Fowler v. Fowler

680 S.W.3d 68

2023 Ark. App. 543

Frank FOWLER, Appellant

v.Ellecia FOWLER, Appellee

No. CV-22-576

Court of Appeals of Arkansas, DIVISION IV.

Opinion Delivered November 29, 2023

APPEAL FROM THE IZARD COUNTY CIRCUIT COURT [NO. 33DR-20-99], HONORABLE DON MCSPADDEN, JUDGE

Baxter Law Firm, PLLC, by: James R. Baxter, for appellant.

Grayson & Grayson P.A., North Little Rock, by: Melanie L. Grayson and Keith L. Grayson; and Murphy, Thompson, Arnold, Skinner & Castleberry, Batesville, by: Tom Thompson, for appellee.

N. MARK KLAPPENBACH, Judge

₁Appellant, Frank Fowler, and appellee, Ellecia Fowler, were married in 2002 and were divorced by a May 2022 decree. Frank appeals the decree’s division of property, contending that the circuit court clearly erred in its valuation of the pharmacy corporation owned by the parties. We affirm.

[1–4] Domestic-relations cases are reviewed de novo on appeal, but the appellate court does not reverse a circuit court’s findings unless they are clearly erroneous. Wilcox v. Wilcox, 2022 Ark. App. 18, 640 S.W.3d 408. A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been made. Id. Furthermore, a circuit court has broad powers to distribute property in a divorce to achieve equitable distribution; mathematical precision is not required. Id. In reviewing a circuit court’s findings, we defer to the court’s superior ₂position to determine the credibility of witnesses and the weight to be accorded to their testimony. Id.

[5] In this appeal, the sole issue is the value placed on the parties’ pharmacy business, Horseshoe Health & Medicine. The parties owned two corporations, each party holding 50 percent of the corporate stock in each corporation. The farm corporation (E & F Farms, Inc.) was valued at $875,711 and awarded solely to Ellecia (a nurse). The farm’s value is not at issue on appeal. The pharmacy corporation (E & F Fowler, Inc.) ran an operating pharmacy that was valued at $1.178 million and awarded solely to Frank (a pharmacist). Frank was ordered to pay Ellecia $151,145 to equalize the distribution of marital assets that each party was awarded.

Frank argues on appeal that the pharmacy corporation was not as valuable as the amount placed on it by the valuation expert, Paul Osborn. Mr. Osborn, a certified valuation analyst for fifteen years and a CPA for nine years, regularly values businesses for litigation purposes. The pharmacy corporation owned the pharmacy business and its inventory but not the building or real estate, which was owned by Frank and Ellecia. Mr. Osborn reviewed the 2017 through 2020 tax returns, its 2017 through 2021 financial statements, and Frank’s past and current involvement in the pharmacy business in determining the pharmacy’s value. Frank had been the primary full-time pharmacist for the pharmacy, but he quit working there full-time toward the end of 2016 or beginning of 2017. A different pharmacist was hired to be the primary pharmacist until November 2021, after which full-time pharmacist, Molly McCurley, took over that position. Frank did continue to work there some, and he made his ₃cell phone available to customers by having it listed in various places in the building.

Mr. Osborn defined the assets of the corporation as the cash, inventory, and goodwill, and he testified that his valuation was of a pharmacy in Horseshoe Bend, Arkansas, being run by a competent pharmacist, not necessarily Frank. Mr. Osborne explained that his valuation was of "a going concern," meaning that the pharmacy would continue in business in Horseshoe Bend. He used three methods: capitalization of income; value based solely on revenue; and book value based on the financial statements. Mr. Osborn explained that using these three methods ensured that he would get an accurate value, and each of the methods resulted in a similar valuation. Mr. Osborn stated that he worked to determine the fair market value, and he testified that the corporate goodwill belonged to the company and is embedded in the value of the company, meaning that he took into consideration the employees, customer lists, trademarks, reputation, and name of the company. Mr. Osborn did not believe that Frank held personal goodwill because Frank allowed the pharmacy to run on its own with other full-time...