In re Marriage of Trapp

2022 IL App (3d) 210291-U
CourtAppellate Court of Illinois
DecidedNovember 21, 2022
Docket3-21-0291
StatusUnpublished

This text of 2022 IL App (3d) 210291-U (In re Marriage of Trapp) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Marriage of Trapp, 2022 IL App (3d) 210291-U (Ill. Ct. App. 2022).

Opinion

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).

2022 IL App (3d) 210291-U

Order filed November 21, 2022 ____________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

In re MARRIAGE OF ) Appeal from the Circuit Court ) of the 10th Judicial Circuit, RAYMOND J. TRAPP, JR., ) Tazewell County, Illinois. ) Petitioner-Appellee, ) ) Appeal No. 3-21-0291 and ) Circuit No. 18-D-258 ) FELICIA E. TRAPP, ) Honorable ) Lisa Y. Wilson, Respondent-Appellant. ) Judge, Presiding. ____________________________________________________________________________

PRESIDING JUSTICE O’BRIEN delivered the judgment of the court. Justices Holdridge and Hettel concurred in the judgment. ____________________________________________________________________________

ORDER

¶1 Held: Trial court’s distribution of marital property, after a trial on disputed financial issues, was not an abuse of discretion where the husband presented competent evidence of the value of both of his businesses. The distribution of the businesses to the husband, with a cash payment to the wife, as modified to reflect increased equity, resulted in an equitable distribution of the marital assets. The trial court’s child support order was reversed and remanded for recalculation of the husband’s income.

¶2 The respondent wife appealed from a trial court’s judgment of dissolution of marriage from

petitioner husband, challenging a number of disputed financial issues. ¶3 FACTS

¶4 The petitioner husband, Raymond J. Trapp, Jr., and the respondent wife, Felicia E. Trapp,

were married on June 23, 2001. Two children were born of the marriage, Z.T., born on October

14, 2001, and R.T., born on October 18, 2003. On July 19, 2018, the husband filed a petition for

dissolution of that marriage. A trial on disputed financial issues was held on August 4, 2020.

¶5 Neil Gerber, a certified public accountant and certified business appraiser, who had been

doing business valuations for 30 years, was hired by the husband to conduct a business valuation

for both of the husband’s businesses: Ray Trapp Electric, Inc., and Trapp Properties, Inc. Both

valuations were as of August 31, 2019, and both reports were dated October 31, 2019. Gerber

testified that in valuing Ray Trapp Electric, Inc., he applied the asset method whereby he subtracted

the liabilities and debts from the fair market value of the assets and came up with an equity value

of $320,000. He valued the intangible assets of goodwill and a non-compete agreement as assets

of the husband at about $90,000. When asked if that value would have substantially changed since

the valuation date of August 31, 2019, especially with the COVID-19 pandemic, Gerber stated that

he was not asked to update his valuation. But, Gerber testified that service work had not generally

been impacted and if the husband were to testify that his income has not changed, then it was

reasonable to say the value of Ray Trapp Electric, Inc., had not changed either.

¶6 As for Trapp Properties, Inc., Gerber testified that he was asked to value the husband’s

equity in that real estate entity as of August 31, 2019. Two buildings were the major assets of that

entity. Gerber derived the fair market value of the original building from a July 30, 2018, Broker

Opinion of Value (hereinafter market analysis) by Justin Ferrill, which Gerber obtained from the

husband. The new building was just constructed in 2019, so Gerber used the cost of construction,

which he obtained from the corporation’s tax returns and depreciation schedules, to determine the

2 fair market value. Gerber personally inspected both buildings, and he believed it was reasonable

to rely on the information that he was provided. Gerber testified that he frequently was hired to

value equity in real estate partnerships, for which he relied on appraisals or other estimates of

value. Gerber believed that his valuation was accurate, even though he relied on a market analysis

rather than an appraisal to value the original building. Gerber determined the net equity value of

Trapp Properties, Inc., by taking those two values and subtracting the two mortgages. He

determined that the net equity value of Trapp Properties, Inc., as of August 31, 2019, was $20,000.

Gerber could not testify as to whether the market conditions in the year since his valuation would

have substantially changed the value, but Trapp Properties, Inc., had been making mortgage

payments during that time, so the equity value would likely be higher. If asked to revalue the

business as of the date of the hearing, Gerber testified that he would use the current loan balance,

which, based on the husband’s most recent financial affidavit, would make the equity value

somewhere between $55,000-$60,000.

¶7 Gerber also valued the wife’s Teacher’s Retirement System fund as of November 15, 2019.

Gerber determined the present marital value of the wife’s pension to be $288,000, if she retired at

age 55, and $275,000, if she retired at age 60.

¶8 The husband testified that he was a self-employed electrician. During the marriage, he

started Ray Trapp Electric, Inc., in 2002 and Trapp Properties, Inc., in approximately 2015. The

husband was the only shareholder owner in Ray Trapp Electric, Inc. He was responsible for

bidding jobs and he had employees who went to the work sites. He paid himself a salary, which

was about $42,000 in 2019. In addition to his salary, the husband paid some personal bills directly

from Ray Trapp Electric, Inc., totaling about $1900 a month. The husband testified that the

increase in cash on hand for Ray Trapp Electric, Inc., from around $28,000 at the time the business

3 valuation was done in 2019, to $106,341 as of June 30, 2020, was partially due to COVID-relief

funding. Those funds had been placed in a separate account, and were used for the proper purposes,

which freed up other funds in the Ray Trapp Electric, Inc., account. Otherwise, the difference was

due to the timing during the month, and a large electrical supply bill had just been paid that would

exhaust most of the difference. The husband testified that his 2019 income tax return for Ray Trapp

Electric, Inc., indicated ordinary business income, or a profit, of $23,021. The husband testified

that was not profit but rather was a distribution to pay some bills for Trapp Properties, Inc.

¶9 The husband testified that, with respect to the two buildings owned by Trapp Properties,

Inc., $390,000 was owed on the original building and $434,000 was owed on the new building.

Although his financial affidavit also listed $000 a month in rental income, the costs of the

mortgages, insurance, and maintenance on the buildings exceeded that amount. The husband

testified that he started Trapp Properties, Inc., as basically his retirement plan; he intended to pay

the buildings off over time and collect rental income when he retires. He acquired the mortgage to

construct the new building after he filed for divorce. The market analysis was completed by Ferrill,

who was the husband’s friend and real estate broker, for the bank for the purpose of obtaining a

loan for the new building. The original building had five spaces for rent; two and a half were

occupied by Ray Trapp Electric, Inc., and two others were rented to tenants. The new building had

four tenants.

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2022 IL App (3d) 210291-U, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-marriage-of-trapp-illappct-2022.