Signorelli v. Signorelli, 21455

• Citation: 189 W.Va. 710,434 S.E.2d 382
• Decision Date: 16 July 1993
• Docket Number: No. 21455,21455
• Court: Supreme Court of West Virginia
• Parties: T. William SIGNORELLI, Plaintiff Below, Appellee, v. Deborah O. SIGNORELLI, Defendant Below, Appellant.

Page 382

434 S.E.2d 382

189 W.Va. 710

T. William SIGNORELLI, Plaintiff Below, Appellee, v. Deborah O. SIGNORELLI, Defendant Below, Appellant.

No. 21455.

Supreme Court of Appeals of

West Virginia.

Submitted May 11, 1993.

Decided July 16, 1993.

Syllabus by the Court

1. " 'Equitable distribution under W.Va.Code, 48-2-1, et seq., is a three-step process. The first step is to classify the parties' property as marital or nonmarital. The second step is to value the marital assets. The third step is to divide the marital estate between the parties in accordance with the principles contained in W.Va.Code, 48-2-32.' Syllabus Point 1, Whiting v. Whiting, 183 W.Va. 451, 396 S.E.2d 413 (1990)." Syllabus Point 2, Wood v. Wood, 184 W.Va. 744, 403 S.E.2d 761 (1991).

2. " 'Unless the parties have made a joint stipulation or property settlement agreement, under Rule 52(a) of the West Virginia Rules of Civil Procedure the circuit court is required to make findings of fact and conclusions of law in its final order which reflect each step of the equitable distribution procedure. The same obligation is imposed upon a family law master under W.Va.Code, 48A-4-4(d).' Syllabus Point 2, Whiting v. Whiting, 183 W.Va. 451, 396 S.E.2d 413 (1990)." Syllabus Point 3, Wood v. Wood, 184 W.Va. 744, 403 S.E.2d 761 (1991).

3. " 'The fair market value of a closely held corporation or other business is not necessarily equivalent to its 'net value' under W.Va.Code, 48-2-32(d)(1) (1984). Under this provision, the net value of a closely held corporation or business equals the net amount realized by the owner should the corporation or business be sold for its fair market value. The pertinent inquiry that must be made is whether the owner-seller will be responsible for the debts of the corporation or business, assuming a sale for its market value.' Syllabus Point 3, Tankersley v. Tankersley, 182 W.Va. 627, 390 S.E.2d 826 (1990)." Syllabus Point 4, Kimble v. Kimble, 186 W.Va. 147, 411 S.E.2d 472 (1991).

4. " ' "A measure of discretion is accorded to a family law master in making value determinations after hearing expert testimony. However, the family law master is not free to reject competent expert testimony which has not been rebutted." This statement is analogous to the rule that "[w]hen the finding of a trial court in a case tried by it in lieu of a jury is against the preponderance of the evidence, is not supported by the evidence, or is plainly wrong, such finding will be reversed and set aside by this Court upon appellate review." Syllabus Point 1, in part, George v. Godby, 174 W.Va. 313, 325 S.E.2d 102 (1984), quoting Syllabus Point 4, Smith v. Godby, 154 W.Va. 190, 174 S.E.2d 165 (1970).' Syllabus Point 1, Bettinger v. Bettinger, 183 W.Va. 528, 396 S.E.2d 709 (1990)." Syllabus Point 5, Kimble v. Kimble, 186 W.Va. 147, 411 S.E.2d 472 (1991).

5. "W.Va.Code, 48-2-32(d)(7)(A) through (E), contain a variety of options that are available to a trial court to provide for payment of a party's equitable distribution share in a divorce proceeding." Syllabus Point 5, Bettinger v. Bettinger, 183 W.Va. 528, 396 S.E.2d 709 (1990).

6. "Where there are substantial nonliquid assets that are subject to equitable distribution, there may be no other recourse than for a trial court to order installment payments for a spouse's share." Syllabus Point 6, Bettinger v. Bettinger, 183 W.Va. 528, 396 S.E.2d 709 (1990).

7. "Where the value of an equitable distribution asset is payable over a term of years, interest should be paid at the going rate in the absence of some special hardship factor shown by the obligor." Syllabus Point 7, Bettinger v. Bettinger, 183 W.Va. 528, 396 S.E.2d 709 (1990).

8. " 'When a family law master or a circuit court enters an order awarding or modifying child support, the amount of the child support shall be in accordance with the established state guidelines, set forth in 6 W.Va.Code of State Rules §§ 78-16-1 to 78-16-20 (1988), unless the master or the court sets forth, in writing, specific reasons for not following the guidelines in the particular case involved. W.Va.Code, 48A-2-8(a), as amended.' Syllabus, Holley v. Holley, 181 W.Va. 396, 382 S.E.2d 590 (1989)." Syllabus Point 9, Bettinger v. Bettinger, 183 W.Va. 528, 396 S.E.2d 709 (1990).

9. "A decision not to follow the SOLA percentages must be undertaken in light of the legislative preference in W.Va.Code, 48A-2-8(b) (1989), that child support should be keyed to 'the level of living such children would enjoy if they were living in a household with both parents present.' If the family law master or circuit court determines that SOLA percentages under 6 W.Va.C.S.R. § 78-16-2.7.2 should not be used, an explanation must be given." Syllabus Point 12, Bettinger v. Bettinger, 183 W.Va. 528, 396 S.E.2d 709 (1990).

Parrish McKittrick, Parrish McKittrick & Associates, St. Albans, for plaintiff.

Robin Jean Davis, Segal & Davis, L.C., Charleston, for defendant.

PER CURIAM:

This appeal is brought by Deborah O. Signorelli, the defendant below, from a final divorce decree entered in the Circuit Court of Kanawha County. The appellee, and plaintiff below, is T. William Signorelli. Mrs. Signorelli contends, inter alia, that the trial court erred in valuing a marital asset--a security service company operated by a closely held corporation owned entirely by the two parties. Mrs. Signorelli also argues that the trial court erred in determining the amount of child support and alimony Mr. Signorelli should pay.

Mr. and Mrs. Signorelli were married in 1978. They have two children--Anthony, born in 1981, and Christopher, born in 1984. The parties separated in June of 1988. Mr. Signorelli instituted these divorce proceedings on June 30, 1988. The parties agree that irreconcilable differences have arisen between them. The family law master and the trial court both found that the differences between the parties were unresolvable.

I. VALUATION OF SECURITY AMERICA

In 1982, Mr. Signorelli founded Security America, Inc. The company provides basic security officer services and does business in both West Virginia and Tennessee. All shares of stock of Security America are owned by the two parties. We outlined our general procedure for determining equitable distribution in divorce cases in Syllabus Point 2 of Wood v. Wood, 184 W.Va. 744, 403 S.E.2d 761 (1991):

" 'Equitable distribution under W.Va.Code, 48-2-1, et seq., is a three-step process. The first step is to classify the parties' property as marital or nonmarital. The second step is to value the marital assets. The third step is to divide the marital estate between the parties in accordance with the principles contained in W.Va.Code, 48-2-32.' Syllabus Point 1, Whiting v. Whiting, 183 W.Va. 451, 396 S.E.2d 413 (1990)."

The parties agree that Security America is a marital asset. The major issue in this case concerns the valuation of the Security America stock and its division between the parties.

The record in this case shows that three experts offered their opinions to the family law master as to the value of Security America. Daniel Selby was hired by Mr. Signorelli and Michael Paterno was hired by the father of Mrs. Signorelli. Mr. Selby and Mr. Paterno entered into a joint stipulation valuing the Security America stock at $312,258. It is unclear whether Mr. Paterno and Mr. Selby were authorized to enter into a joint stipulation regarding the value of Security America. In any event, Mrs. Signorelli's father was unhappy with Mr. Paterno's valuation and sought the services of Daniel Simms. Mr. Simms concluded that the Security America stock was worth $996,579.

In Syllabus Point 3 of Wood v. Wood, supra, we noted that where no joint stipulation by the parties to a divorce is made, the trial court and family law master must make findings of fact and conclusions of law to support the valuation and distribution of marital assets:

" 'Unless the parties have made a joint stipulation or property settlement agreement, under Rule 52(a) of the West Virginia Rules of Civil Procedure the circuit court is required to make findings of fact and conclusions of law in its final order which reflect each step of the equitable distribution procedure. The same obligation is imposed upon a family law master under W.Va.Code, 48A-4-4(d).' Syllabus Point 2, Whiting v. Whiting, 183 W.Va. 451, 396 S.E.2d 413 (1990)."

W.Va.Code, 48-2-32(d)(1) (1984), mandates that a trial court must, for valuation purposes, "[d]etermine the net value of all marital property of the parties as of the date of the commencement of the action or as of such later date determined by the court to be more appropriate for attaining an equitable result[.]" (Emphasis added). In Syllabus Point 4 of Kimble v. Kimble " 'The fair market value of a closely held corporation or other business is not necessarily equivalent to its 'net value' under W.Va.Code, 48-2-32(d)(1) (1984). Under this provision, the net value of a closely held corporation or business equals the net amount realized by the owner should the corporation or business be sold for its fair market value. The pertinent inquiry that must be made is whether the owner-seller will be responsible for the debts of the corporation or business, assuming a sale for its market value.' Syllabus Point 3, Tankersley v. Tankersley, 182 W.Va. 627, 390 S.E.2d 826 (1990)." ¹

[189 W.Va. 713] 186 W.Va. 147, 411 S.E.2d 472 (1991), we elaborated on how the net value of a closely held corporation, such as Security America, should be determined:

Each of the experts offered extensive testimony to support their respective valuations of the Security America stock. The family law master and trial court accepted the joint valuation of Mr. Selby and Mr. Paterno over that of Mr. Simms, stating:

"[T]he evidence of [Mr. Signorelli] ... preponderate[s] over that of [Mrs. Signorelli] in the following respects:

                1.  Risk factors inherent in Security America
                2.  Key man

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