In re Marriage of Ackerman

• Citation: 146 Cal.App.4th 191,52 Cal.Rptr.3d 744
• Decision Date: 27 December 2006
• Docket Number: No. G034259.,No. G034582.,G034582.,G034259.
• Court: California Court of Appeals Court of Appeals
• Parties: In re MARRIAGE Of Boris M. and Ann E. ACKERMAN. Boris M. Ackerman, Respondent, v. Ann E. Ackerman, Appellant.

52 Cal.Rptr.3d 744

146 Cal.App.4th 191

In re MARRIAGE Of Boris M. and Ann E. ACKERMAN.

Boris M. Ackerman, Respondent, v. Ann E. Ackerman, Appellant.

No. G034582.

No. G034259.

Court of Appeal, Fourth District, Division 3.

December 27, 2006.

Law Offices of Brian G. Saylin, Brian G. Saylin, Orange; Law Offices of Ellen G. Winterbottom, Ellen G. Winterbottom; Law Offices of Jeffrey W. Doeringer and Jeffrey W. Doeringer, Huntington Beach, for Appellant.

Keith E. Dolnick, Newport Beach, for Respondent.

OPINION

RYLAARSDAM, J.

This is a consolidated appeal arising out of the dissolution of the marriage of Ann E. Ackerman (wife) and Boris M. Ackerman (husband). In the two appeals, wife respectively challenges the trial court's valuation of husband's medical practice and the award of child and spousal support. We reject those challenges and affirm the judgment.

FACTS

The parties married in August 1991 and legally separated in September 2001. During the marriage, they had two children. At the time of separation, Ethan was three and Audrey was one. Ethan was diagnosed with autism at age two and a half.

Husband is a licensed physician engaged in the practice of plastic surgery. He obtained his physician's license in 1981 and received his board certification in plastic and reconstructive surgery in 1987, at which time he established his medical practice as a sole proprietorship known as Boris M. Ackerman, M.D. Wife signed a premarital agreement, reflecting the practice was husband's separate property with a value of $162,000 as of the date of marriage. Any increase in the medical practice's value would be deemed community property and subject to division upon dissolution. Upon dissolution, the practice would be appraised by a forensic accountant utilizing any generally accepted methodology for valuation.

Wife was not employed outside the home during marriage. She graduated from law school in 1995 and took the California state bar examination in 1998, but was unsuccessful.

The valuation of the medical practice was litigated, with each party presenting his or her own forensic accountant. The court received briefs and then made its final ruling. Wife filed objections to the proposed statement of decision. The trial court responded to each objection in a detailed minute order. Judgment on the bifurcated issue of the medical practice was entered some months later. Wife filed a notice of appeal from that judgment.

In the meantime, the parties litigated support. They stipulated their monthly controllable cash flow at the date of separation was $61,000. The parties' 2001 jointly-filed tax return showed a net income of approximately $36,000. The court took half that amount, rounded it up to $20,000 as a reasonable estimate of half of the community net income, and determined that to be the marital standard of living for each party.

For spousal support, husband was ordered to pay wife $7,500 per month commencing January 15, 2004, $6,500 per month commencing September 1, 2004, and $3,000 per month commencing September 1, 2005. In August 2006, spousal support terminated and in August 2009, jurisdiction terminates. The order was based on three assumptions: (1) wife would review for the bar exam and take it in July 2004; (2) if she passed, she would obtain employment as an attorney before September 1, 2005, when the step-down order took effect; (3) regardless of whether she passed, she would be able to secure employment by September 1, 2004 and earn at least $3,000 a month as a paralegal or legal assistant, based on her own testimony and the vocational examiner's report. If the assumptions do not materialize, the order allows wife to move to modify its terms.

Child support was ordered as follows: $10,070 per month for seven and one-half months commencing January 15, 2004, then $9,080 per month commencing September 1, 2004. The reduction took into account wife's potential earning capability.

Wife filed a notice of appeal from this judgment as well. We consolidated the two appeals for all purposes.

DISCUSSION

1. Introduction

Wife challenges the trial court's valuation of husband's medical practice and award of child and spousal support. In assessing these contentions, we begin with the well-established rule that "[a] judgment or order of a lower court is presumed to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness. [Citations.]" (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133, 275 Cal.Rptr. 797, 800 P.2d 1227.) The deferential abuse of discretion standard governs our review. (In re Marriage of Cheriton (2001) 92 Cal App.4th 269, 282-283, 304, 111 Cal.Rptr.2d 755 [child and spousal support orders] (Cheriton); In re Marriage of Nichols (1994) 27 Cal.App.4th 661, 670, 33 Cal. Rptr.2d 13 [determination of goodwill value].) Generally, "the appropriate test of abuse of discretion is whether or not the trial court exceeded the bounds of reason, all of the circumstances before it being considered. [Citations.]" (In re Marriage of Connolly (1979) 23 Cal.3d 590, 598, 153 Cal.Rptr. 423, 591 P.2d 911.) To the extent that a trial court's exercise of discretion is based on the facts of the case, it will be upheld "as long as its determination is within the range of the evidence presented. [Citation.]" (In re Marriage of Nichols, supra, 27 Cal.App.4th at p. 670, 33 Cal.Rptr.2d 13.) Conversely, a court abuses its discretion if its findings are wholly unsupported, since a consideration of the evidence "is essential to a proper exercise of judicial discretion. [Citation.]" (Johns v. City of Los Angeles (1978) 78 Cal.App.3d 983, 998, 144 Cal.Rptr. 629.)

Findings will be normally implied to support judgments or orders if supported by substantial evidence. (In re Marriage of Aninger (1990) 220 Cal. App.3d 230, 238, 269 Cal.Rptr. 388, overruled by statute on another ground as stated in In re Marriage of O'Connor (1997) 59 Cal.App.4th 877, 882, 69 Cal. Rptr.2d 480.) But where a party states objections, and the statement of decision does not resolve a particular issue, "it shall not be inferred on appeal ... that the trial court decided in favor of the prevailing party ... on that issue." (Code Civ. Proc., § 634.)

2. Medical Practice Valuation

Wife contends the trial court's valuation of husband's medical practice should be reversed because the value of the tangible assets—specifically cash, medical equipment, and an excluded asset—and the goodwill value ascribed to the practice were not supported by substantial evidence. Additionally, she argues, "The court failed to make a finding as to [her] community interest in the rents received ..." from the surgical center that was built during marriage as part of husband's medical practice. We address these in turn.

a. Tangible Assets

i. Cash

The court found the total cash in husband's medical practice was $35,388, but deducted "accrued liability" to arrive a net figure of $13,388. Wife argues this was error because there were only two accounts at issue and one of those "had only one outstanding check in the amount of $2,406[,]" while the other had "no outstanding checks." Since her accountant, Glenn Mehner, "reconciled those accounts as of the date of separation[] at $30,442," she asserts "[i]t is unknown how the court could have selected any other number" and that, because she objected, we may not infer the trial court decided in husband's favor on this issue.

No inference is necessary. At the hearing on wife's objections, the court explained it arrived at $13,388 by taking "either outstanding liabilities or outstanding checks, and ... took it off the $35,000." This finding is supported by Mehner's valuation report. At page 6 of that report, Mehner explains that $35,388 "[represents cash balance at 8/31/01 in [husband's two accounts]" but that $22,000 is "[estimated as approximately one-half months [sic] expenses based on average monthly expenses for the eight months end[ing] August 31, 2001." Deducting the expenses from the cash balance yields $13,388, the number reached by the court.

ii. Medical Equipment

Wife contends the court's determination the medical equipment had a current value of $10,000 lacked substantial evidence. We disagree.

The record is somewhat confusing on this issue because the court's oral and written rulings do not contain any references to "medical equipment." Rather, the only time during its oral ruling that it mentioned $10,000 is when it said it "didn't believe that the office furniture exceed[s] $10,000[,] so [it] used that." Similarly, both the proposed and signed statement of decision, as well as the signed judgment, "add[] back $10,000 for the office furniture" to the amount awarded for goodwill. Neither party addresses this ambiguity but instead assumes the court's references to "office furniture" includes medical equipment. We will do the same.

In his report, husband's expert, James Christensen, identifies the categories of office furniture, leasehold improvements, and medical equipment, along with their corresponding dates of purchase, original cost, depreciation, book value as of December 2001, and estimated current value. The original cost of the office furniture and medical equipment together totaled $111,370. After depreciation, their book value was $7,326. Christensen estimated their current value to be approximately $11,000.

Rather than relying on the estimated current value, the court used an accelerated or straight-line depreciation method and placed a $10,000 value on the furniture and medical equipment. According to Christensen's chart, the original cost of the office furniture and medical equipment in 1995-1996 was $46,278 and $65,092, respectively. By December 2001, their book value had depreciated to $3,455 and $3,871. Wife has not shown the court abused its discretion by rounding the total up to $10,000.

Wife claims Christensen's only basis for his estimate of the current value...