Initially, we note defendant has failed to present argument on
one of his original six assignments of error. Pursuant to N.C.R.
App. P. 28(b)(6) (2005), the omitted assignment of error is deemed
abandoned. We therefore limit our present review to those
assignments of error properly preserved for appeal.
Defendant's remaining assignments of error challenge the
Judgment on grounds it is fatally infected by error in the trial
court's valuation of the business. This assertion has merit.
In an equitable distribution proceeding, the trial court is
to determine the net fair market value of the [parties'] property
based on the evidence offered by the parties. Walter v. Walter
149 N.C. App. 723, 733, 561 S.E.2d 571, 577 (2002) (footnote and
citations omitted). While there is no required method to follow in
assessing the value of the parties' marital property, the approach
utilized must be 'sound[.]' In other words, the trial court must
determine whether the methodology underlying the testimony offered
in support of the value of a marital asset is sufficiently valid
and whether that methodology can be properly applied to the facts
in issue. Id
. at 733, 561 S.E.2d at 577-78 (citations omitted).
In valuing a marital interest in a business, the task of the trial
court is to arrive at a date of separation value which 'reasonably
approximates' the net value of the business interest. Offerman v.
, 137 N.C. App. 289, 292, 527 S.E.2d 684, 686 (2000)
(quoting Poore v. Poore
, 75 N.C. App. 414, 422, 331 S.E.2d 266,
272, disc. review denied
, 314 N.C. 543, 335 S.E.2d 316 (1985)). The trial court's findings of fact regarding the value of a
spouse's business should be specific, and the trial court should
'clearly indicate the evidence on which its valuations are based,
preferably noting the valuation method or methods on which it
, 137 N.C. at 292, 527 S.E.2d at 686 (quoting
, 75 N.C. App. at 422, 331 S.E.2d at 272). Where it appears
that the trial court has 'reasonably approximated the net value of
the [business] . . . based on competent evidence and on a sound
valuation method or methods, the valuation will not be disturbed'
on appeal. Offerman
, 137 N.C. App. at 292, 527 S.E.2d at 686
, 75 N.C. App. at 422, 331 S.E.2d at 272).
, the trial court sought to value a candlestick
manufacturing business owned equally by the parties. The
plaintiff's evidence tended to show that, if capitalization of
excess earnings was considered in valuating the business, the
business had a fair market value of approximately $378,800.00 on
the date of separation. However, the defendant's evidence tended
to show that, where capitalized earnings, capitalized excess
earnings, and revenue multiple methods of evaluation were
applied, the business had a fair market value of approximately
After receiving evidence from both parties, the trial court
engaged in what it deemed an independent assessment of the value
of the corporation based upon . . . facts and circumstances . . .
a reasonable buyer and seller would have considered on the date ofseparation, and it determined the value of the corporation was
$365,000.00. 137 N.C. App. at 294-95, 527 S.E.2d at 687. On
appeal, this Court concluded we were unable to determine whether
the trial court's valuation reasonably approxmiate[d] the value
of the parties' business, noting that
[o]ther than the . . . finding that its
valuation was arrived at by considering the
full value of [a partially performed]
contract, there [wa]s neither an indication
of the valuation method relied upon by the
trial court nor an indication as to what
portion of the assigned value represent[ed]
the value of [the business'] goodwill.
. at 296, 527 S.E.2d at 688. Consequently, the trial court's
equitable distribution judgment was vacated and the case remanded
for further findings.
In Fitzgerald v. Fitzgerald
, 161 N.C. App. 414, 588 S.E.2d 517
(2003), the plaintiff husband owned a share in a surgical practice
which his expert witness valued at $89,500.00 on the date of
separation. The defendant's expert witness claimed her husband's
share of the practice should have a date of separation value of
$170,000.00. The trial court set the date of separation fair
market value of the plaintiff's share at $125,000.00. On appeal,
this Court stated the trial court appeared to have rejected both
experts' valuations; however, because the trial court failed to
identify the evidence on which it based its valuation or the method
it used to reach its [own] figure, it was necessary to reverse the
court's judgment and remand the case for further findings of facton the valuation of [the] plaintiff's interest in his surgical
. at 420, 588 S.E.2d at 522.
In the case sub judice
, the date of the parties' separation
was disputed in their pleadings, defendant contending the date was
31 December 2001 and plaintiff asserting the date of 23 February
2002. Using both an income approach and a cost approach,
defendant's expert witness, Brian Napier (Napier), set the fair
market value of the business on 31 December 2001 at $77,900.00 and
$91,700.00 on 23 February 2002. However, plaintiff's expert
witness, Kathy Diaz (Diaz), valued the business at $375,000.00 on
23 February 2002.
On direct examination, Diaz testified regarding the four
major differences between her valuation and that of Napier, noting
she and Napier examined different amounts of information, utilized
different discount rates in reaching their conclusions, and made
different adjustments regarding the appraisals and tax values of
property. When asked whether there were any significant changes
. . . observed in the information provided to [her] between [23
February 2002] and December 31st of 2001 that would have led to an
appreciably different value[,] Diaz replied as follows:
No, not anything that I would have observed.
Most of those items that I've talked about, we
took into account.
After Diaz testified that she actually took the extra step of
going back and looking at taking their methodology but our numbers
and what the difference would be[,] and that the value [of thebusiness] still rose to well over two hundred thousand dollars[,]
the following exchange occurred:
Q. So you applied their alternate
A. Methodology to our numbers--
Q. --to the same numbers?
A. --to the numbers that we had come up with
for the adjustments that we had made,
Q. And that number was what?
A. It was two hundred and -- almost two
hundred and thirty thousand dollars.
A. And the other -- the second main
DEFENDANT'S COUNSEL: Your Honor, I'm going to
object to that in that I've been provided no
documentation with respect to an expert
opinion or any calculations. Pursuant to the
rules of this Court and specifically stated in
the pretrial order, they are required to
provide me with fifteen days' notice of any
alternate values that they propose. As such,
I move to strike that information.
PLAINTIFF'S COUNSEL: We're not proposing that
as a value.
THE WITNESS: No.
DEFENDANT'S COUNSEL: You Honor, she's
testifying with respect to calculations she
made and is testifying to a value therefrom.
As such, I'm [en]titled to notice of that and
including a written report regarding that.
THE COURT: I will deny your motion, and you
may proceed with your witness.
On cross-examination, defense counsel questioned Diaz
regarding her written report as follows:
Q. [On page 1, the report reads,] Our
analysis considers those facts and
circumstances present at the company at
the valuation date. Our opinion would
most likely be different if another
valuation date was used, correct?
Q. Okay. And so you didn't value the
business as of December 31st, did you?
Q. So your value only deals with February
23rd, 2002, correct?
Q. And so [plaintiff's counsel] asked you,
you know, is it about the same. You
don't know whether it's -- you didn't do
this calculation for that date -- for
12/31, did you?
A. We did some in-house valuations that we
did not include in these reports, but
since it's not in this report, then
As noted above, the trial court set the parties' date of
separation at on or about 31 December 2001, and further fixed the
fair market value of the business at $230,000.00 on that date.
Although the Judgment recites that the trial court's valuation
includ[ed] the fixed assets and liabilities of the business, the
Judgment contains no findings regarding the evidence used to reach
the $230,000.00 figure.
We acknowledge that $230,000.00 is precisely the alternatefigure proffered by Diaz on direct examination. However, Diaz
qualified this number with testimony that all her alternate
valuations were done in-house, and that neither the conclusions
nor calculations regarding those alternate values were part of the
report submitted to plaintiff or the trial court. Further,
although Diaz stated she arrived at the $230,000.00 figure by
employing the same methodology as Napier, she further indicated her
own numbers were utilized in reaching her conclusion. Finally,
and most significantly, the record contains no indication Diaz
intended her alternate figure to value the business as of 31
December 2001, the date of separation determined by the trial
court. To the contrary, when viewed in its entirety, the testimony
of Diaz reveals that each of her calculations was aimed at
determining the fair market value of the business on 23 February
In light of the foregoing, we cannot say the trial
court . . . arrive[d] at a date of separation value which
'reasonably approximate[d]' the net value, Offerman
, 137 N.C. App.
at 292, 527 S.E.2d at 686, of the business. In addition, the
Judgment contains no findings which clearly indicate the evidence
upon which [the trial court's] valuation was based or the
valuation method or methods on which [the trial court] relied[.]
. (quotation marks and citation omitted).
We therefore vacate the Judgment and remand this case for
entry of a new judgment, based upon the existing record, see Minterv. Minter
, 111 N.C. App. 321, 329, 432 S.E.2d 720, 725, disc.
, 335 N.C. 176, 438 S.E.2d 201 (1993), and containing
further and appropriate findings of fact regarding the fair market
value of the business. We emphasize that our holding does not
require voluminous findings from the trial court, but instead
simply findings sufficiently adequate to reflect that it has
performed the task imposed upon it by our case law. See, e.g.,
, 137 N.C. App. at 296, 527 S.E.2d at 688; Fitzgerald
N.C. App. at 420, 588 S.E.2d at 522.
Vacated and Remanded.
Judges TYSON and JACKSON concur.
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