Divorce; Valuation of marital property; McNamara v Horner; The McNamara factors; Judgment of divorce (JOD)

Concluding that the trial court did not err in adopting the $0 valuation for plaintiff-ex-husband’s business and a building he owned “when that value was clearly supported by the record evidence[,]” the court affirmed the JOD as it concerned the valuation of marital property. Defendant-ex-wife argued that “the trial court clearly erred in valuing WebLocal and the Washington Square building at $0, because both continued to generate income and had remaining equity and assets after deducting the debts.” The court held that the trial court did not clearly err in finding that both the business and the “building should be valued at $0 after considering all of the evidence presented at trial.” Defendant asserted “WebLocal was valued according to a ‘fire sale’ approach, because the CPA failed to consider the value of the business as a ‘going concern.’” This argument was without merit. The valuation report clearly showed “that WebLocal was valued on a ‘going concern basis as opposed to an orderly liquidation basis.’ The valuation accounted for the business’s assets, including $340,000 in a bank account, and its debts, which included $520,000 in ‘long-term debt,’ and $65,000 in debt pursuant to loans from shareholders. When subtracting the debts from the assets, the CPA concluded WebLocal was worth $0.” Defendant did “not provide an alternative valuation or point to any specific deficiency in the expert valuation plaintiff provided. Further, [her] contention that plaintiff makes a quarter of a million dollars per year from WebLocal is not supported by the record. Plaintiff’s tax returns showed his income to be: $107,123 in 2020; $34,078 in 2021; and $59,073 in 2022.” Thus, the court could not “find the trial court erred in adopting the $0 valuation when that value was clearly supported by the record evidence.” As to the valuation of the building, defendant asserted that it “had at least $150,000 in equity remaining after debts were subtracted.” While this was “true, the trial court properly considered other factors in determining the building was worth nothing. The appraisal indicated the building had a market value of $1,420,000 in 2021. [The parties] both agreed that the businesses and the business assets should be valued after subtracting any debts.” The court noted that “plaintiff provided an expert appraisal as well as plaintiff’s own opinion testimony and documentation to support his contention the building’s value was less than what the appraisal concluded. Upon review of the entire record, this Court finds that the trial court did not clearly err in finding the building’s value was $0 after considering all of the evidence presented at trial.”