Reprinted from the October 23, 2014 Mongoose newsletter. A business owner, including a shareholder of a closely held corporation, can testify as to the company's value and does not have to be designated as an expert witness. Red Sea Gaming, Inc. v. Block Investments (Nevada) Co., 338 S.W.3d 562 (Tex. App. - El Paso 2010, pet. denied) is an opinion by Justice Anne McClure, which mostly quotes cases from the Houston 14th Court of Appeals and states in part: A property owner is qualified to testify to the market value of his property. Redman Homes, Inc. v. Ivy, 920 S.W.2d 664, 669 (Tex.1996). The testimony must indicate that the owner's assessment is based on the market and not on the intrinsic value of the property to him. Jabri v. Alsayyed, 145 S.W.3d 660, 667 (Tex. App. - Houston [14th Dist.] 2004, no pet.). Most recently, the 14th Court of Appeals concluded that the property owner rule applies to corporate entities owning property and that a representative of the corporate ... Read More >
A spouse is entitled to an offset against the value of a community property business for the value of separate property assets contributed to the business
Hooray for the attorney who cites a case from 1889 and wins! Perhaps we all should review Schmidt v. Huppman, 11 S.W. 175 (Tex. 1889), which held “Where it satisfactorily appears, as in this case, that one spouse brought into the partnership separate funds invested in a particular business, which business was carried on and the profits arising therefrom used in creating and building up the community estate, and the separate funds are employed in the same business at the dissolution of the partnership, upon settlement with the community estate we think the spouse furnishing such separate funds is entitled to reimbursement therefore.” At the trial of this divorce, 123 years after the Schmidt v. Huppman case was decided, the husband proved that his sole proprietor law firm on the date of marriage had $383,233.35 in accounts receivable, $175,391.70 in unbilled time for work in progress, $5,000 in furniture and fixtures, $22,003.74 in accounts payable and $95,307.40 in accrued payroll. ... Read More >