Gaskill v. Robbins

361 S.W.3d 337, 2012 WL 335635, 2012 Ky. App. LEXIS 22
CourtCourt of Appeals of Kentucky
DecidedFebruary 3, 2012
DocketNo. 2010-CA-001814-MR
StatusPublished
Cited by4 cases

This text of 361 S.W.3d 337 (Gaskill v. Robbins) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gaskill v. Robbins, 361 S.W.3d 337, 2012 WL 335635, 2012 Ky. App. LEXIS 22 (Ky. Ct. App. 2012).

Opinion

OPINION

LAMBERT, Judge.

Julie Ann Gaskill appeals from a Warren Family Court’s findings of fact, conclusions of law, and judgment with regard to the valuation and distribution of an oral surgery practice in dissolution proceedings. Finding no error in the trial court’s judgment, we affirm.

Gaskill is fifty-two years old. She is self-employed as an oral surgeon in a sole proprietorship that she established in 1991. The oral surgery practice employs several staff members who keep records, schedule patients, and assist in surgery. When Gaskill established the practice, she was married to Jon Kevin Robbins. In addition to his outside employment, Robbins occasionally assisted Gaskill’s oral surgery practice by performing a variety of administrative duties. Gaskill remains the only oral and maxillofacial surgeon employed by the practice.

Over the course of their marriage, Gas-kill earned approximately 90% of the marital income. The couple amassed a marital estate valued at over $4 million. The oral surgery practice was the largest marital asset held by the couple.

On October 24, 2003, Gaskill petitioned the Warren Family Court for dissolution of her marriage to Robbins. Although many issues were raised during the dissolution proceedings, the issues and facts in this appeal concern the trial court’s valuation of the oral surgery center.

The trial court held an eight-day trial that included testimony from twenty-seven [339]*339witnesses. Among those witnesses were two certified public accountants who testified about the proper valuation of the oral surgery practice. First, Steve Wheeler, Gaskill’s CPA, testified that he compiled two separate reports regarding the practice’s value. Wheeler conducted an in-depth evaluation of the oral surgery practice’s records, financial holdings, liabilities, and even interviewed employees. Wheeler testified that he determined the value of the practice by comparing its assets and liabilities. He opined that the asset-liability method was the most accurate based upon the facts that the business was not actually for sale and there were no available sales figures for similarly situation practices.

In his first report, Wheeler concluded the practice’s value, as of December 31, 2003, was $237,000.00. Following his initial valuation, Wheeler discounted the business valuation by 10% for lack of marketability, or, as Wheeler described, “the ability to quickly convert property to cash at a minimal cost.” Wheeler originally discounted the practice’s value by 23%.

Wheeler subsequently prepared a report that concluded that the practice’s value, as of December 2004, was $114,000. In the 2004 report, Wheeler once again used an asset and liability analysis to determine value. However, in 2004, the practice had a significant drop in cash.

Richard Callahan, a CPA hired by Robbins to evaluate the oral surgery center, also testified at trial. Although Callahan used Wheeler’s data to evaluate the business, he used four different calculation methods that each resulted in a different value. Callahan then used those four values and averaged them together to arrive at the average value.

Callahan’s report also differed from Wheeler’s evaluation in other respects. Where Wheeler’s method doubled employee wages to allow for the cost of replacing personnel, Callahan claimed that a willing buyer could employ the same personnel. Finally, Callahan valued the oral surgery practice at $669,075.00.

Finding Callahan’s view to be more credible, the trial court fixed the value of the practice at $669,075.00. Based upon this valuation, Robbins received a large sum of cash. Gaskill appealed the award.

On appeal, the Kentucky Supreme Court remanded the ease to the Warren Circuit Court based upon its conclusions that: (1) the trial court erred in failing to recognize the presence of both business and personal goodwill; and (2) that the trial court erred by using an arbitrary average of numbers to determine the value of the oral surgery practice. Gaskill v. Robbins, 282 S.W.3d 306 (Ky.2009). The Supreme Court ordered the trial court to re-value the practice. Id. On remand, the trial court determined that the oral surgery practice was valued at $237,000.00. This appeal follows.

Kentucky Revised Statutes (KRS) 403.190(1) instructs trial courts to divide marital property in “just proportions.” Appellate courts will not disturb a trial court’s judgment, division, or valuations in a dissolution action unless the court’s decision is contrary to the weight of the evidence. Clark v. Clark, 782 S.W.2d 56, 58 (Ky.App.1990). Thus, we examine the methods utilized by the trial court to determine whether the trial court clearly erred in valuing the oral surgery practice.

Gaskill first argues that the trial court abused its discretion by failing to adopt the business valuation performed closest to the date of the decree. We disagree. Contrary to Gaskill’s assertions, there is no presumption that assets should be valued within close proximity to the date of the decree. While other jurisdictions have applied a “book value” or “fair [340]*340market value” approach to valuation, Kentucky law has not specifically adopted one method of valuation. Id. at 59. The trial court must consider a variety of factors to properly value a business, including which calculations best represent the business’s value.

Although Gaskill argues that the Courts in Stallings v. Stallings, 606 S.W.2d 163 (Ky.1980), and Clark, 782 S.W.2d at 56, concluded that the trial courts abused their discretion by valuing assets on dates other than the dates of the decrees, we agree with the trial court that those cases are factually and legally distinguishable. Stallings questioned whether property acquired after separation but pri- or to dissolution should be considered marital property. In Clark, the Court concluded that a pension and profit sharing plan should have been valued at date of dissolution rather than the date of the qualified domestic relations order. However, as the Court in Clark acknowledged, there is no bright-line method used to evaluate property. Clark, 782 S.W.2d at 59. “The task of the appellate court is to determine whether the trial court’s approach reasonably approximately (sic) the net value[.]” Id. Our review indicates that the court’s decision to value the oral surgery practice based upon the 2003 evaluation was well-reasoned and based upon ample evidence. As the trial court stated in its order:

It is impractical for an exact snapshot of value to be taken of a business in every case on the day of the divorce decree. These take time and thoughtful inspection to complete, and a valuation must be provided by an expert for consideration at trial, which can be long before the Court dissolves the marriage by decree. The Court should not choose one valuation over another simply because the date of the valuation is closer in time to the Decree, especially if the other valuation more accurately reflects the true value of the business entity. Additionally, a later valuation would be improper if an intentional dissipation of the business value had occurred.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Dustin Allen Anderson v. Kristen Nicole Anderson
Court of Appeals of Kentucky, 2026
Scott William Mitchell v. Cher Beilfuss Mitchell
Court of Appeals of Kentucky, 2025
Scott Williams Mitchell v. Cher Beilfuss Mitchell
Court of Appeals of Kentucky, 2025
Jeremy Steven Delk v. Cynthia Mae Delk
Court of Appeals of Kentucky, 2024
Zeke Coffee, Inc. v. Pappas-Alstad Partnership
2015 COA 104 (Colorado Court of Appeals, 2015)

Cite This Page — Counsel Stack

Bluebook (online)
361 S.W.3d 337, 2012 WL 335635, 2012 Ky. App. LEXIS 22, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gaskill-v-robbins-kyctapp-2012.