West v. West, 2024-Ohio-1086; 2024
In this appeal of a divorce case in Ohio, the appellate court affirmed that the trial court, in having independently determined the value of the husband’s business without having instructed the parties to produce evidence to support the value, did not abuse its discretion. The wife did not dispute the specificities of the trial court’s valuation nor challenge the credibility of the husband’s testimony.
The magistrate judge originally determined the value of the husband’s business at $541,068 “based upon the depreciable assets in the amount of $477,866 on the company’s tax return[” and concluded that that was “an inappropriate method to evaluate the value of a company.” The trial court found that to be an inappropriate manner to value the company. The magistrate then issued another opinion determining the value of the company to be its book value of $27,143. The trial court issued judgment for that amount.
The wife filed objections to the value, saying the trial court ordered the magistrate to use an incorrect method of value and urging the trial court to take into account the income of the company in determining the value and to determine the date of value. The trial court overruled the objections of the wife.
The wife appealed, citing to assignments of error. First, the trial court erred by not instructing the parties to submit additional evidence supporting the value, and, second, the trial court erred by relying on its own determination of value.
The wife had not carried her burden to show that the trial court abused its discretion. “Here, the parties did not submit perhaps the most helpful or the best evidence to the trial court upon which to base the valuation. Neither Husband nor Wife presented an expert business valuation of J&J Performance, Inc., nor did they present the other documents that Wife maintains were necessary.” The wife failed to discuss how the trial court’s approach was unwarranted or discuss an alternative methodology.
The wife’s assignments of error were overruled, and the trial court’s judgment was affirmed.
Editor’s note: This case is an example of a woeful submission of evidence as to the value of a business. Many cases have concluded that the trial courts can only use evidence in submission to determine the value of a business. The wife, as the party most likely to be hurt by this issue, should have made sure that a valuation by a qualified valuation analyst was submitted, but she did not.