Marriage of Bayer, In re, 82CA1106
| Decision Date | 23 August 1984 |
| Docket Number | No. 82CA1106,82CA1106 |
| Citation | 687 P.2d 537 |
| Parties | In re the MARRIAGE OF James T. BAYER, Appellant, and Patricia S. Bayer, Appellee. . III |
| Court | Colorado Court of Appeals |
Epstein, Epstein & Lozow, P.C., Peter L. Franklin, Frederick Epstein, Denver, for appellant.
Plaut, Lipstein & Beckman, P.C., Frank Plaut, Bruce Gordon, Lakewood, for appellee.
In this dissolution of marriage action husband appeals from the permanent orders relative to maintenance, distribution of property, and the award of attorney fees and expert witness fees. We affirm.
Husband and wife had been married thirty-three years. Husband was a successful attorney who reported earnings of $157,500 in 1981. Wife was self-employed as a public relations consultant. She earned $7,000 in 1981, but testified that she would run a deficit over the long run.
The court valued the marital estate at $665,389. It stated that the husband should receive 60 percent of the property, but exceeded this percentage by awarding the husband marital assets valued at $489,102. To compensate the wife, husband was ordered to pay the wife $9,270 in cash, and to execute a promissory note to her for $84,000, with principal payable at the rate of $500 per month. The note also bore interest at the rate of 1 percent per month on the declining balance. The court awarded wife $2,700 per month maintenance, specifically retaining jurisdiction to modify that amount. As well, husband was ordered to pay $6,000 toward wife's attorney and expert witness fees.
Husband contends that the court committed several errors in valuing and in dividing the marital property. First, he argues that the court erred in finding that his accounts receivable constituted marital property and that their value was $62,970. We reject this argument.
Husband testified that, under his law firm's partnership agreement, his retirement or death would entitle him, or his estate, to 90 percent of his outstanding receivables. At the time of the hearing, his outstanding receivables were $153,012.
The receivables, which were awarded to husband, represent debts for services already rendered, and husband's estate would be entitled to them upon his death. Consequently, they constitute "marital property" within the meaning of § 14-10-113(1), C.R.S. (1983 Cum.Supp.). Ellis v. Ellis, 191 Colo. 317, 552 P.2d 506 (1976); In re Marriage of Johnson, 40 Colo.App. 250, 576 P.2d 188 (1977).
Nor did the court err in its valuation of the receivables. Moss v. Moss, 190 Colo. 491, 549 P.2d 404 (1976), cited by husband, did not hold that receivables are not subject to valuation; it merely indicated the breadth of the trial court's discretion when considering the valuation and distribution of shareholders' interests in a professional corporation.
Here, the court reduced the value of the receivables by 10 percent as provided in the partnership agreement and, in accordance with the testimony of the wife's expert, reduced the value an additional 10 percent for uncollectibility. The court further reduced the value to compensate husband for income tax consequences; its final valuation of $62,970 was approximately 41 percent of the total amount of $153,012. These findings are supported by evidence in the record, and we will not disturb them on review. In re Marriage of Hoffman, 650 P.2d 1344 (Colo.App.1982).
Husband next contends that the trial court erred because it failed to reduce the value of his retirement funds to account for the tax consequences of early withdrawal. There was conflicting expert testimony whether proper valuation of these funds should take into account early withdrawal penalties.
Here, the tax evaluation of husband's expert was based solely on hypothetical actions which, if undertaken, would be wholly within the control of the husband. There was no evidence that husband contemplated making an early withdrawal of these funds. In light of the evidence before it, the trial court did not err in rejecting this testimony and basing its valuation on the testimony of the wife's expert.
Citing In re Marriage of Woodrum, 618 P.2d 732 (Colo.App.1980), husband next contends that the trial court erred in awarding him "gross" rather than "net" equity in a mountain condominium. He argues the court should have subtracted capital gains tax which would be imposed were he to sell the property. We disagree.
Woodrum stands for the proposition that the trial court has discretion in determining whether "an equitable distribution can best be achieved by considering the net equity rather than the gross equity" Here, husband testified that he desired to keep the condominium because it served as his mountain retreat. Since there was no evidence of a potential sale of the property, and since the entire property was awarded to husband, there...
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