Dzierzynski v Dzierzynski, (02-879) 05/06/2003

Appeal by defendant from judgment entered 20 November 2001 by Judge Earl J. Fowler, Jr. in District Court, Buncombe County. Heard in the Court of Appeals 27 March 2003.

Kelly & Rowe, P.A., by E. Glenn Kelly, for plaintiff-appellee.

Robert E. Riddle, P.A., by Robert E. Riddle, for defendant- appellant.

    McGEE, Judge.

    Plaintiff filed a complaint for absolute divorce and equitable distribution on 13 April 1999. Defendant filed an answer and counterclaims on 28 April 1999 that included a claim for equitable distribution. The trial court ordered the parties on 7 March 2000 to file equitable distribution affidavits. Defendant filed an amended equitable distribution affidavit on 14 April 2000 and plaintiff filed an equitable distribution affidavit on 25 May 2000. The matter was heard on 6 September 2001 and the trial court issued a letter of opinion on 15 October 2001 stating its decision regarding equitable distribution. The trial court entered a judgment of equitable distribution on 20 November 2001. Defendantappeals.
    The evidence before the trial court tended to show that plaintiff and defendant were married in November 1981 and separated on 7 April 1997. Plaintiff testified at trial that he had worked for Day International for nineteen years. He stated that he owned twenty-five shares of Day International stock that he acquired during the course of marriage as part of his employment. The stock was valued at approximately $4,030 per share as of January 1998. Plaintiff also testified that he acquired options to purchase ten additional shares of stock for $1,000 per share during the course of the marriage, but that he had not exercised those options. Plaintiff owned less than .001 percent of the outstanding stock of Day International.
    David B. Freimoth (Freimoth), senior vice president of Day International and former chief financial officer, testified that the estimated value of the stock as of 30 June 2001 was a negative $1,453.34 per share. Freimoth based his opinion on a memorandum prepared by Tom Koenig, the company's current chief financial officer, regarding the estimated stock value. The memorandum upon which Freimoth relied utilized the earnings before interest, tax, depreciation, and amortization (EBITDA) method of valuation to attain the gross sale value of the corporation. Freimoth stated that the EBITDA was a common method of valuation and that he believed it was the best way to value the investment based on market multiples. He testified that the memorandum used the EBITDA to arrive at the gross sale value of the corporation and thensubtracted the outstanding debt to arrive at the net equity of the corporation. The net equity was divided by the shares invested to arrive at the value of each share.
    Foster Shriner (Shriner), a certified public accountant and expert witness for defendant, testified that the original purchase price of the stock would be a reasonable value of the stock. Shriner stated that he would not value the stock based on the EBITDA methodology. He also stated that a complete evaluation of the company to determine its stock price would cost $20,000 to $100,000. Shriner testified that he did not have an opinion regarding the market multiples used in producing the EBITDA evaluation.
    Defendant argues the trial court erred in finding as fact that plaintiff's twenty-five shares of Day International stock and ten options had a value of zero at the date of trial. Defendant also argues the trial court erred in awarding all the shares and purchase options to plaintiff. We consider both arguments together for the purposes of this opinion.
        In appellate review of a bench equitable distribution trial, the findings of fact regarding value are conclusive if there is evidence to support them, even if there is also evidence supporting a finding otherwise. The trial court has discretion in distributing marital property, and "the exercise of that discretion will not be disturbed in the absence of clear abuse."

Crutchfield v. Crutchfield, 132 N.C. App. 193, 197, 511 S.E.2d 31, 34 (1999) (citations omitted). The decision of the trial court will not be disturbed unless the decision "'was so arbitrary thatit could not have been the result of a reasoned decision.'" Edwards v. Edwards, 152 N.C. App. 185, 187, 566 S.E.2d 847, 849 (quoting White v. White, 312 N.C. 70, 777, 324 S.E.2d 829, 833 (1985)), cert. denied, 356 N.C. 611, 574 S.E.2d 679 (2002).
            If there is "no single best approach to valuing" an asset, "[t]he task of [this Court] on appeal is to determine whether the approach used by the trial court reasonably approximated" the value of the asset at the date of separation. If it appears "the trial court reasonably approximated the net value of the [asset] . . . based on competent evidence and on a sound valuation method or methods, the valuation will not be disturbed." Further, the trial court's findings concerning valuation are binding on this Court if supported by competent evidence.

Fountain v. Fountain, 148 N.C. App. 329, 338, 559 S.E.2d 25, 32 (2002) (citations omitted).
    After reviewing the record, we hold that there was competent evidence to support the trial court's finding of fact. Freimoth testified at trial that the EBITDA methodology was used to obtain the gross value of the corporation. The outstanding debt was subtracted from the gross value and divided by the number of shares invested to arrive at the value of each share. Freimoth's opinion was that the value of the stock was a negative $1,453.34 per share based on this evaluation method. He also testified regarding the acceptance of this method for evaluating stock. Freimoth's testimony provided sufficient evidence to support the trial court's finding of fact that the stock and options possessed a value of zero. We hold that the trial court utilized a sound method and reasonably approximated the value of the stock.     Since we find there is competent evidence in the record supporting the trial court's finding of fact, this finding is binding on appeal. This finding is sufficient to support the trial court's award of the stock to plaintiff. The award of the shares and purchase options to plaintiff did not result in an inequitable division of marital property because the shares and options had zero value. Defendant has failed to demonstrate that the trial court abused its discretion in awarding the twenty-five shares and ten purchase options to plaintiff or that its decision was unreasoned and arbitrary. The findings of the trial court supported the trial court's conclusions of law.
    We have reviewed defendant's remaining arguments and find them to be without merit.
    Affirmed.
    Judges McCULLOUGH and LEVINSON concur.
    Report per Rule 30(e).

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