By Kurt R. Mattson
In a Virginia divorce action, the wife (Stacey) appealed the trial court's order requiring her to pay her ex-husband (Richard) nearly $650,000 in restitution in accordance with a payment plan. The value of some of the couple’s person property was in dispute.
After the divorce proceedings began—and while Stacey was in sole possession of the former marital residence—she removed numerous items of personal property from the home. Stacey then sold many of these items at an auction. After this was discovered, the trial court ordered her to return the items within 45 days. Specifically, the judge told Stacey to return the husband's gold bullion, silver and gold coins, guns and ammunition, and all other personal property she removed and auctioned off. For the personal property that she’d sold, the court ordered her to provide receipts indicating the item and the sale price.
Wife had Opportunity to Present Valuation Evidence
Stacey thought that the trial court’s valuation of the personal property she removed was wrong. But the judge said she had an opportunity to present evidence on the items' value, and the evidence before the trial court was enough to find—based on all the relevant evidence, including the husband's personal inventory list—that she’d sold or otherwise disposed of property worth more than $600,000.
As to the items’ value, the trial court admitted Richard's exhibit, a personal inventory that listed his valuations for pieces of personal property that Stacey removed. Included in the list were two South Sea Tahitian pearl necklaces, which he acknowledged shouldn’t have been included. The court also admitted an identical list, except for a painting that Stacey said was a forgery, was removed from the list (she returned the painting to Richard before the hearing). Also omitted from the second list was one other item—"150 silver rounds" listed as worth about $3,000. Other than that, the two lists were identical.
Richard testified that the values he attributed to each of the items were the best estimates that he could give at the time he made the list.
Richard testified that the values he attributed to each of the items were the best estimates that he could give at the time he made the list. He also testified to having seen a few pieces of his personal property for sale in antique stores, and he provided the court with the listing price given by those stores for these items.
Stacey disagreed with values placed on the personal items, claiming that they were “highly exaggerated.” But she failed to provide the trial court with any contrary evidence of the property's value other than her auction list. The trial court ordered her to pay Richard $619,000, and in setting this amount, the judge remarked that, while the amount Richard submitted to the court was high, he couldn’t find it to be unreasonable, considering all of the other circumstances.
This appeal followed. Stacey claimed the trial court erred in the award to Richard for the personal property.
On appeal, Stacey again argued that there was insufficient evidence to determine the value of the personal property. She said that the trial court's award of $619,000 was wrong and that the court's valuation was mere guesswork because it relied significantly on Richard’s personal inventory list, which she claimed, "fails to provide sufficiently clear identification of items." Stacey also argued that the reliability of his personal inventory list was discredited by the fact that, in his original list, he had valued a painting at $750,000, when it was only appraised for a few hundred dollars.
Judge Randolph A. Beales wrote in his opinion for the Virginia Court of Appeals that Stacey had the chance to introduce evidence of the property's value at the trial.
However, the only evidence of value she introduced was a list of the items she auctioned and their auction sale price. Judge Beales found that the trial court, acting within its discretion, rejected Stacey's argument that those amounts represented the value of the property. The trial court didn’t disregard the auction list entirely, but relied on it in concluding that the property she sold was more valuable than an auction price shown.
In addition to not presenting any other evidence on the value of the property, she didn’t even cross-examine Richard on the value of the items she specifically contested.
Because she had an opportunity to present evidence on the items' value, and the only evidence she presented was largely rejected by the trial court, the evidence before the trial court was sufficient to find that the property Stacey sold or otherwise disposed of was worth at least $619,000. As a result, the appellate court found no error with the trial court’s valuation of the property Stacey removed from the home. “Of course,” Judge Beales said, “valuing these items was quite difficult given that the items were gone because of wife's actions.”
Proven Methodology to Assess Value
Stacey also argued that the trial court erred because it “failed to utilize a proven methodology to assess the value of the tangible personal property.” Stacey claimed that her ex-husband's valuations were based on the assumption that the items were in pristine condition and that, for the items for which he offered specific testimony, he repeatedly testified to the highest listed price. Stacey further contended that the trial court should have valued the property based on the sale prices of the property at auction. But Judge Beales said there was no error here.
Quoting a 1956 Virginia Supreme Court decision, he wrote, “It is generally recognized that the opinion testimony of the owner of property…is competent and admissible on the question of the value of such property, regardless of his knowledge of property values. It is not necessary to show that he was acquainted with the market value of such property or that he is an expert on values.”
Judge Beales said that Richard was the owner of the property, and, as such, his testimony was competent and admissible on the property's value. Plus, the trial court was within its discretion to reject the argument that the auction prices represented the items' values.
In sum, the Court of Appeals affirmed the trial court’s decision, finding it didn’t err in admitting Richard's personal inventory list, or in relying on his exhibits and testimony as to the value of the property. Wharam v. Austin, 2017 Va. App. LEXIS 307 (Va. Ct. App. December 5, 2017).
Avoid Valuation Issues
Aside from walking off with property subject to the divorce settlement, Stacey should have had the gold bullion, coins, guns and ammunition, and the other personal property appraised by a qualified appraiser resulting in a qualified appraisal. That way, she would’ve been able to present the trial judge with trusted and verified evidence on the true value of the property.
To avoid an unfortunate outcome and to conduct proper asset management, attorneys should work with a professional appraiser like Freeman’s to prudently appraise disputed marital property subject to a divorce settlement.
About the Author
Kurt R. Mattson is the President of Union Legal Research. He is the former Director of Library Services and Continuing Education at Lionel Sawyer & Collins in Las Vegas. Prior to this, he worked at BNA and other legal publishers, spending a substantial portion of his career working for Thomson Reuters. He serves as a consultant for several businesses, law firms, and marketing companies.
Kurt received his JD from William Mitchell College of Law and his Masters of Law (LLM) from George Washington University. He received his Masters of Library Information Science (MLIS) from Wayne State University.Kurt is the editor of Lexis’ BSA/AML Update, co-author of A.S. Pratt’s Mortgage Procedure Guide to Federal and State Compliance, and author of Fair Debt Collection Practices: Federal and State Law and Regulation. He is also a contributing author of Brady on Bank Checks. Kurt is also a contributor to other business and legal publications.