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2004-UP-064 - Davis v. Davis

THE STATE OF SOUTH CAROLINA
In The Court of Appeals


Barbara Hyland Davis, Appellant/Respondent,

v.

Randall L. Davis, Respondent/Appellant.


Appeal From Greenville County
 Robert N. Jenkins, Sr., Family Court Judge


Unpublished Opinion No. 2004-UP-064
Heard December 9, 2003 – Filed February 5, 2004


AFFIRMED IN PART and REMANDED IN PART


David A. Wilson and Kenneth C. Porter, both of Greenville, for Appellant-Respondent.

Elizabeth Kimberly Berry, of Greenville, for Respondent-Appellant.

PER CURIAM: Barbara Hyland Davis (Wife) and Randall K. Davis (Husband) appeal from several aspects of a divorce decree.  We affirm in part and remand in part.

FACTS

The parties married in May 1984 and separated in October 1998.  They have two sons, born in 1990 and 1992. At the time of the final divorce hearing, Husband was thirty-eight years old, and Wife was thirty-nine years old. Both parties were employed during the marriage.  Husband has a bachelor’s degree in engineering and was employed at Design/Build Engineers, Inc., a company in which he holds an ownership interest. Wife has a master’s degree in business administration and, at the time of separation, was employed in the accounting department at the Michelin Corporation.

Wife instituted this action against Husband in November 1998 seeking an order of separate maintenance and support, equitable apportionment of marital property and debts, alimony, custody, and attorney’s fees and costs. Husband answered and counterclaimed, seeking custody of the children and equitable apportionment of marital property and debts.

At the commencement of the case, Wife moved to exclude the testimony of Husband’s expert witness, James F. Joyner, III, on the issue of the valuation of Husband’s business interests.  Wife’s basis for this motion was that a pre-trial order required all expert witnesses be named no later than twenty-one days before trial and Husband named Joyner only twenty days before trial. [1] Despite Wife’s objection to Joyner’s testimony on the valuation of Husband’s business interests, she consented to Joyner’s testimony on the issues of Husband’s income and income potential and Wife’s need for alimony. The family court granted Wife’s motion to exclude Joyner’s testimony on the valuation of Husband’s business interests, but allowed Joyner to testify as to the other issues.  Husband proffered Joyner’s testimony on the valuation of his business interests. 

The family court granted Wife a divorce from Husband on the grounds of one year’s continuous separation; ordered Husband to pay quarterly installments of $4,729.75 in rehabilitative alimony for two years; granted joint custody of the minor children to Husband and Wife, with primary placement of the children being awarded to Husband; valued and equitably apportioned marital property and debts; and denied Wife’s request for attorney fees.

Husband moved for reconsideration under Rule 59(e), SCRCP, arguing the family court erred by excluding the testimony of his expert witness regarding the value of his business interests, and in applying low minority shareholder and marketability discounts to those interests.  The family court issued an order increasing the amount of the minority shareholder and marketability discounts, but not to the extent that Husband asserted the discounts should be applied.  The court denied Husband’s request to reconsider its decision to exclude the testimony of his expert witness.   Both Husband and Wife appeal.

STANDARD OF REVIEW

In appeals from the family court, this court has authority to find the facts in accordance with our own view of the preponderance of the evidence. Woodall v. Woodall, 322 S.C. 7, 10, 471 S.E.2d 154, 157 (1996).  This broad scope of review, however, does not require us to disregard the findings of the court below. Stevenson v. Stevenson, 276 S.C. 475, 477, 279 S.E.2d 616, 617 (1981).  We are mindful that the family court judge, who saw and heard the witnesses, was in a better position to evaluate their credibility and assign comparative weight to their testimony. McAlister v. Patterson, 278 S.C. 481, 483, 299 S.E.2d 322, 323 (1982).

LAW/ANALYSIS

I. Equitable Distribution

Husband and wife agreed to distribute their marital property equally; however, on appeal the parties argue the family court erred in valuing Husband’s minority interests in two businesses and in valuing a 1998 Harley-Davidson Motorcycle.  We address the valuation of the two businesses and the motorcycle separately.

A. Valuation of Design/Build and DBE

As a threshold matter, Husband argues in his cross-appeal that the family court abused its discretion in refusing to admit the testimony of his valuation expert, Joyner, as to the value of Husband’s interest in Design/Build Engineers, Inc. and DBE Partnership, LLP.  We agree.

The admission of expert testimony and other evidence is a matter addressed to the sound discretion of the family court judge and absent a clear abuse of discretion, the family court’s ruling will not be disturbed on appeal.  Elledge v. Richland/Lexington Sch. Dist. Five, 352 S.C. 179, 185, 573 S.E.2d 789, 792 (2002). 

The family court excluded Joyner’s testimony on the grounds that Husband failed to designate Joyner as an expert witness at least twenty-one days before the final hearing, as required by a pre-trial order entered by the court. It is undisputed that Husband first notified Wife of his intent to call Joyner as an expert twenty days before the final hearing was scheduled.

Rule 16(b) of the South Carolina Rules of Civil Procedure grants the family court wide latitude to establish rules regarding the conduct of discovery in each case, including the authority to prescribe the time periods for identifying the exhibits or witnesses to be presented at trial.  These pre-trial orders control the subsequent course of the case, “unless modified on motion, or at the trial to prevent manifest injustice.”  Rule 16(b), SCRCP.  Accordingly, a pre-trial order should not be blindly followed, but should instead be applied in a manner that best serves the ends of fairness and judicial economy.  See James F. Flanagan, South Carolina Civil Procedure 137 (2d ed. 1996) (“The language [of Rule 16, SCRCP], particularly the ‘manifest injustice’ standard for modifying the order, suggests that good reason should be required for any changes.  The order should not be followed blindly.”).

Our courts have held that the exclusion of a witness is a severe sanction that should not be imposed lightly or summarily. See Kramer v. Kramer, 323 S.C. 212, 217, 473 S.E.2d 846, 848-49 (Ct. App. 1996) (finding that a court may exclude a witness “only after the court inquires into (1) the type of witness involved; (2) the content of the evidence to be presented; (3) the nature of the failure to identify the witness; and (4) the degree of surprise to the other party.”).  The issue of excluding a witness based on a pretrial order came before this court under similar facts in Jumper v. Hawkins, 348 S.C. 142, 558 S.E.2d 911 (Ct. App. 2001).  In Jumper, the family court excluded a witness when the party failed to comply with the pre-trial order requiring all witnesses to be designated at least ten days before trial.  There, the opposing party was not informed of the excluded witness until, at the latest, eight days before trial. Id. at 144, 558 S.E.2d at 912.  In finding the family court abused its discretion by excluding the witness, this court stated:

We hold that even in the face of a pre-trial order mandating the disclosure of a witness by a certain date, a trial judge is required to consider and evaluate the following factors before imposing the sanction of exclusion of a witness:

(1) the type of witness involved;

(2) the content of the evidence emanating from the proffered witness;

(3) the nature of the failure or neglect or refusal to furnish the witness’ name;

(4) the degree of surprise to the other party, including the prior knowledge of the name of the witness; and

(5) the prejudice to the opposing party.

Id. at 152, 558 S.E.2d at 916. [2]

In the present case, the record provides no indication that the family court adequately considered these factors when deciding to exclude Joyner’s valuation testimony.  As an expert in valuing closely-held corporations, Joyner’s testimony would have been highly probative on the question of the proper valuation methodology to apply in this case.  Husband’s failure to comply with the terms of the pre-trial order by one day resulted in little surprise or cognizable prejudice to Wife’s case.  Wife’s own expert and attorney had ample time to meet with Joyner and did, in fact, question Joyner the day before trial.  Furthermore, Wife consented to the admission of Joyner’s testimony on the issue of determining salary for purposes of awarding alimony.  As such, we find the family court erred in excluding the testimony of Husband’s expert witness.

Moreover, we cannot say the family court’s exclusion of Husband’s expert witness was harmless.  Joyner’s proffered testimony suggested applying a thirty percent minority discount and twenty percent marketability discount to Husband’s interest in DBE.  As to husband’s other business interest in Design/Build, Joyner suggested applying a twenty-five percent minority discount and a thirty percent marketability discount to Husband’s interest.   Even after increasing the minority and marketability discounts pursuant to Husband’s motion for reconsideration, the family court’s discounts were less than the discounts Husband’s expert would have recommended in his testimony. 

Therefore, we find the family court abused its discretion by excluding the testimony of Husband’s expert witness.  Accordingly, we do not reach the merits of the parties’ arguments as to the family court’s valuation of Husband’s interests in Design/Build and DBE.  Instead, we remand this issue to the family court so that the testimony of Husband’s expert may be admitted and given full consideration.  In remanding, we do not make any finding as to the propriety of applying discounts to Husband’s interest in Design/Build and DBE.  Rather, we remand for a de novo determination of the value of these assets, including Husband’s claim that discounts should be utilized.

B. Valuation of the Motorcycle

Wife also contests the family court’s valuation of Husband’s motorcycle.  She first argues the family court erred by relying too heavily on Husband’s testimony.  We disagree. 

At the final hearing, Wife testified that the purchase price of the motorcycle in 1998 was $8,300.  She further testified that she did not feel that the motorcycle had depreciated in value at all over time and that its current value remained at $8,300.  Husband agreed he had paid $8,320 when he purchased the motorcycle, but testified the motorcycle had sustained body damage after being accidentally dropped, and that the damage had not been repaired at the time of the hearing.  Husband also admitted evidence, over Wife’s objection, that the Kelly Blue Book value as of the date of the hearing for that make and model motorcycle with no damage was $4,835.  The family court ultimately valued the motorcycle at this blue book amount.

“The credibility of testimony is a matter for the fact finder to judge.”  S.C. Dep’t of Soc. Servs. v. Forrester, 282 S.C. 512, 516, 320 S.E.2d 39, 42 (Ct. App. 1984).  In this case, the family court was in a better position to evaluate the credibility of the parties’ testimony.  Accordingly, we find no reason to conclude the family court erred in its consideration of Husband’s testimony on this issue.

Wife also argues the family court improperly relied on the blue book value of the motorcycle in assessing its value.  She claims the $4,835 amount quoted does not accurately reflect the value of the motorcycle in the present case because that blue book figure represented the “wholesale trade-in” value of the bike.  This argument was not presented to the trial court and is therefore not preserved for appeal.  See Staubes v. City of Folly Beach, 339 S.C. 406, 412, 529 S.E.2d 543, 546 (2000) (“[A]n issue cannot be raised for the first time on appeal, but must have been raised to and ruled upon by the trial court to be preserved for appellate review.”).  Wife objected to the admission of the blue book figure because the value quoted in the blue book was the value of the motorcycle in March 2000, over a year after the commencement of the marital litigation in this case.  Wife asserts this argument on appeal.  However, we find the date of the blue book value goes to the weight of the evidence and not its sufficiency.   The weight to be given to evidence lies within the province of the fact finder.  Bailey v. Bailey, 293 S.C. 451, 453, 361 S.E.2d 348, 350 (1987).  Because the family court was in a better position to weigh the evidence presented at trial, we find the court did not err in assessing the value of the motorcycle.

II. Alimony

Wife next argues the family court erred by awarding her rehabilitative alimony rather than permanent periodic alimony.  Section 20-3-130(C)(8) of the South Carolina Code (Supp. 2002) requires a court, in awarding alimony, to consider, inter alia, “the marital and nonmarital properties of the parties, including those apportioned to him or her in the divorce or separate maintenance action.”  Although we do not hold that an award of rehabilitative alimony is improper in this case, we find the amount of the rehabilitative alimony awarded was at least partially predicated on an amount of money Wife had previously received from her interest in Design/Build and DBE.  In light of our decision to remand the issue of equitable division of marital property, we remand the issue of alimony to the family court.

III. Child Custody

Wife argues the family court erred in awarding Husband primary placement of the parties’ minor children. We disagree.

In all child custody disputes, the paramount considerations are the child’s welfare and best interests. Cook v. Cobb, 271 S.C. 136, 140, 245 S.E.2d 612, 614 (1978). In awarding custody, the family court should consider how the custody decision will impact the child’s life, including physical, psychological, spiritual, educational, familial, emotional, and recreational aspects.  Woodall v. Woodall, 322 S.C. 7, 11, 471 S.E.2d 154, 157 (1996).  Additionally, the court must assess how each party’s character, fitness, and attitude affect the child. Id.  Indeed, “when determining to whom custody shall be awarded, all the conflicting rules and presumptions should be weighed together with all of the circumstances of the particular case, and all relevant factors must be taken into consideration.” Id. 

In this case, Husband has had primary placement of the children since September 1999.  Our courts have considered a parent’s history as the primary caretaker to be an important factor in determining which parent is best suited to receive custody of a child.  See Smith v. Smith, 294 S.C. 194, 197, 363 S.E.2d 404, 406 (Ct. App. 1987) (holding that the fact the wife had custody of the children since the parties’ separation “alone supports the trial court’s decision in this instance to place the children in the wife’s custody”); West v. West, 294 S.C. 190, 193, 363 S.E.2d 402, 403 (Ct. App. 1987) (awarding custody to the husband after finding that he had been the primary caretaker of the children in the months prior to separation); Roy T. Stuckey, Marital Litigation in South Carolina: Substantive Law 433 (3d ed. 2001) (“There is an assumption that custody will be awarded to the parent who has been the primary caretaker of the children, unless unfitness  is proved or there is other evidence that the welfare of a child will be better served by awarding custody to the other parent”).

Additionally, the evidence supports the family court’s finding that Husband has taken a more active role in the daily lives of the children.  Husband was primarily responsible for getting the children ready each morning and taking them to school or daycare.  He also shared in the responsibility of picking up the children after school, and served as the primary facilitator of the children’s after-school sports activities. 

Furthermore, the family court found Husband has been able to manage the children’s behavior more appropriately than Wife. This conclusion is supported by the observations and recommendations of independent experts contained in the record.  The guardian ad litem concluded that:

Based upon [the psychologist’s] report and the parties’ actions during this litigation, I believe the father will allow the mother to participate in the children’s lives.  It does not appear the mother will allow the father to do so. The report also indicates the children have fewer behavioral problems with the father and therefore a more stable environment.

Indeed, the psychologist’s report states that “[Wife] does appear to be much less able to behaviorally manage the children . . . .  I would not judge her to be seriously deficient in this area, but in comparison to [Husband] she is clearly less well-equipped.”

Therefore, under the facts and circumstances of this case, we find no error in the family court’s decision to award primary placement of the children to Husband.

CONCLUSION

For the foregoing reasons, we affirm the family court’s valuation of Husband’s motorcycle and determination of child custody.   However, as to the valuation of the Husband’s business interests, we remand to the family court for consideration of Husband’s expert testimony.  Because we remand a portion of the equitable division of marital property, we also remand the issue of alimony.

AFFIRMED IN PART AND REMANDED IN PART.

HEARN, C.J., HOWARD and KITTREDGE, JJ., concur.


[1] Wife’s own expert and attorney met with Joyner and questioned him the day before trial.

[2] The final hearing in this case came to a conclusion on April 13, 2000.  The opinion in Jumper was decided on December 17, 2001, more than one year after the final hearing.