McElveen v. McElveen

• Decision Date: 14 September 1998
• Docket Number: No. 2883.,2883.
• Citation: 332 S.C. 583,506 S.E.2d 1
• Court: South Carolina Court of Appeals
• Parties: Della C. McELVEEN, Respondent/Appellant, v. Leland J. McELVEEN, Appellant/Respondent.

332 S.C. 583

506 S.E.2d 1

Della C. McELVEEN, Respondent/Appellant, v. Leland J. McELVEEN, Appellant/Respondent.

No. 2883.

Court of Appeals of South Carolina.

Heard June 2, 1998.

Decided September 14, 1998.

J. Mark Taylor, of Kirkland, Wilson, Moore, Allen, Taylor & O'Day, West Columbia, for appellant/respondent.

C. Dixon Lee, III, and James T. McLaren, of McLaren & Lee, Columbia, for respondent/appellant.

HEARN, Judge:

This is a cross-appeal from a divorce decree which, inter alia, awarded Della C. McElveen (Wife) alimony, child support, and attorney fees, and equitably divided the parties' marital property. We affirm in part and reverse in part.

FACTS AND PROCEDURAL HISTORY

The parties were married in July 1979. It was Wife's first marriage and the second marriage for Leland Joseph McElveen (Husband). They have one child, a son, who was ten years old at the time of trial.

Husband earned a medical degree shortly before the parties married and has practiced medical oncology and hematology since July 1984. Husband now owns a 1/13 interest in South Carolina Oncology Associates, P.A., a professional corporation which operates a large scale medical practice providing care for cancer patients. His gross income is $41,666.67 per month or $500,000 annually. At the time of the divorce, he was forty-five years old.

When the parties met, Wife was a registered nurse employed at a hospital. After the marriage, she continued to work as a registered nurse, on at least a part-time basis, until the birth of the parties' child. She testified she and Husband earned substantially the same income throughout the first five years of the marriage while Husband completed his residency, internship, and a fellowship in oncology and hematology. However, she has not been employed since the parties' child was born and her nursing credentials are not current. She was forty-one years old at the time of the divorce and suffers from fybromyalgia, a degenerative condition which causes her to experience recurrent headaches, fatigue, and muscle pain.

Husband left the marital home on January 21, 1994. Wife instituted this litigation in November of 1994, seeking, inter alia, a divorce on the ground of adultery, pendente lite and permanent spousal and child support, equitable division of marital property, and attorney fees and costs. Husband answered and counterclaimed, admitting he had committed adultery with Bonnie Everett after the parties separated. By amended answer and counterclaim, Husband alleged Wife had committed adultery with Bonnie Everett's husband, Stephen Everett.

The family court issued a temporary order dated February 1, 1995, requiring Husband to pay Wife $8,850 per month in temporary spousal support and $2,500 per month in temporary child support. The court further ordered Husband to pay Wife a $20,000 advance on her equitable distribution award to be used for litigation fees and costs.

The trial of this case was held on June 5 through June 9, 1995. During trial, the parties stipulated the fair market value of Husband's interest in his medical practice was $250,000, specifically noting the stipulation was reached "independent of the experts' testimony and/or opinions, which are in substantial conflict."

By final decree of divorce dated October 6, 1995, the family court granted Wife a divorce on the ground of adultery. The court determined the marital property, including the parties' home and Husband's interest in his medical practice, should be divided on a substantially equal basis. In valuing the marital estate, the court utilized the stipulated value of Husband's interest in his practice and awarded that interest to Husband. The court awarded Wife, among other things, the marital home and $50,000 to complete renovations to the home. Further, the court ordered Husband to pay Wife $11,000 per month in alimony, $1,750 per month in child support, and $65,000 in additional attorney fees and costs. The court also ordered Husband to secure his alimony and child support obligations by maintaining existing life insurance policies, designating Wife as sole beneficiary of seventy-five percent of the death benefits, and designating Wife as sole beneficiary of twenty-five percent of the death benefits in her capacity as trustee for the parties' child. Husband's motion to reconsider, alter or amend was, in relevant part, denied.

Subsequent to the trial but prior to entry of the October 6, 1995, final divorce decree, Wife moved to set aside the trial stipulation as to the value of Husband's interest in his medical practice, to re-open evidence, and for sanctions. In support of this motion, Wife argued she had learned of previously undisclosed negotiations to sell the medical practice. By order dated December 15, 1995, the family court granted Wife leave to undertake discovery relative to the post-trial motion and reserved the medical practice valuation and stipulation issues pending completion of the authorized discovery. Husband's motion for relief from this order was denied. Following completion of discovery, by order dated August 13, 1996, the family court found that negotiations to sell Husband's medical practice did indeed begin prior to the time of the stipulation, and that they were relevant and should have been disclosed during the original discovery process. On this basis, the court set aside the parties' stipulation and re-opened the case for the limited purpose of taking evidence on the fair market value of the practice and redividing the parties' marital property.

The hearing to redetermine the value of Husband's interest in his medical practice was held on October 11 and 18, 1996. During this hearing, Wife presented evidence establishing that negotiations to sell Husband's practice to a third party began in or about April of 1995, and ultimately resulted in a "Letter of Intent," dated October 2, 1995, signed and agreed to by all of the shareholder-physicians and the prospective purchaser, to sell the practice for a total of $23,635,000. The members of the practice subsequently withdrew from the Letter of Intent. Husband maintained at the post-trial hearing that the value of his interest in the medical practice was $183,000, as evidenced by a 1987 stock purchase agreement among the shareholder-physicians. By order dated November 20, 1996, the family court determined that although negotiations to sell the medical practice had transpired, the 1987 stock purchase agreement among the shareholder-physicians was controlling as to the value of Husband's interest in the practice. However, the court determined "the value stipulated to by the parties during trial is the correct value to be used in the division of marital property, and I therefore find that the interest of [Husband] has a value of $250,000." Pursuant to the same order, the court awarded Wife $12,000 in attorney fees and costs incurred as a result of Husband's failure to disclose the negotiations for the purchase of the practice during initial discovery.

STANDARD OF REVIEW

In appeals from the family court, this court has the authority to find the facts in accordance with its own view of the preponderance of the evidence. Owens v. Owens, 320 S.C. 543, 466 S.E.2d 373 (Ct.App.1996). This broad scope of review does not, however, require this court to disregard the findings of the family court. Stevenson v. Stevenson, 276 S.C. 475, 279 S.E.2d 616 (1981). Neither are we required to ignore the fact that the trial judge, who saw and heard the witnesses, was in a better position to evaluate their credibility and assign comparative weight to their testimony. Cherry v. Thomasson, 276 S.C. 524, 280 S.E.2d 541 (1981).

DISCUSSION

I. Valuation of Husband's Medical Practice

Both Husband and Wife appeal the family court's ultimate valuation of the husband's interest in his medical practice. Wife asserts the court erred in failing to find that the Letter of Intent, rather than the 1987 stock purchase agreement, was controlling as to the value of Husband's interest. Husband, on the other hand, contends the court erred in valuing his interest in an amount exceeding the $183,000 stock purchase price established by the 1987 agreement.

Until 1994, Husband practiced medicine as part of a ninephysician group known as Columbia Oncology Associates, P.A., and a related entity known as IntraCare of Columbia, Inc. This practice was governed by a 1987 stock purchase agreement which restricted the transfer of shares in the practice and contained a method for computing the sale price. On December 31, 1994, during the pendency of this action, a tenth doctor, Dr. Truesdale, was added as an additional shareholder-physician of the practice, purchasing her interest for $183,000. On January 1, 1995, the ten shareholder-physicians of Husband's practice merged with the three shareholder-physicians of Consultants In Oncology, to form the thirteenmember South Carolina Oncology Associates, P.A. Also on January 1, 1995, after the commencement of trial in this action, the shareholder-physicians entered into another stock purchase agreement.

At the October 1996 hearing, Wife's expert, Raymond E. McKay, Jr., testified the value of Husband's interest in the practice was equal to an adjusted 1/13th of the total sum offered to the shareholder-physicians by American Oncologist Resources, Inc. pursuant to the October 1995 Letter of Intent. Considering the $23,635,000 offer, and adjusting the amount for applicable loss of benefits and salaries, Wife's expert opined the total value of the offer to the shareholder-physicians was $19,800,652 with a present value of $17,500,592. By dividing the $17,500,592 figure by thirteen, the expert concluded the per-physician value of the practice was $1,526,127 with a present value of $1,346,199. Further, the expert testified that the $1,346,199 figure represents the net economic benefit to each doctor excluding the future earnings component of the offer....