Griggs v. Griggs
| Docket Number | 22-AP-186 |
| Decision Date | 10 March 2023 |
| Parties | Chelsea Griggs v. Christopher Griggs* |
| Court | Vermont Supreme Court |
In the case title, an asterisk (*) indicates an appellant and a double asterisk (**) indicates a cross-appellant. Decisions of a three-justice panel are not to be considered as precedent before any tribunal.
APPEALED FROM: Superior Court, Addison Unit, Family Division CASE NO. 20-DM-00837 Trial Judge: Thomas Carlson
ENTRY ORDER
In the above-entitled cause, the Clerk will enter:
Father appeals from the family division's final divorce order challenging its imposition of shared parental rights and responsibilities (PRR) regarding the parties' child and its division of property. We affirm in part and reverse and remand in part.
Following a five-day trial, the family division issued a final divorce decree including findings of fact and conclusions of law which are summarized in relevant part as follows. The parties met in 2007 and jointly purchased land in 2008, where they built a home, both contributing cash and sweat equity. They married in 2010. Over the course of the next decade or so the parties relocated several times and purchased and renovated various properties as part of a family plan to invest in real property. Mother filed this divorce action in December 2020.
At the time of trial, mother was residing in a home that she purchased in the fall of 2021 in Middlebury, Vermont. Since July of 2021, mother has worked full-time as the general manager of Cookie Love in North Ferrisburgh, Vermont, earning a salary of $50,000 per year plus a modest annual bonus. Mother previously worked as the owner and manager of the Inn on the Green, a business and property that the parties purchased together in 2018 and sold in 2021. Before that, she worked in administrative roles at schools as well as other jobs, which provided health insurance and childcare opportunities for the family. Throughout the marriage, mother worked together with father in improving and managing their rental properties.
Father is a licensed electrician and started his own electrical contracting business known as East View Electrical Services in 2010. He remains the sole owner and manager.
Father's electrical business was the largest asset in the marital estate. Each party hired an expert appraiser to analyze East View, and both testified as to their respective opinions of its value. Both experts used the capitalized-earnings approach to value the business. They separately calculated an annual net cash flow and analyzed the risks and expected growth rate for the business, ultimately arriving at an amount that each believed a reasonable investor would pay for it. Mother's expert arrived at a value of $719,000, and father's expert arrived at a value of $580,000. While the experts' respective calculations differed in minor ways, the most significant contrast was that mother's expert kept approximately $87,600 of Covid Paycheck Protection Program (PPP) funds in the business income for 2020, while father's expert removed them as a one-time windfall. The court found credible mother's expert's statement that currently valuation professionals tend to leave PPP income in because the intent of the PPP program was to replace lost income to encourage employers to keep employees on payroll during the Covid pandemic. The court noted that father's expert recognized that "reasonable experts could differ" on whether to count PPP funds. The court found mother's expert's testimony more convincing and adopted that expert's valuation of $719,000 for East View.
The parties' jointly owned real-estate portfolio and rental business comprised the other significant marital assets. When this proceeding began in 2021, the parties owned several properties together. One was a rental property located on West Shore Road on Lake Dunmore in the Town of Salisbury, consisting of three small residences. The parties purchased the Lake Dunmore property in June 2020, and gutted and renovated two of the units. and then rented out all three. Another property was a home located on Schoolhouse Road in Middlebury, where the parties lived together from 2019 until they separated in 2021. After separating, mother continued to live in this home while father moved into one of the three small homes on the Lake Dunmore property. The parties sold the Schoolhouse Road property in October 2021 and net proceeds of $231,891 were placed in escrow.
A third property was located on Lake Dunmore Road in Salisbury. The parties purchased this home with an accessory dwelling unit in 2017 for $385,000. They used it as their primary residence for some period and otherwise rented it out. They still owned it at the time of trial.
The parties purchased the Inn on the Green for $1,050,000 in 2018, and the down payment and cost of improvements came out of East View accounts. Mother managed the Inn while also taking on primary parenting duties, made possible by the flexible schedule of that work. The parties sold the Inn to Middlebury College in the fall of 2021 for $1,285,000. Accounting for the sale proceeds and related issues were the subject of disputes both in discovery and at trial, which are addressed in greater detail below. Ultimately, proceeds of $309,196 were placed in escrow along with $6500 refunded from a real estate commission.[1]
At the time of the final merits hearing, the parties' real-estate portfolio consisted of three properties: mother's home in Middlebury and the two Salisbury properties-Lake Dunmore Road and West Shore Road. Based on accounting evidence submitted by the parties and expert opinions, the court determined the remaining equity value of each property, totaling $616,000.
The marital estate also included numerous accounts from the parties' various holding and rental companies, as well as retirement and checking accounts. The court found that these accounts contained a total remaining value of $379,412. The court did not attempt to calculate the value of operating accounts of East View. The court noted there was not clear testimony as to their current holdings, and the valuation experts both assumed that all business assets were necessary to generate the income that they used as the basis for their valuations. The court also noted that, based on both parties' testimony, the East View accounts, while ostensibly business accounts, were frequently intermingled with the parties' rental property cash flow, proceeds from real estate sales, payment of joint personal expenses, and father's sole personal expenses.
The court also found that mother used Inn business accounts for her own personal expenses to some extent. Despite intermingling of various business and personal accounts by both parties, the court found that neither party proved "to any degree of likelihood that the other party has hidden or diverted funds."
The court found that the parties' rental-property business and real-estate dealings were an equal joint effort of investment, improvement, maintenance, and management. It found that, overall, the parties contributed roughly equally toward the growth of the marital estate throughout the marriage. After considering the statutory factors, the court decided that an approximately equal split of the marital estate was equitable.
The court awarded father the West Shore Road property where he had been living, as well as the East View business. It awarded mother her home in Middlebury and the Lake Dunmore Road property. The court split one retirement account equally between the parties and awarded all remaining accounts to mother. As calculated by the court, father received $1,036,167 in assets while mother received assets worth $1,058,797.
The court further ordered the following accounting related to this division of property:
The court also awarded father a disproportionate share of tangible personal property, including a tractor, tractor equipment and trailers, boats, and a motorcycle, to compensate for his slightly lower award of accounts and real property.
The parties have one minor child together. Mother was the primary caregiver throughout the marriage, which allowed father to work the long hours he needed to start and grow East View. The court found that father was also a consistently active and engaged parent. In March 2021, after this...
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