The Nebraska Court of Appeals recently upheld a trial court’s use of dual valuation dates for marital dissolution purposes. In Spady, an unpublished opinion, the court decided whether the trial court erred by not changing valuation dates in response to changing economic circumstances. Affirming the trial court’s opinion, the appellate court held that because the complaining party agreed to the original date, and the dates bore a rational relationship to the marital property at the time they were set, the trial court did not abuse its discretion by refusing to change them.
Spady stems from a 2004 divorce filing after 38 years of marriage. The marital estate consisted of a personal residence, interests in car rental and truck equipment businesses, interests in two automobile dealerships, and six parcels of real estate. After addressing the valuation date issue numerous times, the parties finally agreed to value the property as of December 31, 2006.
Due to material changes in the auto industry at the time, Mr. Spady motioned for an amended valuation date late in 2008. Based on testimony from an auto industry expert, the court adopted an August 31, 2008, valuation date for the automobile dealership interests. This date was later pushed back to December 31, 2008, for similar reasons. Mr. Spady tried again to amend the valuation date twice in 2009, but the court refused. The court noted that there were a number of equitable ways to address the valuation issue at trial, stating that “[b]oth sides have prolonged this case to the point that it would be impossible to set a valuation date that should not be changed due to the volatility in the economy. . . .”
Ultimately, the trial court adopted the dates previously set by both parties, and awarded Ms. Spady $1.1 million in property, and a $3.8 million equalization payment. Mr. Spady ultimately appealed the decision, taking issue with the trial court’s selection of the valuation dates.
Affirming the trial court’s decision, the appellate court first stated that error was not committed with respect to the December 31, 2006, valuation date, because the court adopted the date pursuant to the parties’ agreement. Even assuming that Mr. Spady had not agreed to the initial date, the court found no reversible error in refusing to change the dates at trial. The court reiterated that the test is whether the selected date bears a rational relationship to the marital property in question, and refused to extend this test past the time period the date was initially adopted.
The court further noted the importance of having a fixed valuation date during this process, stating that “it would be counterproductive to the goal of equitable division, not to mention judicial economy, to require trial courts to continually reassess the valuation date” to determine whether is still satisfies the rational relationship test. Finding that 199236 both dates adopted bore a rational relationship to the martial property when initially set, the court further stated that “judicial economy weighed heavily in favor of not changing the valuation date,” despite the intervening economic recession.