Virginia M Cappaert v. David S Cappaert
335303
| Mich. Ct. App. | Oct 24, 2017Background
- Divorce between Virginia M. Cappaert (plaintiff) and David S. Cappaert (defendant); appeal from Menominee Circuit Court judgment of divorce.
- Disputes concerned valuation and characterization of marital assets: plaintiff’s art inventory, parties’ farm, and plaintiff’s Wisconsin retirement account; allocation of several debts; and a right-of-first-refusal (ROFR) condition on the marital home.
- Trial court valued plaintiff’s unsold art inventory at $265,032 (after a 20% reduction from reported figures) using retail/market-based evidence rather than material cost.
- Trial court reduced the farm valuation by $216,700 to reflect anticipated future capital gains tax defendant would incur on sale, and awarded farm-related assets/debts largely to defendant.
- Trial court treated plaintiff’s entire Wisconsin retirement account as marital property (declined to identify premarital portion) and allocated certain debts to defendant (including tractor loan, seed debt, student loan, and son’s truck loan). Trial court granted defendant a five‑year ROFR on the marital home at appraised fair market value.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Valuation of plaintiff’s art inventory | Art should be valued at cost of materials (or reduced to reflect consignment commissions and limited annual sell-through) | Art has market value reflecting artist’s skill and past sales; trial court can use retail prices | Court affirmed: market/retail-based valuation not clearly erroneous; 20% reduction reasonable; $265,032 upheld |
| Farm valuation — future capital gains tax credit | Court should not deduct for speculative future tax because sale might not occur or tax law may change | Defendant intends to sell farm; lack of retirement assets makes sale likely; tax consequences properly considered | Court affirmed: trial court may consider tax consequences; defendant likely to sell; deduction permissible |
| Characterization of Wisconsin retirement account | Plaintiff’s premarital contributions should be treated as separate property | Account largely accumulated or grew post-marriage; records insufficient to prove premarital share | Court affirmed: plaintiff failed to prove premarital portion; court would not speculate |
| Allocation of specific debts (tractor, seed, student loan, son’s truck loan) | Some debts (seed, son’s truck) improperly treated as marital debts or credited to defendant without accounting for related assets/equity | Debts arose during marriage; defendant cosigned for some loans and is at risk; tractor debt offsets tractor asset awarded to defendant | Mixed: tractor loan and student loan treatment upheld; seed debt ($18,212) and truck loan allocation reversed/remanded for reconsideration to account for related assets |
| Right of first refusal / appraisal price for home | ROFR purchase price should not be limited to appraised fair market value because third-party sale could exceed appraisal | Appraised fair market value gives defendant equivalent consideration to original valuation; court may set terms | Court affirmed: ROFR at appraised fair market value is reasonable; survey of 35 adjoining acres and cost-splitting not erroneous |
Key Cases Cited
- Sparks v. Sparks, 440 Mich. 141 (trial court equity powers and property division standard)
- Pelton v. Pelton, 167 Mich. App. 22 (trial court latitude in valuing business/marital assets)
- Jansen v. Jansen, 205 Mich. App. 169 (valuation within range of proofs not clear error)
- Butler v. Simmons-Butler, 308 Mich. App. 195 (courts may consider tax consequences when dividing assets)
- Cunningham v. Cunningham, 289 Mich. App. 195 (separate vs marital property; commingling rule)
- Draggoo v. Draggoo, 223 Mich. App. 415 (clear‑error review; deference to credibility findings)
- Huron Ridge LP v. Ypsilanti Twp., 275 Mich. App. 23 (definition of fair market value)
- Gardner v. Dep’t of Treasury, 498 Mich. 1 (fair market value concept)