Filed 10/16/17 Marriage of Abedi CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeals from a judgment of the Superior Court of Orange County, Sheila Prell Sonenshine, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed in part, reversed in part.

Sima Kazerooni Abedi, in pro. per., for Appellant Sima Kazerooni Abedi.

Fisher & Rich, Michael Fisher, John L. Dodd & Associates, John L. Dodd and Benjamin Ekenes for Appellant Hamid Reza Abedi.

* * *

Sima Kazerooni Abedi (wife) and Hamid Reza Abedi (husband) each appeal from a judgment of dissolution of marriage with which neither party is satisfied. Wife contends the court erred in denying her request to continue trial, in its division of several marital assets, in valuing husband’s business as of the date of separation rather than the date of trial, and in refusing her a one-week extension to file her objections to the court’s tentative decision. Wife has not established error.

Husband contends the court overvalued his business. After rejecting the only expert evidence offered on the subject, the court made findings applying a capitalization (cap) rate unsupported by the evidence. The court was well within its discretion in rejecting figures provided by husband’s experts, but the figures the court substituted to establish the value of husband’s business are unsupported by the evidence requiring a new trial on this limited issue.

Accordingly, we affirm in part and reverse in part. On remand, the court should hear evidence from both parties on the issue of the business’s value. After hearing the evidence, if the court continues to believe it is unpersuasive, the court should appoint its own expert.

PROCEDURAL HISTORY

Wife Files for Dissolution of Marriage and the Court Makes Temporary Orders

In February 2010, wife petitioned for dissolution of marriage. She and husband had been married more than 13 years and had two children (a ten‑year-old daughter and an eight‑year-old son). They separated on March 2, 2010.

In July 2010, the court ordered husband to pay temporary spousal support of $24,944 per month and temporary child support of $10,056 per month. The court gave husband temporary control of Amir Abedi, DDS, Inc., and Cornerstone Dental Specialties, Inc. (collectively, the business), on condition he enable wife to view computer programs (such as QuickBooks) and provide her with copies of financial documents.

The Court Grants Wife’s First Request to Continue Trial

In September 2010, wife moved to continue the mandatory settlement conference and bifurcated trial on child custody and visitation, as well as the order to show cause on spousal and child support, because she had recently become self-represented. Over husband’s objection, the court vacated the dates for the mandatory settlement conference, trial, and order to show cause.

In February 2011, the court approved the parties’ stipulation and order for the appointment of retired Justice Sheila Prell Sonenshine as temporary judge. The stipulation stated the parties desired “to have the matter determined as soon as practically possible.” The court ordered the trial bifurcated with trial on child custody and visitation to commence on October 15, 2012.

In the December 5, 2012 judgment on the bifurcated custody and visitation trial, the court awarded sole legal custody of the children to husband and joint physical custody (50% each) to both parties. The court explained the then existing temporary order of joint legal custody and decision making had not worked in this high conflict case. The evidence (including the Evidence Code section 730 evaluator’s report) showed husband was “the best parent to assume this responsibility,” because wife made unilateral decisions and was dictatorial and controlling, whereas husband was more likely to foster a relationship between wife and the children. Trial on all other issues, including property division, was scheduled to commence on April 22, 2013.

The Court Grants Wife’s Second Request to Continue Trial

In February 2013, wife moved ex parte to vacate the trial dates and stay the case. In an earlier declaration, wife’s counsel, Hossein Berenji, declared the court had ordered husband to pay wife’s counsel $75,000 in attorney fees on December 19, 2012. In the ex parte request, Berenji declared that due to the substantial amounts of money currently owed to him, other than sending out three bank subpoenas, he had done no work to prepare for trial for the past several months. He had not been able to conduct discovery to determine where husband’s money was going, including valuation and division of five properties and the business, and discovery of undisclosed accounts where husband deposited excess earnings. Nor had he taken the depositions of husband, husband’s brother, and husband’s former partners and managers of the business. Counsel planned to look into husband’s possible breach of fiduciary duty concerning husband’s accounting methods and cash flow analysis, and other issues.

Husband opposed wife’s motion. His counsel declared husband had paid $75,000 to wife’s counsel on or before January 17, 2013.

On January 31, 2013, the court granted wife’s motion and continued the trial to May 29, 2013, but two months later, Berenji moved to be relieved as wife’s counsel. The court granted the motion and confirmed trial would commence on May 29, 2013.

The Court Denies Wife’s Third Request to Continue Trial

On April 29, 2013, wife moved to continue the trial to January 2014. She declared significant discovery needed to be completed and that husband refused to turn over documents. She requested the court to order $150,000 in fees for attorney Brian Saylin and $150,000 in fees for her accountant. Saylin declared that while he was aware he was approximately the fifth attorney to appear for wife, he had just been retained five days earlier for a limited scope of seeking a continuance of trial and obtaining a reasonable contribution toward his fees and costs and accountant fees. He stated if the trial was not continued, he would return unearned fees and costs to wife and would not represent her any further.

Husband again opposed wife’s motion on grounds, inter alia, he would suffer prejudice because his counsel and experts would have to re-do an enormous amount of trial preparation work.

The court denied wife’s motion to continue the trial.

Trial

Trial took place over 16 days in May and June of 2013. The court issued a 52‑page Statement of Decision and Judgment in March 2014. The balance of the procedural history, facts, and court’s findings will be discussed below as relevant to the parties’ contentions.

DISCUSSION

WIFE’S APPEAL

The Court Did Not Abuse Its Discretion in Denying Wife’s Request to Continue Trial

Wife contends the court abused its discretion in refusing to continue the trial for a third time from May 2013 to January 2014. A court’s decision whether to grant a continuance of trial is reviewed for abuse of discretion. (Lazarus v. Titmus (1998) 64 Cal.App.4th 1242, 1249.)

Under California Rules of Court, rule 3.1332(a), the dates assigned for trial are firm, and parties and their counsel must regard the date set for trial as certain.[1] Even so, “[a]lthough continuances of trials are disfavored,” the unavailability of trial counsel due to “excusable circumstances” or a substitution of counsel that is “required in the interests of justice” or a party’s “excused inability to obtain essential testimony, documents, or other material evidence despite diligent efforts” can constitute good cause for a continuance. (Rule 3.1332(c)(3), (4) & (6).) In considering a request for trial continuance based on the unavailability of counsel, the court “must consider all the facts and circumstances that are relevant to the determination” including “(1) [t]he proximity of the trial date; (2) [w]hether there was any previous continuance, extension of time, or delay of trial due to any party; (3) [t]he length of the continuance requested; (4) [t]he availability of alternative means to address the problem that gave rise to the motion or application for a continuance; (5) [t]he prejudice that parties or witnesses will suffer as a result of the continuance; . . . (10) [w]hether the interests of justice are best served by a continuance, by the trial of the matter, or by imposing conditions on the continuance; and (11) [a]ny other fact or circumstance relevant to the fair determination of the motion . . . .” (Rule 3.1332(d)(1), (2), (3), (4), (5), (10) & (11).)

Here, wife failed to show good cause for a third continuance. Wife was granted a continuance of the mandatory settlement conference and bifurcated trial in September 2010 because she had recently become unrepresented. In February 2011 when Sonenshine was appointed as temporary judge, the stipulation stated the parties desired “to have the matter determined as soon as practically possible.” Two years later, when the court granted wife’s second request to continue trial from February 2013 to May 2013 because Berenji had not prepared for trial or conducted discovery, wife was on notice the court would not grant any further continuances. The court stated at the time, “there would be no more continuances of trial.”

Wife failed to show she made any effort to conduct discovery during the three years the case had been pending even though she had been represented by numerous different attorneys. Further, husband’s counsel stated the first time he received a request for documents from wife was April 22, 2013, with a due date of May 2, 2013 (the day husband’s opposition to the continuance motion was filed), and that he was in the process of having the documents copied and delivered to wife. He asserted husband had been cooperative throughout the litigation and there had never been a motion to compel him to produce any documents. Husband’s counsel pointed out no depositions had been conducted on wife’s behalf even though she had more than three years and the help of four other attorneys to take depositions. The record reflects, at least as of December 5, 2012, husband granted wife access to all the business’s books and records pursuant to a previous court order, so wife had something to work with even without the discovery she failed to conduct. As a result, there was no reason to conclude husband would fail to turn over the newly-requested documents, because he had provided wife what she had requested in the past.

Moreover, husband would have suffered prejudice had the court continued the trial just one month before its scheduled start date. All expert reports and the parties’ final declarations of disclosure including a schedule of assets and debts and an income and expense declaration were ordered to be exchanged on or before April 29, 2013. While husband submitted his documents, wife did not. Husband, his counsel, forensic accountant, real estate appraisers, and other experts had prepared for a trial date of May 29, 2013, including preparation of business valuations and real estate appraisals provided to wife on April 29, 2013. According to husband’s counsel, this work involved an enormous amount of time, energy, and expense that would have to be duplicated if the trial were continued.

We understand wife’s predicament in having only weeks to prepare for trial as a self-represented litigant, but her predicament was of her own making. She knew or should have known Berenji had not undertaken discovery, because in her February 2013 motion to continue trial, Berenji outlined all the discovery yet to be done. The court granted wife a continuance in February 2013 on grounds she had not completed discovery. Berenji asked to be relieved as her counsel in March 2013, a full two months before trial. We presume she knew about the pending April 29, 2013 date for court‑ordered exchange of expert and other trial information, because it was on this very day she filed her motion to continue trial yet a third time. Wife and her counsel allowed time to pass without taking depositions or conducting other discovery and missed the pretrial document exchange deadline, apparently expecting the court to unchain them from lack of preparation. On this record, and considering the prejudice husband would have suffered, we cannot say the court abused its discretion in failing to grant wife additional relief weeks before trial.

Except for the Business, Substantial Evidence Supports the Court’s Valuation and Division of Assets

“Under Family Code section 2550, the court must divide the community estate of the parties equally. ‘This task constitutes a nondelegable judicial function [citation] which must be based upon substantial evidence [citation].’ [Citation.] Section 2552 concerns the method the court should use to value the property. As long as the court exercises its discretion in a legal manner, its decision will be affirmed on appeal if there is substantial evidence to support it.”[2] (In re Marriage of Campi (2013) 212 Cal.App.4th 1565, 1572, fn. omitted.) “The trial court’s findings on the characterization and valuation of assets in a dissolution proceeding are factual determinations which are reviewed for substantial evidence. [Citation.] ‘In this regard, the court has broad discretion to determine the manner in which community property is divided and the responsibility to fix the value of assets and liabilities in order to accomplish an equal division. [Citations.] The trial court’s determination of the value of a particular asset is a factual one and as long as that determination is within the range of the evidence presented, we will uphold it on appeal.’” (Ibid.)

Unless the parties stipulate to an in-kind division of their community estate, the court necessarily must value the community assets and liabilities as a necessary prerequisite to achieving a net equal division. (§ 2552; see In re Marriage of Cream (1993) 13 Cal.App.4th 81, 88 [in-kind division divides fungible assets such as bank accounts, shares of stock, etc., by awarding each spouse one-half].) However, an equal partition of each item of property in the community estate is rarely practical or feasible and, in some cases, may be inequitable. (Hogoboom & King, Cal. Practice Guide: Family Law (The Rutter Group 2017) ¶ 8:1050, p. 8-357.) “Where economic circumstances warrant,” the court may award a community asset exclusively to one party “on such conditions as the court deems proper to effect a substantially equal division of the community estate.” (§ 2601.) Whether “economic circumstances” make the asset distribution method appropriate requires inquiry into the nature of the property, as well as the parties’ individual needs, emotional attachments, business acumen, and financial positions such as the ability to cash out the other spouse. (See In re Marriage of Fink (1979) 25 Cal.3d 877, 886.)

1. Pacific Dental Services Stock

Husband, an endodontist, provides endodontic services on a contract basis to Pacific Dental Services (Pacific). Pacific is a medical service organization that owns, in conjunction with other dentists, many dental offices and contracts with independent contractors for specialty services such as endodontia. During the marriage, husband purchased 75 common shares of capital stock in Pacific for about $50,000 and agreed it was community property. Husband opined it was worth $934 per share or $70,050 and requested the court distribute it to him as separate property. The court awarded all 75 shares to husband as requested. The court stated, “[husband] says [Pacific] may not allow non-dentists to own stock and in any event giving [wife] an interest would ruin his relationship with [Pacific].” The court continued, “[wife] argues the stock is worth $95,000 and because of its great future she should get one-half rather than be bought out. [¶] [Wife] produced no evidence of a value greater than $70,050 and given the significance of the [Pacific] contract, the Court will not rock the boat and jeopardize [husband’s] [Pacific] relationship.”

On appeal wife argues there was no substantial evidence that an in‑kind division would impair the asset. She relies on In re Marriage of Brigden (1978) 80 Cal.App.3d 380 (Brigden). In Brigden, the court awarded the husband all the stock of a publicly‑traded corporation (id. at p. 383), which he co-founded (id. at p. 385). The appellate court reversed, finding it should have been split equally between the husband and the wife. (Id. at p. 384.) Brigden is factually distinguishable, though, because in Brigden there were insufficient community assets to offset the value of the award of the entire block of stock to the husband. (Id. at p. 386.) And in Brigden, the stock was traded on a national exchange. (Id. at p. 393.) The court noted, “Were the stock at issue here stock in a close corporation . . . or shown to be essential to Husband’s ability to earn a living then economic circumstances would perhaps warrant the award of the entire block of stock to Husband upon conditions effecting a substantially equal division of property. A close corporation is the functional equivalent of a family business. An asset which is essential to a party’s ability to earn a living satisfies a critical need which cannot be satisfactorily replaced.” (Ibid., fn. omitted.)

Here, there appear to be plenty of assets to offset the various distributions among husband and wife.[3] And here there is no evidence Pacific is publicly traded. Instead, Pacific is entwined with husband’s business, a fact that underpinned the court’s conclusion everything would run more smoothly if wife were no longer an owner of the stock. We also observe our Supreme Court has commented that Brigden presents unique facts, and a trial court is vested with “considerable discretion in the division of community property in order to assure that an equitable settlement is reached.” (In re Marriage of Fink, supra, 25 Cal.3d at p. 885.)

Wife also contends the court erred in basing its finding on husband’s testimony she acted inappropriately at events. She contends she always acted appropriately. The court found some of wife’s behavior objectionable to the point it determined the parties could not get along well enough to continue in any kind of partnership arrangement. We also note during the earlier bifurcated custody and visitation trial, the court changed legal custody of the children from joint legal custody to sole legal custody to husband, finding joint decision making had not worked in this high conflict case, in part because wife made unilateral decisions and was dictatorial and controlling. The court had ample opportunity to observe the parties and determine whether they could work together and concluded they could not. We will not second guess the court’s determination or re-weigh the evidence. (In re Marriage of Ackerman (2006) 146 Cal.App.4th 191, 204 [resolution of conflicts in evidence and assessment of credibility of witnesses are matters within exclusive province of trier of fact].)

2. Iran Apartment

In an order entered April 17, 2013, the court found wife made a prima facie showing of a possible community property interest in an apartment in Iran. Husband said the apartment had been sold. The court stated if it was sold, it required evidence of the sale. The court stated it was retaining jurisdiction over all aspects of the apartment, and upon a proper application, wife could request the court make further orders regarding the issue. The court ordered the parties to exchange appraisals by May 6, 2013. No appraisal was ever prepared.

At trial the court found the parties contributed $300,000 of community funds for the purchase of the apartment. Husband maintained his name was never on title and explained he bought the apartment to repay his parents for the $300,000 they contributed toward his dental education.[4] Wife maintained she never agreed to give the money to husband’s parents and only learned about it years later. Wife asked the court to find the parties had a 50 percent interest in the apartment because husband’s name appears on title. The court believed wife that she never consented to gifting any monies to husband’s parents but could not give wife credit for half the equity and/or rental value because wife failed to produce any credible evidence of its market or rental value. The court charged husband with $300,000.

On appeal wife argues the court failed to shift the burden of proving the value of the Iran apartment to husband given husband never provided her with an appraisal or the documents necessary for her to conduct her own appraisal.

In deciding In re Marriage of Prentis—Margulis & Margulis (2011) 198 Cal.App.4th 1252 (Margulis), we adopted the following rule: “[O]nce a nonmanaging spouse makes a prima facie showing concerning the existence and value of community assets in the control of the other spouse postseparation, the burden of proof shifts to the managing spouse to rebut the showing or prove the proper disposition or lesser value of these assets. If the managing spouse fails to meet this burden, the court should charge the managing spouse with the assets according to the prima facie showing.” (Id. at p. 1267.) We explained the rule is grounded in several policy considerations including fairness to the nonmanaging spouse, concerns of unequal access to evidence, and fiduciary duties imposed on managing spouses. (Id. at pp. 1268-1269.) We found several cited provisions impose on a managing spouse affirmative, wide‑ranging sua sponte duties to disclose and account for the existence, valuation, and disposition of all community assets from the date of separation through final property division. (Id. at pp. 1269-1270.) “‘“Where the evidence necessary to establish a fact essential to a claim lies peculiarly within the knowledge and competence of one of the parties, that party has the burden of going forward with the evidence on the issue although it is not the party asserting the claim.”’” (Id. at p. 1268.)

As explained in In re Marriage of Schleich (2017) 8 Cal.App.5th 267, 276, “Division 4 of the Family Code addresses marital rights and obligations. Within that division, section 721 recognizes the confidential relationship held by spouses. That relationship is a fiduciary relationship ‘impos[ing] a duty of the highest good faith and fair dealing on each spouse.’ [Citation.] Also within that division, section 1100 addresses management and control of community property. Subdivision (e) of section 1100 provides: ‘Each spouse shall act with respect to the other spouse in the management and control of the community assets and liabilities in accordance with the general rules governing fiduciary relationships which control the actions of persons having relationships of personal confidence as specified in Section 721, until such time as the assets and liabilities have been divided by the parties or by a court. This duty includes the obligation to make full disclosure to the other spouse of all material facts and information regarding the existence, characterization, and valuation of all assets in which the community has or may have an interest and debts for which the community is or may be liable, and to provide equal access to all information, records, and books that pertain to the value and character of those assets and debts, upon request.’”

Husband conceded during his testimony that community funds were used to purchase the apartment. Even though the record does not reflect the chain of title for the apartment, husband testified he purchased the property in Iran for his parents. However, husband also testified his name was never on title and he had never received rental income on the property. Exhibit 1111, which may have shed some light on the property’s ownership, was not admitted by the court.[5]

During trial, the court commented wife claimed the property was community, so she had the burden. Wife argued the burden should be on husband to prove the value of the property. She said she could not obtain the value of the apartment without a grant deed, which husband failed to supply. She asked the court to take judicial notice of the fact the real estate market in Iran has increased tremendously since the time of purchase. The court declined to do so and struck all wife’s testimony on value. Wife asked the court to take jurisdiction and order husband to bring documents so the apartment could be appraised. The court declined stating wife’s discovery period was done. Wife protested, arguing husband had a fiduciary responsibility to supply documents he had deliberately not given. At that point, wife changed her request and stated she wanted the property sold with the proceeds divided between them.

Wife is correct that husband had a fiduciary duty to make full disclosure of all material facts regarding the Iran apartment. However, the burden never shifted to husband, because wife failed to make a prima facie showing there existed real property in Iran that was owned by the community. (Margulis, supra, 198 Cal.App.4th at p. 1258 [prima facie showing relates to community asset].) Wife made a prima facie showing the community contributed $300,000 toward the purchase of an apartment, not that the community owned the apartment. The court charged husband with $300,000. There was no error in the court’s approach.

3. Travel Miles and American Express Membership Reward Points

According to the court, the parties stipulated to the existence of certain airline mileage accounts but argued over the mileage at the date of separation and/or the accumulation and usage thereafter. It appears wife was to provide evidence of her contentions at trial but she did not. Even still, the court noted wife devoted 21 pages of her written closing argument (approximate 13 percent) to the issue.[6] The court awarded each party 50 percent of the miles with United Airlines, Lufthansa, British Airways, and American Airlines. The court did not address wife’s contention she is entitled to half the American Express membership reward points.

On appeal wife argues these travel miles, as well as miles with Southwest Airlines and American Express membership reward points, were “as good as cash” and husband had used hundreds of thousands of miles and points. She said she did not have online or other access to the accounts because they were in husband’s name. Like her argument regarding the Iran apartment, wife contends the court failed to shift the burden of proving the value of the travel miles and reward points to husband.

Husband argues if wife wanted access to the account statements in husband’s name, she could have subpoenaed the records. He is correct. Wife also could have conducted discovery to learn the status of the miles and reward points as of the date of separation, which would have been the evidentiary starting point for wife to make a prima facie showing concerning the existence and value of the community asset.[7] Having failed to make a prima facie showing, the burden never shifted to husband to rebut the showing or prove proper disposition or lesser value of the asset. (Margulis, supra, 198 Cal.App.4th at p. 337.)

4. Placerville and Hesperia Properties

Husband and wife owned 50 percent of several properties in Placerville and Hesperia in the name of Newport Coast Property Management, LLC (NCPM). Husband’s expert viewed the properties and prepared written reports, but wife’s expert did neither.[8] Husband requested the court award the properties to him because it would not be a good idea for he and his wife to continue to be partners in anything. Wife argued her expert was unable to see the properties because she had only three weeks to prepare for trial. Nevertheless, she asked the court to maintain the status quo until she received all the financials or, alternatively, asked for one-half of the down payment and half of all community monies invested plus a percentage for inflation or loss.

The court accepted the testimony of husband’s expert and valued the properties at their fair market value. The court awarded the properties to husband, stating, “The Court has seen first-hand the Parties[’] inability to communicate or get along on any level. Leaving them as partners in this project would only be an invitation for further litigation.”

Unless the parties stipulate or agree to accept some other measure of value, an equal division of the community estate must be predicated on fair market value. (In re Marriage of Cream, supra, 13 Cal.App.4th at pp. 88-89.) Husband’s expert valued the properties at fair market value.

On appeal wife does not directly attack the properties’ valuations as testified to by husband’s expert. Instead, she contends there was no substantial evidence to support the finding her continued ownership would jeopardize the investment or the relationship between NCPM and its co-owners. She argues she should be entitled to retain her interest in NCPM properties because there is a potentially large share of several lucrative real estate deals including a future increase in value and that her community funds had been invested in the lands. This is just another way of saying she wants to hold onto half of the community’s investment.

Similar to its findings regarding the Pacific stock, the court found the parties could not get along well enough to continue in any kind of partnership arrangement. As before, we have no reason to disturb the court’s finding on whether the parties can effectively make joint decisions regarding these properties. Wife has demonstrated no error. She is free to take the payout she receives from these properties and pursue another investment vehicle.

The Court Properly Valued the Business at Date of Separation

The court found the business (Amir Abedi, DDS, Inc., and Cornerstone Dental Specialties, Inc.) is one entity, and wife does not challenge this finding on appeal. The court found the success of the business in increasing its servicing from 40 offices to 78 offices from the date of separation to the time of trial was dependent on husband’s efforts. Therefore, the court valued the business as of the date of separation, December 31, 2009.[9]

On appeal wife contends the court erred and should have valued the business at the time of trial.

Section 2552, subdivision (a), provides the court shall value the assets and liabilities of the community “as near as practicable to the time of trial.” However, section 2552, subdivision (b) provides an exception. “The court for good cause shown may value all or any portion of the assets and liabilities at a date after separation and before trial to accomplish an equal division of the community estate of the parties in an equitable manner.” (§ 2552, subd. (b).)

In In re Marriage of Duncan (2001) 90 Cal.App.4th 617 (Duncan), the court stated, “When a spouse operates a community property business after separation, there is an inherent tension between the general rule that the business must be valued as of the date of trial [citation] and the rule that a spouse’s earnings after separation are his or her separate property.” (Id. at p. 624.) The court noted section 2552 is “designed to remedy certain inequities such as ‘when the hard work and actions of one spouse alone and after separation . . . greatly increases the “community” estate which must then be divided with the other spouse.’” (Id. at p. 625.)

“Case law has established that good cause generally exists for a professional practice to be valued as of the date of separation.” (Duncan, supra, 90 Cal.App.4th at p. 625.) “This exception to trial date valuation applies because the value of such businesses, ‘including goodwill is primarily a reflection of the practitioner’s services (accounts receivable and work in progress) and not capital assets such as desks, chairs, law books and computers.’” (Id. at pp. 625-626.) In Duncan, the court valued husband’s business as of the time of separation (id. at p. 629), because the evidence showed the business had all the attributes of a professional practice, including performing services for a fee, offering specialized knowledge and experience, being licensed and regulated, and having assets that consisted largely of office equipment, accounts receivable and work in progress (id. at p. 626). The value and success depended almost exclusively on husband’s skill, industry, guidance, and reputation. (Ibid.)

In the case before us, substantial evidence supports the conclusion the value and success of the business depends on husband, and accordingly the court properly valued the business as of the time of separation. Husband testified he opened his own dental practice in Chino Hills in 1999. In the late nineties, husband formed Amir Abedi, D.D.S., Inc. Initially husband was the only endodontist at his practice, but in 2006 or 2007, he began hiring others to perform root canals. Husband began providing endodontic services for Pacific in 2006 or 2007. At some point husband coined the term “Team Endo,” which is a more efficient way to deliver endodontic services using trained dental assistants. A “Team Endo” consisted of four people: an endodontist who heads the team, a general dentist, and two dental assistants trained in endodontic care. Husband described he divided up the root canal process into eight distinct procedures so there were certain things a general dentist could delegate to increase efficiency.

He tried this new system with Pacific where all equipment and staff was provided so that specialists did not have to invest in anything to be associated with the group. His teams go to the office of a general dentist who has an affiliation with Pacific and transport equipment in minivans. When husband first began working with Pacific, he serviced two offices and was the only endodontist performing services for Pacific. After the first year, he had approximately eight to 10 offices. At some point he formed Cornerstone Dental Specialties, Inc., for accounting purposes. By 2008 or 2009, over 80 percent of husband’s gross income was being generated from Pacific. At the time of trial, husband was still performing root canals with Pacific and had hired 11 other endodontists.

Husband trained the endodontists and dentists that were hired for Team Endo by having them observe his work. However, he testified his most important function was probably recruiting new endodontists. In so doing, he circulated print ads, wrote letters to dental schools, attended annual meetings and trade shows with the American Association of Endodontists, and made personal phone calls. He did the same sort of recruitment for dentists. Since January 1, 2010, he recruited and trained four to five new endodontists and two or three dentists.

Husband’s expert, Patrick Wood, testified husband’s system is a unique delivery system for endodontic work, so much so that they negotiated into the Pacific contract mutual restrictions so employees could not be taken. There was also a trade secret agreement that prevented Pacific from stealing husband’s system. As a result of husband’s efforts, he testified the number of dental offices husband serviced increased from 40 to about 76 between January 1, 2010 and the time of trial.

The above testimony offered by husband and Wood constitutes substantial evidence husband’s business had the attributes of a professional practice as described in Duncan, supra, 90 Cal.App.4th 617. The court did not err in valuing the business at the time of separation rather than the time of trial. (See In re Marriage of Stevenson (1993) 20 Cal.App.4th 250, 253 [small business dependent on skill and reputation of one spouse should be valued as of date of parties’ separation].)

Wife Waived Her Argument the Court Erred in Failing to Allow Her an Extension to File Objections to the Tentative Decision

Finally wife argues the court erred in not giving her a one-week extension to file objections to the tentative decision. The argument revolves around her difficulty in meeting the court’s deadlines because they fell during her ski vacation with her son and because her computer malfunctioned. Wife’s brief on this issue does not contain a single citation to the record on appeal, so we do not know what efforts, if any, wife made to request an extension and how, if at all, the court responded. (See Mansell v. Board of Administration (1994) 30 Cal.App.4th 539, 545 [“We are not required to search the record to ascertain whether it contains support for [appellant’s] contentions”].) The argument also lacks citation to legal authority. Having failed to properly brief the issue, we deem it waived. (See Rule 8.204(a)(1)(B) & (C), (a)(2)(C); see also Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, 852 [appellant’s failure to support contention with meaningful legal analysis waives issue on appeal].)

HUSBAND’S APPEAL

The Court’s Valuation of the Business Is Unsupported by Substantial Evidence

1. Factual and Procedural Background

Based on his experts’ opinions, husband asked the court to value the business at $202,000 as of December 31, 2009. Wife challenged husband’s proposed value, but according to the court, “she failed to either proffer any evidence of what she thinks is the correct value or suggest such a value in her closing argument.” The court devoted six pages of its statement of decision to valuation of the business—more than any other issue it was asked to decide. While the court rejected many of wife’s arguments regarding valuation, it stated, “The Court is impressed with one of [wife’s] arguments. She argues it is impossible for a company, which is producing over $1,000,000 a month, with an available cash flow of over $200,000 a month, to be worth only $202,000. [Wife’s] numbers are wrong but the concept she urges is correct . . . . [¶] [Husband’s] own witnesses agree[d] [the business’s] 2008 gross receipts were $5,301,659 and total income was $4,733,000 and its 2009 gross receipts were $5,623,863 and the total income was $4,779,000. The net operating income (and before certain add backs for personal expense etc.) was $763,919 in 2008 and $1,017,540 in 2009.”

The court declined to value the business at $202,000 as requested by husband. Instead, the court valued the business at $1,968,000. The court reached this valuation by first determining the so-called excess earnings were $104,018 and multiplying that number by a cap rate of three to arrive at an excess earnings goodwill value of $312,054. The court also determined the market approach to the value of goodwill by taking an estimate of monthly net operating income of $100,000 and multiplying by 36 months to arrive at a market approach valuation of $3,600,000. Averaging the valuation using the excess earnings approach ($312,054) and the valuation using the market approach ($3,600,000), and (inexplicably) rounding up, the court arrived at its valuation of $1,968,000.

In his appeal, husband contends substantial evidence does not support the court’s valuation of the business. He contends the court erred by using a cap rate of three rather than one in determining excess earnings goodwill value, and by applying a multiple of 36 rather than three months in determining the market approach goodwill value.

The evidence bearing on the business’s valuation consisted of husband’s testimony and that of his experts Dan Close, Kurt Skarin, Thomas Turk, and Patrick Wood. Wife did not offer expert testimony. Husband challenges the court’s rejection of his undisputed expert evidence for determining the business’s value. Given husband contends the court erroneously rejected the only evidence on valuation, we set forth the court’s reasoning in some detail.

The court wrote, “Simply stated [husband’s] experts’ opinions come down to the following: (1) the business made around $100,000 a month in 2009; (2) because of the 90 day cancellation clause and other issues no one would pay more than $300,000 to buy it; (3) [husband] takes out about $100,000 a year more than what an executive would make doing the same job he does[;] (4) it is reasonable to apply a cap rate of 1 to the $100,000 excess earnings because of the riskiness of the business i.e. the 90 day cancelation clause[;] and (5) $200,000 is the appropriate value. (Market value of $300,000 plus excess earning of $100,000, divided by two.)

“The centerfold of [husband’s] experts’ arguments is the 90 day cancellation clause. But it is not in and of itself the determinative consideration. Although the contract does permit a 90 day without cause cancellation the Court[] may not consider speculative factors when valuing community assets. [Citations.] The same reasoning applies to the concern about the inability to obtain covenants not to compete and financing.

“But there are other even more compelling reasons to reject part of the experts’ opinion. Indeed as [husband] himself testified, he had a great relationship with [Pacific] at the time of separation; one which he had worked very hard to establish[] and maintain. In fact, prior to the date of separation and with the 90 day cancellation clause in effect, [the business’s] [Pacific] revenues had increased substantially from the inception of the relationship to the date of separation.

“Finally, another factor mandates the Court does not elevate the 90 day cancellation clause to Holy Grail status. [Husband] himself testified, he gave up his dental practice because he thought he could do better financially focusing his attention on [the business]. The Court finds it highly unlikely [husband] would have abandoned his own dental practice and two offices if he were concerned his future was so uncertain because of the 90 day cancellation clause. Stated another way, why would [husband] give up revenues he had derived over decades of education and private practice to take a chance on higher annual profits that were likely to end in three months?

“Limiting the value to three months of profit and/or a cap rate of 1 is therefore on these facts unrealistic. Based on the evidence of what actually had transpired at the time of separation, and [husband’s] choice to go forward with [Pacific], the Court finds a three year period rather than three months to be appropriate in determining market value. Moreover, and for the same reasons, the Court concludes a cap rate of 3, applied to a three year period is determinative of the value as of December 31, 2009.”

2. Valuing a Going Business in Marital Dissolution Proceedings

Issues concerning the valuation of community property are reviewed for abuse of discretion. (In re Marriage of Ackerman, supra, 146 Cal.App.4th at p. 197.) To the extent a court’s exercise of discretion is based on the facts of the case, it will be upheld “as long as its determination is within the range of evidence presented.” (Ibid.) “Conversely, a court abuses its discretion if its findings are wholly unsupported, since a consideration of the evidence ‘is essential to a proper exercise of judicial discretion.’” (Ibid.)

“In connection with the valuation of a business in a dissolution action, the court must decide whether the business has any goodwill, and if so, what is its value.” (In re Marriage of Greaux and Mermin (2014) 223 Cal.App.4th 1242, 1251.) “[W]hen goodwill attaches to a business, its value is a question of fact.” (In re Marriage of Foster (1974) 42 Cal.App.3d 577, 583 (Foster).) As we recently explained in In re Marriage of Finby (2013) 222 Cal.App.4th 977, 985, “Business and Professions Code section 14100 declares, ‘The “good will” of a business is the expectation of continued public patronage.’ ‘t is well established that the goodwill of a . . . professional practice as a sole practitioner’ created during marriage constitutes a divisible asset of the community in an action for dissolution of marriage. [Citations.] ‘“[W]here the issue is raised in a marital dissolution action, the trial court must make a specific finding as to the existence and value of the ‘goodwill’ of a professional business as a going concern’” even if it involves the business “‘of a sole practitioner . . . .’””

Determining goodwill is not an easy task. “It has been aptly stated: ‘Accountants, writers on accounting, economists, engineers, and courts, have all tried their hands at defining goodwill, at discussing its nature, and at proposing means of valuing it. The most striking characteristic of this immense amount of writing is the number and variety of disagreements reached.’” ([i]In re Marriage of Lopez (1974) 38 Cal.App.3d 93, 108, disapproved on other grounds in In re Marriage of Morrison (1978) 20 Cal.3d 437, 444-445.) Hence, the valuation process is not a perfect science. (See In re Marriage of Lopez,. at p. 109 [“We emphasize that no rigid or unvarying rule has been enunciated by our courts for determining the existence or value of the ‘goodwill’ of a law practice or any other profession as a going business, and therefore each case must be determined upon its own facts”].)

“[C]ourts have not laid down rigid and unvarying rules for the determination of the value of goodwill but have indicated that each case must be determined on its own facts and circumstances and the evidence must be such as legitimately establishes value.” (Foster, supra, 42 Cal.App.3d at p. 583.) As described in one treatise, “[t]he published decisions do not provide an evidentiary blueprint for establishing the value of goodwill. It is clear that expert testimony is essential. The expert can rely on any rational valuation approach. However, an approach is necessary. Speculation is not a substitute for methodology.” (5 Raye & Pierson, Cal. Civil Practice: Family Law Litigation (2017) Professional Goodwill, § 5:82.)

In the exercise of its broad discretion, the trial court “makes an independent determination of value based upon the evidence presented on the factors to be considered and the weight given to each. The trial court is not required to accept the opinion of any expert as to the value of an asset.” (In re Marriage of Bergman (1985) 168 Cal.App.3d 742, 753 (Bergman); see Foster, supra, 42 Cal.App.3d at p. 583 [in establishing value of goodwill, opinion evidence is admissible but not conclusive].) An expert’s opinion, even if uncontradicted, may be rejected if the reasons given for it are unsound. (Kelley v. Trunk (1998) 66 Cal.App.4th 519.) “‘“The chief value of an expert's testimony in this field, as in all other fields, rests upon the material from which his opinion is fashioned and the reasoning by which he progresses from his material to his conclusion . . . it does not lie in his mere expression of conclusion.” (Italics added.) [Citation.] In short, “Expert evidence is really an argument of an expert to the court, and is valuable only in regard to the proof of the facts and the validity of the reasons advanced for the conclusions.”’” (People v. Hunt (1971) 4 Cal.3d 231, 237.)

Against this backdrop we consider our decision in In re Marriage of Rosen (2002) 105 Cal.App.4th 808 (Rosen). In Rosen, we reversed a judgment of dissolution on grounds, inter alia, the court’s finding on goodwill valuation was erroneous. (Id. at p. 814.) At trial, the wife’s expert offered the only evidence of goodwill; the husband did not present expert testimony. The wife’s expert concluded the husband’s law practice had a value of $60,500, $42,000 of which represented goodwill, a conclusion the trial court adopted. (Id. at pp. 817, 819.) On appeal the husband argued the determination was incorrect, and we agreed, rejecting the wife’s expert’s conclusions. (Id. at pp. 819‑820.) We explained, “the fact the expert’s testimony was not contradicted by other expert testimony does not make it conclusive on the trial court or on us.” (Id. at p. 820.) We found the expert’s failure to use an average of the husband’s net income resulted in a figure that was not “reasonably illustrative” of the husband’s income. (Ibid.) While Rosen dealt with the excess earnings method of valuation, we noted it is not the only measure of goodwill value. (Id. at p. 819.) “Goodwill value may be measured by ‘any legitimate method of evaluation that measures its present value by taking into account some past result,’ so long as the evidence ‘legitimately establishes value.’” (Ibid.)

Relatedly, in In re Marriage of Hargrave (1985) 163 Cal.App.3d 346 (Hargrave), the wife’s expert testified the husband’s business had goodwill valued at $100,000. The husband and his two experts testified goodwill was zero. (Id. at p. 352.) The referee found goodwill was $35,000. On appeal, the wife contended no substantial evidence supported the referee’s finding. (Ibid.) The appellate court agreed stating, “The error divulged in the testimony of husband’s experts lay in their determination of value by positing what might occur if all husband’s clients suddenly canceled their contracts with him. Likewise, their reliance upon how much husband might be able to obtain for the goodwill were he to attempt to sell the business was not a correct measure of value in the context of a dissolution proceeding.” (Id. at p. 353.)

Because the referee rejected all the testimony on the subject of goodwill valuation, the referee should have required the parties to furnish additional evidence or should have appointed his own expert to testify on the issue. (Hargrave, supra, 163 Cal.App.3d at p. 355.) The appellate court reversed and remanded the matter to the court to conduct a new trial on the value of the business. (Id. at p. 357.)

We agree with Hargrave. Further, Evidence Code section 730 provides in relevant part, “When it appears to the court, at any time before or during the trial of an action, that expert evidence is or may be required by the court or by any party to the action, the court on its own motion or on motion of any party may appoint one or more experts to investigate, to render a report as may be ordered by the court, and to testify as an expert at the trial of the action relative to the fact or matter as to which the expert evidence is or may be required . . . .”

Here, the court accepted the valuation methods provided by husband’s experts but rejected the experts’ recommendation to apply a cap rate of one to the excess earnings and a monthly multiplier of three in applying the market approach. The court found these figures too speculative as it relates to the 90-day cancellation clause and the more likely scenario that husband’s business would continue to grow as the evidence showed it had previously done. To the extent the court rejected the experts’ figures as speculative, the court was well within its discretion. (See e.g. Duncan, supra, 90 Cal.App.4th at p. 635 [court properly refused to introduce speculative value of employment contract into process of determining fair economic value of community property asset for equal division purposes].)

The court was entirely justified in rejecting testimony by husband’s expert for yet another reason. The market approach goodwill value does not seem particularly apt in a dissolution setting. It seems to us the value of the business for dissolution purposes is the same post‑ and pre‑separation, and will not necessarily equate with market value. “‘The value of community goodwill is not necessarily the specified amount of money that a willing buyer would pay for such goodwill. In view of exigencies that are ordinarily attendant a marriage dissolution the amount obtainable in the marketplace might well be less than the true value of the goodwill. Community goodwill is a portion of the community value of the professional practice as a going concern on the date of the dissolution of the marriage. As observed in Golden [v. Golden (1969) 270 Cal.App.3d 401], “. . . in a matrimonial matter, the practice of the sole practitioner husband will continue, with the same intangible value as it had during the marriage. Under the principles of community property law, the wife, by virtue of her position of wife, made to that value the same contribution as does a wife to any of the husband’s earnings and accumulations during marriage. She is as much entitled to be recompensed for that contribution as if it were represented by the increased value of stock in a family business.’” (Hargrave, supra, 163 Cal.App.3d at p. 353.)

But even though the court was justified in rejecting the cap rate and monthly multiplier and the ultimate opinion on value provided by husband’s experts, the court had no basis upon which to substitute its own figures. The court’s use of different figures (cap rate of three and monthly multiplier of 36), for which there was no testimony, resulted in a business valuation of $1,968,000 unsupported by substantial evidence. Neither the cap rate of three, nor the monthly multiplier of 36, fell within the range of the evidence presented. (See Bergman, supra, 168 Cal.App.3d at p. 754 [court permitted to reject discount rate utilized by each expert and apply its own rate somewhere in between]; see also In re Marriage of Hebbring (1989) 207 Cal.App.3d 1260, 1274 [court properly assigned a value between those urged by parties].) It was within the court’s discretion to reject the cap rate and monthly multiplier of husband’s expert and, if wife had offered expert evidence, to apply its own cap rate and monthly multiplier somewhere in between that testified to by competing experts; or if the evidence supported different figures from those testified to by husband’s experts, to select figures supported by such evidence.

Given the court rejected the only expert evidence before it, the court could have appointed its own expert. (Evid. Code, § 730.) But the court could not utilize the remedy it chose—to arbitrarily assign a new cap rate and monthly multiplier without adequate evidentiary support. An award must generally be within the high and low valuation opinions offered. (Community Development Com. v. Asaro (1989) 212 Cal.App.3d 1297, 1306.) Notwithstanding the great deference shown to a trial court's consideration of the evidence, a finding regarding the valuation of a business must have a factual basis to withstand challenge on appeal. A finding that goodwill exists, accompanied by an arbitrary assignment of a value, will not suffice; nor will an arbitrary opinion of the market value of a business. (See Hargrave, supra, 163 Cal.App.3d at p. 354 [“Because of the nature of the issues that must be adjudicated by trial judges in the family law courts, those courts are vested with wide discretion. That discretion, however, is not without limit, and its exercise may not be based on caprice or whimsy. Certainly, a family law judge may not adjust values merely to achieve mathematical equality in the division of community property”].)

DISPOSITION

The judgment is affirmed except as to the valuation of husband’s business. We reverse the judgment on that limited basis and remand to allow both parties to put on evidence of value. If, after hearing both parties’ evidence, the court continues to believe the evidence is unpersuasive, the court should appoint its own expert to assist in its determination of value. Any equalization payment must also be adjusted based on any change in the court’s determination of the value of the business. Husband shall recover his costs incurred on appeal.

IKOLA, J.

WE CONCUR:

ARONSON, ACTING P. J.

FYBEL, J.