Tarneja v. Tarneja

• Decision Date: 15 June 2005
• Docket Number: No. 26421.,26421.
• Citation: 164 S.W.3d 555
• Parties: Kavita Vicky TARNEJA, Respondent, v. Kailash C. TARNEJA, Appellant.
• Court: Missouri Supreme Court

Page 555

164 S.W.3d 555

Kavita Vicky TARNEJA, Respondent, v. Kailash C. TARNEJA, Appellant.

No. 26421.

Missouri Court of Appeals, Southern District, Division Two.

June 15, 2005.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

M. Douglas Harpool, Kristoffer R. Barefield, Lathrop & Gage, L.C., Springfield, for appellant.

Mark J. Millsap, J. Matthew Miller, Baird, Lightner & Millsap, P.C., Springfield, for respondent.

ROBERT S. BARNEY, Judge.

Appellant Kailash C. Tarneja ("Husband") appeals the judgment of the Circuit Court of Greene County, Missouri, dissolving his twenty-six year marriage to Respondent Kavita Vicky Tarneja ("Wife"). Husband raises four points of trial court error challenging the trial court's valuation and characterization of Husband's interest in his medical practice; the valuation by the trial court of an investment account which Husband maintains was not based on the "most current available balance;" the trial court's purported use of incorrect values for certain investment accounts awarded to Wife which created a purportedly unequal division of property; and, the trial court's award of maintenance to Wife. We affirm the judgment in all respects save for the trial court's maintenance award which we reverse. We remand the matter of maintenance to the trial court for further proceedings.¹

The standard for reviewing a decree of dissolution is the same as in any court-tried action. Bullard v. Bullard, 929 S.W.2d 942, 944 (Mo.App.1996). The decree must be affirmed unless it is unsupported by substantial evidence, it is against the weight of the evidence, or it erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976).² "We do not retry the case, rather we accept as true the evidence and reasonable inferences therefrom in the light most favorable to the prevailing party and disregard contradictory evidence." McCallum v. McCallum, 128 S.W.3d 62, 65 (Mo.App.2003). Additionally, we defer to the trial court's determinations of credibility in making our review. In re Marriage of Colley, 984 S.W.2d 163, 166 (Mo.App.1998).

The record reveals that the parties were married as part of an arranged marriage in New Delhi, India, on April 26, 1978. Husband is a board certified radiologist who attended medical school in India. Wife testified that she had obtained a "bachelor's degree and a teacher's training degree from India" prior to the parties moving to the United States in late 1978. Once the parties were residents of the United States, Husband began practicing medicine and Wife worked as a homemaker and as a part-time substitute teacher.³

On January 9, 2001, Wife filed a petition for dissolution of marriage. The trial court granted Wife's petition for dissolution of marriage and dissolved the parties' marriage. In its division of marital property, the trial court awarded Wife properties worth $1,520,792.00 and Husband was awarded properties valued at $1,466,403.72, inclusive of his interest in his medical practice. Additionally, the judgment, inter alia, awarded Wife periodic modifiable maintenance in the amount of $6,500.00 per month; ordered Husband to pay the bulk of the marital debt; required each party to pay his or her own attorney's fees; and, ordered Husband to pay all expenses incurred by one of the parties' sons while he completed college. Husband's appeal followed.

In his first point on appeal, Husband maintains the trial court erred in valuing his interest in his medical practice at $433,863.00. According to Husband, the trial court's valuation was erroneous in that it included certain property belonging to his business partner and, therefore, his interest was overstated by $154,352.50. Further, he argues that said property was mischaracterized as marital property.

We begin our analysis by noting that the "trial court has broad discretion to identify marital property." N.M.O. v. D.P.O., 115 S.W.3d 854, 859 (Mo.App.2003). "If the evidence supports the trial court's classification, we will not find error in the trial court's decision." Id. Additionally, we observe that "[a] trial court is prohibited from entering a valuation of marital property not supported by any evidence at trial, but the trial court, nonetheless, enjoys broad discretion in valuing marital property." Kirkham v. Kirkham, 975 S.W.2d 500, 505 (Mo.App.1998). "When the trial court's valuation of property is within the range of conflicting evidence of value offered at trial, the court acts within its discretion to resolve conflicts in evidence." Taylor v. Taylor, 25 S.W.3d 634, 644 (Mo.App.2000). "The trial court is entitled to believe or disbelieve the testimony of either party concerning the valuation of marital property in a dissolution proceeding, and can disbelieve expert testimony." Wofford v. Wofford, 991 S.W.2d 194, 200 (Mo.App.1999).

"In a dissolution proceeding, the object of any valuation of a business is, of course, to determine its fair market value for purpose of application of the equitable distribution rules to arrive at a fair property division." Thill v. Thill, 26 S.W.3d 199, 203 (Mo.App.2000). "`The judicial determination of value must be an informed judgment, but fair `value' is not susceptible of determination by any precise mathematical computation.'" Id. (quoting Flarsheim v. Twenty Five Thirty Two Broadway Corp., 432 S.W.2d 245, 255 (Mo.1968)). No one formula or method of determining value is binding or conclusive. Miranda v. Miranda, 596 S.W.2d 61, 65 (Mo.App.1980). "Generally, therefore, the trial court can accept the opinion of one expert as to value over another and can prefer one method of valuation over competing methods based on the particular facts of the case and the circumstances of the corporate entity involved." Thill, 26 S.W.3d at 203 (quoting Flarsheim, 432 S.W.2d at 255).

In the present matter, the record reveals the parties and their children moved to West Plains, Missouri, in 1983. Husband established a radiology practice in conjunction with the local hospital, Ozark Medical Center, whereby he was to be the exclusive provider of radiological services to the hospital. Thereafter, Husband formed West Plains Imaging and Associates, Inc. ("WPIA") and became the sole shareholder of that corporation. Husband used WPIA as a billing entity through which his medical practice operated.

In 1987, due to an increased workload, Husband hired Dr. Rob Armstrong ("Armstrong") to provide radiology services for WPIA. Thereafter, Husband and Armstrong entered into an oral agreement whereby they would essentially split the profits of the practice equally, after payment of joint overhead expenses.

The aforementioned agreement between Husband and Armstrong remained in effect until in the midst of Husband's dissolution of marriage proceedings Husband and Armstrong formed West Plains Imaging, L.L.C. ("WPI") on January 28, 2003, although the terms of the agreement were not to go into effect until July 1, 2003.

Under the WPI agreement, all bank accounts, accounts receivable, equipment, and office furnishings were transferred from WPIA to WPI and Armstrong was given a one-half ownership interest in WPI.

At trial,⁴ Cheryl Ward ("Ward"), the office manager for both WPIA and WPI, testified on May 6, 2003, that Husband owns "one hundred percent" of WPIA. She stated that she pays out of the WPIA accounts various personal bills relating to both Husband and Wife, together with Husband's professional expenses such as malpractice insurance and continuing education fees. Ward stated that Husband does not get a monthly check and instead "draws money throughout the month." Husband's half of what is left over at the end of the month once expenses are paid "stays in the corporation" of which he "is the sole owner." Ward testified that if there was extra money remaining in the account after the expenses were paid, she transferred these funds to the Salomon Smith Barney account ("the SSB corporate account"), which is also in the name of WPIA. She stated that the SSB corporate account is "where [Husband] keeps some of his money that he didn't need to take on a monthly basis as income."

Under the agreement with Armstrong that was in effect at the time of her testimony, Ward stated that in calculating how Armstrong is paid, she takes "the income for the month, subtract[s] the expenses, and the balance is divided equally between [Husband] and Dr. Armstrong. There are some adjustments that are deducted from Dr. Armstrong's for things like depreciation and stuff. And then the net of that is the check that is paid to him monthly." Armstrong is "compensated by an equal share after expenses are deducted from the month's income." She testified that Husband's retirement plan is "through Smith Barney," but that "Armstrong is not part of the corporate plan at all" and acknowledged that Armstrong "did not receive any withdrawal or withholding from his salary for retirement or 401K purposes."

In discussing the recent formation of WPI, Ward stated that Husband and Armstrong each own half of that business and that their agreement relating to WPI was to go into effect on July 1, 2003. Significantly, she stated that WPI had no assets and she was unaware as to how the assets of WPIA would be transferred into the new company.

Alan Rank ("Rank"), a financial consultant with Salomon Smith Barney, testified that about once a month he would receive checks from WPIA to deposit into the SSB corporate account and that the account was used to "accumulate the funds for future transfer [to the retirement accounts] ... and as funds accumulated, purchases of various common stocks and mutual funds were made with the excess balance." He testified that there would be certain fees assessed if the SSB corporate account was ordered to be liquidated. Further, he testified that as of March 30, 2003, the SSB corporate account held by his corporation had a balance of $462,925.80, but the balance of the account...