THE VALUE OF VALUATION

November 17, 2011 § 3 Comments

Some lawyers like to play a cat-and-mouse game in which they go light on some proof, expecting the chancellor to fill in the blanks in their client’s favor. Sometimes that strategy fails calamitously.

The latest case in point is Powell v. Powell, decided by the COA on November 8, 2011, an equitable distribution case. Sherida Powell and her husband James were locked in a battle over the marital estate, the major components of which were the marital residence, some future payments from the sale of a business, and James’s retirement account. The chancellor decided the values based on the proof, and sherida hit the appeal button, complaining that the judge’s adjudication of values was incorrect.

The COA, via Judge Irving, disagreed with Sherida. The opinion is instructive about what works and does not work as proof of values, so I am quoting it here:

¶20. Sherida first attacks the value that the chancery court assigned to the marital home, which James testified was worth $80,000 before he renovated it prior to his marriage to Sherida. Sherida complains that numerous documents could have been provided to prove the value of the home. While such documents could have been provided, they were not–not by James, and not by Sherida. Sherida was entitled to provide whatever documentation she could obtain regarding the value of the home; in the absence of such, we decline to find error with the chancery court’s valuation of the home.  * * *

¶21. Sherida next complains that the chancellor erred in “failing to calculate the value” of the future payments on the promissory note from ASAP’s sale. We note that Sherida made no effort to provide a calculation of the future value of the payments. In the absence of any valuation of the ASAP promissory note payments, we decline to hold the chancery court in error in its valuation of the payments.

¶22. Sherida also complains that James’s retirement account should have been considered a marital asset. In her brief, Sherida concedes that the only evidence as to the value of the account came from her trial exhibit 31. That exhibit was simply a summary of Sherida’s valuation of certain assets, including James’s retirement account. It appears that Sherida’s “value” for the account is simply the percentage that she believes she should receive of each of his monthly disability checks. This did not provide the chancery court with an adequate valuation of the retirement account. No other evidence was presented by either party that conclusively established the account’s value. Under these circumstances, the chancery court did not err in declining to evaluate the account as a marital asset.

A few nuggets from this case:

  • The chancellor has no duty to go out and develop your proof for you. It’s up to you to put adequate proof in the record to support your client’s position. If you don’t do so, the appellate courts are not going to entertain your complaint that the judge should have found a different way.
  • The chancellor can pick and choose what to believe from equivalent proof. In other words, if each party simply lobs up a guess as to a value, the judge can pick which one to swing at and hit. It’s up to you to come up with weightier proof, like an appraisal from a qualified appraiser, or some other weightier source, if you want to have the upper hand as to values.
  • If you want the judge to calculate future values or some such, then offer an expert, or a stipulated table, or something of the like. Don’t expect the trial judge to perform actuarial and trigonometric calculations when you have not provided the template to do so.
  • If you fail to provide adequate proof of the valuation of a retirement account and the parties’ relative contributions to it, you do so at your client’s peril. Here, the fallout was a finding by the trial court that the account was not marital. In Pierce v. Pierce, 42 So.3d 658 (Miss.App. 2010), the fallout was a remand for further findings of fact.
  • If you don’t put evidence into the record, don’t expect to be able to argue about it on appeal. And don’t expect the trial judge to rule in your favor, either.
  • Once again … the more difficult you make it for the trial judge to figure out, the less likely you will prevail, as I have often said here before.
  • When you have a valuation case, jump on it early. Get your client to bring you as many documents as possible, such as account balances, valuations, appraisals and financial statements. Get tax returns with depreciation info. Collect closing statements and property tax data. Use discovery to get admissions as to admissibility and authenticity of documents, and to admit values. Discover the existence of any other documents. If valuation will be contested, line up your experts. And remember that experts must be designated no later than 60 days before trial, per UCCR 1.10, if  you were requested to disclose them in discovery.

There’s another interesting aspect to this case, and you can read about it here.

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