In a Florida divorce case, the husband appealed the trial court’s finding that the goodwill in his business, a provider of retirement plan and fiduciary services, was all enterprise goodwill. This was the finding even though there was a noncompete agreement in existence. In Florida, enterprise goodwill is a marital asset, but personal goodwill is not.
No analysis: The husband failed to show that the business depended on his own personal skill, reputation, or continued participation. Plus, his own testimony undermined his assertion that personal goodwill existed. He had taken over the book of business without specialized training from the former owner, and the value of the business did not decrease after the former owner was out of the picture. “In other words, the value followed the book of business itself and was not dependent on the identity of the owner,” the trial court wrote.
What’s more, the mere existence of a noncompete agreement “does not transform the entire nature of the business,” the court wrote, especially considering the husband’s own testimony about his role. The appellate court upheld the decision of the trial court.
The case is Donahue v. Donahue, 2024 Fla. App. LEXIS 8801; 2024 WL 4795980, and a case analysis and full court opinion are available on the BVLaw platform.