Schickner v. Schickner, 237 Ariz. 194

Marriage (1998) produced two minor children; parties held community interests in two medical businesses: 50% in Western Medical Eye Center, LLC (WME) and 20% in Physicians Surgery Center, LLC (PSC).
Husband (ophthalmologist) practiced at WME and performed surgeries at PSC; dissolution petition filed by Husband in June 2010.
Dispute at trial: valuation of the community interests in WME and PSC and characterization of post-petition distributions paid to Husband during the ~3-year pendency.
Husband’s experts provided substantially lower valuations (including versions applying minority-share/marketability discounts); Wife’s expert produced much higher valuations without discounts.
Trial court applied minority-share discounts, found WME community 50% interest = $602,000 and PSC 20% interest = $536,000, and ruled post-petition distributions were Husband’s separate property (characterizing them as earned income).
On appeal, Wife challenged (1) application of minority-share discounts/undervaluation of WME and PSC and (2) the court’s denial of her claim to one-half of post-petition distributions; appellate court affirmed PSC valuation, vacated WME valuation and the distributions ruling, and remanded for further proceedings.

Issue	Wife's Argument	Husband's Argument	Held
Whether trial court undervalued WME and PSC by applying minority-share discounts	Discounts inappropriate for buy-out between co-owners; trial court should value without minority/marketability discounts (higher valuations)	Discounts appropriate given minority status and lack of control/marketability for the community interests	PSC valuation affirmed (20% interest; discounts appropriate); WME valuation vacated and remanded (50% interest; discounts inappropriate given joint control)
Whether post-petition distributions from WME and PSC are community property or Husband's separate earned income	Distributions exceeding contractual $250,000 salary (and all PSC distributions) are community profits and Wife entitled to one-half	Distributions were compensation for Husband’s toil and labor and thus his separate property	Vacated and remanded: trial court failed to determine reasonable compensation for Husband’s labor; distributions in excess of reasonable compensation may be community property and must be recalculated

Roden v. Roden, 190 Ariz. 407 (trial court valuation reviewed for abuse of discretion)
Pro Finish USA, Ltd. v. Johnson, 204 Ariz. 257 (distinguishing dissenters’ rights "fair value" buy-out precedent)
In re Marriage of Davies, 880 P.2d 1368 (Mont.) (minority-share discounts may be appropriate in some domestic-relations valuations)
In re Marriage of Tofte, 895 P.2d 1387 (Or. App.) (discounts depend on marketability/control and sale likelihood)
Rueschenberg v. Rueschenberg, 219 Ariz. 249 (profit characterization depends on toil vs. inherent business qualities)
Toth v. Toth, 190 Ariz. 218 (marital property should be divided substantially equally absent sound reason)