Trial court reversed for failure to account for enterprise goodwill in valuing husband’s chiropractic practice.
When valuing a business interest, a circuit court shall include the value of the salable professional goodwill attendant to the business interest.
Valuation of husband’s accounting business reversed – goodwill of a going concern can be a marketable asset.
Holbrook limited – saleable goodwill of dental practice is divisible.
Where husband’s own expert testified to value of goodwill, court need not decide whether a sole dental practice is distinct from a large law firm as in Holbrook.
Because boarding kennel is a commercial business, it is not subject to Holbrook. Trial court may use entire amount set out in cross-purchase agreement to set value, including compensation for professional goodwill.
The trial court erred in determining that the marital estate included the goodwill value of John’s partnership. Like an educational degree, a partner’s theoretical share of a law firm’s goodwill cannot be exchanged on an open market.
Trial court’s determination of goodwill predicated on annual average income before taxes was erroneous. Computation of goodwill should be based on income after taxes, not before.
Dentist’s professional goodwill is not a divisible marital asset. Court distinguishes solo practitioner, where goodwill is only reputation for competency, from clinic with many employees where goodwill does not rest on reputation of any one person.
Because of the speculative nature of professional goodwill, any such goodwill of husband’s solo dental practice could not be made part of the marital estate.
Where goodwill can be attributed to the business or practice itself, making it realizable upon sale, that value is subject to equitable distribution.
Solo podiatry practice had goodwill and should be valued and distributed, as distinguished from a law practice. Medical doctor’s practice is more easily transferred than a law practice.
Value of husband’s interest in the goodwill of his medical practice is limited to the value as determined by the practice’s stockholder’s agreement. Follows Holbrook.
Goodwill of solo law practice is too speculative – more equitable to consider earning power and set alimony.
Court not necessarily bound in valuing the goodwill of a professional association by a shareholders’ agreement fixing such value.
Salaried employee of a medical association does not possess goodwill for equitable distribution purposes.
Gynecologist practice does not have saleable goodwill in this case, but there may be in other cases if there is evidence of sales value which does not depend on the future participation of the professional spouse.
No professional goodwill in P.I. practice
Value of covenant not to compete is not a factor in valuation of professional practice’s goodwill.
Institutional goodwill, but not personal goodwill, of surgical practice should be included in marital estate. Noncompete agreement does not, by itself, prohibit all future employment.