Averaging Valuations

November 18, 2013 § 1 Comment

I’ve whined here before about inadequate proof of values in equitable didtsribution cases and the burden it places on the trial judge. I won’t repeat my plaints here.

The latest case where a chancellor had to make a decision with far-less-than-precise proof of values is Williams v. Williams, decided by the COA on October 5, 2013.

Phillip and Gail Williams were before the court in a divorce where the main matter in dispute was equitable distribution. Neither party produced an appraisal of a residence and real property in Alabama. Instead …

  • Phillip introduced a document styled “An Acknowledgment of Lease Purchase Agreement” by which Phillip purported to sell the property to a purchaser for installment payments of $325 a month until he could “obtain a loan to pay off the balance of $40,000 … less the $325 a month without interest …” The document was filed among the land records in Alabama. In his testimony, Phillip stated that the purchaser would, indeed, be paying more than $50,000 for the property.
  • Gail introduced a tax receipt showing that the property was valued for tax purposes at $61,100, with $43,900 attributed to the house, and the remainder to the underlying property.

Also included in the adjudication were the parties’ householdd goods, yard equipment, and tools, the values of which were in dispute between the parties, and for which there was no appraisal. Each party accused the other of undervaluing the items that he or she would keep, while overvaluing the items that the other would receive.

The chancellor averaged Phillip’s claimed $40,000 value with Gail’s tax receipt value of $61,110, and adjudged the value of the Alabama property at $50,550. She also averaged the parties’ valuations of the personalty.

Phillip appealed, complaining that the chancellor was in error in averaging the values.

Judge Fair, for the COA, addressed the issue this way:

¶31. In McKnight v. McKnight, 951 So. 2d 594 (Miss. App. Ct. 2007), we held that the averaging of proposed appraisals was allowed in valuation of marital realty. Even more recently we held chancellors are required only to do the best they can with what is introduced into evidence before them:

[T]he chancellor cannot be blamed for the failure of the parties to present evidence of valuation. Faced with similar circumstances, this Court held as follows in Dunaway v. Dunaway, 749 So. 2d 1112, 1121 (¶28) (Miss. Ct. App. 1999):

[T]he chancellor, faced with proof from both parties that was something less than ideal, made valuation judgments that find some evidentiary support in the record. To the extent that the evidence on which the chancellor based his opinion was less informative than it could have been, we lay that at the feet of the litigants and not the chancellor. The chancellor appears to have fully explored the available proof and arrived at the best conclusions that he could, and we can discover no abuse of discretion in those efforts that would require us to reverse his valuation determinations.

It was not the chancellor’s duty to obtain appraisals of the marital property. Willie cannot now complain that the chancellor’s valuations are unfair when no reliable evidence of the value of the property was presented at trial. This issue is without merit. Common v. Common, 42 So. 3d 59, 63 (¶¶12-13) (Miss. Ct. App. 2010).

¶32. We find the chancellor’s averaging of valuations provided on Rule 8.05 forms submitted in the record and discussed on the record an acceptable course of action and within her discretion.

¶33. Overall, we find Phillip’s objections to the characterization, valuation, and division of marital property to be based on the evidence and within her discretion under Hemsley, Ferguson, and their progeny.

I get it that in some cases the cost of obtaining appraisals can seem disproportionate to the advantage to be gained. And there are some cases where one side, if not both, would prefer for the proof to be fuzzy in hopes that the chancellor will fall their particular way. 

When you leave it up to the trial judge to resolve inconclusive or incomplete evidence, you get what you get. As long as the chancellor “explored the available proof and arrived at the best conclusions that he could,” and did not otherwise abused discretion, you will be stuck with the results.

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