FAMILY LAW – Marital property, valuation of sole proprietorship or closely held business can include boh personal and enterprise value (case of first impression in Ky): Julie Anne Gaskill v. Jon Kevin Robbins (SC 2/19/2009)

Julie Anne Gaskill v. Jon Kevin Robbins
2007-SC-000190-DGE 2/19/2009
2007-SC-000207-DGE 2/19/2009

Opinion by Justice Noble; Chief Justice Minton not sitting.
In a case of first impression in Kentucky, the Supreme Court held that the goodwill of a closely-held or sole proprietorship business can have both personal and enterprise value. The Court held that enterprise goodwill—based on a business’ established relationship with employees, customers and suppliers—is a marital asset, while personal goodwill—the goodwill that depends on the continued presence of a particular person is non-marital. The Court remanded the dissolution case back to the Family Court for a valuation based on its decision and held that the Family Court’s adoption of husband’s expert’s valuation of the wife’s oral surgery practice was an abuse of discretion where the expert reached his figure by taking the average of four different methods of valuation. The Court also held that Family Court’s decision to divide the marital estate equally was not an abuse of its discretion. Justice Abramson concurred in part, dissenting only from the portion of the majority’s opinion which precluded the trial court from presuming a non-compete clause into the valuation, noting that such clauses are integral and typical in the sale of professional practices.