Everyone has heard about Jay Leno’s amazing, extensive classic-car collection. But Connecticut has its own prominent heritage-car collectors, including Wayne Carini and Herb Chambers. Private parties in our state also amass impressive collections of vintage or luxury autos, either as hobbyists or as investors. Either way, such collections can quickly become lucrative assets.
When a couple divorces, the judge will likely classify a valuable car collection as a marital asset subject to equitable distribution between the divorcing litigants. The litigants may be able to settle this matter through negotiation and mutual agreement, including issues of ownership, valuation and division.
If the litigants do not settle on valuation and possibly division, it will be the job of the judge in the divorce proceedings to determine whether any or all of the collection is subject to equitable distribution – meaning fair division between the parties – in the trial. The court will normally place a value on the collection and potentially on each vehicle within the collection, depending on the plan for distribution.
A primer on equitable distribution
The judge’s basic process for dividing property in Connecticut divorce is to:
- Identify all property owned either jointly or solely by one of the litigants. Normally all of it becomes part of the marital estate subject to equitable distribution between them. Connecticut is a rarity in that it is an all-property state, so it does not recognize anything owned, inherited or received as a gift by one of the litigants as “separate” property. Rather, all marital property, which often encompasses everything either party owns alone plus what they own jointly, may be fairly assigned to one or the other litigant.
- Assign values to all property. While the court must not assign specific values to each item, the family lawyer in a high-asset case is likely to request it of the court to better arrive at a fair distribution. See Bornemann v. Bornemann, 245 Conn. 508 (1998).
- Determine which litigant gets what property or whether the court will order any of it sold and the proceeds divided.
A litigant with strong feelings about the property distribution can seek representation by a matrimonial attorney who will present evidence and make arguments in line with the client’s wishes for equitable distribution. In the case of a classic-car collection, the client may be motivated by sentimental attachment or by monetary value.
Evaluating a unique heritage car collection
It is extremely important that a litigant present solid evidence of value for the court has wide discretion in deciding which valuation method to apply to the collection and in assigning a value. See Bornemann.
For example, in an unpublished Connecticut case a litigant who collected vintage cars and trucks presented as their expert evidence of value the testimony and written report of the owner of a classic-car company. The judge adopted the expert’s valuations, finding him a “very knowledgeable and credible witness.” Callahan v. Callahan, 2017 WL 4080388, (unpublished 2017). In another case, the court accepted valuations supported by “methodology, research and expertise” that it found credible. Callahan v. Callahan, 2012 WL 2362387 (unpublished 2012).
Part of the presentation usually includes an independent appraisal and at least one expert witness. Factors that may impact value of a classic-car collection:
- Stipulation: Can the litigants agree on values?
- Condition: Are the vehicles in pristine condition or do some need repairs or body work? How serious and costly are the problems? Are parts still available for vintage models and if not, how difficult or costly will repair be? How does the substitution of alternate parts impact the value? Has the car been in an accident and was it significantly rebuilt?
- Mileage: Does high mileage lower the valuation?
- Assessed valuations: Are there assessments used for insurance or of cars that are collateral for loans? Did either or both litigants obtain independent assessments? What values were sufficient to support financing?
- Sales and prices: Are there any similar collections advertised for sale or are there records of such sales?
- Litigant and judicial opinions: Are values proposed by the litigants reasonable and on what are they based? Judges in Connecticut also have discretion to apply their own knowledge and opinion to the valuation decision.
- Sentimentality: Was the collection solely the effort of one litigant? Does it have personal or sentimental worth? Were its origins in the family of one of the litigants?
- Rarity and obscurity: Were a limited number of vehicle types in the collection manufactured or do few survive?
- Expert opinions: Each party will usually present the opinion of an expert within the field as to valuation. The closer the experience of an expert to the specific type and history of the collected vehicles, the more likely they are to be persuasive.
- Notoriety: Does the collection contain vehicles owned by celebrities or that appeared in movies or on television?
- Documentation: Are there published materials like books, magazines or trade journals about similar collections? Do collector associations exist for the type of vehicles at issue that may have newsletters or archival information?
- Manufacturer certifications: Does the particular manufacturer have a certification program for its collectable vehicles and have any cars in the collection received such a stamp of approval?
A litigant with strong sentimental connection to the collection may not place so much of a monetary value on it as a personal one. The strength of a personal connection may impact the nature of the arguments to the court vis-à-vis future ownership decisions. On the other hand, the other litigant may urge that the collection be sold and the proceeds split.
A skilled family lawyer can curate strong and sometimes obscure evidence of value that may be important for the judge determining worth of the collection. Such evidence may take significant research to uncover, so choosing legal counsel with the experience and capacity to undertake such an investigation may be crucial.