Brown v. Brown, 2022

In this Mississippi divorce case, the appellate court en banc reversed in part and remanded in part, asking the trial court to determine whether certain items were marital property and determine the values for certain marital properties so a proper distribution of marital property can be made. Included was a used-car business that was remanded for a value to be determined. Several judges dissented primarily because the marital estate in total was not very material and they believed the appellate court could have made adjustments without remanding.

Greg Brown appealed the decision of the Chancery Court, challenging the Chancery Court’s valuation of several property items, the valuation of several items, the valuation of a business the parties owned, and the award of two specific items to his wife, Rhonda. This digest will focus on overall concepts and the issue relating to the value of the co-owned used-car business.

Parties’ requests to the court.

Rhonda told the Chancery Court that she wanted back the approximately $30,000 she invested in R&G (the used car business Greg operated). Greg valued R&G at $6,241. His annual net income was about $18,000 per year. Greg was alright with the house going to Rhonda (about $12,000 of equity). The Chancery Court, after examining the evidence and the property, made its distribution based on the Ferguson factors that guide the courts in determining equitable distributions. 

Standard of review.

“The chancery court has substantial discretion as to the distribution of property in a divorce.” (Dunaway v. Dunaway) “The chancery court’s findings will be affirmed unless the court was manifestly wrong, abused its discretion, or applied an erroneous legal standard.” (Ory v. Ory) 

Whether the chancery court erred in failing to value R&G auto sales.

The Chancery Court awarded the ownership of R&G to Greg (except for “the Black Truck”). Greg challenged the Chancery Court’s failure to “articulate the value of R&G.” The appellate court agreed that the Chancery Court should assigned it a value. Because it was not, the appellate court reversed the overall distribution of R&G and all of the marital property. The appellate court noted that any Ferguson factor that impacted the overall distribution should be considered in the remanded distribution of property. There was some evidence presented from which the Chancery Court could have valued R&G, but it failed to do so.

The Chancery Court had information that would allow it to value the business, and it is necessary for the Chancery Court to value the business “for there to be a truly equitable and fair distribution of the parties’ assets.” The appellate court also noted that additional evidence will need to be presented in order to determine what a willing buyer would have paid for the business at the appropriate date of valuation, i.e., January 2017.

It was not for the appellate court to determine the value of R&G, but rather for the Chancery Court to do so. The Chancery Court had the option of reviewing evidence presented and determining a value, requiring the parties to present competent evidence if needed, or to appoint an expert, to be paid by the parties, to value R&G.

Conclusion.

The appellate court noted that it was not possible for the appellate court to evaluate the overall distribution of assets due to the lack of specification of some assets and lack of values of others, including S&G. “[W]e reverse in part and remand the chancery court’s distribution of the marital property for further proceedings consistent with this opinion.”

Dissent.

As noted, this case was heard en banc. As such, it was not surprising that there was a dissenting opinion, written by Judge Wilson on behalf of himself and Judges Barnes and Carlton.

The dissent noted that this case involved the equitable distribution of a small marital estate with few assets. Despite Rhonda’s significant investment in R&G, the Chancery Court awarded full ownership of R&G to Greg. Noting and discussing some specific items of property Greg challenged, the dissent noted that there was no dispute regarding many of the items, some of which were no longer owned at the date of the trial. Greg failed to show that the failure to assign a value to these items had prejudiced Greg in any way. “This Court can modify the final judgment to award Greg the tractor and his equipment. Otherwise, the division of property is fair and should be affirmed.”

Value of R&G.

Greg valued R&G at $6,241, and Rhonda did not offer any opinion as to its value. The evidence indicated that R&G was not a valuable asset. Greg testified that, at the time of trial, there were only five cars on the lot, and they had been financed by a floor plan and were not owned by Greg at the time of trial. Unlike what the majority argued, there was no inherent contradiction between Greg’s valuation and the evidence regarding the gross receipts of the business. “A disinterested ‘willing buyer’ probably would not pay much to acquire a small West Memphis [AK] car lot whose sole proprietor earns only $18,029 per year while working full-time at the business.” It was noted that Rhonda did not want a remand and was satisfied with the decision of the Chancery Court. Further, there was no reason for the Chancery Court to appoint an expert to be paid by the parties to value R&G, a small used-car lot with minimal profits.

The various errors that Greg alleged were “harmless.” Mostly, the Chancery Court’s distribution was fair. The appellate court can make the small adjustments to certain assets and modify the ruling instead of remanding it.