Porter v. Porter
| Decision Date | 27 July 1988 |
| Docket Number | No. 40A01-8704-CV-00092,40A01-8704-CV-00092 |
| Citation | 526 N.E.2d 219 |
| Parties | F.H. PORTER, Respondent-Appellant, v. C.J. PORTER, Petitioner-Appellee. |
| Court | Indiana Appellate Court |
G. Terrence Coriden, Lawson, Pushor, Mote & Coriden, Columbus, for respondent-appellant.
Deborah L. Farmer, Campbell, Kyle & Proffitt, Noblesville, for petitioner-appellee.
Respondent-appellant, Frederick H. Porter (Fred), appeals the provisions of a Jennings Circuit Court dissolution decree dissolving his marriage to petitioner-appellee, Carol J. Porter (Carol), relating to the division of marital property and the maintenance of child support.
We affirm.
Fred and Carol were married on August 10, 1974. The marriage produced two sons, Christopher and Matthew, ten and eight years old respectively at the time of the dissolution. Fred and Carol separated on January 23, 1986, and Carol filed a petition for dissolution on January 28, 1986. At the time Fred, a licensed medical doctor, earned approximately $200,000 per year as an otolaryngologist (ENT), 1 for Southern Indiana ENT, Inc. (Southern Indiana) which Fred previously incorporated in 1979. Carol, who had been a full-time wife, mother, and homemaker after Christopher's birth, obtained a nursing job after the separation with an expected annual income of $18,000.
A contested final hearing was held on September 11, 1986. The trial court entered a dissolution decree on September 17, 1986. The trial court awarded custody of Christopher and Matthew to Carol, subject to Fred's reasonable visitation. Fred was ordered to pay for the support of the children as follows:
1. Three Hundred Seventy-Five Dollars (375.00) per week, fifty-two (52) weeks per year.
2. Three Thousand, One Hundred Twenty Dollars per year ($3,120.00) for clothing and sports equipment in the following manner:
(a) Seven Hundred Fifty Dollars ($750.00) cash to the Wife each September 1 and April 1, including September of 1986.
(b) The remainder in-kind with receipts made availble (sic) to the Wife.
3. All reasonable medical, dental and optometric expenses.
4. The costs of sports camps, clinics and lessons.
5. That the above obligation and future support obligations be secured by term life insurance in the amount of Five Hundred Thousand Dollars ($500,000.00) payable to a trustee to be selected by the Husband and for the benefit of the children's support and education.
Record at 179. The trial court found the marital estate to have a total value of $935,222. The marital estate was broken down as follows:
1. 1982 Volvo $ 7,500.00
2. Pension Plans 2 300,000.00
3. Southern Indiana ENT, Inc. 3 400,000.00
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TOTAL OF LITIGATED ASSETS $707,500.00 -----------
TOTAL OF OTHER ASSETS 227,722.00 k
-----------
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TOTAL $935,222.00
Record at 182. The trial court awarded $475,000 (approximately 51%) to Carol to be delivered as follows:
Record at 183. The remaining $335,000 was to be in the form of an alimony judgment secured by the corporate shares of Southern Indiana and Fred's share of the pension/profit sharing plan. This amount was to be paid in monthly payments amortized over 20 years.
Fred raises nine issues on appeal. One issue was addressed favorably by the trial court's response to Fred's motion to correct error. On another issue, Fred failed to set forth any argument in his brief and thus waived the issue. Ind. Rules of Procedure, Appellate Rule 8.3(A)(7). The remaining issues, consolidated and restated, are as follows:
I. Whether the trial court erred in determining the value of the marital estate.
II. Whether the trial court erred in its provisions concerning child support.
III. Whether the trial court erred in its provisions to secure the judgment.
IV. Whether the trial court erred with respect to the admission of certain evidence.
In marriage dissolution proceedings, IND.CODE 31-1-11.5-11(b) provides that the trial court shall divide the marital assets of the parties in a "just and reasonable manner." That same statute directs the trial court to consider the following factors in arriving at a just and reasonable division:
(1) The contribution of each spouse to the acquisition of the property, regardless of whether the contribution was income producing.
(2) The extent to which the property was acquired by each spouse prior to the marriage or through inheritance or gift.
(3) The economic circumstances of each spouse at the time the disposition of the property is to become effective, including the desirability of awarding the family residence or the right to dwell in that residence for such periods as the court may deem just to the spouse having custody of any children.
(4) The conduct of the parties during the marriage as related to the disposition or dissipation of their property.
(5) The earnings or earning ability of the parties as related to final division of property and final determination of the property rights of the parties.
Deciding what is a just and reasonable disposition is left within the sound discretion of the trial court. Cunningham v. Cunningham (1982), Ind.App., 430 N.E.2d 809; Hasty v. Hasty (1981), Ind.App., 427 N.E.2d 1119. We will reverse only if that discretion is abused. Ernst v. Ernst (1987), Ind.App., 503 N.E.2d 619. In our review, the presumption is that the trial court considered all the evidence of record and properly applied the statutory factors. Chestnut v. Chestnut (1986), Ind.App., 499 N.E.2d 783. The party challenging the trial court's division of marital assets must overcome this presumption. Temple v. Temple (1982), Ind.App., 435 N.E.2d 259. This court will not weigh the evidence, but will consider the evidence in a light most favorable to the judgment. Morphew v. Morphew (1981), Ind.App., 419 N.E.2d 770. Therefore, we will find that the trial court has abused its discretion only where the result reached is clearly against the logic and effect of the facts and circumstances before the court, including the reasonable inferences to be drawn therefrom. Chestnut, supra.
Fred claims that the trial court erred in determining the value of the marital estate. Specifically, he maintains the trial court erred in determining the value of his share in the corporate practice, erred in determining that his share of the practice's pension/profit sharing plan was includable in the marital estate, and in determining the value of the plan. Consequently, Fred maintains that Carol was awarded assets greater than the marital estate.
Fred first contends that the trial court erred in determining the value of his share in Southern Indiana because the court considered both tangible and intangible assets (e.g. goodwill) in its evaluation. Goodwill has been defined thusly:
[T]he advantage or benefit which is acquired by an establishment beyond the mere value of the capital stock, funds, or property employed therein, in consequence of the general public patronage and encouragement which it receives from constant or habitual customers on account of its local position, or common celebrity, or reputation for skill, or affluence, or punctuality, or from other accidental circumstances or necessities, or even from ancient partiality or prejudices. (Footnote omitted.)
38 Am.Jur.2d Goodwill Sec. 1 (1968).
Specifically, he argues that Southern Indiana's shareholder purchasing agreement was the proper method for evaluating the corporate practice. That agreement provided for the purchase or sale of corporate shares of stock which are tangible assets. Therefore, Fred asserts that the trial court should have considered only the corporate practice's tangible assets in its evaluation.
Fred cites Peddycord v. Peddycord (1985), Ind.App., 479 N.E.2d 615, to support his contention. However, in that case the court did not hold that a corporate or professional practice must be evaluated solely on its tangible assets. Rather, the court only addressed the issue of which of two evaluation methods set forth in a partnership agreement should be adopted to determine the husband's interest in his law firm for purposes of property division in a dissolution proceeding.
The court in Peddycord stated in pertinent part:
There is no dispute that a spouse's interest in a professional partnership is a marital asset subject to division in a dissolution. However, placing a precise or even an approximately accurate value on such a partnership interest, especially when the partner whose interest in question continues as a member of the firm, is not easy.
Universally, when a partnership agreement exists, courts have attempted to value the continuing partner's interest by reviewing that agreement. Weaver v. Weaver (1985), 72 N.C.App. 409, 324 S.E.2d 915; Holbrook v. Holbrook (1981), 103 Wis.2d 327, 309 N.W.2d 343; In re Marriage of Fonstein (1976), 53 Cal.App.3d 846, 126 Cal.Rptr. 264; Stern v. Stern (1975), 66 N.J. 340, 331 A.2d 257. (Emphasis added.)
Id. at 616. However, the courts in Stern and Weaver noted that when the terms of a partnership agreement are used, the value calculated is only a presumptive value which can be attacked as not reflective of the true value. Furthermore, in Poore v. Poore (1985), 75 N.C.App. 414, 331 S.E.2d 266, the court stated in pertinent part:
In Weaver, we stated that there is no single best approach to valuing an interest in a professional partnership, and that various...
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