Court Opinion

ID: 4154550
Source: CourtListenerOpinion
Date Created: 2017-03-22 11:07:15.458457+00
Date Added: 2024-06-11T14:34:41.316575
License: Public Domain

STATE OF MICHIGAN

                             COURT OF APPEALS

MICHAEL J. RADLER,                                                   UNPUBLISHED
                                                                     March 21, 2017
                 Plaintiff-Appellant/Cross-Appellee,

v                                                                    No. 328025
                                                                     Midland Circuit Court
                                                                     Family Division
JUDITH M. RADLER,                                                    LC No. 09-005486-DO

                 Defendant-Appellee/Cross-
                 Appellant.

Before: CAVANAGH, P.J., and SAWYER and SERVITTO, JJ.

PER CURIAM.

          Plaintiff appeals, and defendant cross-appeals, from the parties’ judgment of divorce. We
affirm.

                            I. FACTS AND PROCEDURAL HISTORY

        Plaintiff filed a complaint for divorce on February 20, 2009. After a three-day trial in
February 2010, Judge Jonathan E. Lauderbach issued findings of fact and conclusions of law on
May 17, 2010. The court found that the appreciation in value of 330,000 shares of stock that
plaintiff owned before the marriage in his family’s business, The Radler Group (TRG),1 as well
as 208,616 shares of TRG stock held in two irrevocable trusts in which plaintiff was a
beneficiary, became a marital asset in December 2006 when plaintiff became president of TRG
and became involved in the active management of the company. The court noted that plaintiff
had presented no evidence at trial with respect to the current valuation of the stock. Relying on
“the best evidence available,” the court found that the appreciation in value of the stock was
$4.37 per share. After itemizing and dividing the marital assets, the court awarded the entirety of
the stock to plaintiff and awarded defendant the sum of $1,197,906.74 “to equalize the value of

1
  The Radler Group is a holding company that holds the stock of six subsidiary corporations.
The subsidiary corporations own and rent real estate, including store fronts, industrial properties,
and office buildings, in the Chicago area.

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the property being distributed.” The court also awarded defendant spousal support in the amount
of $4,000 per month for 15 years, less than the amount suggested by the Friend of the Court
prognosticator for spousal support, in light of the “approximately $1,300,000 in cash and
marketable securities, and being mindful of the income that she should be able to derive
therefrom.”

        Plaintiff’s new counsel brought a motion for reconsideration and/or in the alternative for
limited reopening of proofs in order to allow the court to review the two trust documents, which
had not been admitted at trial. Plaintiff maintained that his interest in the stock was not vested at
the time the complaint for divorce was filed or at the time of trial and, therefore, the stock held in
trust was not a marital asset. Both parties also requested clarification of the court’s findings of
fact and conclusions of law on a number of issues. During an August 2011 hearing on the
motions for clarification, Judge Lauderbach expressed that he was not comfortable with the value
that he placed on the stock due to the lack of valuation evidence at trial and so he appointed an
independent expert to perform a valuation of the business. The court provided specific
instructions on the scope of the valuation and an evaluation date of February 20, 2009. A
hearing to take testimony from the court-appointed expert began on February 27, 2013, before
Judge Lauderbach, and concluded during a final hearing on the matters under reconsideration on
August 20, 2014, before Judge Michael J. Beale.2 Judge Beale did not modify Judge
Lauderbach’s prior decision “as to classification of the Radler Group stock as marital, the date
upon which it became marital and the number of shares determined to be marital.” Judge Beale
accepted the expert’s finding that the value of the stock in February 2009 was $4.19 per share
and found that the appreciation in value of the stock was $1.45 per share. Judge Beale also did
not revisit Judge Lauderbach’s decision with respect to the amount and duration of spousal
support. However, Judge Beale held that the spousal support obligation would not commence
until the judgment of divorce was entered due to the “significant reduction in the marital share of
TRG stock.” Judge Beale also found no basis to amend or modify Judge Lauderbach’s property
distribution of the marital estate and the award of a cash payment to defendant to equalize the
property distribution. He concluded, however, that an equal split of the marital estate was not
fair and equitable:

         [T]he total marital estate, excluding the items equally shared, breaks down in the
         following fashion: Plaintiff’s share is $992,411.74; while Defendant’s share is
         $368,278.50. Applying an equalizing analysis to these numbers would have a
         cash payment to Defendant in the amount of $312,066.62. This is approximately
         75% less than the cash payment calculated by Judge Lauderbach in his original
         findings of fact. Additionally, the amount of spousal support previously ordered
         was impacted by the awarding of approximately $1,300,000 in cash and
         marketable securities to Defendant from Plaintiff. Assuming the assets other than
         the cash payment remained the same, the total cash and marketable securities
         going to Defendant is reduced to $312,066.62 + $102,093.26 for a total of
         $414,159.88.

2
    The case was assigned to Judge Beale when Judge Lauderbach resigned.

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              The Court does not find that an equal split of the marital estate is a fair and
       equitable resolution, and therefore, chooses to alter the property distribution rather
       than revisit the issue of spousal support. The Court finds the property awarded to
       each party, except the items of equal split as decided by Judge Lauderbach, will
       be given a 40% share to Plaintiff and a 60% share to Defendant. This includes the
       assets which the Court could not find a marital value, namely Dow Retirement
       Health Care Assistance Plan and First of America account. The total amount of
       the marital estate subject to the disproportionate division is $1,360,690.24,
       therefore Plaintiff should receive $544,276.10 and Defendant should receive
       $816,414.14. The offsetting cash payment from Plaintiff to Defendant shall be
       $448,135.64. The Court finds the disparities of potential income and the actions
       of Plaintiff relating to the contempt of court proceedings warrants the
       disproportionate division of the martial [sic] estate as noted above. Defendant
       will continue to receive the spousal support as ordered by Judge Lauderbach;
       however, the funds otherwise available are substantially lessened due to the
       business valuation report for the Radler Group Ltd. The Court finds this to be an
       equitable resolution of the marital estate.

                          II. THE 330,000 SHARES OF TRG STOCK

        Plaintiff argues that the trial court erred by finding the increase in value of plaintiff’s
330,000 shares of TRG stock to be a marital asset. “In a divorce action, this Court reviews for
clear error a trial court’s factual findings on the division of marital property and whether a
particular asset qualifies as marital or separate property.” Hodge v Parks, 303 Mich. App. 552,
554–555; 844 NW2d 189 (2014).

        When dividing a marital estate, the goal is to make an equitable division of the marital
property in light of all the circumstances. Byington v Byington, 224 Mich. App. 103, 114; 568
NW2d 141 (1997). A trial court divides property by first determining whether the contested
assets are marital or separate property. Reeves v Reeves, 226 Mich. App. 490, 493-494; 575
NW2d 1 (1997). “Generally, marital property is that which is acquired or earned during the
marriage, whereas separate property is that which is obtained or earned before the marriage.”
Cunningham v Cunningham, 289 Mich. App. 195, 201; 795 NW2d 826 (2010), citing MCL
552.19. The marital estate is generally “divided between the parties, and each party takes away
from the marriage that party’s own separate estate with no invasion by the other party.” Reeves,
226 Mich. App. at 494. A premarital asset’s appreciation is considered part of the marital estate
“[w]hen one [spouse] significantly assists in the acquisition or growth of [the other] spouse’s
separate asset . . . .” Reeves, 226 Mich. App. at 495. In contrast, a premarital asset’s appreciation
should not be considered part of the marital estate if the appreciation is due to “wholly passive”
appreciation. See id. at 497. A premarital asset increases in value by wholly passive
appreciation when there is no addition of capital or active management during the marriage. See
Dart v Dart, 460 Mich. 573, 585 n 6; 597 NW2d 82 (1999).

       The trial court did not clearly err by finding that plaintiff’s 330,000 shares of TRG stock
that had been acquired before the parties’ marriage was plaintiff’s separate property until
December 2006, when the appreciation in value of the stock between December 2006 and

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February 20, 2009, became a marital asset. Hodge, 303 Mich. App. at 554–555. There is no
dispute that plaintiff became president of TRG’s board of directors after his father stepped down
from that role in December 2006. Plaintiff sat as one of seven members of the board of directors,
which had the responsibility of approving all of the company’s major decisions. The board had
nine monthly board meetings in 2007 because, according to plaintiff, “suddenly you have a
group of largely disinterested people who just have been taking their monthly payments and kind
of coming in town every now and then for, you know, a little bit of a free trip, thrown into the
prospect of having to run a company.” Plaintiff attended nine board meetings between January
2009 and September 2009. Defendant would stay home to take care of the home and the
children remaining at home when plaintiff traveled to attend board meetings. Plaintiff also
received monthly payments of $4,000 from TRG as salary and expense reimbursement. The
evidence supported the trial court’s finding that plaintiff took an active role in the management
of TRG during the marriage beginning in late December 2006 and that defendant’s domestic
efforts in managing the home and family affairs allowed plaintiff to actively participate in the
company. The trial court did not clearly err in finding that the appreciation in value of the stock
became a marital asset subject to equitable division in December 2006 when plaintiff took an
active role in managing TRG.

                 III. THE 208,616 SHARES OF TRG STOCK HELD IN TRUST

        Plaintiff argues that the trial court erred by finding that plaintiff had a divisible interest in
the shares of TRG stock held in irrevocable trusts because plaintiff did not have a vested interest
in the shares on the date the complaint for divorce was filed. Plaintiff has provided no authority
in support of his argument, has provided no citations to the record, and has provided no citation
to the trust documents themselves, other than to referring to a “simple reading of each
document[]” and a reference to “Exhibit K.” “An appellant may not merely announce his
position and leave it to this Court to discover and rationalize the basis for his claims . . . nor may
he give issues cursory treatment with little or no citation of supporting authority.” Peterson
Novelties, Inc v Berkley, 259 Mich. App. 1, 14; 672 NW2d 351 (2003); see also Prince v
MacDonald, 237 Mich. App. 186, 197; 602 NW2d 834 (1999) (“[W]here a party fails to cite any
supporting legal authority for its position, the issue is deemed abandoned.”). This issue is
abandoned.

                             IV. VALUATION OF THE TRG STOCK

        Plaintiff argues that the trial court erred by ordering the independent expert to use the
investment value as the standard of value in appraising the TRG stock and restricting the expert’s
ability to value the company using the fair market value standard of value. The trial court did
not, however, restrict the expert from offering testimony and an opinion using fair market value
as the standard of value.3 The true gist of plaintiff’s argument is that Judge Beale erred in his

3
  The expert testified that the difference between the investment value and the fair market value
standard of value is that the fair market value standard allows discounts for lack of control and
lack of marketability.

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valuation of The Radler Group because the expert testified that he would have applied a fair
market value standard of value and applied discounts if he had been appraising the company
under Illinois family and divorce law. However, there is no one set, uniform method for valuing
a closely held corporation. See, e.g., Kowalesky v Kowalesky, 148 Mich. App. 148, 156; 384
NW2d 112 (1986). Indeed, the expert testified that the method of valuing business assets in a
divorce case varies from state to state.

       A trial court’s valuation of an asset is a finding of fact reviewed for clear error. Jansen v
Jansen, 205 Mich. App. 169, 171; 517 NW2d 275 (1994). With respect to business valuations in
divorce actions, a trial court has great latitude in determining the value of stock in closely held
corporations, and where a trial court’s valuation of a marital asset is within the range established
by the proofs, no clear error is present. Jansen, 205 Mich. App. at 170–171. The expert offered
testimony and an opinion regarding the valuation of the TRG stock using the investment value
standard of value. Judge Beal’s valuation of the TRG stock was within the range established by
the proofs and was not clearly erroneous.

        Defendant argues on cross-appeal that the trial court erred by reopening proofs and
appointing the independent expert. This Court reviews for an abuse of discretion a trial court’s
decision whether to reopen proofs. Mixon v Mixon, 237 Mich. App. 159, 163; 602 NW2d 406
(1999).

        Trial courts are required by court rule to include a determination of the property rights of
the parties in the judgment of divorce. MCR 3.211(B); Yeo v Yeo, 214 Mich. App. 598, 601; 543
NW2d 62 (1995). “As a prelude to this property division, a trial court must first make specific
findings regarding the value of the property being awarded in the judgment.” Olson v Olson, 256
Mich. App. 619, 627; 671 NW2d 64 (2003). A trial court is required to assign a value to marital
property even if neither party submitted “persuasive evidence” regarding its value. In Olson, this
Court noted that there are numerous ways in which a trial court can make such a valuation,
including valuation based on expert testimony, valuation based on lay testimony, or the trial
court’s appointment of “its own independent expert to provide it with a perhaps more objective
valuation.” Id. at 627 n 4.

        Here, after making findings of fact and conclusions of law, and after the parties filed
motions for reconsideration and for limited reopening of proofs, but before a judgment of
divorce was entered, Judge Lauderbach sua sponte determined that the proofs on the issue of
stock valuation were deficient and that he did not have sufficient evidence to make a
determination regarding that value of the stock so as to allow him to make an equitable
distribution of marital property. Without citation to authority, defendant argues that Judge
Lauderbach erred by reopening proofs and appointing an independent expert to value the stock.
A party’s failure to cite supporting authority in favor of an assertion of error constitutes an
abandonment of the issue. Prince, 237 Mich. App. at 197. Nonetheless, Judge Lauderbach
indicated that he did not have ample information to determine a fair value and, therefore,
appointed an independent expert to assist the court. See Steckley v Steckley, 185 Mich. App. 19,
23; 460 NW2d 255 (1990). In light of the court’s duty to value marital property and to
determine an equitable distribution of the property, defendant has failed to demonstrate that the
trial court abused its discretion by appointing an expert witness to assist the court in making such
determinations. Although defendant challenges the credibility of the expert, it was for the court

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to judge the credibility of the expert and determine the weight to be given to the evidence
presented. SSC Assoc Ltd Partnership v Gen Retirement Sys of the City of Detroit, 210 Mich
App 449, 452; 534 NW2d 160 (1995).

                                   V. JOINT TAX RETURNS

        Plaintiff argues that Judge Lauderbach lacked authority to order him to file amended joint
tax returns for tax years 2010 and 2011. Plaintiff has not cited any Michigan law for the
proposition that a trial court lacks authority to order parties to file joint tax returns while the
parties are still married. A party’s failure to cite supporting authority in favor of an assertion of
error constitutes abandonment of the issue. Prince, 237 Mich. App. at 197. We consider this
issue abandoned. We also conclude that Judge Lauderbach did not clearly err by ordering the
filing of joint amended tax returns.

                  VI. EQUITABLE DISTRIBUTION OF MARITAL ASSETS

        Plaintiff argues that Judge Beale did not have jurisdiction to revisit Judge Lauderbach’s
finding that the marital assets should be equally divided. Plaintiff has not cited any authority in
support of his argument that a trial court cannot modify the distribution of marital assets in order
to reach an equitable distribution in light of all of the circumstances prior to entry of the
judgment of divorce. We consider this issue abandoned. Prince, 237 Mich. App. at 197. We
further conclude that the distribution of the marital property was not inequitable.

                                   VII. SPOUSAL SUPPORT

        Plaintiff argues that the trial court erred by ordering that the spousal support award would
be effective with the entry of the judgment of divorce. Plaintiff has abandoned this issue by
failing to cite any authority in support of his assertion that Judge Beale had no authority to order
that the award be effective with the entry of the judgment. Prince, 237 Mich. App. at 197. We
further conclude that Judge Beale did not abuse his discretion when he ruled the award would be
effective with the entry of divorce.

                                    VIII. ATTORNEY FEES

       On cross-appeal, defendant argues that the trial court abused its discretion by denying her
request for attorney fees. This Court generally reviews a trial court’s decision whether to award
attorney fees in a divorce action for an abuse of discretion. Richards v Richards, 310 Mich. App.
683, 699; 874 NW2d 704 (2015). Findings of fact on which the trial court bases an award of
attorney fees are reviewed for clear error. Id. at 699-700.

       In a divorce action, attorney fees are “awarded only as necessary to enable a party to
prosecute or defend a suit but are also authorized when the requesting party has been forced to
incur expenses as a result of the other party’s unreasonable conduct in the course of litigation.”
Richards, 310 Mich. App. at 700 (internal quotation marks omitted). As such, “MCR 3.206(C)(2)
provides two independent bases for awarding attorney fees and expenses . . . . Whereas MCR
3.206(C)(2)(a) allows payment of attorney fees based on one party’s inability to pay and the

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other party’s ability to do so, MCR 3.206(C)(2)(b) considers only a party’s behavior, without
reference to the ability to pay.” Richards, 310 Mich. App. at 700-701.

         Defendant cites generally MCR 3.206(C), Richards, 310 Mich. App. at 683, and Cassidy v
Cassidy, ___ Mich App ___; ___ NW2d ___ (2017), but she offers no argument or analysis, and
fails to apply the law to the facts, in support of her assertion that the trial court erred by denying
her request for attorney fees. Defendant merely announces, in a conclusory fashion with record
citation only to the statement of facts in her brief on appeal, that she is entitled to an award of
attorney fees and tells this Court to agree. That is insufficient to warrant this Court’s review
because “[a]n appellant may not merely announce a position then leave it to this Court to
discover and rationalize the basis for the appellant’s claims.” Cheesman v Williams, 311 Mich
App 147, 161; 874 NW2d 385 (2015).

       Affirmed. No costs, neither party having prevailed in full.

                                                              /s/ Mark J. Cavanagh
                                                              /s/ David H. Sawyer
                                                              /s/ Deborah A. Servitto

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