Equitable Distribution

Burden is Upon Husband/Owner of Business to Prove Value of Business

In the case of Boyd vs. Boyd, PICS Case No. 13-3256 (C.P. Lawrence County, October 7, 2013), the Honorable John W. Hodge ruled that where husband maintained exclusive control over the evidence necessary to establish the value of business on the date of the parties’ marriage, he bore the initial burden of presenting such evidence at the time of equitable distribution consideration.

Husband and wife were married in 1998, but later separated. Husband was the sole proprietor of a grass turf business incorporated under the name Boyd Turf Industries Inc. Husband established the business prior to the parties’ marriage.

The court noted, however, that the increase in the value of the business during the course of the parties’ marriage was an asset subject to equitable distribution. Here, the court considered wife’s motion to establish the burden of production.

Wife asserted that because husband maintained exclusive control over the evidence necessary to establish the business’ value on the date of the parties’ marriage, husband should bear the burden of presenting such evidence at the time of equitable distribution consideration.

Alternatively, wife argued that if the court denied her request to place the burden of production on husband, wife should be entitled to all documentation relied upon by husband to establish the value of the business on the date of the parties’ marriage.

Relying on Smith v. Smith, 653 A.2d 1259 (Pa. Super. 1995), the court determined that it was appropriate to place the burden upon husband to initially present evidence regarding the business’ value as of the date of the parties’ marriage.

Husband had exclusive control over the information necessary to value the business, and it would be unreasonable to expect wife to obtain such documentation because she did not have any ownership interest in the business, the court observed.

The court thus concluded that husband had the burden of establishing the business’ value at the time of marriage. Should husband fail to offer sufficient evidence to establish a premarital value, the equitable distribution master could accept wife’s evidence as credible in this regard.

Reference: Digest of Recent Opinions, Pennsylvania Law Weekly (January 7, 2014)

Filed Under: Family Law: Equitable Distribution

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