Opinion
No. 3-186 / 02-1325.
Filed April 30, 2003.
Appeal from the Iowa District Court for Jefferson County, DANIEL P. WILSON, Judge.
Mary Ling Viviano appeals from the property distribution provisions of the parties' dissolution decree. AFFIRMED.
Myron Gookin of Foss, Kuiken, Gookin Cochran, P.C., Fairfield, for appellant.
Robert Rutt of Robert G. Rutt, P.C., Fairfield, for appellee.
Considered by SACKETT, C.J., and ZIMMER and VAITHESWARAN, JJ.
Mary Viviano appeals from the property distribution provisions of the decree dissolving her marriage with John Viviano. She claims the district court undervalued a closely held corporation which was awarded to John. Both parties seek an award of appellate attorney fees. We affirm.
I. Background Facts and Proceedings.
The parties married in 1994 and separated in 2001. They had no children during the marriage. Mary has three children from a previous marriage. At the time of trial, Mary, was fifty-four years of age, and John was fifty-one.
Mary has a bachelor's degree in sociology. She also has a bookkeeping certificate and some computer-related training. Prior to the parties' separation, Mary worked in various positions. She has operated both a jewelry business and an air and water purifier business. During the marriage, she also performed some bookwork and data entry activities for her husband's consulting business.
John has an associate's degree and a bachelor's degree. In 1996, he started a consulting business. John operated the business as a sole proprietorship under the name Rishi Associates (Rishi). Rishi provides strategic planning, sales development, and other services for small businesses. John incorporated Rishi as a subchapter S corporation in late 1999. John and Mary each owned a fifty percent interest in the company. John operated the business out of the parties' home. He provided consulting services as the company's only employee. Mary provided some services to the company as an independent contractor a few hours a month. She provided no services to Rishi after December 2001. Rishi generated income in excess of $80,000 in tax year 2001.
John entered the marriage with assets totaling approximately $156,114. The assets were comprised of an IRA account, a cash account, an automobile, real property, and various personal effects. Mary entered the marriage with assets worth $4000 which included equity in her home and various personal effects.
In November 2001, Mary petitioned for dissolution of the parties' marriage. She received temporary spousal support of $1,000 per month from February of 2002 until the date of trial. Trial commenced on July 9, 2002. The district court dissolved the parties' eight-year marriage by decree entered July 15, 2002. The court awarded Mary assets valued at $76,078 and awarded John assets totaling $215,658. As part of its decree, the court valued the assets of Rishi at $200 and awarded the business to John. The court also awarded Mary $750 per month for twenty-four months as rehabilitative spousal support and ordered John to pay $1000 for Mary's attorney fees. Mary appeals contending the trial court undervalued Rishi.
II. Scope of Review.
In this equity case our review is de novo. Iowa R.App.P. 6.4. We examine the entire record and adjudicate rights anew on the issues properly presented. In re Marriage of Smith, 573 N.W.2d 924, 926 (Iowa 1998). We give weight to the fact-findings of the trial court, especially when considering the credibility of the witnesses, but are not bound by them. Iowa R. App. 6.14(6)( g); In re Marriage of Vieth, 591 N.W.2d 639, 640 (Iowa Ct.App. 1999).
III. Property Division.
On appeal, Mary contends Rishi has a value of at least $21,572.19 consisting of office equipment, a brokerage account, and goodwill. John contends the claims raised on appeal by Mary were not brought to the trial court's attention. As a result, he argues Mary has not preserved error. See In re Marriage of Okonkwo, 525 N.W.2d 870, 872 (Iowa Ct.App. 1994) (holding matters not raised in the trial court will not be considered on appeal). John's claim that Mary did not properly preserve error is not without merit. Our review of the record reveals that Mary made a general claim for division of the parties' assets, but presented little, if any, evidence regarding the specific claims she now raises in this appeal. Assuming, without deciding, that error was preserved, we conclude the trial court's property distribution was equitable.
The partners to a marriage are entitled to a just and equitable share of the property accumulated through their joint efforts. In re Marriage of Russell, 473 N.W.2d 244, 246 (Iowa Ct.App. 1991). After assigning valuations, a determination must be made as to the equitable allocation of the assets and debts. Vieth, 591 N.W.2d at 640. Assets and debts should be equitably, but not necessarily equally, divided under the circumstances after considering the criteria delineated in Iowa Code section 598.21(1) (2001). In re Marriage of Driscoll, 563 N.W.2d 640, 642 (Iowa Ct.App. 1997).
Determining the value of a closely held corporation is an inherently difficult endeavor. In re Marriage of Conley, 284 N.W.2d 220, 222 (Iowa 1979); In re Marriage of Steele, 502 N.W.2d 18, 21 (Iowa Ct.App. 1993). The market value of stock in a closely held corporation can rarely be ascertained. Steele, 502 N.W.2d at 21. Because of the difficulty of this task, the district court is allowed considerable discretion. Id.
On appeal, Mary contends Rishi had office equipment worth $2,162.34. At trial, she offered no evidence as to the value of Rishi's office equipment and failed to identify any office equipment on the stipulation of assets and liabilities she presented to the trial court. The evidence indicates that Rishi's equipment consisted only of a used computer, a fax machine, and some files. Moreover, the record suggests the parties stipulated the value of Rishi's assets was $200 at the time of trial.
Mary also maintains the court failed to consider a brokerage account, identified in the record as the WCMA account, in arriving at its valuation of the business. The record reveals the WCMA account was, in fact, considered in the property division. This asset was considered apart from Rishi. The court valued the account at $76.00 and awarded it to John. Mary claims the account's value was $3409.85 as evidenced by an account statement dated July 3, 2002. However, she offered no evidence to rebut Rishi's July 8, 2002 balance sheet, which indicates the account's value at the time of trial was actually $76.00 because of business charges paid out of the account.
Mary also claims the valuation of Rishi should include goodwill. On appeal she proposes that we find Rishi had goodwill valued at $16,000 (consisting of twenty percent of $80,000 in gross revenues in 2001) at the time of trial. We decline her invitation. Mary has failed to show this is a case where goodwill should be valued. In addition, she did not inform the trial court she was seeking an award for goodwill or "blue sky" at trial, and offered no evidence to support the model for valuation she now proffers on appeal. Rishi is a one-person consulting business, operated out of a personal residence, with no inventory, and only nominal assets. It has been in operation for only six years. We find no basis in the record for an award of goodwill.
We conclude the trial court's valuation of Rishi is well within the permissible range of evidence, and we are not inclined to disturb it on this appeal. See In re Marriage of Moffatt, 279 N.W.2d 15, 19 (Iowa 1979).
IV. Appellate Attorney Fees.
Mary and John each seek an award of appellate attorney fees. We consider the needs of the party making the request, the ability of the other party to pay, and whether the party making the request was obligated to defend the trial court's decision on appeal. In re Marriage of Cooper, 524 N.W.2d 204, 207 (Iowa Ct.App. 1994). Considering these factors, we award John $500 in appellate attorney fees.