Gazelle v. Gazelle ( 2023 )

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22-P-829 Appeals Court
AYCA CELIKKOL GAZELLE vs. GUY SCOTT GAZELLE.
No. 22-P-829.
Plymouth. May 2, 2023. – June 26, 2023.
Present: Milkey, Walsh, & Smyth, JJ.
Divorce and Separation, Alimony, Division of property, Amendment
of judgment. Exchange Rate. Real Property, Appraisal
report. Appraisal.
Complaint for divorce filed in the Plymouth Division of the
Probate and Family Court Department on July 25, 2013.
The case was heard by Kevin R. Connelly, J., and a motion
to amend the judgment was also heard by him.
Viktor A. Theiss (Patrice E. Morse also present) for the
wife.
David H. Lee (Kimberley J. Joyce also present) for the
husband.
MILKEY, J. The parties divorced after a lengthy marriage.
Trial commenced in the Probate and Family Court on October 3,
2017, and continued over eighteen nonconsecutive days until
December 18, 2018. On December 29, 2020, the judge issued
2
findings and rulings, and a judgment of divorce nisi entered.
As is pertinent to this appeal, the judge sought to divide the
marital estate equally between the parties, and he ordered the
husband to pay a specified amount of alimony. Complicating both
the division of assets and the setting of alimony was the fact
that much of the marital estate consisted of real estate
holdings in Turkey. At the center of the dispute were eleven
condominium units located in the Etiler neighborhood of Istanbul
that the wife inherited or purchased from her family. The judge
assigned these assets (Etiler assets) to the wife, as she had
requested. On appeal, the wife challenges the currency exchange
rates that the judge applied to the Etiler assets in order to
convert their value (and corresponding rental income) from
Turkish lira into United States dollars (U.S. dollars).
Specifically, the wife claims error in the fact that the judge
applied exchange rates from 2016 or 2017, instead of at the time
judgment entered in 2020. According to the wife, the value of
the lira had plummeted in the three-plus years after the
beginning of the trial, and that, as a result, the judge ended
up giving her significantly less than one-half of the marital
estate that he intended that she receive. For related reasons,
she argues that the judge set her alimony too low and that,
going forward, her alimony should be adjusted for any changes in
the exchange rate. The wife made these arguments in a motion to
3
amend the judgment, which the judge denied on August 19, 2021.
In this consolidated appeal, we affirm.
Background. The parties disputed the value of the Etiler
assets at trial, and each side put forward an expert on how much
the properties were worth. The dueling experts presented
appraisal reports, both completed in 2016, as to the market
value of the Etiler assets in Turkish lira. The judge found the
reports deeply flawed, and he concluded that both experts had
skewed their appraisals in favor of their clients. Unable to
choose between them, the judge split the difference between the
appraisals for those condominium units covered by both reports.
The judge accepted the husband's assigned value for the two
condominium units that the wife declined to have appraised.1 The
wife does not challenge the methodology employed by the judge to
place a dollar value on the Etiler assets, except with respect
to the exchange rates that he chose. We turn to review in some
detail how that issue arose at trial.
In October of 2017, in the early days of trial, the parties
stipulated as to what the exchange rate had been on twenty-two
1 After she filed her complaint for divorce, the wife
transferred two of the condominium units to her daughter from a
previous marriage. The wife did not have those units appraised,
because she maintained that they were not part of the marital
estate. The judge rejected this argument.
4
specific dates from 2007 to 2017.2 The most recent date covered
by the stipulation was October 23, 2017. Although the value of
the Turkish lira had declined significantly over the previous
decade, it appeared to have been relatively stable during the
year preceding the start of the trial (at least based on the
limited information presented in the stipulation). That
stability may explain the scant attention that the parties paid
to the exchange rate in the early phases of the trial.
Over the course of the intermittent fourteen-month trial,
the value of the Turkish lira began to plummet against the U.S.
dollar. This was concerning to the wife who had requested that
the Etiler assets be assigned to her.3 Accordingly, on November
14, 2018, the fifteenth day of trial, the wife moved to have the
judge take judicial notice of updated exchange rates.4 The judge
2 The current litigation commenced in July of 2013. Why the
parties saw fit to provide exchange rates going all the way back
to 2007 is not readily apparent. Whatever the explanation, the
stipulation generally included the exchange rates for two dates
per calendar year from 2007 to 2017, with those dates falling at
the beginning of January and July.
3 The falling lira meant that the Etiler assets would be
worth less in U.S. dollars if their value in Turkish lira
remained the same.
4 The wife first asked the husband to stipulate to updated
exchange rates. When he refused, she assembled updated figures
in the form of a chalk that she requested that the judge accept.
5
denied that motion but indicated that he might revisit the
exchange rate issue at a later date.
In his findings and rulings issued on December 29, 2020,
the judge did not use the wife's updated exchange rates.
Instead, a close reading of those findings and rulings reveals
that he did the following. First, he took the values of the
Etiler assets set forth in each of the two 2016 appraisal
reports as stated in Turkish lira and converted them into U.S.
dollars. He did this by using the exchange rates in effect on,
or closest in time to, the specific valuation dates included in
the respective reports.5 This required the judge to take
judicial notice of those exchange rates, because the specific
dates at issue were not among those included in the stipulation
that the parties had submitted. Having in this manner
determined the value that each party effectively ascribed to the
Etiler assets in U.S. dollars based on his or her expert's
appraisal report, the judge then split the difference between
these two sets of figures.6 The resulting total value he placed
on the Etiler assets was $4,082,591.92.
5 The judge noted that he otherwise was trying to value the
marital estate as of October 2017, the start of trial. As
noted, the parties had stipulated as to what the exchange rate
was on October 23, 2017, and the judge utilized that rate in
determining, for example, the value of a family debt owed to the
wife.
6
As mentioned, the wife filed a motion to amend the judgment
of divorce nisi that requested that the judge recalculate how
much the Etiler assets were worth in U.S. dollars using an
updated exchange rate. Specifically, the wife asked the judge
to use the exchange rate from the date of judgment, which at
that point was approximately one-half of what it had been at the
start of trial. If he had done this, the wife maintains,
instead of her having to pay the husband $1,070,999.12 to
compensate for her receiving the Etiler assets, the husband
would have to pay her $217,687.28. The judge denied that
motion.
Discussion. 1. Division of marital estate. In many
respects, the issues raised by this case are quite ordinary. In
most divorces, the marital estate will include real estate, or
other assets, whose value can fluctuate dramatically over time
due to routine market forces. As a result, the trial judge
often is called upon to select the appropriate point in time
that such property should be valued. Typically, the dispute is
over whether to value the assets at the time of trial, or at an
earlier date such as when the parties separated. See, e.g.,
Connor v. Benedict, 481 Mass. 567, 576 (2019), and cases cited.
6 As discussed above, the judge used only the husband's
valuation for two of the condominium units because the wife
declined to have those units appraised. See note 1, supra.
7
"The determination of the appropriate valuation date is left to
the discretion of the trial judge." Id. See Savides v.
Savides, 400 Mass. 250, 253 (1987) (judge has "broad discretion"
to select valuation date of marital estate). "Except where
'warranted by the circumstances of a particular case,' however,
the valuation date typically is the date of trial." Connor,
supra, quoting Moriarty v. Stone, 41 Mass. App. Ct. 151, 154
(1996).
Several aspects of the case before us make this different
from the routine scenario. For one thing, the trial took over
fourteen months to conclude.7 This meant that "the date of
trial" was not a single point in time, but a lengthy period in
which the value of the assets may have changed significantly.
For another, because the assets in dispute were foreign, their
value in U.S. dollars was linked to the fluctuating currency
exchange rate (an issue discussed at length infra). Moreover,
as the trial judge himself implicitly recognized, exchange rates
are precisely the type of information that can be ascertained by
judicial notice; they are not dependent on trial evidence put
forward by the parties. See Verveine Corp. v. Strathmore Ins.
Co., 489 Mass. 534, 536 n.5 (2022), quoting Commonwealth v.
7 The reason for this extended time frame is not entirely
clear, although the parties stated at oral argument that part of
the delay was driven by the unavailability of foreign witnesses.
8
Green, 408 Mass. 48, 50 n.2 (1990) (proper to take judicial
notice where information is "subject of generalized knowledge
readily ascertainable from authoritative sources").8 Relatedly,
because the determination of the relevant exchange rates could
be decoupled from the trial record, the judge faced the
opportunity to place a value on the Etiler assets not just at
the time of trial, but right up until the date that judgment
entered (which, after all, was the point in time that the
marital estate was divided). In effect, the wife seeks to pose
the following question to us: in determining how much the
marital estate being divided was worth, why should the judge not
make use of readily available, up-to-the-minute data, especially
where, as here, a lengthy amount of time had passed?
There is some superficial appeal to the wife's math-based
arguments. However, the force of those arguments evaporates
under scrutiny. That is because the wife relies on a
fundamentally flawed factual premise: namely, that changes in
8 Other jurisdictions have uniformly ruled that courts can
take judicial notice of foreign currency exchange rates. See,
e.g., Nature's Plus Nordic A/S v. Natural Organics, Inc., 78 F.
Supp. 3d 556, 558 (E.D.N.Y. 2015) (taking judicial notice of
foreign currency exchange rate); Royatex Ltd. v. Daughan, 551
A.2d 454, 455 (Me. 1988) ("foreign currency rate of exchange is
a proper subject of judicial notice"). For a useful discussion
of specific sources that courts can use to take judicial notice
of foreign exchange rates, see USGen New England, Inc. v.
TransCanada Pipelines, Ltd. (In re USGen New England, Inc.), 429
B.R. 437, 493-494 (Bankr. D. Md. 2010), and cases cited.
9
the actual value of a foreign asset can be determined based
solely on changes in the exchange rate. To be sure, the value
of a foreign asset in U.S. dollars is, by definition, the
product of multiplying the nominal value of the asset in the
local currency by the exchange rate. Therefore, if one assumes
that the value of the asset in the local currency stays constant
over time, it does follow -- as the wife asserts -- that the
value of the asset in U.S. dollars will move in lock step with
the fluctuating exchange rate. But the assumption that the
nominal value of the asset in the local currency will have
stayed constant during the relevant period is hardly self-
evident, and it therefore needs to be supported by evidence.
For example, it could well be that inflationary pressures in the
country where the asset is located were causing increases in the
nominal value of that asset in the local currency so as to at
least partially offset a declining exchange rate when the value
is converted into U.S. dollars.9 This is a matter of simple
arithmetic. The key point is that one cannot determine how the
9 In fact, there are reasons to expect that a country whose
currency is falling will be experiencing higher inflation. That
is because it appears to be generally accepted among economists
that exchange rates and relative inflation rates are inversely
related, albeit not in a simple way. See, e.g., J. Madura,
International Financial Management 112-114 (2015) (addressing
inverse relationship between these rates, while noting that
other factors will affect exchange rate). Our opinion does not
depend on there being any such causal relationship.
10
value of a foreign asset in U.S. dollars may be changing over
time solely by looking at changes in the exchange rate.
With this background in mind, we turn back to the case
before us. As already noted, we agree with the wife insofar as
she argues that the judge could have taken judicial notice of
the fact that the exchange rate declined significantly during
and after the trial. See Verveine Corp., 489 Mass. at 536 n.5.
Nevertheless, we discern no error in the manner through which
the judge placed a U.S. dollar value on the Etiler assets. The
judge had discretion to choose the valuation date, and there was
nothing unreasonable in the judge's looking to the dates on
which the parties' experts completed their respective appraisals
or in relying on the exchange rates in effect on those dates.10
See Connor, 481 Mass. at 576-577.
The remaining question is whether the judge abused his
discretion in denying the wife's two requests to calculate the
10The wife does not argue that the judge's assigning a
value to the Etiler assets in U.S. dollars at the time each
expert conducted his appraisal was inconsistent with the judge's
defined mission of trying to value the estate as of the start of
trial. Of course, it is possible that the dollar value of these
assets changed between the dates of the appraisals in 2016 and
October 2017. However, the practical reality that judges must
work with evidence that already might be somewhat stale is
hardly unique to this case. In any event, for the reasons
already discussed, it cannot be determined that the value of the
Etiler assets in U.S. dollars dropped between 2016 and 2017
solely by looking at changes to the exchange rate.
11
value of the Etiler assets by applying updated exchange rates.
In making her requests, the wife made no showing that the
nominal value of those assets had stayed constant in the
intervening years.11 In other words, the wife presented only
part of the picture. Having not addressed how the value of the
Etiler assets in Turkish lira may have changed during the
relevant time period, the wife is unable to demonstrate that she
in fact received less than one-half of the value of the marital
estate in U.S. dollars.12
11The extended length of the interim period does not in the
end assist the wife, because it stands to reason that the more
time that goes by, the less likely it is that the value of the
Etiler assets stayed the same. Additionally, we note that data
available from respected sources suggest that during the
relevant time period, Turkey in fact was experiencing inflation
that was significantly higher than that which was occurring in
the United States. See International Monetary Fund, Inflation
rate, average consumer prices (2023), available at:
https://www.imf.org/external/datamapper/PCPIPCH@WEO/OEMDCCf.
According to such sources, the inflation rate in Turkey remains
extraordinarily high, dramatically higher than what it is in the
United States. We do not rely on such data in our analysis and
therefore have no cause to resolve whether comparative inflation
rates are a proper subject of judicial notice. See Sweeney v.
Sweeney, 135 N.E.3d 1189, 1196 (Ohio Ct. App. 2019) ("court may
take judicial notice of past [consumer price index] rates
because they are generally known and not subject to dispute").
Nor do we mean to suggest that, were we to take judicial notice
of relative inflation rates, we then would have a refined sense
of whether rising nominal values in the Turkish real estate
market would fully offset a declining exchange rate in
converting the value of Turkish assets into U.S. dollars. We
claim no such aptitude. For present purposes, the key issue is
not what we know, but what we do not know.
12We additionally note that the wife could have pursued
other obvious means of addressing the risk that the declining
12
One additional point about the division of assets warrants
comment. Even to the extent that the wife might be correct that
the value of the Etiler assets in U.S. dollars dropped
significantly during the period between the end of trial and
entry of judgment, it still would not be clear that the delay
had any actual economic impact on her. Had judgment entered
sooner, the marital estate would have been divided in the same
manner, and any decrease in value of the Etiler assets still
presumably would have fallen on the wife.13
2. Setting of alimony. The wife separately argues that
the judge's reliance on outdated exchange rates had the effect
of overstating the rental income she received from the Etiler
assets, which in turn reduced the amount of the alimony that she
was due. This argument fails for the same reasons as set forth
above: while the exchange rate in fact does appear to have
fallen significantly during the three-plus years at issue, we do
exchange rate might reduce the value of the Etiler assets so as
to leave her with less than one-half of the marital estate. For
example, she could have requested that these assets be sold and
the proceeds divided, something that the judge ordered with
respect to certain of the other assets the couple owned
elsewhere in Turkey. Alternatively, she could have requested
that the Etiler assets be assigned to the husband. The wife
tellingly did not pursue such options.
13Nothing in the record suggests that the wife would have
sold the Etiler assets if the judgment of divorce nisi had
entered earlier.
13
not know whether there was an offsetting increase in the nominal
rental income that the Etiler assets generated.14 On the current
record, the wife has not shown that the judge abused his
discretion in declining to recalculate alimony using an updated
exchange rate.15
3. Periodic adjustments to alimony. In her motion to
amend the judgment of divorce nisi, the wife requested that the
judge modify the alimony order so that once per quarter going
forward, the amount of alimony due her would be "trued up" based
on any changes in the exchange rate. In other words, the wife
was looking to have the amount of alimony adjusted to account
for the fluctuating exchange rate through periodic adjustments.
14We acknowledge that the wife also receives a Turkish
pension, which was part of the calculus in setting the alimony
payments. If that pension generates payments in a fixed amount,
then a decrease in the exchange rate would indeed reduce the
value of those payments in U.S. dollars. However, the record
before us does not indicate whether the amount of the pension
payments is in fact fixed or instead includes, for instance, a
cost of living adjustment. Moreover, in any event, the wife's
pension payments amount to a negligible portion of her income
($87 per week, which is approximately four percent of her total
weekly income).
15Unlike the division of assets, the setting of alimony can
be revisited through a complaint for modification based on a
showing of materially changed circumstances. See G. L. c. 208,
§ 49 (e). Our ruling today is not intended to preclude the wife
from seeking to prove in that context that the value of her
income from the Etiler assets has dropped significantly. She
would need to present more than a naked change in the exchange
rate to do so.
14
The judge denied this request and the wife now asks us to order
that such a system be implemented.
The wife maintains that the arrangement she proposed is
supported by Stanton-Abbott v. Stanton-Abbott, 372 Mass. 814,
816 (1977) (contrasting "application of a contingent or variable
clause of a judgment to events as they occur, with the
modification of a judgment"). The husband counters by arguing,
based on more recent case law, that the wife's proposal would
amount to a presumptively invalid self-modifying order that is
warranted only in "special case[s]." Young v. Young, 478 Mass.
1, 9 (2017), quoting Stanton-Abbott, supra at 817.16 For the
reasons set forth above, looking solely to the fluctuating
exchange rate paints an incomplete picture of whether the amount
of alimony should be adjusted. Whatever else can be said about
the propriety of the type of automatic alimony adjustments that
the wife proposes, we conclude that she has not justified how
her proposal would be warranted here.
16The husband also points out that at trial, the wife was
seeking a fixed amount of alimony and that she did not raise her
argument about automatic adjustments until her postjudgment
motion. Although his argument that she thereby waived the issue
has significant force, we choose to pass over this issue to
reach the merits.
15
Conclusion. We affirm the judgment of divorce nisi and the
order denying the wife's motion to amend that judgment.17
So ordered.
17We deny the husband's request that we order the wife to
pay his appellate costs and attorney's fees. Although we find
the wife's arguments unpersuasive, they are not frivolous. See
Marabello v. Boston Bark Corp., 463 Mass. 394, 400 (2012).