Cowboy Boots & Hero Sandwiches Valued in TN Divorce
- At September 13, 2013
- By Miles Mason
- In Business Valuation, Divorce
- 0
Tennessee business valuation law case summary – retail apparel and fast food restaurant. Divorce and family law from the Court of Appeals.
Deborah Joanne Cupples Plunk v. Edward Lee Plunk — Tennessee divorce business valuation (from 1997)
Deborah Plunk (wife) appealed the final divorce decree entered by the trial court which awarded custody of the parties’ two children to wife, ordered Edward Lee Plunk (husband) to pay child support and rehabilitative alimony to wife, and distributed the parties’ real and personal property.
The parties were married for 26 years. Their primary source of income during the marriage was their retail western-wear store, Boots For Less. Until the time of their separation, both parties worked full-time at the store. Husband did the paperwork and sold merchandise. Wife waited on customers, stocked inventory, maintained the store’s computer inventory system, cleaned, and performed other tasks. Wife participated in the management of the store and was capable of running the store when husband was not there.
The couple’s 1992 and 1993 tax returns indicated total income of $83,947 and $63,252. Although the tax returns attributed this income solely to husband, it was undisputed that neither drew a set salary from Boots For Less and that most of this income was generated by the store, where both parties worked full-time. The parties also earned a small income from their activities as licensed bail bondsmen and from rental properties which they acquired over the years, including the Magic Valley property on which Boots For Less was located and other residential properties.
At the time of trial, wife was 43 and had a high school education. Most of her job experience came from working at Boots For Less. After the parties’ separation, wife contacted other retail stores to inquire about employment opportunities. Wife did not think it would be a problem for her to find a new job. Husband had a high school education and some college education and military experience. Like wife, most of husband’s job experience came from his employment at Boots For Less. Husband also owned a 50% interest in two Subway restaurants, which he formerly valued at $25,000. However, husband testified that the Subways had no value at the time of trial because their debts exceeded their assets. During the year prior to the divorce, the Subways earned no profits. In the final divorce decree, the trial court divided most of the parties’ marital property equally, with all real property to be owned by the parties as tenants in common. The marital estate, which was valued in excess of $900,000.
Rather than ordering a distribution of the proceeds from the sale of the parties’ real property, the trial court ordered that the proceeds be deposited with the court clerk to be disbursed later pursuant to court order or agreement of the parties. The trial court awarded husband his interest in the Subway restaurants. In addition to distributing the parties’ property, the trial court ordered husband to pay rehabilitative alimony to wife in the amount of $400 per month for a period of 24 months and to pay child support in the amount of $798 per month. In calculating husband’s child support obligation, the trial court attributed $40,000 of the parties’ total income for 1993 to husband.
On appeal, wife contended that the trial court erred in failing to award wife any interest in the Subway restaurants and in failing to provide for a definite distribution of proceeds upon the sale of the parties’ real property. The court of appeals affirmed the trial court’s decision to award husband his interest in the two Subway restaurants and to allocate to husband any debt associated with them.
In light of husband’s testimony that the debts of the Subway restaurants exceeded their value, the court of appeals concluded that the trial court did not abuse its discretion in declining to award wife any interest in the restaurants. It also concluded that the trial court did not abuse its discretion in requiring that the proceeds from the sale of the parties’ real property be deposited with the court clerk prior to distribution of the funds. The final divorce decree entered by the trial court was affirmed.
No. 02A01-9702-CH-00040, 1997 WL 729262 (Tenn. Ct. App. Nov. 24, 1997).
See original opinion for exact language. Legal citations omitted.
To learn more about Tennessee business valuation law, see Business Valuation in Tennessee Divorce Law. To learn more about the division and valuation of professional practices in divorce, see When Professionals Divorce in Tennessee: Valuing Professional Practices.
Miles Mason, Sr. JD, CPA handles complex divorce matters including business valuations and forensic accounting issues. View his professional biography listing books and articles published on business valuation and forensic accounting and seminars presented to lawyers, judges, business valuation experts, and forensic accountants. Miles Mason, Sr. authored The Forensic Accounting Deskbook: A Practical Guide to Financial Investigation and Analysis for Family Lawyers, published by the American Bar Association. The Miles Mason Family Law Group, PLC’s offices are located in Memphis, Tennessee and serves West Tennessee and Nashville. Contact Us today at (901) 683-1850.