Ortho Group + MRI Valued with No Experts in TN Divorce
Tennessee business valuation law case summary – Orthopedic Group + MRI. Tennessee divorce and family law from the Tennessee Court of Appeals.
Odom v. Odom – Tennessee divorce business valuation – Chattanooga Orthopedic Group, PC, Center for Sports Medicine, and MRI
Alan and Janis Odom were married in 1970. The husband, Dr. Alan Odom, was an orthopedic surgeon in Chattanooga. Mrs. Odom was a high school graduate with two years of college, and did not work outside the home. Dr. Odom filed for divorce in 2007, after being romantically involved with his nurse since 2005.
In addition to his medical practice, the husband was one of ten partners in the Chattanooga Orthopedic Group, PC, (COG) and the Center for Sports Medicine, LLC, (CSM). COG had recently acquired an MRI machine for $1,000,000, and each of the ten COG shareholders equally realized income from that machine.
No expert testimony was presented as to the value of these businesses. The sole testimony was that of Dr. and Mrs. Odom.
At trial, Dr. Odom testified that his interest in both COG and CSM had a combined value of $78,000. He based the $78,000 value on the amount he would be entitled to receive pursuant to his employment agreement with COG should he leave that practice. However, Mrs. Odom testified that prior to the divorce, Dr. Odom had told her that his interest in COG was worth $450,000, prior to purchasing the MRI machine.
The trial court valued Dr. Odom’s interest in COG at $450,000, plus an additional $50,000 due to the new MRI machine, for a total of $500,000. On appeal, Dr. Odom argued that the trial court had overvalued COG. In its opinion, the trial court had erroneously referred to Mrs. Odom’s testimony as “unrefuted,” even though that was not the case. However, the Court of Appeals concluded that this value was “within the range of values represented by all of the relevant valuation evidence” and that the Court of Appeals should not second guess the trial court. Therefore, the Court of Appeals upheld the trial court’s valuation. As to the trial court’s error in saying that the testimony was unrefuted, the Court of Appeals reviewed the record and was confident that the trial court had fully considered the husband’s testimony.
No. E2007-02250-COA-R3-CV (Tenn.Ct. App. Sep. 30, 2008).
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.
