Spillert v. Spillert, 89-1874

• Decision Date: 03 July 1990
• Docket Number: No. 89-1874,89-1874
• Citation: 564 So.2d 1146
• Parties: 15 Fla. L. Weekly D1783 Susan Carol SPILLERT, Appellant/Cross-Appellee, v. Leonard J. SPILLERT, Appellee/Cross-Appellant,
• Court: Florida District Court of Appeals

Page 1146

564 So.2d 1146

15 Fla. L. Weekly D1783

Susan Carol SPILLERT, Appellant/Cross-Appellee, v. Leonard J. SPILLERT, Appellee/Cross-Appellant,

No. 89-1874.

District Court of Appeal of Florida First District.

July 3, 1990.

Rehearing Denied Aug. 15, 1990.

Albert Datz, of Datz, Jacobson & Lembcke, Jacksonville, for appellant/cross-appellee.

Hal Castillo, of Lewis, Paul, Isaac & Castillo, Jacksonville, for appellee/cross-appellant.

BARFIELD, Judge.

The parties appeal and cross-appeal the final judgment of dissolution of marriage because neither is satisfied with the trial judge's award of support and distribution of property. Because we find the trial judge erred in valuing the husband's medical practice, we reverse and remand for review by the trial judge of both support and property distribution.

The husband is a plastic surgeon in Jacksonville, Florida, in a professional corporation known as Leonard J. Spillert, M.D.P.A. in which he is a sole practitioner. The wife's expert witness valued his medical practice at $560,660 to $682,118. The husband's expert valued the medical practice at $140,690. In the final judgment, the trial judge found the husband's practice worth $350,675 "which represents averaging of the differences of the two expert opinions," a figure not based on any evidence in the record.

We reverse the awards for support and distribution of property and direct the trial judge to use the valuation of Neil Ossi, $140,690, in determining support and property distribution because the valuation proposed by Charles Wiggins is premised on a legally erroneous analysis.

Charles Wiggins, a professor of accounting and finance at the University of North Florida, testified regarding the "fair market value" and "investment value" of the husband's P.A. He used a computer program to project the husband's income to the year 2006 (when he is 65) reduced to present value. Backing out his actual income, and putting in the fair market salary for an average plastic surgeon, Wiggins computed a real growth rate (in excess of 5% inflation) of 2%/year, and set a required return of 30-32% (i.e., treating the husband as an investor in the practice). Using regression analysis, he found that the "fair market value" of the practice on 1-1-89 was $560,660 (i.e., a physician could buy the practice for that amount, pay himself an average annual salary of $208,000 and still make 30% return on the investment). Wiggins also determined the "investment value" as of that date (i.e., assuming the husband remains with the practice) to be $682,118 (he explained the difference by a lower required return of 20% due to the fact that there is no risk of transfer).

On cross-examination, Wiggins stated that the computer program he used was for service businesses, but that he had never evaluated a sole practitioner plastic surgeon P.A. before; he was not aware that four plastic surgeons in Jacksonville had been unable to sell their practices (he was given their names, but didn't call them). In his calculations, he assumed a straight transfer to someone of Dr. Spillert's training and expertise under similar conditions; he admitted he was not aware of any plastic surgeon practices having been sold in Jacksonville. He assumed that Spillert would stay on during a transition period and that a noncompete clause would be included in the transfer. He admitted that if Dr. Spillert died, the practice could probably not be sold for the "fair market value" he had calculated.

Neil Ossi, president of Corporate Business Investment Company, which specializes in business...