In Re The Marriage Of: Paul Gilbert Silvi v. Carol Louise Silvi ( 2017 )

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IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON •••••4
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In the Matter of the Marriage of ) „ •-•
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) No. 75166-2-1
PAUL G. SILVI, ) S20"
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) DIVISION ONE
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Respondent, ) —,.-
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) UNPUBLISHED OPINION
CAROL L. SILVI, )
) FILED: March 13, 2017
Appellant. )
)
BECKER, J. — Carol Silvi appeals the division of property ordered by the
court in her dissolution. Finding no abuse of discretion, we affirm.
According to findings of fact and conclusions of law entered by the trial
court, Paul and Carol Silvi were married in Michigan in September 1987. Paul
moved to Seattle in late 1993 to work as a sports reporter, and Carol followed
soon after. Per the parties' agreement, Carol did not seek employment after they
moved to Seattle. The couple had three children.
Paul eventually became the sports anchor at a Seattle television station.
He received regular salary increases and was the primary earner in the family.
Carol has been a part-time fitness instructor since 2009.
The parties separated in September 2013, and Paul initiated this divorce
action in June 2014.
No. 75166-2-1/2
Trial occurred over about five days in September and October 2015. Both
Paul and Carol testified.
By the time the decree of dissolution was entered, the Silvis' three children
were all over 18. The oldest child had already finished college, and the younger
two were living away at college.
On March 15, 2016, the trial court entered findings of fact, conclusions of
law, and a decree of dissolution. Carol appeals.
Retirement plan distribution
On March 3, 2016, the court sent draft findings of fact and conclusions of
law to the parties. In the draft was a finding that it would be fair and equitable to
award "more assets" to Carol. To accomplish this, $300,000 of Paul's 401(k)
retirement account would be awarded to Carol. The court invited the parties to
provide any objections or clarifications to the court via memorandum.
Paul filed a memorandum requesting reductions to Carol's award,
including a request that she receive only $155,000 from the retirement account.
He argued that the division of community assets as proposed in the draft was
neither fair nor equitable because the maintenance he was ordered to pay Carol
would allow her to pay all of her reasonable living expenses and purchase a
home, while leaving him unable to pay his living expenses, replace his car, or
purchase a home. He also argued that the allocation of assets did not consider
the relative financial situations of the parties after paying their current and future
debts imposed by the court, including his obligation to incur and pay future loans
for the college expenses for the children.
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The court's final findings of fact and conclusions of law, entered March 15,
2016, remained largely the same as the draft, except that Carol was awarded
$200,000 from Paul's retirement account instead of $300,000.
Carol assigns error to the court's decision that she was entitled to only
$200,000 from the account. She first argues that the court "reconsidered" its
initial decision regarding the retirement account in violation of CR 59, without any
newly discovered or newly admitted evidence and without calling for a response.
There was no procedural irregularity. CR 59 does not control the procedure
when a court calls for comments on a draft as a preliminary step to issuing a final
decree.
Carol centers her argument on the principle that a trial court's ultimate
conclusion of law must be supported by its findings of fact. In re Marriage of
Rockwell, 141 Wash. App. 235, 242, 170 P.3d 572(2007), review denied, 163
Wash. 2d 1055 (2008). She contends that with an award of only $200,000 from
Paul's retirement account, her share of the community assets is roughly equal to
Paul's. In her view, the finding that the assets must be weighted in her favor to
achieve a fair and equitable distribution was defeated when the court reduced
her share of the retirement account to $200,000.
In a dissolution action, the trial court must order a "just and equitable"
distribution of the parties' liabilities as well as their property. RCW 26.09.080.
When fashioning just and equitable relief, the court must consider all relevant
factors, including but not limited to:(1) the nature and extent of the community
property,(2) the nature and extent of separate property,(3) the duration of the
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marriage, and (4) the economic circumstances of each spouse at the time the
property distribution is to become effective. RCW 26.09.080.
The court has "broad discretion" to determine what is just and equitable
based on the circumstances of each case. Rockwell, 141 Wash. App. at 242. A
trial court is in the best position to decide issues of fairness. In re Marriage of
Brewer, 137 Wash. 2d 756, 769, 976 P.2d 102(1999). Accordingly, a property
division made during the dissolution of a marriage will be reversed on appeal
only if there is a manifest abuse of discretion. In re Marriage of Muhammad, 153
Wash. 2d 795, 803, 108 P.3d 779(2005). Trial court decisions in dissolution
proceedings will seldom be changed on appeal. In re Marriage of Stenshoel, 72
Wash. App. 800, 803, 866 P.2d 635 (1993).
Carol's calculation of relative shares is based on the chart attached as an
exhibit to the findings of fact and conclusions of law. The chart assigns to Paul
the responsibility of paying off the loans already incurred to pay college expenses
for the children, loans that amounted to at least $72,000 at the time of trial. The
chart does not reflect the court's finding that Paul was responsible for paying
current obligations of $90,000 on those loans and that he was also responsible
for future obligations. At different points in the litigation, Paul estimated that
when the two younger children finished college, his total obligation on the Parent
Plus loans would be either $125,000 or $150,000. That estimate is consistent
with the numbers for the loans that Paul had already incurred.
The postdissolution economic position of each party is of paramount
concern in dividing the property of the spouses. In re Marriage of Williams, 84
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Wn. App. 263, 927 P.2d 679(1996), review denied, 131 Wn.2d 1025(1997); In
re Marriage of Urbana, 147 Wash. App. 1, 195 P.3d 959 (2008). It was appropriate
for the court to take into account the argument Paul made regarding the effect
the future college loans would have on his economic position.
The trial court must order a "just and equitable" distribution of the parties'
property and liabilities. RCW 26.09.080. If the future college loan obligations are
taken into account, the distribution carries out the finding that the community
property should be distributed unequally, in favor of Carol.
Carol does not refute Paul's calculation of how the burden of being
responsible for future liabilities, in particular the college loans, will affect his
postdissolution economic position. She argues that when the court found that a
fair distribution would award "more assets" to her, the choice of the word "assets"
was purposeful and the finding therefore compelled the court to award her a
greater share of the "assets."
Carol's argument puts too much weight on a single word. The court was
aware of its statutory responsibility to distribute both assets and liabilities. RCW
26.09.080. Carol's concern that the reduction to $200,000 had the unintended
result of making the distribution roughly equal was brought before the trial court
by Carol's motion for reconsideration, and the court did not agree. Because a
trial court is in the best position to decide issues of fairness, we do not find an
abuse of discretion in the court's final decision to award Carol $200,000 rather
than $300,000 from the retirement account. Paul's future obligations for the
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college loans provided a tenable basis for a calculation that the ultimate
distribution was weighted in Carol's favor as the court intended.
Valuation of the business
The trial court found that Paul's business, Silvi Sports Inc., had no net
value:
Mr. Silvi's Interest in Silvi Sports, Inc. Many years ago Mr. Silvi
developed a portable soccer net that he hoped would make him a
substantial fortune. However, it has not been a success. The
rights to distribute the product are now owned by a Washington
corporation he formed called Silvi Sports, Inc., in which Mr. Silvi
contributed $500 and his concept(his patent for the product expired
a long time ago) in return for what is now a 41% interest in the
company. In 2013, the most recent year Silvi Sports filed a tax
return, it reported gross sales of $22,270, cost of goods sold of
$18,146 and other expenses of $21,541, for an operating loss of
$17,417. Exh. 132.
. . . The company's only asset is its inventory, consisting of
approximately 50 poorly constructed nets, and an undetermined
number (substantially fewer than 350)that were better produced.
The only credible evidence indicates that the cost of operating Silvi
Sports, Inc. each year is and will continue to be the same or more
than the sales it generates. The Court therefore finds the company
has no net value, and awards to Mr. Silvi his 41% interest in it.
Consistent with the above finding, the chart of assets listed the value of
Silvi Sports Inc. as $0. Carol unsuccessfully moved the trial court to reconsider
the $0 valuation, and she assigns error to it on appeal.
A trial court must set forth on the record the factors and methods that were
used in reaching a finding as to the value of a business. In re Marriaoe of Hall,
103 Wash. 2d 236, 247,692 P.2d 175 (1984). Carol contends that the trial court did
not set out any factors or describe what method it used to value Silvi Sports Inc.
and valued the business at zero only because it had a negative cash flow.
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In the finding quoted above, the trial court explained that the $0 valuation
was based on the company's scant inventory and evidence that the business
operates, and will continue to operate, at a loss. The finding adequately sets
forth the factors and methods the court used in valuing the business.
Carol specifically contends that the trial court's valuation of Silvi Sports
Inc. failed to account for its goodwill value. In her pretrial brief, Carol included a
proposed division of assets and debts. On this chart, she listed "Paul Silvi's
goodwill & name" with a value of "intangible." Separately, she listed Silvi Sports
Inc. with a value of $150,000. During trial, she asked Paul on cross-examination
whether he had determined the value of his goodwill as it related to Silvi Sports
Inc. Paul said he had not, but agreed he had some name value related to the
product because of his job as a sports anchor. In closing, Carol argued that Paul
should be ordered to hire an expert to set a goodwill value.
Neither party presented expert testimony or any other evidence from
which the court might have been able to ascertain the amount of the company's
goodwill value. In valuing Silvi Sports Inc. at $0, the court implicitly found that the
business had no goodwill value. Because no evidence of goodwill value was
presented to the court, it was not necessary for the court to state its finding
regarding goodwill value any more specifically, and court cannot be faulted for
failing to assign goodwill value to the business. The court's valuation of Silvi
Sports Inc. was within the scope of the evidence and will not be disturbed. See
In re Marriage of Soriano, 31 Wash. App. 432, 435,643 P.2d 450 (1982).
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Affirmed.
WE CONCUR:
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