Marriage of Courtright, In re

• Decision Date: 28 April 1987
• Docket Number: No. 3-86-0327,3-86-0327
• Citation: 107 Ill.Dec. 738,507 N.E.2d 891,155 Ill.App.3d 55
• Parties: , 107 Ill.Dec. 738 -Appellant, andJohn B. Courtright, Defendant-Appellee. Appellate Court of Illinois, Third District
• Court: United States Appellate Court of Illinois

Page 891

507 N.E.2d 891

155 Ill.App.3d 55, 107 Ill.Dec. 738

Marie R. COURTRIGHT, Plaintiff-Appellant, andJohn B Courtright, Defendant-Appellee.

No. 3-86-0327.

Appellate Court of Illinois Third District.

April 28, 1987.

Susan Tungate, Tungate & Tungate, Watseka, for Marie E. courtright.

Gill M. Garman, Sebat, Swanson, Banks, Lessen & Garman, Danville, for John B. Courtright.

Justice STOUDER delivered the Opinion of the court:

This is an action to dissolve the marriage of Marie and John Courtright. The plaintiff, Marie, appeals from that portion of the judgment of the Circuit Court of Iroquois County pertaining to the distribution of marital property, the award of permanent maintenance, and the denial of her request for attorney fees.

The evidence introduced at trial established that the parties were married in 1956 and invested twenty nine years in the marriage prior to its termination. Four children were born; all adults at the time of the dissolution. The defendant, John, is a licensed physician and practices in a three-man clinic as a general practitioner. He is in his late fifties. John's adjusted gross income for the four years prior to the dissolution ranged from $83,000 to $100,000. Marie is in her mid-fifties, has a degree in education from Northwestern University, but is not presently licensed to teach. She has not worked outside the home since 1958 but has obtained seasonal employment as a switchboard operator at a Colorado resort at $5.75 an hour. She is in general good health except for some residual disability in her left foot as a result of childhood polio. At the time of the dissolution she had also shown some discomfort in her right foot from an arthritic condition. Her health prevents her from working at jobs which require her to be on her feet for any length of time.

The trial court found that the value of all marital assets was agreed upon except for the value of John's medical practice. The court awarded certain IRA accounts, household goods, the family's 200-acre farm free and clear of all liens, and the marital home to Marie. The home, valued at $135,000, was subject to a $22,000 mortgage. The court awarded John certain assets which include two items in dispute on this appeal. Marie claims that improper valuations were attached to John's pension fund and accounts receivable for his medical practice; which in turn adversely affected the property distribution. While the defendant has a significant income generated from his medical practice, he also incurred substantial obligations via the property distribution, including significant litigation costs, payable almost solely from that income.

The trial court did not award permanent maintenance on the basis that property allocated to Marie, together with her potential earning abilities, would provide her with sufficient income. It did, however, award rehabilitative maintenance in the amount of $1100.00 per month in order to help Marie adjust to her new status and provide time to seek suitable employment and improve her skills, if necessary. The court retained jurisdiction to review the issue of further extension of the award at the end of two years although the court believed that this award, together with investment and rental income, should permit Marie to become and remain financially independent in the future.

The trial court also denied Marie's request for attorney fees. The court reasoned that John had already been assigned significant litigation costs as debts and noted that, although the fees were reasonable, insufficient evidence was presented to support them or to establish Marie's inability to pay them.

The first issue presented by the parties centers on the property distribution and certain valuations attached to the good will and accounts receivable of John's medical practice and the value placed on John's pension fund. Marie contends that the failure of the court to consider the good will of the practice and improper valuations of the accounts receivable and John's pension fund produced an inequitable property distribution.

The Illinois courts have differed on whether the good will developed in a professional practice deserves separate consideration and specification as an asset of the practice or whether it is a factor already given consideration under the Illinois Marriage and Dissolution of Marriage Act (IMDMA). In In re Marriage of White (5th Dist.1981), 98 Ill.App.3d 380, 53 Ill.Dec. 786, 424 N.E.2d 421, the court held that good will should be considered separately because "despite the intangible quality of good will in a professional practice, it is of value to the practicing spouse both during and after the marriage and its value is manifested in the amount of business and, consequently, in the income which the spouse generates." (98 Ill.App.3d 380, 384, 53 Ill.Dec. 786, 789, 424 N.E.2d 421, 424; see also In re Marriage of Rubinstein (2d Dist.1986), 145 Ill.App.3d 31, 99 Ill.Dec. 212, 495 N.E.2d 659.) The counterpoint to this argument was expressed in In re Marriage of Wilder (1st Dist.1983), 122 Ill.App.3d 338, 77 Ill.Dec. 824, 461 N.E.2d 447, when the court held that this definition of good will is reflected in three of the factors which the trial court must consider in reaching a just property distribution under section 503(d) of the IMDMA. The Wilder Court's conclusion was that the ability to generate income, which the petitioner argued is what good will reflects, was already considered by the legislature when the IMDMA was enacted. 122 Ill.App.3d 338, 347, 77 Ill.Dec. 824, 830, 461 N.E.2d 447, 453; see also In re Marriage of Kapusta (1st Dist.1986), 141 Ill.App.3d 1010, 96 Ill.Dec. 234, 491 N.E.2d 48 (1st division of first district following 5th division decision in Wilder ).

Although many businesses possess this intangible known as good will, the concept is unique in a professional business. The concept of professional good will is the sole asset of the professional. If good will is that aspect of a business which maintains the clientele, then the good will in a professional business is the skill, the expertise, and the reputation of the professional. It is these qualities which would keep patients returning to a doctor and which would make those patients refer others to him. The bottom line is that this is reflected in the doctor's income-generating ability.

In this case, the trial court received evidence of John's future projected income; income that has been based on the past performance in his practice and the likelihood that his skill, expertise, and reputation will permit him to continue in a similar fashion in the future. Section 503(d) of the IMDMA requires that the court examine certain factors in apportioning marital property. Those factors include:

the relevant economic circumstances of each spouse when the division of property is to become effective * * * [,the] occupation amount and sources of income, vocational skills [and] employability [ ] of each of the parties * * * [,and] the reasonable opportunity of each spouse for future acquisition of capital assets and income." (Ill.Rev.Stat.1985, ch. 40, par. 503(d)(4), (7), and (10).

The fact remains that the court has considered good will in its property allocation. It considered the evidence presented regarding John's continuing escalating future income propounded by Marie's expert as well as the factors which dictated against it. The court cited specifically the "ravages of advancing time and the significant changes occurring in the area of health care" which would force a reduction in certain aspects of the practice.

We have determined that the trial court sufficiently considered the aspect of good will in this case. The trial court valued the business at $45,000--$7,500 in fixed assets and $37,500 in receivables. Although good will was not considered in the court's valuation of the business itself, it was a factor in examining John's income potential. To figure good will in both facets of the practice would be to double count and reach an erroneous valuation.

Marie further contends that improper valuations of John's accounts receivable and pension fund contributed to the erroneous property distribution. She asserts that the valuation of the pension fund four and one-half months prior to the dissolution and the valuation...