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An  unpublished  opinion  of  the  North  Carolina  Court  of  Appeals  does  not  constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
NO. COA02-1457
NORTH CAROLINA COURT OF APPEALS
Filed:                                                                                          6 January  2004
CHARLES A. BUZZANELL,
Plaintiff
v.                                                                                              Buncombe County
                                                                                                No.  00 CvD  2106
CORINA MILLER  (BUZZANELL),
Defendant
Appeal  by  plaintiff  from  judgment  entered                                                  31  July            2002  by
Judge Earl J. Fowler, Jr. in Buncombe County District Court.   Heard
in the Court of Appeals  27 October  2003.
Robert E. Riddle for plaintiff-appellant.
No brief for defendant-appellee.
HUNTER, Judge.
Charles A. Buzzanell (“plaintiff”) appeals from a Judgment of
Equitable  Distribution,  concluding  that  an  equal  division  of  the
parties’  marital  property  was  equitable.    For  the  reasons  stated
herein, we affirm.
Plaintiff and Corina Miller  (“defendant”) were married on  30
November 1998.   At the time of the marriage, plaintiff was employed
as   a   palliative   care   physician   by   an   anesthesia   practice.
Plaintiff  subsequently  terminated  his  employment  on  or  about                             1
December  1998  and  opened  his  own  palliative  care  practice,  Blue
Ridge  Pain  Management  and  Palliative  Care,  P.A.                                           (“the  PA”),  in




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Hendersonville,  North  Carolina.     Defendant  worked  full-time  to
assist plaintiff in the administration of his medical practice.
Approximately  thirteen  months  after  their  marriage,  the
parties separated on 22 January 2000.   Plaintiff filed a complaint
on  20 April  2000 seeking divorce from bed and board and equitable
distribution.    Defendant replied and counterclaimed for equitable
distribution and alimony.
The  action  was  heard  on  27  November  2001,  during  which  the
parties’  assets  were  identified,  valued,  and  distributed.     The
court  considered  evidence  provided  by  each  party’s  expert  in
valuation  of  medical  practices  and  valued  the  PA  at  $155,048.00
after making adjustments to the methodology offered by defendant’s
expert.    Further,  the  court  found  a  marital  interest  in  a  home
plaintiff   purchased   prior   to   the   marriage   due   to   certain
improvements  and  mortgage  payments  that  were  made  on  the  home
during  the  marriage  with  marital  funds.    Ultimately,  the  trial
court determined an equal division to be equitable.   Plaintiff was
awarded the PA, certain personal property, the marital interest in
the  home,  and  a  debt.     Defendant  was  awarded  the  commercial
property  in  Hendersonville,  certain  personal  property,  and  a
distributive award of  $81,058.00.    Plaintiff appeals.
In order for this Court to conduct proper appellate review of
an equitable distribution order, the trial court’s findings of fact
must be specific enough that the appellate court can determine from
reviewing  the  record  whether  the  judgment  represents  a  correct
application of the law.   See Coble v. Coble, 300 N.C. 708, 714, 268




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S.E.2d                                                                      185,                                190   (1980).   “Although  the  trial  court   [is]  not
required to recite in detail the evidence considered in determining
what division of the property would be equitable, it [is] required
to  make  findings  sufficient  to  address  the  statutory  factors  and
support  the  division  ordered.”    Armstrong  v.  Armstrong,  322  N.C.
396,  405,  368 S.E.2d  595,  600  (1988).    The equitable distribution
of the property is ultimately vested within the wide discretion of
the trial court and “‘will be upset only upon a showing that it was
so arbitrary that it could not have been the result of a reasoned
decision.’”   Wall v. Wall, 140 N.C. App. 303, 307,  536 S.E.2d  647,
650  (2000)  (citation omitted).    On appeal, plaintiff brings forth
nine  assignments  of  error  regarding  the  Judgment  of  Equitable
Distribution  that  essentially  question  whether  the  trial  court:
(I)  properly  determined  the  value  of  the  PA;                         (II)  erred  in
determining  there  was  a  marital  interest  in  the  home  plaintiff
purchased  prior  to  the  marriage;                                        (III)  properly  considered  tax
consequences  as  a  distributional  factor;                                (IV)  erred  in  limiting
plaintiff’s  cross-examination  of  defendant’s  expert  witness  on
valuation of the PA; and (V) erred in charging defendant twice for
the value of a computer.
I.
Plaintiff  argues  the  trial  court  erred  in  valuating  the  PA.
Specifically,  plaintiff  contends                                          (1)  defendant’s  expert,  Foster
Shriner  (“Shriner”),  lacked  sufficient  knowledge  about  the  PA  to
accurately determine its value, (2) the court incorrectly adjusted
the  valuation  methodology  used  by  Shriner  to  arrive  at  the  PA’s




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value, and  (3) the court failed to properly value the receivables
of the PA when it determined the PA’s value.    We disagree.
The applicable law as to the valuation of a marital interest
in a professional practice is as follows:
[T]he task of the trial court is to arrive at
a  date  of  separation  value  which  “reasonably
approximates”  the  net  value  of  the  business
interest.
“[A]   court   should   make   specific
findings  regarding  the  value  of  a
spouse’s  professional  practice  and
the   existence   and   value   of   its
goodwill,    and    should    clearly
indicate  the  evidence  on  which  its
valuations   are   based,   preferably
noting   the   valuation   method   or
methods   on   which   it   relied.   On
appeal, if it appears that the trial
court  reasonably  approximated  the
net  value  of  the  practice  and  its
goodwill, if any, based on competent
evidence  and  on  a  sound  valuation
method  or  methods,  the  valuation
will not be disturbed.”
Offerman  v.  Offerman,  137  N.C.  App.  289,  292-93,  527  S.E.2d  684,
686                                                                          (2000)                                      (citations  omitted).    Further,  this  Court  recognizes
that “[w]hen . . . a professional practice has not been established
for a sufficient period to determine goodwill based upon comparable
past  earnings,  the  capitalization  of  excess  earnings  method  of
valuing goodwill should be used.”   Conway v. Conway, 131 N.C. App.
609,  618,  508 S.E.2d  812,  819  (1998).
In  the  instant  case,  the  following  findings  of  fact  made  by
the trial court are pertinent to defendant’s first argument:
6.                                                                           Plaintiff presented a valuation of the PA
by  Mr.  David  Keller,  an  expert  in  the
valuation   of   medical   practices,   who
concluded that the after tax value of the




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practice was approximately $31,000. . .
It was his opinion that the practice had
no  goodwill,  goodwill  being  “evident  if
he  had  earnings  in  excess  of  average
earnings  and  he  was  able  to  transfer
those earnings to a buyer.   As of January
31,                                              2000,  the  market  for  his  practice
would be almost non-existent”.   The court
finds    that  [Keller’s]  consideration  of
tax  consequences  is  speculative,  and  an
improper  consideration  in  valuation  of
the  practice.    The  court  finds  further
that   the   write-off   ratios   and   the
deductions  for  collection,  used  by  Mr.
Keller were excessive.
7.                                               Defendant presented a valuation of the PA
prepared by Mr. Foster Shriner, an expert
in  valuation  of  medical  practices.    He
valued  the  PA  at  $180,165,  by  using  the
capitalization    of    excess    earnings
method.  .  .
8.                                               Mr. Shriner checked his valuation against
comparable  market  data,  and  used  the
Justification  of  Purchase  test,  both  of
which supported his conclusions as to the
value of the PA.
9.                                               At trial, Mr. Shriner testified that the
data  he  used,  had  been  identified  as
representing  eleven  months.     At  trial,
Mr.  Keller  testified  that  it  was  really
data  representing  twelve  months.     The
court  finds  that  an  adjustment  to  the
valuation  is  necessary,  and  should  be
11/12ths  of  the  amount  calculated  by
Foster   Shriner.                                Mr.   Shriner   also
testified  that  he  had  not  considered  a
$10,103  loss,  and  it  appeared  that  the
loss  should  have  been  considered.    The
court  finds  that  after  considering  the
$10,103    loss,    and    considering    the
additional  month  of  time                      (above),  the
value  of  the  business  is  $155,048.    The
court has considered that the business is
a  relatively  new  one,  but  finds  the
valuation  prepared  by  Mr.  Shriner,  as
corrected, represents the true net value
of the practice.




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We conclude that these findings sufficiently set forth the court’s
careful consideration of the valuations presented by both parties’
experts.   The trial court found that Shriner’s valuation, based on
the  capitalization  of  excess  earnings  method,  would  correctly
represent  the  PA’s  true  net  value  if  two  adjustments  were  made.
The  trial  court’s  adoption  of  Shriner’s  method  of  valuing  the  PA
was supported by the evidence.    We agree, however, that the trial
court erred in finding of fact  9 in adjusting Shriner’s valuation
of  simply  multiplying  that  figure  by                                     11/12  and  then  deducting
$10,103.00.    Nevertheless,  if  the  errors  identified  by  the  trial
court  are  corrected  mathematically  using  Shriner’s  formula,  the
value  of  the  PA  exceeds  the  value  set  by  the  trial  court.    Any
error in the trial court’s adjustments was, therefore, harmless to
plaintiff.
II.
Next,  plaintiff  argues  the  trial  court  erred  in  determining
there was a marital interest in the home he purchased prior to the
marriage.    We disagree.
In equitable distribution cases, the trial court is required
to  identify  and  classify  all  property  as  marital  or  separate.
McIver  v.  McIver,  92  N.C.  App.  116,  123-24,  374  S.E.2d  144,  149
(1988).                                                                       “In some instances, however, the property may have a dual
character  of  both  marital  and  separate,  and  in  that  event,  the
trial  court’s  classification”  of  the  property  must  be  determined
using the source of funds analysis.    Ciobanu v. Ciobanu,  104 N.C.
App.                                                                          461,                                                        464,   409  S.E.2d   749,   751   (1991).   This  analysis




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essentially  provides  that                                                   “the  acquisition  of  property  is  an
on-going process which ‘does not depend upon inception of title but
upon  monetary  or  other  contributions  made  by  one  or  both  of  the
parties.’”     Id.                                                            (citation  omitted).     Thus,  with  respect  to  a
spouse’s  separate  property,                                                 “the  marital  estate  shares  in  the
increase  in  value  of  separate  property                                   ‘it  has  proportionately
“acquired”  in  its  own  right’  through  financial,  managerial,  and
other contributions, but does not share in the increase in value of
separate  property  acquired  through  passive  appreciation,  such  as
inflation.”    Id. at  465,  409 S.E.2d at  752  (citation omitted).
Based  on  the  evidence  presented  in  the  case  sub  judice,  the
trial  court  found  that  marital  funds  had  been  used  to  reduce  the
mortgage  on  plaintiff’s  separate  property,  i.e.  the  home,  by
$10,730.00  and  that  improvements  made  to  that  home  during  the
marriage  were  primarily  responsible  for  its  increase  in  value  by
$11,000.00.                                                                   The   court   further   found   that   both   financial
contributions  established  a  marital  interest  in  the  home  of
approximately $21,794.00.   Because these findings are supported by
competent  evidence,  we  cannot  conclude  the  court  abused  its
discretion in determining that there was a marital interest in this
home.
III.
Plaintiff  also  argues  the  trial  court  failed  to  properly
consider  and  make  findings  regarding  tax  consequences  as  a
distributional  factor  when  it  determined  equal  division  was
equitable.    We disagree.




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In  North  Carolina,  a  trial  court  shall  consider  all  of  the
distributional factors listed in N.C. Gen. Stat. § 50-20(c) (2001)
when determining whether an equal division is equitable.   One such
factor  to  be  considered  is  the  “tax  consequences  to  each  party.”
N.C.  Gen.  Stat.                                                            §                                    50-20(c)(11).   A  trial  court  abuses  its
discretion  when  it  fails  to  consider  any  of  the  distributional
factors for which the parties offered evidence and make findings of
fact regarding them.   See Armstrong, 322 N.C. at 405, 368 S.E.2d at
600.
Here,  plaintiff’s  expert  offered  evidence  relating  to                  “the
after  tax  value  of  the  practice                                         [being]  approximately               $31,000.”
After considering the evidence, the trial court found that value to
be “speculative, and an improper consideration in the valuation of
the [PA].”   Further consideration of tax consequences by the trial
court was unnecessary because (1) no evidence was offered as to any
anticipated   sale  of  the  PA                                              (or  the  commercial  property  in
Hendersonville), and (2) the court did not order the liquidation of
property as part of the distribution.   Thus, there was no abuse of
discretion by the trial court.
IV.
Plaintiff argues the trial court erred in failing to allow him
to  cross-examine  Shriner  as  to  whether  the  valuation  methodology
Shriner  used  in  other  cases  was  consistent  with  his  testimony  in
the present case.    We disagree.
Our  Supreme  Court  has  specifically  declined  to  set  precise
limits   for   the   scope   of   cross-examination   for   impeachment,




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requiring  only  that                                                         “‘(1)  the  scope  thereof  is  subject  to  the
discretion of the trial judge, and (2) the questions must be asked
in  good  faith.’”    State  v.  Harrington,  78  N.C.  App.  39,  43,  336
S.E.2d                                                                        852,                                                         854   (1985)   (citation  omitted).     Nevertheless,  with
respect  to  the  value  of  property,  the  Court  has  held  that  “[t]he
impeachment purpose of the cross-examination is satisfied when the
witness responds to a question probing the scope of his knowledge.
Any  further  inquiry  which  states  or  seeks  to  elicit  the  specific
values of property dissimilar to the [property] subject to the suit
is at best mere surplusage.”   Power Co. v. Winebarger, 300 N.C. 57,
64,  265 S.E.2d  227,  232  (1980).    The questions asked by plaintiff
on cross-examination of Shriner regarding the valuation methodology
he  used  in  other  cases  and  the  values  he  came  up  with  in  those
cases  were                                                                   “mere  surplusage”  and  not  relevant  to  the  case  sub
judice.    Thus,  the  trial  court  did  not  abuse  it  discretion  in
limiting the scope of plaintiff’s cross-examination.
V.
Finally,  plaintiff  argues  the  trial  court  erred  in  charging
him  twice  for  the  value  of  a  $2,500.00  computer  when  making  its
equitable distribution award.   However, as plaintiff recognizes in
his brief to this Court, there were actually two computers at issue
-- one computer valued at $2,500.00 that defendant bought prior to
the  marriage  and  another  computer  that  defendant  bought  using  a
check  from  the  PA  in  the  amount  of  $3,200.00.    The  trial  court
identified defendant’s computer as a marital asset and assigned it
to  plaintiff.    The  other  computer  was  identified  as  a  tangible




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asset  of  the  PA.     The  court’s  consideration  of  two  separate
computers does not support plaintiff’s argument that he was charged
twice for the same computer; thus, his argument is without merit.
In conclusion, the trial court did not abuse it discretion in
determining the parties were entitled to an equal distribution of
their assets.
Affirmed.
Chief Judge EAGLES and Judge GEER concur.
Report per Rule  30(e).

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