Husband Not Allowed to Offer Seller’s Opinion of Business Value

Tennessee case summary on business valuation evidence in divorce.

Mitzi Sue Garner v. Robert Allen Garner

The wife in this Hamilton County, Tennessee, sued for divorce in 2009 after being married in 1977.  The case went to trial in 2010.  The couple co-owned a gym that the husband operated, and the wife worked at a veterinary clinic.  One of the main issues at trial was the value of the gym.  In particular, testimony focused on cash transactions.  The husband’s income, for child support purposes, was set at $2400 per month.  After various motions, this was upped to $4583 per month.

The husband brought an appeal, but the Court of Appeals dismissed the appeal because the judgment was not final, since parenting time had not been finalized.  After various motions, the trial court finally entered a final order in 2019.  The husband was ordered to pay child support of $241 per month, and he filed another appeal with the Tennessee Court of Appeals.

The husband’s argument on appeal was that the value of the gym had not been correctly determined.  In particular, the husband, who did not have an attorney at trial, attempted to offer the testimony of Lawrence Day, the person who had sold him the gym.  This testimony had been excluded because there was no foundation for his expert testimony on the issue of value.  Both the wife and husband had been allowed to offer their opinion as to value, since they were owners.  The husband argued that Mr. Day’s testimony should have been allowed, since he held a mortgage on the property, and thus had some ownership interest.

Unfortunately, the husband had not made an offer of proof as to what the witness would have said.  And the husband did not testify as to his personal opinion of the value.  For that reason, the appeals court affirmed the lower court’s holding.

The appeals court did hold that the husband should have been allowed more latitude in cross examination as to the wife’s valuation, in particular, her reliance upon a tax appraisal.  But it found that this did not rise to the level of reversible error.

After reviewing the other issues in the case, the Court of Appeals affirmed and remanded the case for collection of costs.  It assessed the costs of appeal against the husband.

No. E2019-01420-COA-R3-CV (Tenn. Ct. App. July 29,  2020).

See original opinion for exact language.  Legal citations omitted.

To learn more, see Business Valuation in Tennessee Divorce.