Marriage of Roullier, In re, 87-95
| Decision Date | 10 December 1987 |
| Docket Number | No. 87-95,87-95 |
| Parties | In re the MARRIAGE OF Robert H. ROULLIER, Petitioner and Appellant, and Erica Lee Roullier, Respondent and Respondent. |
| Court | Montana Supreme Court |
Jon E. Ellingson, Ellingson & Moe, Missoula, for petitioner and appellant.
Datsopoulos, MacDonald & Lind, Ronald B. MacDonald, Missoula, for respondent and respondent.
This is a dissolution case heard before the Honorable Douglas Harkin without a jury in May of 1986. The petitioner-husband, Robert H. Roullier (hereinafter, Robert), appeals the District Court decision. The respondent-wife is Erica Roullier (hereinafter, Erica). We modify the portion of the judgment ordering a payment from Robert to achieve the purpose of equalizing the division of the marital estate, and affirm in all other respects.
Robert and Erica were married September 24, 1977 and remained married for approximately seven years. One child, a daughter named Rikki, was born to the marriage on September 15, 1978. Robert filed for dissolution February 26, 1985. At that time, Robert was 38 years of age and Erica was 34 years of age.
A decree of dissolution was entered December 30, 1985. The parties were unable to agree on the issues of child custody, support, maintenance, and the division of the marital estate, and these matters were reserved for trial. Pending trial, the parties stipulated to joint custody with Erica as the primary custodial parent, child support of $350 per month, and temporary maintenance of $1,000 per month beginning May 15, 1985.
Robert is president and chairman of the board of Davis Transport, Inc., a trucking corporation, and controls 57.16% of the corporate stock. He also controls the same percentage interest in a related partnership, Trade Street Enterprises. Previously, Robert worked as an accountant. His current salary is approximately $18,000 per month. A large portion of that salary is utilized to amortize stock purchase obligations resulting from his purchase of his interest in Davis Transport, and his take-home pay after the payment of this obligation is approximately $4,112.97 per month. Erica holds a college degree in elementary education but has never held a full-time position in that field. Erica held the primary responsibility of maintaining the household and caring for their daughter Rikki. At the time of trial, Erica was attending paralegal training classes in Billings and earning approximately $600 per month as a part-time file clerk.
A bench trial began on May 14, 1986 and the District Court issued findings of fact and conclusions of law October 2, 1986, and a judgment on October 7, 1986. After subtracting certain assets owned by Robert prior to the marriage, the marital estate was divided in an equal fashion. Joint custody was granted with Erica as the primary custodial parent. Child support in the amount of $450 per month was ordered. Erica is to receive maintenance of $1,000 per month for four years, and $500 per month for the following two years. Erica was awarded attorney fees in the amount of $8,622.22.
Robert raises eight issues on appeal:
(1) Did the District Court properly value Robert's interest in Trade Street Enterprises?
(2) Did the District Court properly value assets owned by Robert prior to the marriage?
(3) Did the District Court correctly calculate the amount that Robert must pay to Erica to achieve an equal division of the marital estate?
(4) Did the District Court correctly find that Robert agreed to pay for all costs of a four-year college curriculum for his minor daughter?
(5) Was the award of maintenance excessive in amount and duration?
(6) Was the award of child support excessive in amount?
(7) Did the District Court properly award attorney's fees?
(8) Did the District Court commit error by ordering Robert to indemnify Erica for joint debts he was ordered to assume?
Robert holds a 57.16% interest in a partnership entity referred to as Trade Street Enterprises (T.S.E.). The District Court found the partnership had no positive or negative value for the purposes of determining the property distribution and therefore assigned a zero valuation to Robert's interest. T.S.E. is a partnership created by the owner-managers of Davis Transport, Inc. The sole source of income for T.S.E. comes from Davis Transport. At trial, Robert chose to serve as his own expert witness. Robert testified that T.S.E. was operating at a loss and valued the fair market value of his interest in this entity at negative $299,745. Robert's contention is that Erica failed to present any evidence as to the value of T.S.E. and that his negative valuation must therefore be accepted.
The District Court refused to find Robert's valuations sufficiently credible and stated,
[G]iven the discrepancies in [Robert's] preparation of financial documentation for various purposes, his apparent willingness to create values for his own purposes, the Court is unable to adopt his assessment evaluation ... [of] Trade Street Enterprises.
The record sufficiently supports this finding. Accordingly, the District Court properly refused to accept Robert's valuation and we will not order the District Court to accept a valuation which is not credible.
The District Court's task of valuing T.S.E. was complicated by the fact that Erica's expert witness was not retained to specifically value T.S.E. Erica's expert witness clearly stated he was not rendering a specific opinion as to the value of T.S.E. and its assets. Erica contends the following testimony by her expert supports a valuation of zero:
Q. You have not been retained to do an appraisal of the equipment in Trade Street, have you?
A. No, I have not.
Q. You did render an opinion in direct examination that with regard to Trade Street where they are able to acquire in excess of $3,000,000 worth of trucks in late '84 and '85 and experience a two hundred plus thousand dollar cash shortfall, which was handled by Davis, and still render Davis profitable that, as I understand it, Trade Street was more or less operating at a wash; is that correct?
A. Yes.
Q. So do you have an opinion as to the value based on just that phenomenon of Trade Street Enterprises as of December 31, 1985?
A. Not specifically, because it is a lot more complex than to just say off the top of my head.
Q. All right. If we assume for a moment that the value of Trade Street is zero, assuming that--
A. Okay.
Q. Taking the December 31, 1985, balance sheet or financial statement, did you, during the recess, calculate the value of Davis Transport for the purpose of coming to an asset valuation based on your figures?
A. Yes. What I did was, taking like you mentioned, Davis Transport at zero, putting in 236,787 as an asset, eliminating the debt, you end up with a net worth of approximately four hundred seventy to $500,000.
Q. Do you feel it appropriate to assume that Trade Street Enterprises has a value of zero for this purpose?
A. It seems reasonable.
Although this testimony may indicate Erica's expert suspected T.S.E. was operating "at a wash," it fails to offer sufficient evidence alone to support the zero valuation.
The District Court was faced with a situation where one party suggested a valuation which was not credible and the other party failed to provide a specific valuation. The problem was compounded because the determination of a value for an entity such as T.S.E. is complex. Still, the District Court heard and considered an extensive amount of evidence regarding the value of T.S.E.: gross revenues of T.S.E. for 1984 and 1985; the source of those gross revenues (i.e. Davis Transport, Inc.); recent truck acquisitions for 1984 and 1985, and the truck values; state and federal tax "write-offs" associated with T.S.E.; tax benefits passing from T.S.E. in interest expenses and depreciation; the condition and resale value of trucks owned by T.S.E.; the ability of T.S.E. to meet operating expenses, amortize capital acquisition debts, and other debt obligations; documents demonstrating the cash flow analysis for T.S.E. for 1981 to 1985; federal tax document returns for 1984 and 1985; T.S.E. depreciation schedules; and the T.S.E. partnership agreement. Although Erica's expert did not give a specific value for T.S.E., he did offer a significant amount of testimony regarding the general financial status of T.S.E. and its relationship with Davis Transport. Finally, there was a large amount of evidence as to the worth of Davis Transport, Inc., an entity which is significantly related to T.S.E. There is a lack of an arms-length relationship between the entities and Robert testified he did not believe they could operate on an independent or separate basis. The consideration of the value of Davis Transport inevitably involved considerations of the value of T.S.E. In In Re Marriage of Johnston (Mont.1986), 726 P.2d 322, 325, 43 St.Rep. 1808, 1812, we stated:
In valuing the assets in a marital dissolution case, it must be noted that the District Court has broad discretion to determine net worth.
Although it may be true that the District Court was not given the best possible evidence to value the partnership, the value determination will stand unless clearly erroneous. In Re Marriage of Laster (1982), 197 Mont. 470, 477, 643 P.2d 597, 601. We affirm the District Court's valuation of T.S.E.
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