How Much is Valuation Worth?
February 20, 2018 § Leave a comment
Valuation, valuation, valuation. It’s a subject I’ve talked about here often. I started to link some of my posts on the subject, but, instead, let me simply ask that you enter the word “valuation” above in the Search box and see for yourself the plethora of posts that pop up.
Most of the cases on which I have commented went up on a complaint by the disappointed party that the chancellor didn’t value assets correctly, or didn’t give proper weight to evidence presented, or whatever. The overwhelming number of cases decided on appeal say the same thing: the trial judge will do the best she can do with what evidence you present, so you’d better make a decent record.
The latest version of this old, sad tale comes to us courtesy of Mr. Timothy Benton, who appealed from a judgment assessing him with alimony and child support that he says are not supported by the evidence.
Tim and his wife, Beth were married in 2000. Tim was owner of two businesses, Tim Benton Tree Service and Benton Green, LLC, the income from which supported the family. Beth helped in the businesses from time to time, but she primarily cared for the parties’ four children.
Tim and Beth separated in 2013, and Beth filed for divorce in November, 2014, on the grounds of desertion, HCIT, and ID.
Following a temporary hearing on January 12, 2015, which both parties attended, Beth was awarded custody and Tim was ordered to pay her temporary child support of $3,500 and temporary alimony of $1,500. Because neither party could produce their tax returns at the hearing, the court reset the matter for February 18, 2015, with directions to produce them then. In addition, the judge directed Tim to produce any business financial records showing his income and operating expenses. When Tim appeared on the February date, he failed to produce the records, and the court continued the matter to April 6, 2015, with the same directions.
On April 6, 2015, Tim appeared yet again without financial records as directed. His attorney withdrew from representation.
The case proceeded to trial. Beth produced an 8.05 financial statement and some bank statements. Tim had neither 8.05 nor any financial records. The judge based her findings on the meager evidence presented, concluding that Tim had more than $17,000 a month in income. She ordered him to pay $2,500 a month in child support, plus all of the expenses and tuition of private schooling and all medical expenses of the children. The chancellor also ordered Tim to pay $6,000 per month in alimony and granted other financial relief.
Tim lawyered up and filed a R59 motion claiming that he had been unable adequately to represent himself at trial and needed a new trial to present CPA evidence.
Not surprisingly, the chancellor denied the motion, stating that, ” … the burden lied at the feet of the litigants to provide the Court with sufficient evidence in which to value the marital assets … during the course of the litigation [Tim] was afforded ample opportunity and time on multiple occasions to provide supplemental evidence, which he did not do.”
In Benton v. Benton, decided January 23, 2018, the COA affirmed. On the issue of the valuation used by the chancellor, Judge Irving wrote:
¶10. Tim argues that the chancery court erred in failing to value all material marital assets, including Benton Tree Services, and in rendering decisions of alimony and child-support awards accordingly. In response, Beth argues that the court properly distributed the marital assets in light of the fact that Tim refused to comply with the court’s orders to produce financial records. Thus, Beth maintains that the court’s subsequent alimony and child support awards were proper.
¶11. The Mississippi Supreme Court has stated that “the foundational step to make an equitable distribution of marital assets is to determine the value of those assets based on competent proof.” Dunaway v. Dunaway, 749 So. 2d 1112, 1118 (¶14) (Miss. Ct. App. 1999) (citing Ferguson v. Ferguson, 639 So. 2d 921, 929 (Miss. 1994)). “Nevertheless, it is incumbent upon the parties, and not the chancellor, to prepare evidence touching on matters pertinent to the issues to be tried.” Id. “Where a party fails to provide accurate information, or cooperate in the valuation of assets, the chancellor is entitled to proceed on the best information available.” Stribling v. Stribling, 906 So. 2d 863, 870 (¶25) (Miss. Ct. App. 2005) citation omitted).
¶12. Here, it is undisputed that the chancellor did not value Tim’s businesses. However, we refuse to hold her in error because of a party’s failure to cooperate in providing the necessary documents for proper valuation, and we reiterate the applicable caselaw set forth by the chancery court in its order denying Tim’s motion for a new trial. See Jenkins v. Jenkins, 67 So. 3d 5, 13 (¶21) (Miss. Ct. App. 2011) (declining to find a chancellor in error for failing to conduct a marital-property valuation where the parties failed to provide the relevant evidence); Common v. Common, 42 So. 3d 59, 63 (¶¶12-13) (Miss. Ct. App. 2010) (holding that a chancellor was not in error for valuing marital assets solely from the parties’ 8.05 financial statements, because the parties failed to provide the necessary evidence, and further holding that the former husband could not “now complain that the chancellor’s valuations [were] unfair when no reliable evidence of the value of the property was presented at trial”); Dunaway, 749 So. 2d at 1121 (¶28) (holding that, “[f]aced with proof that was far less than ideal, the chancellor made a valuation of the marital estate that finds some support in the record,” and refusing to hold a chancellor in error due to the former husband’s failure to produce evidence). It is this Court’s opinion that the chancellor did the best she could with the little information presented to her, and that she did not abuse her discretion. Accordingly, we affirm.
Not much to add, except this:
- It is always a losing, self-destructive strategy to play cat-and-mouse games with financial proof, withholding all or some. The chancellor’s attitude and reaction in this case is about what one should expect in the face of repeated failure to present financial records, especially after having been ordered by the court to do so.
- Forgive me for repeating what I often have said here: it is up to you to make a record of financial values. It’s not the judge’s job. Don’t expect your opponent to do it for you. It’s “at the feet of the litigants,” as the learned chancellor so eloquently put it.