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Change from Stipulated Valuation Date
© 2004 National Legal Research Group, Inc.
MINNESOTA: Bender v. Bender, 671 N.W.2d 602 (Minn. Ct. App. 2003).
The trial court properly valued certain assets as of March 31, 2001, even though the parties had stipulated to value them as of December 31, 2000. The market dropped sharply between the two dates.
The parties were divorced in 2002. They stipulated to valuing all of their assets as of December 31, 2000. The trial court nevertheless found that because of the subsequent downturn in the market, it was unfair not to update the values of certain investment accounts. It used the later date of March 31, 2001 with respect to several accounts awarded to the wife. The property distribution made by the court below awarded each party approximately $1.17 million, including a requirement that the husband pay the wife $261,000 to effectuate the distribution. The husband appealed.
The court of appeals affirmed the reliance on a more current valuation date, even though it applied different valuation dates for assets distributed to the wife and the husband. As to its authority to use another valuation date in general, the court below relied upon Minn. Stat. 518.58(1), which provides that that court is directed to value assets for purposes of division as of the date of the initially scheduled prehearing settlement conference, but that a different date may be relied upon if the parties agree to such a date or if equities require another date. Here, the value of the assets awarded to the wife decreased by $31,000 between December 31, 2000 and March 31, 2001. With a finding that there was both a substantial change in the value of the accounts and that another date was fair and equitable, the adoption of March 31, 2001 as the valuation date was deemed appropriate.
The husband argued that the trial court committed error when it employed a different valuation date for the accounts distributed to the wife from the date it used to value the accounts distributed to the husband, which remained December 31, 2000. In affirming the trial court's holding, the court of appeals noted that the husband had failed to recognize that there were no findings that the accounts awarded to the husband had suffered a similar decrease in value that would support an alteration of their value or their valuation date.
The appellate court also noted that, after reviewing the evidentiary record, the trial court used different valuation dates for different assets, and that the trial court's findings supported both its individual determinations regarding the assets valued, as well as its overall determination that the property distribution was, in the aggregate, equitable.
Editor's Note: The decision does not generally discuss contract principles, or explain why the court's equitable power to choose a valuation date was not controlled by the parties' agreement, just as the court's power to divide marital property is generally controlled by the terms of the property settlement agreement between the parties. The mere fact that the courts believed the stipulation to be inequitable does not alone justify the decision to disregard it; parties are permitted to sign contracts reaching results which a court might deem inequitable. There was certainly an argument on the facts that the sharp drop in the market after the agreed-upon date of valuation was not foreseen by the parties, so that the stipulation was unenforceable on grounds of mutual mistake. But the contractual element of the case merited considerably more discussion than it received.
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