This case in Domestic Relations involved a divorce that had been litigated for 10 years. One of the disputes revolved around the valuation of the husband’s orthopedic practice. In particular, the valuation of the receivables was disputed. Both experts used the fair market value standard and both placed great emphasis on the value of the receivables.
The husband valued the receivables using records from 1999. The wife’s expert used the value of receivables in 1998. The husband claimed that the wife’s expert did not use the most recent financial information. However, according to the court, the husband did not provide the most recent receivable information to the wife, nor did the husband have his expert testify, instead relying on an affidavit authenticating the contents of the report. The Appeals Court also noted discrepancies in the 1999 records and the differences in information he provided to the two experts, and used this to support it’s finding that the Wife’s expert opinion was more credible.
In general, the trial Court found the husband’s expert report less credible and the Appeals Court found no abuse in relying on the wife’s expert’s testimony and report.
Traditionally, valuations are performed at a particular time and as of a valuation date. This case really emphasizes the importance of the two sides agreeing on a common valuation date. Had they agreed that 1998 was the valuation date, the issue of timely data, and discrepancies would never have occurred. The case also shows how the court’s perceived failure to disclose can backfire on the party who has the information advantage, normally the owner spouse.
Finally, the exceptional period in delay from filing to final trial, points out the cost of multiple valuations which can be avoided with a fixed valuation date. Experts are not usually required to update their reports except at an additional cost. Dating the valuation as close to the divorce as possible can avoid the cost of updating the report, but may not reflect the valuation realities of the marital assets.
The relevant date is when the parties effectively terminated the marriage, either by separate living arrangements, or by filing for separation or divorce. This approach acknowledges that divorces sometimes take time, but the delay in the court decision should not affect the value of the marital property at the time of divorce. This approach would eliminate the cost of updating the report since any updates would be irrelevant, baring unusual changes in circumstances. If there were unusual circumstances, the effect could be introduced at trial without a complete revaluation.
Utah Supreme Court Puts Limits on Free Attorneys for Contempt of Court
On October 24, 2017, the Supreme Court decided that while an indigent parent may have an attorney for a hearing to decide whether they are in contempt of court or not, once they are found in contempt he or she may lose their free attorney. When a person is found in contempt, the court makes orders regarding what must be done to “purge” their contempt, or else face jail time. The court may set a date for the person on contempt (“contemn or””) to come back to court and either prove that they have purged their contempt or go to jail
In Liming v Damos, the Supreme Court decided:
- A hearing to determine whether a contemnor has purged himself of civil contempt (a “purge” hearing) is a civil proceeding; and
- The Due Process Clauses of the Utah and United Statues Constitutions do not guarantee an indigent parent the right to appointed counsel at a civil contempt purge hearing.
The Supreme Court said that a purge hearing is civil in nature if the original contempt sanction was civil.
In this case, the Commissioner recommended that Mr. Liming be found in contempt for failing to pay his child support, and that he be sentenced to 30 days in jail, with the term suspended as long as he paid his full monthly child support and arrearage payments, and complied with other conditions for one year. The contempt would then be considered purged as long as Mr. Liming remained in compliance. The Judge adopted the Commissioner’s Decision.
Not quite a year later, the Athens County Child Support Enforcement Agency filed a motion to impose the sentence for Mr. Liming’s failure to comply with the seek-work program, to report employment changes to the agency, and to pay child support. The court held a hearing, and Mr. Liming requested a public defender, and the court denied his request. The court found that he had failed to comply with the conditions of the court’s purge order, and Mr. Liming was sentenced to 10 days of his 30 day sentence, with the remaining 20 suspended on the condition that he fully comply with the conditions of the purge order for one year. Mr. Liming appealed the court’s decision.
The Fourth District Court of Appeals said that the original contempt hearing was civil in nature, and enforcing the sentence did not change the purge hearing to a criminal action. This can be confusing – how can it be a civil matter when a person is facing jail time? Contempt is it’s own animal. It is said that a person who is facing contempt has the keys to his own prison. All he has to do is comply with the court’s order, and the threat of jail time is gone.
Mr. Liming argued that it was impossible for him to pay his child support. He argued that the trial court was obligated to determine whether it was impossible for him to pay his child support. The Supreme Court of Utah said that while inability to pay is a defense to contempt, the burden of proof is on the person asserting the defense. The court said there is a presumption of ability to pay from the fact that there is an order to pay, and because Mr. Liming did not object to the original order. In addition, Mr. Liming did not offer any evidence of inability to pay at his hearing to impose the suspended sentence.
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