Court Opinion

ID: 4954099
Source: CourtListenerOpinion
Date Created: 2021-09-24 13:28:18.772917+00
Date Added: 2024-06-11T08:15:04.072941
License: Public Domain

SCHILLER, Judge,
concurring.
I join the majority in its resolution of all issues except the first. As to the issue of assessing good will value to a professional sole proprietorship, I am compelled to disagree with the majority’s approach because it is not consistent with Supreme Court precedent, and it fails to aid either litigants or trial judges in applying the law.
In the case of professional sole proprietor-ships the proposed “rule” of eliminating “professional good will” from marital property, but including “enterprise good will” will invariably plunge trial courts into a quagmire and will ensure continued appellate challenges. The unacknowledged fiction in this area is the idea that an operating sole professional proprietorship has a “going concern” value at a fixed point in time (for equitable distribution that fixed point in time is supposed to be the date of separation, Sutliff v. Sutliff, 518 Pa. 378, 543 A.2d 534 (1988)). An assessment of value to a going concern is only relevant if the business at issue is going to be sold.1 Where, however, there is no intent on the part of a sole proprietor to *1379liquidate a business the only intangible value of the business is in its potential stream of income; by definition such income is “in futu-ro,” derivable only from the sweat of the proprietor, and in the case of Butler v. Butler, 541 Pa. 364, 663 A.2d 148 (1995), the Supreme Court recognized:
[W]here there has been an award of alimony, as in the ease sub judice, to also attribute a value to goodwill that is wholly pursuant to the professional spouse would in essence result in a double charge on future income.
Id. at 379, 663 A.2d at 156 [citation omitted].
Thus, in the case of a sole professional proprietorship, where (as in the present case) the non-proprietor spouse has been awarded alimony, that spouse is already deriving a benefit from the business, and a separate assessment of “value” would be a double charge. Moreover, in any professional sole proprietorship anything other than the tangible assets of the proprietorship (such as cash on hand, furniture, machinery, realizable accounts receivable, client lists, and inventory) cannot be considered marital property because a “value” does not exist independent of the professional’s ability and willingness to work. See Solomon v. Solomon, 531 Pa. 113, 124, 611 A.2d 686, 691-92 (1992).
On remand the trial judge should assess a value to each tangible asset of the business, and compute the total value of the business without reference to any intangibles. If such an approach were adopted it would provide judges and litigants more predictability and guidance, and, if done correctly, will aid appellate courts in reviewing trial court’s decisions.

. I wish to emphasize that I do not reject the idea that a sole proprietorship can have "going concern value.” I do, however, reject the idea that it is relevant for equitable distribution.purposes when the proprietorship is not to be transferred. Where a business is ongoing its value is in its income and that income is subject to a claim of alimony. Additionally, the income produced by the business in the past would have been responsible for having generated part or all of the property subject to equitable distribution. Thus any separate value assessed for going con*1379cern or "enterprise good will” will result in a double charge.