Courts Must Base Valuation on Competent, Substantial Evidence
When determining the value of an asset, a trial court must rely on competent, substantial evidence. In a recently decided case, Florida’s Fourth District Court of Appeal reversed a trial court’s valuation of a party’s stock holdings. Tucker v. Tucker, Case No. 4D14-4423 (Fla. 4th DCA July 22, 2015). During a hearing on the matter, the former wife presented an expert witness who testified that the shares at issue were worth 1 cent per share. However, the time allotted for the hearing expired prior to the conclusion of the expert witness’s testimony. As a result, a second evidentiary hearing was set, at which both parties had expert witnesses present. At the second hearing, prior to introducing any expert testimony, the former husband’s attorney stated that the former husband claimed the stock was valued at 4 cents per share and that his expert witness would testify to that effect. Without considering any expert testimony, the trial court ruled that the shares were valued at 2.5 cents per share (the average of 1 cent per share and 4 cents per share).
On appeal, the former wife argued that the trial court erred in determining the value of the shares without allowing her to finish presenting evidence and without hearing testimony from the former husband’s expert witness. The Fourth District Court of Appeal agreed with the former wife. “A trial court’s property valuation must be supported by competent, substantial evidence.” Id. (quoting Garcia v. Garcia, 25 So. 3d 687, 689 (Fla. 4th DCA 2010)).
The appellate court held that the trial court’s ruling was not supported by competent, substantial evidence for three reasons. First, the trial court should have allowed the former wife to finish presenting her evidence before reaching a conclusion as to the stock’s value. Second, the trial court erred in considering statements from the former husband’s attorney instead of relying on expert testimony. Third, “the court erred in determining the stock’s value because the court, without providing a factual explanation, appears to have split the difference between the parties’ respective values of one cent and four cents to arrive at the 2.5 cents value.” Id. (citing Blossman v. Blossman, 92 So. 3d 878, 878-79 (Fla. 1st DCA 2012) (“In setting the [stock’s] value . . . , it appears as though the trial court split the difference between the two valuations. Florida law prohibits this type of valuation. The Court offered no findings or explanation of how it arrived at the value . . . . Therefore the valuation is not supported by competent, substantial evidence and must be reversed and remanded to allow the trial court to make a finding based on competent, substantial evidence.”) (internal citation omitted)).
Because the trial court’s determination of value was not supported by competent, substantial evidence, the appellate court remanded the case so that the trial court could complete the evidentiary hearing and reach a proper valuation.
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