holding that salable professional goodwill represented by a noncompetition covenant is a marital asset
How later courts described this case
- holding that salable professional goodwill represented by a noncompetition covenant is a marital asset
- noting that the "non-compete aspect of the sale would be a mechanism for the transfer of some portion of [orthodontist's] professional goodwill to the buyer"
- observing that this area of law “has been hotly debated in jurisdictions across the county for at least thirty years” (internal quotation marks omitted)
- distinguishing “corporate goodwill” from “professional goodwill”
Written by the judges who cited it.
The opinion
DYKMAN, PJ.
¶ 52. {dissenting). I read the majority opinion as acknowledging that the trial court double-counted the value of Tim's orthodontic practice by valuing goodwill (of whatever type) which at least in some part is a measure of Tim's earning capacity, and then used Tim's future earning capacity to set maintenance. But because the record is insufficient to identify a non-divisible portion of Tim's practice, the majority affirms.
¶ 53. Part of the problem is that there is no double-counting rule. Cook v. Cook, 208 Wis. 2d 166, 180 , 560 N.W.2d 246 (1997), explains that the "rule" is not inflexible, but instead "serves to warn parties, counsel and the courts to avoid unfairness by carefully considering the division of income-producing and non-income-producing assets and the probable effects of that division on the need for maintenance and the availability of income to both parents for child support." There are a multitude of double-counting rules, but each is wholly dependent on its facts. Thus, if the facts in an asserted double-counting divorce case are identical to the facts in one of the several published double-counting cases, a predictable result can be obtained. Otherwise, the teaching from Cook is that the result where double-counting is present must be fair.
¶ 54. So, I disagree that the problem in this case is a lack of expert testimony. I think it is clear that the trial court divided the value of Tim's practice and also used the income from that practice to set maintenance. I think the difficulty is that, though the trial court carefully examined the testimony, made credibility determinations, and considered a variety of factors in setting maintenance, it did not specifically consider the Cook double-counting "fairness" requirement to address the double-counting problem. To do this, the trial court *181 did not have to make a finding as to what portion of the value of Tim's practice was divisible and which non-divisible. I believe, and I think the majority does too, that there is some of each in the value accepted by the trial court. But for me, an exact finding as to which is which is not necessary. It may be that if the majority were to agree with me, the resulting property division and maintenance award would not change on remand. Or it might. But the parties and any reviewing court could see the trial court's reasoning in this respect, and the pole star of appellate review of discretionary decisions is whether the trial court used a rational process to reach a reasonable conclusion. See City of Stoughton v. Thomasson Lumber Co., 2004 WI App 6, ¶ 38 , 269 Wis. 2d 339 , 675 N.W.2d 487 (WI App 2003). And, since this is an opinion designated for publication, practitioners and trial courts would, if the majority remanded, include a Cook analysis in potential double-counting cases in the future. But because I would remand and the majority affirms, I can only respectfully dissent.