Home Family Law Divorce Court docket Lacks Jurisdiction to Divide LLC Not a Occasion

Divorce Court docket Lacks Jurisdiction to Divide LLC Not a Occasion

Tennessee case abstract on property division and enterprise valuation in divorce.

Thomas John Pitera v. Samantha Pitera

The husband and spouse on this Blount County, Tennessee, had been married in 1998 when the husband was within the Marine Corps and the spouse was employed on base.  Beginning in 2005, the husband was employed as a contractor with the U.S. Military in Iraq, and in 2007, he shaped an LLC which engaged in trucking in Iraq, till the contract was terminated in 2015.  The events separated in 2015, and the husband filed for divorce later that yr.  A trial was held in 2016, and the ultimate judgment was entered in 2018.  The spouse was granted alimony in solido of over $7 million, to be paid over a interval of 10 years.  To safe cost, the spouse was granted a lien on actual property, together with property owned by LLC’s owned by the husband.

Due to the termination of the LLC’s contract with the federal government, the LLC had a contingent declare in opposition to the federal government, probably value $32 million.  The courtroom ordered that the primary $6.6 million recovered beneath that declare can be awarded to the spouse.  The husband introduced an enchantment to the Tennessee Court docket of Appeals.

The husband first argued that the decrease courtroom had erred in designating one of many LLC’s as marital property.  Nevertheless, the appeals courtroom seemed deeper and concluded that the true difficulty was whether or not the trial courtroom had jurisdiction to adjudicate possession of property owned by the LLC, regardless that the LLC was not a celebration to the case.  The appeals courtroom agreed and held that the trial courtroom had no jurisdiction to adjudicate possession of property owned by the LLC.  Accordingly, it vacated that portion of the decrease courtroom’s order.

The appeals courtroom subsequent turned to the contingent declare in opposition to the federal government.  As soon as once more, the Court docket of Appeals held that the decrease courtroom had acted improperly.  Because the LLC was not a celebration to the case, the trial courtroom erred in adjudicating possession of this declare, because it was property of the LLC.

The husband additionally argued that the decrease courtroom had erred in setting the valuation of the corporate.  The husband argued {that a} monetary assertion relied upon by the courtroom was outdated and never licensed by a CPA.

Nevertheless, the appeals courtroom discovered that the monetary assertion had been correctly admitted, and that the decrease courtroom had thought of info that had taken place after the date of the assertion.  The appeals courtroom primarily seemed on the husband’s arguments as going to the burden of the proof, and held that such selections are correctly made by the trial courtroom.

The appeals courtroom did, nonetheless, discover it essential to remand the case.  Because the contingent declare had been handled individually, it was by no means taken under consideration in figuring out the worth of the corporate.  Due to this fact, on remand, the decrease courtroom would want to reevaluate the worth of the enterprise.

After addressing another points within the case, the Court docket of Appeals remanded the case for additional proceedings.  The spouse requested legal professional charges on enchantment, however this request was denied.

No. E2019-01136-COA-R3-CV (Tenn. Ct. App. Nov. 10,  2020).

See unique opinion for actual language.  Authorized citations omitted.

To be taught extra, see Property Division in Tennessee Divorce.

To be taught extra, see Business Valuation in Tennessee Divorce.

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