Gardner v. Gardner

• Docket Number: SD 38026
• Decision Date: 06 May 2024
• Citation: 689 S.W.3d 530
• Parties: Christopher J. GARDNER, Appellant, v. Cathy J. GARDNER, Respondent.
• Court: Missouri Court of Appeals

689 S.W.3d 530

Christopher J. GARDNER, Appellant,

v.Cathy J. GARDNER, Respondent.

No. SD 38026

Missouri Court of Appeals, Southern District, In Division.

Filed: May 6, 2024

APPEAL FROM THE CIRCUIT COURT OF JASPER COUNTY.Honorable Gayle L. Crane, Judge

ATTORNEY FOR APPELLANT - BRADLEY R, BARTON, Webb City, MO.

ATTORNEY FOR RESPONDENT - SARAH L. REEDER, Joplin, MO.

MARY W. SHEFFIELD, J.

Christopher J. Gardner("Husband") appeals from an amended judgment dissolving his marriage to Cathy Jo Gardner("Wife").In relevant part, the amended judgment: (1) ordered Husband to pay child support in the amount of $2,000 per month "until further order of court or the children are no longer eligible for support under Missouri law"; and (2) found that Husband’s business, Gardner Express Care, LLC("Express Care") had a value of $1,307,485 and ordered Husband to pay Wife $574,006.74 "as and for property equalization."Husband filed a "Motion to Reopen, Correct, Amend or Set-Aside the Amended Judgment or, in the Alternative, Motion for New Trial"(the "post-trial motion").¹Husband’s post-trial motion requested: (1) a new trial and/or to reopen the evidence based on newly discovered evidence that his oldest child had married, and was now emancipated; (2) to reopen the evidence to allow Husband to introduce additional evidence of two SBA loans in the amounts of $92,748.88 ("the 2017 Loan") and $340,600 ("the 2020 Loan"), respectively; (3) and to correct the division of marital assets and debts because the trial court overvalued Express Care.Husband’s motion was denied by operation of law and Husband filed this appeal, raising seven points.In points 1 through 4, Husband claims the trial court abused its discretion in denying his post-trial motion seeking a new trial to present evidence of his oldest child’s emancipation (point 1), and to reopen the evidence to present additional evidence of his oldest child’s emancipation (point 2), the 2017 Loan (point 3) and the 2020 Loan (point 4).In points 5 and 6, Husband claims the trial court erred by not including the 2017 Loan as a valid marital debt because there was no substantial evidence to support the exclusion of that debt (point 5) and because that exclusion was against the weight of the evidence (point 6).In his final point, point 7, Husband claims the trial court erred in valuing Express Care at $1,307,485 because there was no substantial evidence to support that valuation.Finding no merit in any of Husband’s points, we affirm.

Factual and Procedural Background

Husband and Wife were married in 1997, and, at the time of trial in September 2022, had two unemancipated daughters.Husband is a nurse practitioner and began operating a clinic under the entity, Christopher J. Gardner, NP, LLC("Gardner LLC"), in 2008.Wife was primarily a homemaker until December of 2017, when she began working for Husband at his clinic.In 2018, Husband formed a second LLC, Express Care, for the purpose of opening a walk-in urgent care clinic and weight loss service.The couple began having marital problems, and in May 2020, Husband moved out of the marital home and then in with his girlfriend.A few months later, Husband filed a petition for dissolution and Wife filed a counter-petition for dissolution.Wife also filed a motion to join Express Care as a necessary party, which was sustained.In September 2022, a trial was held and the following evidence was adduced.

The SBA Loans

Husband testified he had taken out two SBA loans related to his two LLCs.According to Husband, the first loan was a construction loan taken out in the name of Gardner LLC in 2017 and the second was a loan taken out in the name of Express Care LLC in 2020 for the purpose of covering expenses from business losses during the COVID pandemic.Husband offered two exhibits related to the loans, Exhibits 10 and 11, which were printouts purportedly from the SBA website.Exhibit 10 showed a principal balance of $95,231.20 on a loan that originated in June 2017 with the "co-obligor" listed as Gardner LLC and an accrued interest of $0.00.Neither Husband nor Wife were listed as an obligor on the document.Exhibit 11 showed a principal balance of $340,600 on a loan that originated in June 2020 with the "co-obligor" listed as Express Care.Again, no other obligor was listed and the accrued interest was listed as $0.00.

Husband did not offer copies of any promissory notes evidencing the indebtedness of his companies, the terms of repayment, or who was obligated to repay the debts.Husband testified his business received a PPP loan during COVID, but that debt had been forgiven.²Husband testified the current balance on the 2017 Loan was $93,970.As to the 2020 Loan, Husband claimed the principal amount was $340,600.Husband was unsure if the 2020 Loan was a PPP type of loan or not, but testified he would be expected to resume payments in approximately "15 months or so[,]" and he believed it had a 3.75% interest rate over 20 years.

In an attempt to clarify Husband’s testimony regarding the loans, the trial court and Husband had the following exchange:

[Trial court] So I have two - I have Exhibits 10 and 11 that one is $340,000.00 loan and another is $95,231.00.But on last year’s tax return - let me find it - I only have PPP loan of $134,000.00 and the EID loan of $5,000.00.So how do I get over $435,000.00 of loans today when the tax return shows a PPP loan, well actually at the end of tax year it said $130,345.00, which if I understand is forgiven and then an EID loan of $5,000.00?So according to the tax return there should only be $5,000.00 in loans but yet you’ve given me these loan things, which I’m not for sure where they came from, of $435,000.00?

[Husband] So those come from the SBA.

[Trial court] So are you telling me as of last year you had no SBA loans?

[Husband] Last year.No, there were two PPP loans that were forgiven.There was one EID-L loan and then there was a second distribution that they just added on top of the original loan.That’s why it is $360,000.00 instead of whatever the original amount was.

[Trial court] So according to your tax return, at the end of the year you had zero of EID loan and you had $130,345.00 in PPP loan.The testimony has been the PPP loan was forgiven so that would be zero of the last year.But Exhibits 10 and 11 shows $435,000.00 worth of loans, which I guess is a SBA loan?

[Husband] There’s two separate loans there.One is the EID, the $93,000.00, $95,000.00 that’s the loan from when I started the business, the construction loan.

[Trial court] Okay.But there’s nothing on your tax returns that you have a loan.

[Husband] I don’t know.I don’t know how to answer that.I can call my accountant about that, I guess, I don’t know.

[Trial court] Well what do you think the $349,000.00 loan is for?And did that occurred [sic] just this year?

[Husband] The $349,000.00?

[Trial court] Yes.That’s Exhibit 11.All it says is: Dispersed, current, originated 6-16 of 2020, again, it is not on your tax return and current principle balance is $340,600.00.

[Husband] So that’s the original EID loan that they added $200,000.00 and some to just a few months ago.And I haven’t had to make any payments on that, maybe that’s why it is not on the tax return, I don’t know.

[Trial court] And why did - was it an open loan that you could take disbursements when you wanted?

[Husband] applied once and they gave me - they did some calculation and gave me a number and then I got another email a year later and they said the second distribution is coming and you’re eligible so fill this out and then they do another calculation and add to it.

[Trial court] And was this during the COVID years?

[Husband] Yes.

[Trial court] So you don’t have to pay this back now?

[Husband] Not right now, I will.

[Trial court] And what do you have that shows that you’re ever going to have to pay it back because, again, it is not on your tax returns?

[Husband] I guess the loan documentation that shows that it is deferred for, I believe, 18 months and then it begins - the payments begin but interest accrues during that time.

[Trial court] So the $95,000.00 says your payoff date is 8-1 of ‘22.

[Husband] That is if I pay it off, that’s the payoff.

[Trial court] Okay.It says no accrued interest, no outstanding interest, total interest is zero, undisbursed is zero, there’s no daily interest accrual, which tells me there’s not a loan.

[Husband] The SBA website isn’t very good at the printouts.

[Trial court] Are both of these supposed to be SBA loans?

[Husband] It is through the SBA, yes that’s where I got them.

[Trial court] And are they all part of the COVID money?

[Husband] No, the first one is not, the $90,000.00 something was my construction loan.

[Trial court] So I’m at a place where it is hard for me to show 10 and 11 when I have a tax return that doesn’t show them.I understand that $200,000.00 was taken out this year but I don’t understand why there’s no - nothing on your tax returns and you told me the other Exhibits weren’t accurate, but they don’t have them either.So all I have is a couple of pieces of paper, Exhibits 11 and 2, [sic] saying there’s loan numbers, tax ID numbers and the money and it doesn’t really do anything for me to tell me whether or not because the controlling documents to me are income tax returns and profit and loss.So I don’t know if we have any other documentation or not.

Express Care’s Value

Husband valued Express Care at $500,000 based on the company’s assets minus its debts.Husband testified the 2020 Loan consisted of two distributions, and the second distribution, which totaled $225,000, was placed into Express Care’s checking account.As to Express Care’s debt, Husband testified the business had an indebtedness of $484,570.As to Express Care’s assets, Husband testified the business had three vehicles and "$734,000.00, give or take" but believed approximately $300,000 should be subtracted from that amount...