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Unpublished Opinion No. 2004-UP-064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.