Stephanie Reed v. Scott Reed
339 P.3d 1109
Idaho2014Background
- Scott and Stephanie Reed divorced after a marriage (three children). Trial occurred January 2011; various post-trial documents were entered by the magistrate court but many did not comply with I.R.C.P. 54(a).
- The magistrate valued and awarded Father (Dr. Reed) community interests in two closely held corporations (Mountain Health Care, Inc. — owns building/land/equipment — and Mountain Health Services, P.C. — medical practice), and assigned Mother a monetary equalization judgment and $10,000 in attorney fees.
- Valuation disputes centered on (a) the market value of corporate real property (conflicting appraisals), (b) corporate equipment, cash/receivables, and long-term debt (financial statements were dated Dec. 31, 2009), and (c) whether discounts for minority interest and lack of marketability should apply.
- Mother obtained a writ of execution to seize Father’s shares, but stock had not been issued; magistrate ordered the corporations to issue stock and deliver it to the sheriff; executions and sales later occurred.
- Father appealed to the district court, which affirmed most findings but the district court and this Court found multiple errors (incorrect valuation support as to corporate debt, child-support income math, attorney-fee award based on mistaken income, and the issuance/delivery of shares in the absence of a final/appealable judgment).
Issues
| Issue | Mother’s Arg. | Father’s Arg. | Held |
|---|---|---|---|
| Valuation of Mountain Health Care, Inc. (real property, equipment, receivables, long-term debt) | Appraisal and expert exhibits support the magistrate’s valuation; rely on Mother’s appraiser for land value and Father’s expert for other assets | Father argued land value was overstated, debt was higher at trial date, and valuation must be as of trial date; requested discounts for minority/lack of marketability | Court upheld most factual findings except debt: remanded to determine credibility of clinic manager’s testimony that debt had increased by trial date; if credible, adjust corporate value and equalization payment |
| Award of corporate stock to Father with monetary equalization to Mother | Awarding operational practice and building to Father is practical; equalization payment makes division substantially equal | Argued valuation errors and that court should consider sale of shares; challenged post-judgment enforcement requiring stock issuance | Court affirmed award of assets to Father (Father waived discrete argument about abuse of discretion), but vacated order compelling issuance/delivery of shares because no final/appealable judgment authorized execution; remand required |
| Child-support calculation (Mother’s imputed income) | Impute income because Mother voluntarily reduced hours; use guideline income | Father argued magistrate miscalculated and misapplied income figures; urged correct full-time income be used | Court held magistrate miscalculated Mother’s guideline income (used incorrect hours), vacated and remanded for recalculation of child support |
| Attorney-fee award under I.C. § 32-704 | Fees appropriate after considering § 32-705 factors and parties’ resources; memorandum of costs timely for court’s purposes | Father argued memorandum was untimely, cited wrong statute, facts don’t justify fees, and magistrate misunderstood Mother’s income | Court held statute allows fee awards without prevailing-party rule and memorandum need not cite § 32-704; but vacated fee award because magistrate relied on incorrect income figure in exercising discretion and remanded for reconsideration |
Key Cases Cited
- Suter v. Suter, 97 Idaho 461 (Idaho 1976) (community assets valued as of date of divorce trial absent exceptions)
- Camp v. East Fork Ditch Co., Ltd., 137 Idaho 850 (Idaho 2002) (appellate scope: findings of fact not set aside unless clearly erroneous)
- Russ v. Brown, 96 Idaho 369 (Idaho 1974) (trial court must accept positive, uncontradicted testimony of a credible witness unless inherently improbable or impeached)
- Jones v. Jones, 117 Idaho 621 (Idaho 1990) (trial court need only consider § 32-705 factors when awarding fees under § 32-704)
- Pelayo v. Pelayo, 154 Idaho 855 (Idaho 2013) (upholding attorney-fee award under § 32-704 without findings required for maintenance under § 32-705(1))
- Empire Lumber Co. v. Thermal-Dynamic Towers, Inc., 132 Idaho 295 (Idaho 1998) (owner is qualified to testify to property value)