the burden of proof rests must accrue to the benefit of the party who opposes the issue. Klatt, 654 P.2d at 737; Hendrickson v. Hendrickson, 583 P.2d 1265, 1268 (Wyo. 1978). The wife came forward with evidence, though perhaps not overwhelming in nature, of the value of the business. Once the wife made a prima facie showing, the evidence was entitled to stand unless controverted. Ferguson v. Ferguson, 481 P.2d 658, 659 (Wyo.1971). If evidence was available which would have refuted this proof, it was incumbent upon the husband to produce it at the trial. Id. This is the essence of our adversarial process. The husband's expert was not provided all the information necessary to make a more credible appraisal. The trial court discounted his opinion for this reason. It is reasonable to infer that the husband, as the former secretary/treasurer and business manager, had knowledge of the business and what records would exist regarding the value. The husband asserts the wife thwarted his efforts to obtain the detailed financial information necessary to perform a more thorough analysis. The wife contends she had no independent knowledge of the details of the business finances and she advised the husband he could obtain any information he required from the accountant and the current business manager. The husband's counsel conceded at oral argument before this court that the husband did not pursue a motion to compel in order to obtain the necessary financial information though the action had been pending for over a year. [¶ 17] The husband's complaint that the trial court completely disregarded accounts receivable in its determination of value is unfounded. The $50,000 value exceeded both parties' estimates of the value of the hard assets by $20,000; consequently, we can infer some value for the accounts receivable was included. A reasonable interpretation of the evidence supports some deduction from the estimated accounts receivable for expenses and uncollectable accounts. The court made a reasonable judgment given the limited help it received from the parties in determining the exact amount of those deductions. In addition, if the husband's valuation of $394,772 is reduced to account for the thirty-two percent padding that his expert conceded may have occurred in his appraisal and to exclude the $206,243.33 good will value rejected by the trial court, only $62,201.63 remain. The trial court's value of $50,000 is well within the range of that number and the wife's number. [¶ 18] In Holland, 2001 WY 113, 35 P.3d 409, the husband similarly complained about the district court's division of marital property and argued the court should have explained a portion of the award to the wife which appeared to be intended to balance the disparity created by the award of an investment account to the husband. This court responded: Husband contends that this Court must be able to ascertain with certainty what the basis for that $135,000.00 payment is. The contrary is true. Husband had the burden of demonstrating that the evidence adduced before the district court did not support the property distribution as a whole. This he has failed to do. 2001 WY 113, ¶ 9, 35 P.3d 409. We find ourselves in the same predicament here. The husband, despite not requesting findings pursuant to W.R.C.P. 52(a), complains that the trial court did not explain the basis for its determination of the value for the business. However, the record contains adequate evidence to support a value in the range of the court's finding, and the trial court found the husband's evidence of a higher value to be unpersuasive. Given those facts, we cannot conclude the trial court abused its discretion in determining the pathology business was worth $50,000.