Court Opinion

ID: 9565191
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:16:37.690707+00
Date Added: 2024-06-11T09:19:27.530195
License: Public Domain

SWANSTROM, J.,
dissenting in part.
I would affirm the district court’s order in total. The majority remands for the trial court to redetermine the value of goodwill. However, there is no real equation which the trial court can apply to relate the value of goodwill to the amount, if any, the husband should be paid for his agreement not to compete. That is because, as the majority opinion correctly' shows, goodwill is comprised of many variable components. There is no definite relationship between goodwill and a covenant not to compete unless the parties to a transaction agree both as to the value of the goodwill and the value of the covenant. This determination is not made without the participation of the buyer, as well as the sellers. Here, the sale has been completed; the purchase price fully paid.
The husband contends in the trial court that the goodwill of the business had no separate value. From evidence already presented once, the magistrate was unable to assign any separate value to goodwill. I see little to be gained by a remand on this point. The fact remains that after the trial court has made its new determination of the value of the goodwill, whether it is $1 or $100,000, there will be no additional dollars available for distribution from the sale of the community business. This is not a case where an asset was omitted from the distribution or not considered.
Finally, the husband’s contention that he is entitled to a greater share of the sale proceeds because of his agreement not to compete is not convincing in light of his previous conduct. First, he took the untenable position of trying to sell the business, with the expectation of obtaining the best price, while advertising to the world his intention to open a competing business on adjoining property. Regardless of whether the business to be sold has any ascertainable goodwill value, a reasonable and prudent purchaser would not agree to pay as much — if indeed he would purchase at all— under such circumstances.
Had the husband here wanted to continue in the operation of this type of business at the same location he could have done so. The trial court allowed him every reasonable opportunity to purchase the wife’s interest in the business. This included at least one opportunity to meet the bona fide offer of a prospective purchaser. The husband first said that he would and later he declined. Now, he wants to be compensated for not being able to compete in close proximity to the business he left. I am not persuaded that there is any legal or equitable grounds for a remand.