Marriage of Dieterle, In re, 21464

• Decision Date: 06 February 1998
• Docket Number: No. 21464,21464
• Parties: In re the MARRIAGE OF Brian D. DIETERLE and Laurie S. Dieterle. Brian D. DIETERLE, Petitioner-Respondent, v. Laurie S. DIETERLE, Respondent-Appellant.
• Court: Missouri Court of Appeals

Page 556

960 S.W.2d 556

In re the MARRIAGE OF Brian D. DIETERLE and Laurie S. Dieterle.

Brian D. DIETERLE, Petitioner-Respondent, v. Laurie S. DIETERLE, Respondent-Appellant.

No. 21464.

Missouri Court of Appeals,

Southern District,

Division One.

Feb. 6, 1998.

James K. Justus, Justus & McCullah, Forsyth, for Appellant.

Gary W. Allman, Cantwell, Allman, Smith & Trokey, LLP, Branson, for Respondent.

GARRISON, Presiding Judge.

Laurie Dieterle ("Wife") appeals from a decree dissolving her marriage to Brian Dieterle ("Husband"). She complains that the trial court erred in valuing Husband's medical practice, and in granting sole custody of the parties' minor child ("Daughter") to Husband. We affirm in part, and reverse in part.

Husband and Wife met in St. Louis in October 1989, and married on March 30, 1990. At that time, Husband, a physician, was in training as a resident; Wife was a student. Wife had two young sons from a prior marriage, who lived with her and Husband; Husband had two grown daughters and a son from previous marriages. On April 15, 1991, Daughter was born. Husband completed his residency in 1992, and the family moved to Branson, Missouri, where Husband assumed the medical practice of another physician.

The couple had agreed that Husband would practice medicine full-time and that Wife would remain at home with the children. This arrangement continued until the parties separated on January 27, 1995, the date Husband filed his petition for dissolution. On December 27, 1996, the trial court dissolved the marriage, awarded sole custody of Daughter to Husband, granted Wife visitation rights, divided the couple's property and debts, and awarded Wife temporary maintenance.

This court will affirm a dissolution decree unless no substantial evidence supports it, unless it is against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law. T.B.G. v. C.A.G., 772 S.W.2d 653, 654 (Mo.banc 1989); Murphy v. Carron, 536 S.W.2d 30, 32 (Mo.banc 1976). We are mindful that the trial court has a superior opportunity to assess the credibility of witnesses, and we recognize that it is free to believe all, part, or none of the testimony of any witness. T.B.G., 772 S.W.2d at 654. When determining the sufficiency of the evidence, we accept as true all evidence and inferences therefrom that are favorable to the trial court's decree, and disregard all contrary evidence. Id. We will reverse a decree as "against the weight of the evidence" only if we are firmly convinced that it is wrong. Id.

Wife raises two points on appeal, the first of which relates to the trial court's valuation of Husband's medical practice. She contends that the trial court erroneously concluded that Husband's medical practice had no equity, because "it failed to take into account the accounts receivable, patient charts, and goodwill of the practice ... and included three debts which were not practice-related."

The evidence indicated that Husband paid the doctor whose practice he "assumed" $7,400 for equipment, and that he later paid approximately $5,000 for a computer. Husband's opinion was that the equipment used in his practice was worth approximately 50 percent of those amounts. Husband testified that he had accounts receivable of $85,000, which are only partially collectible, and that he had 3,500 patient charts. Apparently anticipating evidence to be presented by Wife, Husband called the chief financial officer of Skaggs Hospital in Branson, who testified that Skaggs had purchased three or four medical practices, but had paid only for the fixed assets. He testified that the hospital had not purchased or paid for accounts receivable or patient charts.

Wife called an expert who testified that accounts receivable and patient charts, as well as goodwill, are part of the value of a medical practice. He valued Husband's medical practice at $70,000, which included amounts for all of those components.

The trial court adopted neither value, and instead found that "certain debts exist and that [Husband's] practice would not have existed were it not for said debts." These debts were to Student Loan Corporation in the amount of $47,787, to Husband's parents in the amount of $54,000, and to Skaggs Hospital in the amount of $16,000, for a total of $117,787. The trial court then held that the practice had no equity, presumably because these debts exceeded even the highest value placed on the practice by the evidence.

It is well-settled that debts are not marital property, and that trial courts are not obliged to allocate them between the parties in a dissolution. Reisenleiter v. Reisenleiter, 926 S.W.2d 914, 917 (Mo.App. E.D.1996). Trial courts are, however, required to consider marital debts in establishing a fair division of marital property. Id. Marital debts are debts incurred subsequent to or in contemplation of marriage. In re Marriage of Welch, 795 S.W.2d 640, 643 (Mo.App. S.D.1990). While the existence of marital debts affects the overall net value of the marital estate, a marital debt does not alter the value of a specific marital asset unless it is secured by a lien or other encumbrance on that asset. Oldfield v. Oldfield, 666 S.W.2d 17, 19 (Mo.App. E.D.1984).

In the instant case, Husband testified that he incurred the debts to his parents and to Student Loan Corporation to finance his medical education, which he completed in 1988, one year before he met Wife. These debts, apparently not incurred subsequent to or in contemplation of the marriage, are not marital debts Welch, 795 S.W.2d at 643. The Skaggs Hospital debt was incurred to pay the family's living expenses when they first moved to Branson in 1992, and apparently was marital in nature. Nowhere does the record indicate, however, that any of these three debts encumbers Husband's medical practice, or any individual component thereof. Nor does either party claim that monies from these loans were used to acquire equipment, supplies, or other assets for the practice.

The trial court erred when it utilized these three debts in determining the value of Husband's medical practice. Oldfield, 666 S.W.2d at 19. While the debt to Skaggs Hospital is apparently marital in nature and could be considered in the overall evaluation, as well as distribution, of the marital estate, Welch, 795 S.W.2d at 642, the other two debts are not. If valued without being diminished by those debts, Husband's practice may be a significant part of the marital estate. Reconsideration of the value of the practice, and consideration of the Skaggs debt as marital in nature, may, in the trial court's discretion, affect the division of the marital estate. Accordingly, we reverse the portion of the trial court's decree valuing Husband's medical practice and dividing the marital property, and remand this case for further proceedings consistent with this opinion.

In this regard, Wife also contends that the trial court erroneously failed to consider the accounts receivable, patient charts, and goodwill as a part of the value of Husband's practice. The conclusion that these matters were excluded in the valuation is not determinable from the judgment. In concluding that the medical practice had no equity, and therefore no value for division purposes, the trial court considered the debts referred to above, the total of which exceed even the highest of the valuation opinions. One of those opinions included consideration of the items which Wife now argues were ignored by the court. The trial court's methodology, however, made it unnecessary for it to determine whether those items should be considered in valuing the practice. On remand, attention is directed to cases such as Theilen v. Theilen, 847 S.W.2d 116, 120 (Mo.App. W.D.1992), which instructs trial courts to consider the value of tangible assets, accounts receivable, and monetary assets in determining the value of a professional practice, as well as Hanson v. Hanson, 738 S.W.2d 429, 434-436 (Mo.banc 1987), which discusses the necessary evidentiary support required to consider goodwill as an ingredient in value. See also In Re Marriage Of Hershewe, 931 S.W.2d 198, 203-204 (...