Experts tussle about noncompete goodwill treatment in divorce case

Mauceri v. Mauceri, 199th District Court Collin County, Texas, No. 199-50537-2013

Inescapable truth or a jurisdictional matter? This question is at the heart of a debate between two experienced appraisers about a Texas divorce case, in which one of them served as the valuator to the prevailing party. The estranged spouses fought over the value of an insurance agency that was marital property but that the husband wanted to keep after the divorce.

The parties had stipulated to a fair market value with a noncompete agreement and a lower FMV without a noncompete. For the purpose of asset distribution, the court assigned the higher value to the business. It based its decision on testimony from Bob Dohmeyer (Dohmeyer Valuation Corp.), who was retained as the wife’s expert. Dohmeyer testified that awarding the husband the business while also discounting for the lack of a noncompete would amount to a windfall to the husband.

Assessing the implications of the case, a fellow appraiser took issue with the “windfall” argument. Divorce is a state law issue, Jim Alerding (Alerding Consulting LLC), observed. To his knowledge, it’s the rare court that includes salable personal goodwill in the marital estate. “So I am not comfortable in saying that exclusion of salable personal goodwill is a ‘windfall,’ because, as I said, it is a matter of what the law in a given state is.”

In his repartee, Dohmeyer rejects the idea that the treatment of goodwill in this type of situation depends on jurisdiction. What you are dealing with, he says, are economic facts, and they, “just like the weight of a sack of potatoes, are independent of state borders, laws and case history.”

Read more about the case and the sparring experts here.