Property Valuation Averaging Between Two Parties
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Where the parties introduce competing evidence on the value of an asset, can the trial court value the asset at the average of the parties’ positions? A significant number of cases permit this practice. See Rolla v. Rolla, 48 Conn. App. 732, 712 A.2d 440 (1998) (proper to adopt value halfway between parties’ competing estimates); Ross v. Ross, 50 Mass. App. Ct. 77, 734 N.E.2d 1192 (2000); In re Sacry, 253 Mont. 378, 833 P.2d 1035 (1992); Walker v. Walker, 9 Neb. App. 694, 618 N.W.2d 465 (2000) (proper to average competing appraisals); Frost v. Frost, 84 Ohio App. 3d 699, 618 N.E.2d 198 (1992); Cloutier v. Cloutier, 567 A.2d 1131 (R.I. 1989).
There is authority, however, that valuation averaging is error under at least some conditions:
We agree with the former husband’s contention that the trial court’s valuation of the marital residence is not supported by competent substantial evidence. There is no evidence in the record to support the value the trial court assigned to the marital home. It appears from the record that the trial court split the difference between the valuations offered by the parties to arrive at the figure in the final judgment. This is improper.
Solomon v. Solomon, 2003 WL 21990208, at *3 (Fla. 2d Dist. Ct. App. 2003).
Moreover, while it is appropriate for a family court judge to select a value for property that falls within the range of values testified to, it is inappropriate to simply average the values testified to by the parties to arrive at a value.
Ferguson v. Ferguson, 300 S.C. 1, 5, 386 S.E.2d 267, 269 (Ct. App. 1989).
The conflicting holdings in the above cases may be reconcilable on the facts. Reading Soloman and Ferguson, a sense emerges that the trial courts were using valuation averaging as an excuse for failing to make an independent determination of value. That is, rather than undertake the difficult process of deciding which valuation was more credible, the trial court in each case avoided the issue by splitting the difference. Reading the cases permitting valuation averaging, a sense emerges that the trial courts did independently review the evidence, but found that both parties’ valuations were flawed and that the truth lay somewhere between them. Thus, a trial court is permitted to take an average of valuation testimony if it finds that the valuations being averaged are not credible. But the court cannot use valuation averaging as a device to avoid the threshold step of reviewing the credibility of the competing determinations.
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