Gray v. Gray

• Citation: 609 A.2d 694
• Parties: Mary Ann GRAY v. Gordon E. GRAY.
• Decision Date: 26 May 1992
• Court: Maine Supreme Court

Page 694

609 A.2d 694

Mary Ann GRAY v. Gordon E. GRAY.

Supreme Judicial Court of Maine.

Argued March 20, 1992.

Decided May 26, 1992.

Laurie Kadoch, Patricia Nelson-Reade (orally), Verrill & Dana, Portland, for plaintiff.

Robert W. Harrington (orally), Boston, Mass., for defendant.

Before WATHEN, C.J., and ROBERTS, GLASSMAN, CLIFFORD and COLLINS, JJ.

CLIFFORD, Justice.

Gordon Gray appeals from a divorce judgment entered in the Superior Court (Cumberland County, McKinley, A.R.J.). Gordon contends that the court erred in the value it placed on the businesses he operates and in its determination that those businesses had marital as well as nonmarital components, and abused its discretion in dividing the marital component of that property. Gordon further contends that the court abused its discretion in awarding alimony and attorney fees to Mary Ann Gray. We discern no abuse of discretion and, except for a mathematical calculation in the amount of attorney fees, no error. Accordingly, after modifying the award of attorney fees, we affirm the judgment.

Gordon and Mary Ann began living together in May of 1980, and married in February 1983. They separated in July 1986, and Mary Ann brought the within divorce action in March of 1988.

Gordon has considerable experience in the insurance industry and was part owner and employee of an insurance related business in Massachusetts before moving to Maine and living with Mary Ann. During their period of cohabitation prior to marriage, Gordon experienced financial difficulties. He started up businesses, most notably Group Marketing Services, Inc. and Key Benefits Network d/b/a Benefit Management of Maine, Inc., ¹ working out of the home owned by Mary Ann. Mary Ann, an executive at UNUM, provided guidance and acted as a sounding board for ideas in the development of the new ventures. When the businesses progressed to the point where Gordon moved their operation out of Mary Ann's home and into rented office space, Mary Ann executed a mortgage on her home in order that office furniture could be purchased.

At the time the parties were married in 1983, both were pursuing full-time careers; Gordon managing his companies, and Mary Ann as an executive with UNUM. During the first year of the marriage, Gordon earned about $36,000 and Mary Ann about $33,000. At the time of the divorce, in early 1991, Gordon was earning about $300,000, while Mary Ann's salary was about $55,000-60,000. They purchased real estate and a home on Sheehan Island in Raymond, and Gordon acquired an ownership interest in a South Portland condominium. Gordon also acquired Fast Pace Stables during the marriage. ²

The court determined the value of Gordon's business enterprises to be $900,000, ³ $400,000 of which the court found to be marital. Of the $400,000 marital component, the court set aside $100,000 to Mary Ann, and the balance to Gordon. The court also awarded alimony to Mary Ann in the amount of $1500 per month and further ordered Gordon to pay attorney fees and expenses incurred by Mary Ann in the divorce proceedings in the amount of $52,725.44. Gordon filed a timely appeal from the Superior Court judgment.

I. VALUATION AND ALLOCATION OF BUSINESS INTERESTS

Gordon contends that the divorce court erred in the value it placed on Gordon's business entities, erred in its determination that $400,000 of that value was marital property, and in any event, set aside an excessive portion of that amount to Mary Ann. Although the court excluded certain valuation evidence submitted by Gordon shortly before trial, ⁴ there was extensive evidence, most in the form of expert testimony, presented by both parties relative to the value of Gordon's business interests. Jack Ketchum, Mary Ann's expert witness, testified that the value of those businesses was $1,300,000. David Hawkes, the expert retained by Gordon, testified to a substantially lower value. The court found the value of all of Gordon's businesses to be $900,000. ⁵ The court further found that of the $900,000, $400,000 represented the increase in value of the business entities during the marriage and was marital property. Of the $400,000, the court set aside $100,000 to Mary Ann, and $300,000 to Gordon.

A divorce court's determination of what property is marital and what is nonmarital is reviewed for clear error and will not be disturbed if there is competent evidence in the record to support it. West v. West, 550 A.2d 1132, 1133 (Me.1988). The record discloses no clear error in the court's finding the value of Gordon's businesses to be $900,000. The court correctly recognized that the valuation of closely held business interests is not an exact science. The value determined by the court is within the range of value evidence presented at trial. See Shirley v. Shirley, 482 A.2d 845, 849 (Me.1984) (finding value within range of expert opinion is valid provided conclusion reached through independent view of evidence). We give due regard to the opportunity of the trial court to judge the credibility of the witnesses and weigh the evidence. See Mattson v. Mattson, 376 A.2d 473, 476 (Me.1977); M.R.Civ.P. 52(a).

Nor did the court clearly err in finding that $400,000 of the value of the businesses is attributable to their growth during the marriage. There is ample evidence that the businesses grew rapidly during the period of the marriage. Financial statements for Benefit Management, Inc. and Group Marketing Services, Inc. signed by Gordon in 1983 (the year of the marriage) place values on the businesses of $550,000. A 1984 statement gives a value of over $1 million, and a 1988 statement sets a value of over $2 million. The court found that the increase in value of the businesses during the marriage resulted primarily from the efforts of Gordon rather than from the inherent value of the property itself. Such an increase in value of otherwise separate property during the marriage attributable to marital effort is considered marital property subject to distribution. MacDonald v. MacDonald, 532 A.2d 1046, 1049-50 (Me.1987). Gordon's additional contention that the court's finding is based on faulty financial data is unpersuasive, especially in view of Gordon's failure to provide complete and timely financial information in regard to his business interests.

Gordon also argues that the $100,000 set aside to Mary Ann from the $400,000 of the value of the businesses found to be marital is excessive. Pursuant to 19 M.R.S.A. § 722-A(1) (1981), the court is directed to divide marital property "in such proportions as the court deems just, after considering all relevant factors." Among those factors are the contribution of each spouse to the acquisition of the marital property, including the contribution of a spouse as homemaker, (section 722-A(1)(A)), the value of the property set aside to each spouse (section 722-A(1)(B)), and the economic circumstances of each spouse at the time of the division (section 722- A(1)(C)). The court's disposition of marital property is reviewed for abuse of discretion. Axtell v. Axtell, 482 A.2d 1261, 1263 (Me.1984). In this case, in view of the value of property set aside to each spouse, and the disparity in income between the parties, the court's distribution to Mary Ann of an amount equal to twenty-five percent of the value of Gordon's businesses found to be marital property does not constitute an abuse of discretion.

II. ALIMONY

Gordon contends that because Mary Ann has a financially secure career and earns $60,000 per year, has a vested interest in a pension plan, and owns a considerable amount of property (partly as a result of the divorce distribution), she is able to support herself and has no need for financial help from Gordon, at least not in the amount of $1500 per month. Gordon contends that this case is markedly different from that of a wife who has no career and few, if any, marketable skills. Accordingly, Gordon argues that it was an abuse of discretion for the court to award alimony. We disagree. A divorce court is vested with broad powers to order one spouse to pay alimony to the other if the amount is reasonable and takes into account the paying spouse's ability to pay. Jacobs v. Jacobs, 507 A.2d 596, 600 (Me.1986). In viewing alimony awards we defer to the discretion of the trial court unless "the court has violated some positive rule of law or has reached a result which is plainly and unmistakably an injustice that is 'so apparent as to be instantly visible without argument....' " Bryant v. Bryant, 411 A.2d 391, 395 (Me.1980) (quoting Capron v. Capron, 403 A.2d 1217, 1218 (Me.1979)).

Although we agree with Gordon that the essential underlying purpose of alimony is the maintenance and support of the payee spouse, Skelton v. Skelton, 490 A.2d 1204, 1207 (Me.1985), 19 M.R.S.A. § 721(1) (Supp.1991) sets out the many factors that a divorce court must take into account in determining whether and in what amount alimony should be awarded. ⁶ The divorce judgment in this case reflects that the court considered those factors. The judgment refers to the disparity between the parties in earning and in property distribution and the "very high life style" enjoyed by the parties during their marriage. The judgment also notes Gordon has continued such a life style following their separation. The earning potential, ability to pay, contributions of one party to the other's earning potential, and standard of living enjoyed during the marriage are all legitimate factors to be considered by the court, as they were in this case. There is evidence in the record that Mary Ann helped Gordon to get a start in his businesses...