In re the Marriage of Maurer

619 P.2d 964, 49 Or. App. 355, 1980 Ore. App. LEXIS 3734
Court of Appeals of Oregon·Decided November 24, 1980·No. No. 15-79-00038, CA 16604·Published·Cited by 8 cases

Opinion

THORNTON, J.

Husband appeals from a decree of dissolution assigning as error the following:

1) Awarding permanent spousal support;

2) Valuing husband’s veterinary opthalmology practice in a manner that attributes too great a value to the goodwill of such practice; and

3) Providing for annual increases in the amount of child support where there was no evidence to establish the fact or level of inflation.

This is a 17-year marriage. Husband is 40 years old and is one of about 25 veterinary opthalmologists with clinical practices in the country. He works three days per week in Eugene and flies to San Mateo, California, for two days per week. Most of his business comes from referrals from general practitioners, although he occasionally obtains clients from other sources. Husband is one-fourth owner of a clinic building in Eugene which he shares with three other veterinarians. In the three years husband has practiced, his income has steadily increased. In 1978 he grossed $99,754 and netted $47,497 before taxes, but after deducting his costs of doing business. His 1979 estimates, based on ten months’ receipts, are $130,956 gross and $62,335 net, before taxes.

Wife is 38 and working part-time as a secretary to a sole medical practitioner, netting, after taxes, approximately $300 per month. She has a teaching certificate which has lapsed, but which could be revalidated by taking nine hours of classes. During the marriage, wife taught full-time for four years and substituted for three years. She testified that she enjoyed teaching and felt she was good at it. She has some specialized training in remedial reading. She stated she had allowed her certification to lapse and has not renewed it (or otherwise sought full-time employment) since the parties separated in 1978 because she felt she should be available in the mornings and evenings to [358] care for the parties’ two children, Amy Jo, 14, and Baron, 8. Both husband and wife are in good health.

The trial court awarded the parties joint legal custody of their two children and gave wife physical custody and the family home. After assigning a $27,000 value to husband’s practice,1 he made an approximately equal property division. He ordered permanent spousal support as follows: $500 per month for five years, $300 per month for ten years, and $200 per month thereafter until wife dies or reaches 62. He also provided for child support of $300 per month per child to continue until the children become emancipated, die, reach majority or, if enrolled in school, until they reach 21. The amount of such support is to increase annually by $25 per child per month until it reaches $400 per month, whereafter it will remain constant.

I. Spousal Support

Where the parties have disparate income earning capacities, spousal support is appropriate to enable the disadvantaged spouse to live in a manner not overly disproportionate to that which she enjoyed during the marriage. Grove and Grove, 280 Or 341, 571 P2d 477, 280 Or 769, 572 P2d 1320 (1977). Permanent spousal support is appropriate where the marriage is of long duration and the spouse’s age, education, health or other factors make it unlikely that the recipient spouse will ever be able to earn an adequate income. ORS 107.105(1)(c); Hinsdale and Hinsdale, 20 Or App 638, 532 P2d 1137, rev den (1975). Where it appears that, through training and education, the recipient spouse can eventually augment her earning capacity to the point where she can sustain a lifestyle comparable to that enjoyed during the marriage, spousal support should be ordered to enable her to gain that training or education.

We believe permanent support is appropriate in this case. The trial court’s spousal support award takes into [359] account the expectation that wife will be able to earn substantially more than she did at the time of trial, but assumes, we think reasonably, that even when she is able to work full-time as a teacher, her income is going to be unreasonably disproportionate to that which she would have enjoyed but for the dissolution. Accordingly, we conclude that permanent spousal support is justified in this case under the tests set forth above.

II. Goodwill

The trial court valued husband’s practice as a going concern and appears to have attributed approximately $39,500 to goodwill value. Both sides here offered expert testimony on this issue, although none of the experts had any experience with the sale or other transfer of the specific type of practice involved here. Wife’s expert testified that, based on an approach which combines the fair market value of the tangible assets with a figure representing the capitalized net profits, the practice was worth approximately $160,000. Net profits were determined by subtracting the market value of husband’s services (estimated at $40,000 per year) from the net receipts before income taxes but after deducting expenses ($62,335). Husband’s experts disputed that a sole medical specialist practice has much goodwill value (a maximum of $5,000), based on their experience with valuation and transfer of interests in professional partnerships. The explanation for this low figure is that husband (since he has no one earning money for him in his absence) is the chief asset of the business and his gross receipts approximate the reasonable value of his services. There remains, therefore, very little in the way of "profits” after the value of husband’s services have been deducted from gross receipts.

We conclude that we need not consider whether the trial court erred in assigning a value to the goodwill of husband’s practice. We reach this conclusion because we are of the opinion that the property division was proper as a matter of an equitable division of the marital assets.

III. Child Support

Citing the increase in recent years in the number of show cause hearings to modify spousal and child support [360] because of erosion of the real value of such payments through inflation, the trial court’s child support award included a provision for annually escalating the amount of child support by $25 per month per child until it increases from $300 to $400. In DeBoney v. DeBoney, 36 Or App 783, 585 P2d 742 (1978), rev den 285 Or 1 (1979), we confronted a similar provision. We did not rule on the propriety of anticipating inflation by incremental increases in support levels; we held only that such an increase was not justified in that case because it raised the amount of support beyond an appropriate level. 36 Or App at 788.

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In re the Marriage of Maurer, 619 P.2d 964, 49 Or. App. 355, 1980 Ore. App. LEXIS 3734 (Or. Ct. App. 1980).

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