Dawn M. Quartana v. Michael J. Quartana

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
August 3, 2022
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.

Appeal No. 2020AP1168 Cir. Ct. No. 2018FA1043

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT II

DAWN M. QUARTANA,

PETITIONER-APPELLANT,

V.

MICHAEL J. QUARTANA,

RESPONDENT-RESPONDENT.

APPEAL from a judgment of the circuit court for Waukesha County:
LEE S. DREYFUS, JR., Judge. Affirmed.

Before Gundrum, P.J., Neubauer and Grogan, JJ.

Per curiam opinions may not be cited in any court of this state as precedent

or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).
No. 2020AP1168

¶1 PER CURIAM. Dawn M. Quartana appeals a judgment of divorce
from Michael J. Quartana.1 Dawn challenges the amount and duration of
maintenance. She also claims that the circuit court erroneously valued Michael’s
minority interest in two community-based rental facilities. We affirm.

BACKGROUND

¶2 Michael and Dawn were married in 1997. They divorced in 2020,
after approximately twenty-three years of marriage. Michael and Dawn have three
children. At the time of the divorce, two of the children were adults. The third
child graduated from high school three months after the divorce was granted. At
some point during the divorce proceedings, Dawn moved from the marital
residence to an apartment. The children remained in the house with Michael. The
parties agreed that child support and placement orders were not required, but they
disagreed on the issues of maintenance and property division.

¶3 In January of 2020, the circuit court held a two-day trial to determine
maintenance and property division. At the trial, Michael testified that he worked
as a loan officer for Bell Bank. A stock purchase agreement from 2013 shows
that, for part of the marriage, Michael owned an interest in Assured Mortgage.
Michael testified that Assured Mortgage merged with Bell Bank in October of
2018. As a result of the merger, Michael received an equity payout and became an

1
Because the parties have the same last name, we refer to them by first names for clarity.

There are two signed judgments of divorce in the record. One is dated May 14, 2020, and
one is dated May 26, 2020. In an order denying Michael Quartana’s motion to dismiss, we
concluded that the May 26 judgment is the appealable document.

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employee of Bell Bank.2 As an employee of Bell Bank, Michael’s salary was
determined using a base amount plus commissions. A year-end paystub in
Michael’s financial disclosure statement showed that his gross income in 2019
was $169,023. An income statement showed that Michael’s net monthly income
was $9,084 per month.

¶4 Michael also invested in and owned several real estate properties.
As material, Michael testified that he had a one-third ownership interest in two
community-based rental facilities, Autumn Creek I and Autumn Creek II. The
Autumn Creek properties paid a monthly distribution to Michael. The parties
stipulated that Michael’s full interest in Autumn Creek I was worth $119,361, and
his full interest in Autumn Creek II was worth $274,085. They disagreed,
however, on what discount should be applied to calculate the value of Michael’s
ownership interests.

¶5 Michael called the only expert witness, Scott Wildman, a certified
public accountant and business evaluator, to testify on the fair market value of
Michael’s ownership interests. Wildman testified that he reviewed the operating
agreements, which established a formula or “purchase price adjustment” for
valuing a disassociating owner’s interest. The formula provided that, in the event
an owner leaves, the owner is entitled to 95 percent of the fair market value for
Autumn Creek I and 90 percent of the fair market value for Autumn Creek II.

¶6 Wildman testified that, following the principles of fair market value,
it is “typical” to discount a minority interest due to a lack of control and

2
At the time of the trial, $93,874 of the payout remained in a checking account. The
circuit court awarded $46,937 to Michael and $46,937 to Dawn.

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marketability. According to Wildman, a “lack of control discount gives
consideration to the membership interest that doesn’t have complete control over
the entity[.]” Wildman explained that the noncontrolling interest does not “have
the power to sell the underlying property, … to buy additional properties, to
declare distributions, [or] to make other major decisions.” Wildman further
testified that a “discount for lack of marketability covers the liquidity of the
ownership interest…. [I]n other words, there’s not an active primary market for a
one-third ownership interest in either of these entities. So it suffers from a lack of
liquidity.” Wildman told the court that, in his professional opinion, it was
“appropriate” to apply a 5 to 10 percent discount for a lack of control and a 10 to
15 percent discount for a lack of marketability. Wildman explained that Michael’s
“one-third ownership interest [would be] a noncontrolling interest” and that
“there’s no active market for [Michael’s] ownership interest.”

¶7 Wildman then testified about a chart prepared by Michael. The chart
used two steps to determine the value of Michael’s interests. First, it determined
the fair market value of Michael’s interests using Wildman’s discounts for lack of
control and marketability. The chart showed that, when applying a 5 percent
discount for lack of control and a 10 percent discount for lack of marketability, the
estimated fair market value of Michael’s one-third interest in Autumn Creek I was
$102,054, while the estimated fair market value of Michael’s one-third interest in
Autumn Creek II was $234,343. Second, the chart applied the purchase-price
adjustments in the operating agreements. The fair market value of $102,054 for
Autumn Creek I was reduced by 5 percent to $96,951, or 95 percent of fair market
value. The fair market value of $234,343 for Autumn Creek II was reduced by 10
percent to $210,909, or 90 percent of fair market value.

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¶8 Dawn also testified. She told the court that, during the marriage, she
was a homemaker. Dawn testified that she did the cooking, took the children to
doctor’s appointments and school activities, ran errands, and cleaned the house.
Dawn claimed that she had been diagnosed with fibromyalgia, rheumatoid
arthritis, and bulging and ruptured disks, but that she did not file a form from her
doctor with the court because she “didn’t think it was necessary.” Dawn admitted
that she accrued credit card debt during the pendency of the divorce proceedings.
She stated that she had “no problem” assuming responsibility for her personal
spending, but she asked that any family expenses be considered marital debt. The
parties stipulated that Dawn had an earning capacity of $25,000 per year. Dawn’s
financial disclosure statement showed approximately $8,435 in monthly expenses,
including $1,200 for food and household supplies and $4,173 for installment
payments.3

¶9 On March 12, 2020, the circuit court granted a divorce to the parties
and ordered Michael to pay Dawn maintenance of $4,000 per month plus 25% of
Michael’s W2 employment income over $169,000 and any distributions from
business entities, including Autumn Creek I and Autumn Creek II, for five years.
The court accepted Wildman’s valuation of the Autumn Creek properties and
awarded one-half of the marital property to Dawn and one-half of the marital
property to Michael. To equalize the property division, the court ordered Michael
to pay Dawn $484,802.

3
At the trial, Dawn’s attorney clarified that Dawn’s monthly expenses without the
$4,000 for debt payments were $6,715.

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DISCUSSION

I. Maintenance

¶10 Dawn makes three arguments in support of her claim that the circuit
court erroneously exercised its discretion when setting the amount and duration of
maintenance. Specifically, Dawn claims that the circuit court erred when it:
(1) limited maintenance to five years; (2) calculated Michael’s income; and
(3) considered potential investment income. We address each contention in turn.

¶11 Circuit courts have discretion in determining the amount and
duration of maintenance. LaRocque v. LaRocque, 139 Wis. 2d 23, 27, 406
N.W.2d 736 (1987). We will not disturb a circuit court’s discretionary decisions
regarding the calculation of maintenance unless the court erroneously exercised its
discretion. Rohde-Giovanni v. Baumgart, 2004 WI 27, ¶17, 269 Wis. 2d 598, 676
N.W.2d 452. A circuit court erroneously exercises its discretion when it fails to
consider relevant factors, bases its award on factual errors, makes an error of law,
or grants an excessive or inadequate award. Id., ¶18.

¶12 The “touchstone” of a proper maintenance award is set by statute.
LaRocque, 139 Wis. 2d at 32. WISCONSIN STAT. § 767.56(1c) (2019-20)4 sets
forth a list of factors for a circuit court to consider when determining the amount
and duration of a maintenance award:

(a) The length of the marriage.

(b) The age and physical and emotional health of the
parties.

4
All references to the Wisconsin Statutes are to the 2019-20 version unless otherwise
noted.

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(c) The division of property made under s. 767.61.

(d) The educational level of each party at the time of
marriage and at the time the action is commenced.

(e) The earning capacity of the party seeking maintenance,
including educational background, training, employment
skills, work experience, length of absence from the job
market, custodial responsibilities for children and the time
and expense necessary to acquire sufficient education or
training to enable the party to find appropriate employment.

(f) The feasibility that the party seeking maintenance can
become self-supporting at a standard of living reasonably
comparable to that enjoyed during the marriage, and, if so,
the length of time necessary to achieve this goal.

(g) The tax consequences to each party.

(h) Any mutual agreement made by the parties before or
during the marriage, according to the terms of which one
party has made financial or service contributions to the
other with the expectation of reciprocation or other
compensation in the future, if the repayment has not been
made, or any mutual agreement made by the parties before
or during the marriage concerning any arrangement for the
financial support of the parties.

(i) The contribution by one party to the education, training
or increased earning power of the other.

(j) Such other factors as the court may in each individual
case determine to be relevant.

These factors “are designed to further two distinct but related objectives in the
award of maintenance: to support the recipient spouse in accordance with the
needs and earning capacities of the parties (the support objective) and to ensure a
fair and equitable financial arrangement between the parties in each individual
case (the fairness objective).” LaRocque, 139 Wis. 2d at 33.

¶13 When determining the appropriate maintenance award, courts should
start with “the proposition that the dependent partner may be entitled to 50 percent
of the total earnings of both parties.” Bahr v. Bahr, 107 Wis. 2d 72, 85, 318

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N.W.2d 391 (1982). This amount may then be adjusted following reasoned
consideration of the statutorily enumerated maintenance factors. Id.
Notwithstanding the proscribed starting point, “[t]he payment of maintenance is
not to be viewed as a permanent annuity.” Vander Perren v. Vander Perren, 105
Wis. 2d 219, 230, 313 N.W.2d 813 (1982). Rather, maintenance “is designed to
maintain a party at an appropriate standard of living, under the facts and
circumstances of the individual case, until the party exercising reasonable
diligence has reached a level of income where maintenance is no longer
necessary.” Id.

¶14 First, Dawn claims that the circuit court erroneously exercised its
discretion when it limited maintenance to five years. She asserts that, under the
circumstances in this case, five years is too short a time period for her to become
self-sustaining to the level she enjoyed during the marriage. Specifically, Dawn
points out that the circuit court failed to consider that, at the time of the divorce,
she was fifty years old, had custodial responsibilities for one of the children, had a
limited earning capacity and no meaningful work experience, had a limited
education, and suffered from medical issues. We are not persuaded that the circuit
court erroneously exercised its discretion.

¶15 Contrary to Dawn’s claim, the record reveals that the circuit court
considered the statutory factors. In an extensive oral decision, the circuit court
noted that Michael and Dawn had a “long-term marriage” of twenty-three years. It
recognized that Dawn was almost fifty-one years old and acknowledged that
Dawn may have health issues. It found, however, that Dawn did not provide any
medical documentation showing that her health issues would preclude her from
working. The circuit court explained: “[O]ther than [Dawn’s] indication of the

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health issues … we didn’t have really any supporting documentation [showing]
they rise to the level where it can and may preclude employment[.]”

¶16 The circuit court also considered each party’s income and the impact
of the property division. It found that Dawn’s stipulated income of $25,000 was
reasonable given that Dawn did not have any significant skills, training, education,
or employment history. The court determined that Dawn’s equalization payment
of $484,000, combined with a $285,000 payment for rental properties, would
provide Dawn with a cash estate of approximately $770,000. The court concluded
that Dawn could invest the $770,000 to generate approximately $35,000 to
$40,000 a year. The circuit court said:

There’s a reasonable likelihood that … if properly and
appropriately invested that that kind of sum would be able
to produce an income stream … somewhere in the range of
[$35,000] to [$]40,000 per year, without having to invade
the principal at all. But that would be up to [Dawn],
whatever she does with the money.

¶17 Finally, the circuit court considered Dawn’s proposed budget of
$8,000 a month and any resulting tax liability. It noted that neither party requested
child support because the youngest child would graduate from high school
approximately 90 days after the trial. It found Dawn’s proposed household
expenses of $1,200 a month did not have “any significant or substantial support,”
noting that she was a single person. It also determined that Dawn’s request for
$4,173 per month for debt payments was not supported with any documentation
and that the marital debt was paid for. It found that Dawn would have “little or no
income tax liability” and that “$4,000 per month, based upon the $169,000
annualized salary to [Michael] and the $25,000 imputation of income to [Dawn] is
almost exactly a 50/50 equalization of the income[.]”

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¶18 Considering all of these factors, the circuit court concluded that five
years was an appropriate term for maintenance. It determined that five years
would give Dawn the “opportunity to get things in place so that she has the ability
to support herself under all circumstances,” adding:

That will give [Dawn] an opportunity one, if she chooses
to, go back to school, get an additional education…. This
will give her time to in that respect, get her finances in
order. … give an opportunity for [Dawn] to … be able to
grow her investments over time, and to make arrangements
so that she has a viable and supportable income stream
going forward[.]

The circuit court’s oral ruling shows that in determining the length of Dawn’s
maintenance, it considered the dual objectives of support and fairness and made
findings regarding the factors listed in WIS. STAT. § 767.56. In effect, Dawn is
asking this court to view the evidence differently than the circuit court viewed it,
with an emphasis on evidence that best supports her position. This is not
appropriate under our standard of review. See Noll v. Dimiceli’s, Inc., 115
Wis. 2d 641, 644, 340 N.W.2d 575 (Ct. App. 1983) (if more than one reasonable
inference can be drawn from the evidence, we must accept the one chosen by the
circuit court).

¶19 Next, Dawn challenges the amount of maintenance, claiming that the
circuit court based the $4,000 figure on an erroneous calculation of Michael’s
income. She claims that the court improperly determined that Michael’s 2019
income was $169,000 per year. Dawn contends that the circuit court should have

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used the average of Michael’s W2 income from 2015 to 2018 instead, which
would have produced an average income of $315,207 per year.5 We disagree.

¶20 In its oral decision, the circuit court explained why it rejected
Dawn’s request to use the average of Michael’s W2 income from 2015 to 2018. It
noted that a “substantial portion” of Michael’s income at that time was due to
Michael’s ownership interest in Assured Mortgage, which merged with Bell Bank
in 2018. The court noted that the remaining proceeds of the sale became marital
property that were divided between the parties. It thus concluded that “[i]t is not
viable for the court to look at those past numbers for the purpose of determining
maintenance” and used Michael’s 2019 salary of $169,000 as “the base to go
from.” The court also determined that Michael’s salary was “variable” and noted
that Michael had additional income from the Autumn Creek I and Autumn
Creek II investments. To take the variability of Michael’s earnings into account,
the circuit court thus ordered Michael to pay 25% of his W2 employment income
over $169,000 and 25% of any distributions from business entities, including
Autumn Creek I and Autumn Creek II, for five years. These findings are not
clearly erroneous.

¶21 Michael’s income from 2015 through part of 2018 is from a business
Michael no longer owns. On appeal, Dawn does not dispute that Assured
Mortgage merged with Bell Bank in October of 2018 or that Michael became an
employee of Bell Bank. Under these facts, it was reasonable for the circuit court

5
In her brief on appeal, Dawn uses two numbers for Michael’s average income:
$310,362 and $315,207. In her trial brief, Dawn asked the circuit court to base Michael’s income
on the average of Michael’s income from 2015-2018, which she claims would be $315,207.
Accordingly, for the purposes of this appeal, we will use Dawn’s figure of $315,207.

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No. 2020AP1168

to reject Dawn’s $315,207 figure and instead rely on Michael’s 2019 year-end
paystub showing that Michael earned $169,023 as an employee of Bell Bank. See
Hefty v. Hefty, 172 Wis. 2d 124, 134, 493 N.W.2d 33 (1992) (court may base
maintenance on amount and nature of income at the time divorce is granted).
Dawn also fails to take into account the fact that $169,000 is merely a starting
point for calculating Michael’s income. The circuit court awarded Dawn an
additional 25 percent over and above Michael’s base salary of $169,000. Using
this calculation, Dawn’s maintenance payments will increase as Michael’s income
increases.

¶22 Finally, Dawn claims that the circuit court erroneously considered
the $35,000 to $40,000 of potential interest in determining the term and amount of
maintenance. She appears to challenge both the factual and legal basis for this
determination. Dawn first contends that the circuit court erroneously exercised its
discretion because its factual analysis of her potential interest income is “purely
hypothetical” and “unsupported[.]” This claim is belied by the record.

¶23 As we have seen, the court determined that Dawn would receive
approximately $484,000 from the equalization payment and $285,000 from the
sale of property, for a total of $770,000 in “cash-related assets[.]” It reasoned that,
“if properly and appropriately invested,” Dawn would be able to earn $35,000 to
$40,000 per year. The circuit court acknowledged that it “may take a while,
understanding we have [a] reduced income rate environment,” but concluded that
five years of maintenance would give Dawn time to “get her finances in order.”
Based on these findings, the circuit court had a basis in the record for its
conclusion that the property settlement would permit Dawn to earn investment
income. See Wright v. Wright, 2008 WI App 21, ¶40, 307 Wis. 2d 156, 747
N.W.2d 690 (the fact that entities are not currently earning an income is not a

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factor which should eliminate them from the maintenance consideration); Liddle v.
Liddle, 140 Wis. 2d 132, 154-55, 410 N.W.2d 196 (Ct. App. 1987) (circuit court
had basis in the record for conclusion that property settlement would permit wife
to have investments).

¶24 Dawn also contends that any future interest she may earn by
investing the marital property was an improper factor for the court to consider
because an asset may not be counted both as marital property subject to division
and as part of the party’s future income. While Dawn is correct that the law does
not permit the double counting of an asset for both property division and
maintenance, see Kronforst v. Kronforst, 21 Wis. 2d 54, 64, 123 N.W.2d 528
(1963), this principle does not apply to income from assets awarded in a property
division. As we explained in Wright:

Income from assets awarded to a spouse as part of an equal
property division are generally included in calculating that
spouse’s income for maintenance. The double-counting
rule prevents the principal value of the asset from being
counted twice. The future income generated from the asset
is separate and distinct from the asset itself, and therefore
can be included in the spouse’s income for maintenance
calculations.

Wright, 307 Wis. 2d 156, ¶42 (citation omitted); see also McReath v. McReath,
2011 WI 66, ¶¶53, 60, 335 Wis. 2d 643, 800 N.W.2d 399 (value of investment
property is separate from the income it generates).

¶25 Based on these principles, we conclude that the circuit court
appropriately considered any future interest Dawn could earn when calculating her
income. The marital property had a principle value of $770,000 in “cash-related
assets” at the time of the property division. This amount is separate and distinct
from any future interest Dawn could earn if she elects to save the assets and earn

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income from them. See Wright, 307 Wis. 2d 156, ¶42. Consequently, the circuit
court did not double count Dawn’s property settlement.

¶26 In sum, the circuit court did not erroneously exercise its discretion
when it awarded Dawn $4,000 per month plus 25% of Michael’s W2 employment
income over $169,000 and any distributions from business entities, including
Autumn Creek I and Autumn Creek II, for five years. The court considered the
relevant statutory factors, applied the correct law, and reached a conclusion that a
reasonable judge could reach.

II. Property Valuation

¶27 Dawn claims that the circuit court erroneously calculated the fair
market value of Michael’s one-third interests in Autumn Creek I and Autumn
Creek II. The valuation of marital assets is a finding of fact that we will not
disturb unless it is clearly erroneous. See Schorer v. Schorer, 177 Wis. 2d 387,
396, 501 N.W.2d 916 (Ct. App. 1993). We are guided by the rule that in “divorce
actions, trial courts are not required to accept any one method of valuation over
another.” Id. at 399. A circuit court is free to make its own assessment of
competing expert opinions and “determine the fair market value of a business asset
based upon the nature of the business.” Sharon v. Sharon, 178 Wis. 2d 481, 492,
504 N.W.2d 415 (Ct. App. 1993).

¶28 The circuit court must value assets at their fair market value.
Schorer, 177 Wis. 2d at 399. Fair market value is the price that property will
bring when offered for sale by one who desires but is not obligated to sell and
bought by one who is willing but not obligated to buy. Liddle, 140 Wis. 2d at 138.
“This definition requires consideration of what factors buyers and sellers find

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relevant when negotiating a deal. Thus, disadvantages or liabilities of ownership
may dramatically affect the fair market value of property.” Id.

¶29 The circuit court accepted Wildman’s formula for determining the
fair market value of Michael’s interests in the Autumn Creek properties, stating in
its oral decision that it was “satisfied [the interests] should be discounted.” The
court noted that Michael’s interests were “not necessarily readily saleable[.]” It
thus “accept[ed] the analysis and the basis as to how it was reached … from the
testimon[y] from … Wildman under the circumstances” and concluded that
“Autumn Creek I [had a fair market] value of $96,851 [sic6] [and that] Autumn
Creek II [had a fair market] value of $210,909.”

¶30 Dawn claims that this valuation is erroneous because the circuit
court should have used the purchase price discounts in the operating agreements
for Autumn Creek I and Autumn Creek II. She points out that the formulas only
apply 5 and 10 percent discounts, respectively, for determining the fair market
value of Michael’s interests. Dawn thus claims that the court erred when it relied
on Wildman’s formula, which further reduced the value of Michael’s interests by
5 percent for lack of control and 10 percent for lack of marketability, because the
court did not “expand on why it chose to further reduce the value other than
stating it agrees with the expert analysis.” Dawn’s argument misses the first step
in the calculation.

¶31 The ownership agreements for Autumn Creek I and Autumn
Creek II provide that Michael is entitled to 90 and 95 percent of fair market value.

6
The correct figure is $96,951.

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Specifically, the ownership agreement for Autumn Creek I provides: “In the event
the Company votes to purchase the dissociating Member’s Interest, the Company
shall pay to the dissociating Member(s), or his estate, trust, successors or assigns
an amount equal to 95 percent (95%) of the fair market value of the dissociating
Member’s Interest[.]” Similarly, the operating agreement for Autumn Creek II
provides: “In the event the Company votes to purchase the dissociating Member’s
Interest, the Company shall pay to the dissociating Member(s), or his estate, trust,
successors or assigns an amount equal to 90 percent (90%) of the fair market value
of the dissociating Member’s Interest[.]” The agreements do not, however,
provide a specific formula for calculating fair market value, providing only that:

The fair market value of the Interest shall be determined by
agreement of the dissociating member or his representative,
and the remaining members. If there is no agreement, the
fair market value of the Interest shall be determined by a
certified and licensed appraiser to be chosen by the
Members entitled to vote on the matter in sufficient time to
allow for a decision[.]

Accordingly, the first step in the analysis is to determine fair market value. Only
after the fair market value has been calculated can the purchase price discounts be
applied.

¶32 In this case, Wildman testified that when determining the fair market
value of Michael’s interests, discounts were “appropriate” to account for a lack of
control and marketability. As Wildman explained, the 5 and 10 percent discounts
were appropriate because there was “no active market” for Michael’s
noncontrolling ownership interests. The circuit court reasonably relied on this
testimony. See id. at 146-47 (minority interest discount can be an appropriate
factor in valuation). Moreover, “[t]he duty of testing an expert’s opinion is upon
counsel, not the court.” Id. at 150. Dawn did not provide the circuit court with

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expert testimony contradicting Wildman’s formula for determining fair market
value or challenge the resulting calculations in the chart presented at trial.
Accordingly, we conclude that the circuit court properly considered all of the
relevant information available to it and went through a rational decision-making
process with regard to the value of Michael’s interests in the Autumn Creek
properties.

By the Court.—Judgment affirmed.

This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)5.

17