Court Opinion

ID: 1066908
Source: CourtListenerOpinion
Date Created: 2013-10-09 19:24:45.842813+00
Date Added: 2024-06-11T15:28:11.456475
License: Public Domain

COURT OF APPEALS OF VIRGINIA

Present: Chief Judge Fitzpatrick, * Judges Baker and Annunziata
Argued at Alexandria, Virginia

THOMAS C. SHOOLTZ

v.   Record No. 2205-96-4

JANE HOFFMAN SHOOLTZ                       OPINION BY
                                    JUDGE ROSEMARIE ANNUNZIATA
 JANE HOFFMAN SHOOLTZ                    APRIL 28, 1998

v.   Record No. 2209-96-4
THOMAS C. SHOOLTZ

            FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
                     Jack B. Stevens, Judge

          William M. Baskin, Jr. (Southy E. Walton;
          Baskin, Jackson & Hansbarger, P.C., on
          briefs) for Thomas C. Shooltz.

          David H. Fletcher (Martin A. Gannon; Gannon,
          Cottrell & Ward, P.C., on briefs) for Jane
          Hoffman Shooltz.

     Jane H. Shooltz (wife) and Thomas C. Shooltz (husband) both

appeal the equitable distribution order of the trial court.     Wife

contends the trial court erroneously valued the husband's two

businesses, erroneously reduced the monetary award based on tax

consequences to husband, and erroneously refused to reopen the

equitable distribution hearing to take further evidence on the

business valuation issue.   Husband contends the trial court

erroneously counted a single asset twice in its equitable
     *
      On November 19, 1997, Judge Fitzpatrick succeeded Judge
Moon as chief judge.
distribution award.     For the reasons which follow, we reverse.

                   I.    Motion to Reopen Hearing

     The parties were married in September 1976, and separated in

August 1993.   Husband filed for divorce in December 1993, and

wife responded with a cross-bill for divorce.       The trial court

referred the matter to a commissioner in chancery, who

recommended a divorce based on the separation of the parties for

more than one year.
     The circuit court held an equitable distribution hearing on

September 15 and 17, 1994, during which evidence was taken on the

value of the husband's two start-up businesses, Gateway II

Limited Liability Corporation ("Gateway II") and Highland Limited

Partnership ("Highland").    The trial court granted husband's

motion to strike as speculative the valuation testimony of the

wife's expert in which he determined the present value of the

businesses' future earnings based largely, not on historical

earnings, which did not exist, but on husband's income

projections.

     The parties submitted written memoranda on November 3, 1994.

On January 22, 1996, sixteen months after the evidentiary

hearing, the trial court rendered its decision by letter opinion.

Upon husband's Motion to Reconsider, in which he asked the court

to reduce the monetary award made to wife in its January 22, 1996

letter opinion, the trial court reduced the monetary award by

letter opinion issued on May 20, 1996.

                                   2
     The matter had been held within the breast of the court for

nearly twenty months, during which time husband's businesses had

begun operations.   The wife thereafter moved for reconsideration,

asking, inter alia, that the court revalue the husband's

interests in Gateway II and Highland.    Wife argued that during

the court's delay in reaching a decision, Gateway II had begun

operations and that sufficient historical earnings were now

available to warrant the application of the wife's expert's

methodology for valuation.   Wife's expert testified that, as of

the hearing, Gateway II and Highland were earning profits, which

were substantially consistent with the projections on which he

had relied to project Highland's and Gateway II's future

earnings.
     In denying wife's motion to reopen the equitable

distribution hearing to revalue the marital estate in 1996, the

court concluded that it lacked the discretionary power under the

provisions of Code § 20-107.3(A) to value the businesses as of a

date other than that of the equitable distribution hearing.   We

disagree.

      Motions to reopen a hearing to take further evidence are

matters within the court's discretion.    See Kirn v. Bembury, 163
Va. 891, 900-01, 178 S.E. 53, 56 (1935) ("Such motions are

addressed to the sound discretion of the court . . . .   Usually,

such motions are based upon error apparent on the face of the

record, or for the purpose of introducing after-discovered

                                 3
evidence."); Rowe v. Rowe, 24 Va. App. 123, 144, 480 S.E.2d 760,

770 (1997) (citing Morris v. Morris, 3 Va. App. 303, 307, 349
S.E.2d 661, 663 (1986)). 1

     In the present case, the trial court declined to exercise

its discretion to reopen the hearing on the value of the

husband's businesses after a sixteen-month delay in bringing the

equitable distribution issue to closure and notwithstanding the

wife's proffer that the circumstances had substantially changed.

 In denying the motion to reopen, the court erroneously concluded

that the provisions of Code § 20-107.3(A) abrogated the court's

discretionary power and confined its review of the issue to the
                                           2
date of the initial evidentiary hearing.
     1
      In addition to considering newly discovered evidence and
legal error as the primary bases for the exercise of discretion
in reopening a hearing, see, e.g., Wells Fargo Alarm Servs., Inc.
v. Virginia Employment Comm'n, 24 Va. App. 377, 386, 482 S.E.2d
841, 845 (1997); Hughes v. Gentry, 18 Va. App. 318, 326, 443
S.E.2d 448, 453 (1994) (citing Holmes v. Holmes, 7 Va. App. 472,
482, 375 S.E.2d 387, 393 (1987)), Virginia courts have also
included among the factors to be applied in the analysis whether
a party seeking rehearing had "ample opportunity to present
evidence" at the initial hearing, see, e.g., Old Dominion Elec.
Coop. v. Virginia Elec. & Power Co., 237 Va. 385, 395, 377 S.E.2d
422, 428 (1989); Rowe, 24 Va. App. at 144, 480 S.E.2d at 770
(citing Morris, 3 Va. App. at 307, 349 S.E.2d at 663); whether
the moving party's request to take additional evidence was
timely, Rowe, 24 Va. App. at 144, 480 S.E.2d at 770; whether the
moving party asserted the claim requiring rehearing at the
initial hearing, Brown v. Brown ex. rel. Beacham, 244 Va. 319,
324, 422 S.E.2d 375, 378 (1992); Dietz v. Dietz, 17 Va. App. 203,
217, 436 S.E.2d 463, 472 (1993); and whether the grant of a
motion to reopen a hearing would cause prejudice, delay,
confusion, inconvenience, surprise or injustice to the opposing
party. Old Dominion, 237 Va. at 397, 337 S.E.2d at 429; Fink v.
Huggins Gas & Oil Co., 203 Va. 86, 91, 122 S.E.2d 539, 543
(1961).
     2
      In its current form, Code § 20-107.3(A) provides in

                                4
     Prior to its amendment in 1988, Code § 20-107.3 did not fix

a valuation date, and the trial court chose a valuation date if

the parties could not agree to one.   See Mitchell v. Mitchell, 4
Va. App. 113, 118, 355 S.E.2d 18, 21 (1987); see also Clements v.

Clements, 10 Va. App. 580, 584 n.4, 397 S.E.2d 257, 259 n.4

(1990) (explaining the 1988 amendment).   In Mitchell, 4 Va. App.

at 118, 355 S.E.2d at 21, a pre-amendment case, this Court held

that the trial court should generally value assets as of the date

of the evidentiary hearing and not as of the date of separation,

because "the date of trial will usually be the most current and

accurate value available."
     Following the 1988 statutory amendment, we held in Gaynor v.

Hird, 11 Va. App. 588, 593 n.1, 400 S.E.2d 788, 791 n.1 (1991),

that "the 1988 amendments to Code § 20-107.3(A) codified the rule

announced in Mitchell."   The adoption of the statutory rule

fixing the evidentiary hearing as the presumptively proper date

for valuation of property did not, however, change the

fundamental policy objectives which underlie it, viz., that, in
the interest of just and fair results, the trial court should use

relevant part:

          The court shall determine the value of any
          such property [of the parties] as of the date
          of the evidentiary hearing on the evaluation
          issue. Upon motion of either party made no
          less than twenty-one days before the
          evidentiary hearing the court may, for good
          cause shown, in order to attain the ends of
          justice, order that a different valuation
          date be used.

                                 5
a valuation date which is most likely to provide the court with

the most current and accurate information available.    We do not

interpret the amendment to Code § 20-107.3 to preclude this

objective, and we find nothing in its provisions which supports

the conclusion that the court's inherent authority to reopen a

hearing to take additional evidence, including more current

evidence, has been curtailed by this statutory provision. 3

     Accordingly, we find that the trial court erred in

concluding that Code § 20-107.3(A) barred it from reopening the

hearing on the valuation of assets.    The trial court's error of

law with respect to its discretion to reopen the hearing was

itself an abuse of discretion.    As the Supreme Court has

recognized, a trial court "by definition abuses its discretion

when it makes an error of law."     Koon v. United States, 116
S. Ct. 2035, 2047 (1996).     Accordingly, we reverse and remand the

case for the trial court to consider the issue of reopening the

hearing in light of the relevant factors which govern its
                          4
exercise of discretion.

     3
      Where, in the exercise of its discretion, the court
concludes a reopening of the hearing to take more current
evidence is warranted, it follows that the valuation date is the
date of the reopened evidentiary hearing.
     4
      We note that, on remand, the trial court retains the
discretion to refuse to reopen the hearing on the valuation of
assets, subject only to our possible later review for an abuse of
that discretion. In the current appeal, we hold only that the
trial court erred in concluding it had no such discretion. We
make no comment on how the trial court should exercise that
discretion on remand.

                                   6
        We address below the remaining claims of error regarding the

valuation of husband's businesses as they may arise again in the

course of the proceedings on remand.

                                  II.

         Admissibility of Expert Business Valuation Testimony

        Wife appeals the valuation of two businesses developed by

husband with marital funds:    Gateway II, a family amusement

center, and Highland, a mini-storage facility.      Both parties

presented the expert testimony of accountants at the equitable

distribution hearing.    At the time of the hearing, Highland had

applied for building permits but had not begun construction,

which husband's accountant stated would take a year.      Gateway II

had completed most of the development process and was scheduled

to open for business in approximately six weeks, on December 1,

1994.
        Applying the "net assets value" method of valuation,

husband's expert testified that Gateway II was largely financed

by debt, except for an amount husband personally invested in the

project, totalling $49,144.    Applying the net assets value

method, husband's expert concluded that Gateway II had no value.

He acknowledged, however, that Gateway II could be considered to

have a value of $49,000, the amount of husband's personal

investment not financed by loans.       When asked how long Gateway II

would have to be in operation before he could value the business

using an income-based valuation method, husband's expert

                                   7
responded, "I guess you could get some indications after -- after

a year."

     Husband's expert testified that the Highland investment

property was worth the same amount as its debt and, therefore,

had no value.   He also opined that years would pass before

Highland would have a positive cash flow.

     Wife's expert placed a value on Gateway II and Highland by

determining the present value of the projected future earnings of

the businesses.   The expert arrived at the present value of the

projected future earnings by evaluating payments to husband from

his partners, the history of the projects, and projections of

earnings developed by husband.   Wife's expert calculated the

present value of Gateway II's projected future earnings to be

$1,381,303 and the present value of Highland's projected future

earnings to be $1,982,958.
     The court granted husband's motion to strike wife's evidence

of the value of Gateway II and Highland.    The court concluded, "I

don't think it's the law that you can get somebody to get on the

stand and project earnings of a company that has done no

business, has no record of income.   That's pure speculation.

Couldn't be more pure."

     On January 22, 1996, the trial court issued an opinion

letter dividing the assets between the parties.   The court later

determined that the opinion letter contained clerical errors and

issued a corrected opinion letter, also dated January 22, 1996.

                                 8
In the opinion letter, the court valued Gateway II at $49,144 and

Highland at $0.

                A.   Motion to Strike Expert Testimony

     The trial court struck wife's expert's opinion of the value

of Gateway II and Highland because the expert's projections and

opinion testimony were overly speculative and, by implication,

unreliable. 5   Based on the evidence presented to the court at

trial, we find no error in this ruling. 6
     The fundamental infirmity in the testimony of wife's expert

is that the effort failed to establish the propriety of

application of the "discounted future earnings" method to

determine the value of a business which is on the threshold of

beginning operations and which has no historical earnings and

failed to establish that such methodology would render accurate

results.   "Expert testimony is admissible in civil cases to

assist the trier of fact, if the evidence meets certain

fundamental requirements, including the requirement that it be

     5
      Husband and wife both refer to the methodology of wife's
expert as the "capitalization of earnings" method. Strictly
speaking, wife's expert used the "discounted future earnings"
method, in which projected future income is given a present
value, rather than the "capitalization of earnings" method, in
which one year's earnings are multiplied by a capitalization
rate. See Alan S. Zipp, Divorce: Valuation, Tax, and Financial
Strategies 20-21 (Tax Advisors Planning Series 1995) (explaining
methods of valuation). Both methods rely on the expectation of
future earnings to determine the value of a business.
     6
      This conclusion is based solely on the evidence presented
at trial. We voice no opinion with respect to the admissibility
of the evidence upon rehearing.

                                   9
based on an adequate foundation."     Tarmac Mid-Atlantic, Inc. v.

Smiley Block Co., 250 Va. 161, 166, 458 S.E.2d 462, 465 (1995)

(citing, inter alia, Lawson v. Doe, 239 Va. 477, 482-83, 391
S.E.2d 333, 336 (1990)).    When a litigant claims that a

particular scientific, technical or other specialized theory or

technique is valid, there must be some basis for determining the

validity of the proffered theory or technique.     Satcher v.

Commonwealth, 244 Va. 220, 244, 421 S.E.2d 821, 835 (1992)

("'Wide discretion must be vested in the trial court to

determine, when unfamiliar scientific evidence is offered,

whether the evidence is so inherently unreliable that a lay jury

must be shielded from it, or whether it is of such character that

the jury may safely be left to determine the credibility for

itself.'" (quoting Spencer v. Commonwealth, 240 Va. 78, 98, 393
S.E.2d 609, 621 (1990))).   Where the expert's conclusion rests on

sound methodology and theory, the conclusion is admissible.     See

Code § 8.01-401.3. 7
     In the present case, wife failed to produce any evidence to

establish the validity of her expert's methodology in the context

     7
      Code § 8.01-401.3(A) provides:

          In a civil proceeding, if scientific,
          technical, or other specialized knowledge
          will assist the trier of fact to understand
          the evidence or determine a fact in issue, a
          witness qualified as an expert by knowledge,
          skill, experience, training, or education may
          testify thereto in the form of an opinion or
          otherwise.

                                 10
of this case.   Indeed, the only evidence in the case on this

issue was presented by husband's expert, who testified that

valuation methods which depend on earnings, such as the

discounted future earnings method, are never used for the

valuation of a business with no operating history.     This opinion

remained wholly unrebutted by wife.     While we recognize that

"'[t]he court may not refuse or fail to give parties a reasonable

opportunity to develop and present evidence of value,'" Gottlieb

v. Gottlieb, 19 Va. App. 77, 93 n.6, 448 S.E.2d 666, 675-76 n.6

(1994) (quoting Bowers v. Bowers, 4 Va. App. 610, 618, 359 S.E.2d
546, 551 (1987)), in the absence of a proper foundation for the

opinion proffered by wife's expert, the court did not abuse its

discretion in striking the testimony.      See Satcher, 244 Va. at

244, 421 S.E.2d at 835.

                     B.   Valuation of Highland

     Wife also challenges the trial court's valuation of

Highland, contending the court used inconsistent methods in

valuing Highland and Gateway II.      We disagree that the trial

court's reasoning was inconsistent.     We will not disturb a trial

court's finding of the value of an asset unless the finding is

plainly wrong or unsupported by the evidence.      Rowe, 24 Va. App.

at 140, 480 S.E.2d at 768; Traylor v. Traylor, 19 Va. App. 761,

763-64, 454 S.E.2d 744, 746 (1995).

     Husband's expert testified that Highland owned a piece of

property worth $1,150,000; the debt on the property equalled the

                                 11
asset's value.    The expert, therefore, concluded that Highland

had no net asset value because its debt matched the value of its

assets.   Husband's expert acknowledged that husband had invested

$49,144 in Gateway II and initially stated that Gateway II had no

value.    He later changed his view and stated that the value of

Gateway II was $49,000 because $49,000 of the value of Gateway II

was not financed by debt.

     Wife argues that the trial court determined that Highland

had no value based on its net asset value but valued Gateway II

according to husband's capital contributions.    Starting from this

premise, wife contends the court should have valued Highland at

husband's capital contribution of $968,084, which she calls its

"book value." 8   The book value and adjusted book value methods of

valuation require a court to value a business at the net value of

assets and liabilities, which is precisely what the trial court

did in valuing both Highland and Gateway II.    McDavid v. McDavid,

19 Va. App. 406, 414-15, 451 S.E.2d 713, 719 (1994) (explaining

that fair market value of assets is appropriate to value a real

estate holding company); Bosserman v. Bosserman, 9 Va. App. 1, 8,
384 S.E.2d 104, 109 (1989) ("[V]aluation based upon the
     8
      The "book value" of a business refers to assets and
liabilities at their actual historical cost, no matter what the
current value of the assets and liabilities might be. The
"adjusted book value" of a business adjusts the book value to
reflect the current value of each asset and liability. Zipp,
supra, at 19-20. The trial court purported to value Highland and
Gateway II according to book value, although husband's expert
testified to the current, rather than historical, value of the
business assets and liabilities.

                                 12
corporation's net assets has gained wide acceptance in cases

where the corporation is a real estate holding company."); see

also Goldberg v. Goldberg, 626 A.2d 1062, 1066 (Md. Ct. Spec.

App. 1993) ("[A]djusted historical cost . . . appears an entirely

appropriate way to evaluate . . . interests in newly formed

companies without any earning or profit history . . . ."); In re

Marriage of Bors, 839 P.2d 272, 273 (Or. Ct. App. 1992) ("[B]ook

value is an appropriate technique to value a corporation that has

just been formed.").   Neither book value nor adjusted book value,

however, requires the court to value a business according to

capital contributions without reference to liabilities.
     Wife's premise that the trial court valued Gateway II

according to husband's capital contributions is without merit.

Although husband contributed $49,144 to Gateway II, the court

considered that contribution because it represented the portion

of Gateway II not financed by debt, and thus constituted a net

asset.   We find that the trial court did not use inconsistent

valuation methods to determine the value of the two businesses.

                               III.

                    Reduction in Marital Award

     With respect to the potential tax liabilities to be

addressed by the parties, wife's expert testified at the

equitable distribution hearing that the parties had approximately

$1,220,000 in suspended passive tax loss and $334,000 in

carried-over investment interest.     The expert testified that the

                                13
parties could apply the approximately $1,555,000 in suspended

passive losses and investment interest to offset income or

capital gains for a tax benefit of $518,000.    The husband's

expert did not testify about the tax loss at the equitable

distribution hearing.

     Six months after the equitable distribution hearing, husband

moved for permission to liquidate marital assets to pay

approximately $100,000 in taxes.     According to husband's

attorney, the taxes arose from the husband's sale of stock as

well as margin calls on the parties' margin account.    Husband

testified that, after the equitable distribution hearing, he sold

$750,000 of stock in a Charles Schwab margin account to generate

$250,000 to retire a debt acquired during the marriage in

conjunction with husband's investment in a partnership called

Birch's Crossroads.   Husband thereafter filed a motion to reduce

the value of the marital estate by the amount of tax liability

incurred as a result of husband's court-approved sale of stock.
     Granting the motion to reopen the hearing on this issue, the

court took further evidence on the potential tax consequences

faced by the parties as a result of the equitable distribution of

their property.   Husband maintained that the June 1995 sale of

stock had generated an additional $307,000 in tax liability.      In

response to wife's expert's testimony that husband had $374,803

of tax benefits from $1,135,766 in passive losses which he could

use to offset the tax liability, husband's expert stated that

                                14
most of the tax loss could not be used to offset tax liability

because the tax loss from the defunct partnership named Birch's

Crossroads would have to be reduced by husband's negative capital

account in that partnership before the loss could be applied to

offset other gains.   Both experts relied on tax forecasts because

the tax returns had not yet been filed.

     The trial court ruled that any passive losses from Birch's

Crossroads would have to be offset by the gains and income from

Birch's Crossroads before the losses could be used to offset any

other income.   The court reduced the award from husband to wife

from $200,000 to $50,000.   The difference reflected husband's

additional approximate tax liability of $307,000. 9

     Code § 20-107.3(E) requires a trial court to consider the

"tax consequences to each party" in fashioning an equitable

distribution award.   The primary conflict in the testimony over

the parties' tax liabilities was whether husband could apply his

accumulated passive losses to offset capital gains from the sale

of stock.   In its opinion letter of May 20, 1996, the trial court

determined that the testimony of husband's expert with regard to

tax consequences was more persuasive than that of wife's expert,

and ordered that the award to wife be reduced from $200,000 to

$50,000 to account for husband's tax liabilities.     Wife contends

     9
      During the hearing, husband's expert revised his opinion of
husband's tax liability from $307,000 to $242,434. Wife does not
argue that the court should have based its award on $242,000
rather than $307,000.

                                15
the court's determination of the parties' tax liabilities was

erroneous because husband's tax consequences were speculative,

were the result of husband's unilateral actions, and were offset

by accumulated passive losses.

     We find that the trial court did not abuse its discretion in

considering the tax consequences of the distribution of assets

based on tax returns which had not yet been filed.    After hearing

testimony and receiving memoranda on the tax consequences of the

disposition of assets, the trial court found:    "I don't see that

there is anything artificial or made up in this.    These are real

life taxes that have to be paid."     This finding is supported by

the record, and we will not disturb it on appeal.    In Arbuckle v.

Arbuckle, 22 Va. App. 362, 366, 470 S.E.2d 146, 148 (1996),

relied upon by wife, we disapproved consideration of tax

consequences based on a hypothetical sale of an asset.    The

present case involves actual dispositions of assets.    In

Arbuckle, we stated: "Every capital asset has a value basis and,

thus, a potential liability for capital gain tax upon sale.     That

potential liability is a proper consideration in the

determination of a property division and an award, if not

speculative." 22 Va. App. at 367, 470 S.E.2d at 148; see also
Barnes v. Barnes, 16 Va. App. 98, 106, 428 S.E.2d 294, 300 (1993)

(approving consideration of capital gains tax in equitable

distribution).

     The trial court in its discretion approved the sale of

                                 16
stock, which generated part of the capital gains liability,

because the proceeds of the sale reduced marital debt.

Furthermore, wife knew of husband's settlement of marital debt

which created an additional capital gains liability.     Finally,

the sale of stock due to margin calls created the remainder of

the tax liability.   Wife's claim that the tax consequences for

which husband sought relief resulted from his unilateral action

was properly rejected by the trial court.     Husband's action was

not unilateral but was undertaken with the knowledge of wife and

the court.
     We also reject wife's contention that accumulated passive

losses would offset the tax liabilities.     "Where experts offer

conflicting testimony, it is within the discretion of the trial

judge to select either opinion."      Rowe, 24 Va. App. at 140, 480

S.E.2d at 768.   The trial court considered the testimony and

memoranda of both parties' experts on tax strategies and

consequences and accepted the husband's position.     This

conclusion was firmly grounded in tax law, 26 U.S.C.

§ 469(g)(1)(A), and was a proper exercise of the trial court's

discretion.

                                IV.

              Distribution of $220,000 Reimbursement

     At the equitable distribution hearing, both experts

testified that husband's partner in the development of Highland

had agreed to reimburse him up to $220,000 for expenses incurred

                                17
in conjunction with the development of Highland.     As of the date

of the hearing, husband had incurred $147,000 in reimbursable

expenses.    Before the court reached its decision, it held a

subsequent hearing on January 20, 1995, at which husband updated

the court on his financial affairs.     Husband testified he had

received $220,000 in reimbursement for Highland development

expenses in December 1994 or January 1995.     In its accounting of

the assets subject to equitable distribution, the court included

$147,500 as a "Highland L.P. Loan Receivable," the amount due to

be reimbursed as of the date of the equitable distribution

hearing, and considered this amount when fashioning the award to

wife.    However, in fashioning the award, the court did not

consider husband's receipt of the additional $72,500 in full

payment of the $220,000 due him for Highland development

expenses.
        At a hearing on August 9, 1996, the trial court stated that

it had not previously considered the reimbursement when making

the equitable distribution award.      Although the earlier testimony

established that husband had received $220,000, husband and both

attorneys became confused as to the amount of the reimbursement,

and husband testified that he had received only $200,000 in

reimbursement.    The trial court increased its award to wife by

$100,000, one-half of the amount supposedly reimbursed by

husband's partner in Highland.

        This Court will not disturb an equitable distribution award

                                  18
"unless it is plainly wrong and without evidence to support it."

 Srinivasan v. Srinivasan, 10 Va. App. 728, 732, 396 S.E.2d 675,

678 (1990).   The trial court's $100,000 adjustment in the award

was a factual error and plainly contrary to the evidence.     The

trial court mistakenly incorporated the $220,000 reimbursement in

its award twice:   once as $147,500, and a second time as

$200,000.   The credible evidence established that the total

reimbursement was $220,000, but the trial court accounted for

$347,500 of reimbursement ($147,500 plus $200,000).   Rather than

increasing the award to wife by $100,000 as one-half of $200,000,

the trial court should have increased the award by $36,250 as

one-half of the unaccounted-for $72,500, to bring the total

reimbursement for Highland expenses to $220,000.
     For the reasons stated, this case is reversed and remanded

for further proceedings consistent with this opinion.

                                     Reversed and remanded.

                                19