VALUING POKER GAME BUSINESS AND PARSING A HEAD INJURY AWARD

Novak v. Novak 2014 MT 62

Husband had a 1/2 interest in a business that ran a poker game at a Great Falls tavern. Two CPA's opined hugely different values for the business. The district court found a value very much toward the low end, but between the two values. Wife had received a serious head injury falling from a horse. She had received $97,000 insurance proceeds for her injuries. She was fully disabled, suffering from grand mal seizures and other serious on-going medical problems. She had spent all but $15,000 of the award, purchasing a car and paying other expenses. She requested maintenance which was denied by the district court. The district court found that by virtue of her status as wife, she would in the future receive a portion of husband's retirement and that by virtue of her disabilities, she would receive SSDI. Their disabled son, who lived with Wife, destroyed items awarded to Husband. Each filed post decree contempt motions. Wife's motion was based on husband not doing anything to get her a portion of his military retirement, which was denied because the decree just noted that she was entitled to that by operation of law and technically the husband had not been ordered to do anything to get her those benefits. Husband's motion was granted for her failure to protect husband's items from their son's malicious destruction of those items. Husband was awarded attorney fees in conjunction with his contempt motion. Wife's request for attorney fees was denied.

Wife appealed.

Valuation. The Supreme Court affirmed the district court business valuation.

1. There is no rigid rule for valuing goodwill.
2. The Wife's expert ignored several factors: the risk that a rival poker game could open and the fact that the revenues from the Husband's poker game were declining. Husband's expert ignored the declining income. 
3. When faced with big differences between valuations, the district court was required to state reasons for its valuation decision -- which the district court did here.
4. Wife had claimed husband skimmed income, but the proof was insufficient. 

Maintenance. The Supreme Court reversed the district court denial of maintenance.

1. Wife was indisputably unemployable.
2. When the effect of denying maintenance is to make a spouse a ward of the state, the district court should award maintenance if possible. So the district court's consideration of her eligibility for SSDI was wrong.
3. The district court found wife had essentially blown the majority of her award. The Supreme Court found this wrong too: they classified this as "marital misconduct" which is barred from consideration.
4. The district court found that the $97,000 was income to wife. The Supreme Court found several flaws with this: Wife had obvious and on-going serious medical problems which would offset a lot of the money. Part of the $97,000 may have been for loss of future earnings, which should have been parsed -- but in fairness to the district court, neither side offered any testimony on that issue.
5. The district court validly considered Wife's portion of Husband's retirement, but by itself that was clearly too little to meet her needs.
6. The district court did not consider Husband's allocated debts which might reduce or eliminate his ability to pay -- which the district court could consider on remand.

Attorney Fees. The Supreme Court reversed the district court's denial of attorney fees to Wife, but affirmed the award of attorney fees to Husband.

1. There are 3 basic factors to consider under 40-4-110: necessity, reasonableness, competent evidence. Here the district court erred in determining Wife's income for maintenance purposes which also impacted "necessity". The fact that she had received $97,000 was not proper when considering the attorney fee award either.
2. Because Wife had been found in contempt for her failure to safeguard the items awarded to Husband from malicious destruction by their son, an attorney fee award for Husband's contempt motion was proper.

EDUCATIONAL SURROGATE PARENT OF ADULT

 In Re C.S. 2014 MT 74

This is an interesting and unusual case. The foster father of a special ed student enrolled in the Butte Public Schools disagreed with the education plan for the student. The student had turned 18 and ran away from the home of his biological mom, leading to the appointment of the foster father. Under the federal Individuals with Disabilities Education Act (IDEA), the student was entitled to the appointment of a "surrogate parent" through the school district. The school district appointed another adult, who approved the educational plan the foster father had disputed. The foster father filed a motion with the court to substitute himself as the surrogate parent. The district court denied his motion. The Supreme Court reversed, finding that the Montana Statute implementing IDEA, Section 20-7-461 M.C.A. and the relevant part of the federal law, Section 20 U.S.C. 1415(m)(2), only authorized the appointment of a stranger to the child if a parent was not available. The end result: the appointment of the foster father as "surrogate parent".

The Supreme Court found that the student's "...biological mother's rights were extinguished when he turned eighteen" leaving the foster father as the only "parent" with legal rights to care for the student, hence his right to appointment as "surrogate parent".