Marriage of Parker, In re, s. 15545

• Decision Date: 15 December 1988
• Docket Number: Nos. 15545,15547,s. 15545
• Citation: 762 S.W.2d 506
• Parties: In re the MARRIAGE OF Mary PARKER and Gary Parker. Mary PARKER, Petitioner-Respondent-Appellant, v. Gary PARKER, Respondent-Appellant-Respondent.
• Court: Missouri Court of Appeals

Page 506

762 S.W.2d 506

In re the MARRIAGE OF Mary PARKER and Gary Parker.

Mary PARKER, Petitioner-Respondent-Appellant, v. Gary PARKER, Respondent-Appellant-Respondent.

Nos. 15545, 15547.

Missouri Court of Appeals,

Southern District,

Division One.

Dec. 15, 1988.

Robert P. Baker, Sarcoxie, for petitioner-respondent-appellant, Mary parker.

Charles Buchanan, Joplin, for respondent-appellant-respondent, Gary Parker.

CROW, Presiding Judge.

By an amended decree entered December 2, 1987, the trial court (1) dissolved the marriage of Mary Parker ("Mary") and Gary Parker ("Gary"), (2) divided their marital property, (3) awarded custody of the youngest of their three unemancipated children to Mary and ordered Gary to pay Mary child support of $350 per month for such child, (4) awarded custody of the parties' other two unemancipated children to Gary, (5) ordered Gary to pay Mary maintenance of $600 per month for 36 months, and (6) required Gary to pay Mary's lawyer $3,500 for the latter's fee.

Gary appeals (number 15545), maintaining the trial court erred in (1) dividing the marital property, and (2) awarding Mary maintenance. Mary appeals (number 15547), insisting the trial court erred in (1) setting the maintenance at too low a figure and limiting its duration, (2) setting the child support at too low a figure, and (3) failing to require Gary to continue to provide "health insurance" for the child awarded to Mary.

We address Gary's appeal first.

Mary and Gary met in September, 1964, when she was a freshman at a chiropractic college and he was a sophomore at the same institution. They married April 3, 1965. Because of the birth of their first child (Kevin), Mary completed only one year of chiropractic school. Gary, however, continued his education, graduating in January, 1967. Gary, Mary and Kevin moved to Joplin, establishing their household in a home purchased with funds supplied by Mary's parents. Gary began his career as a chiropractor by purchasing a practice from another chiropractor, using funds borrowed from Mary's parents.

Three other children were ultimately born to Mary and Gary: Kyle on October 7, 1967, Gretchen on August 18, 1969, and Heather on April 10, 1973.

By the time the parties separated--December 19, 1985--their marital assets included two parcels of real estate: a lien-free home valued by the trial court at $91,250, and the office building where Gary conducts his chiropractic practice. The latter realty was valued by the trial court at $239,300 and, at time of trial, was subject to a deed of trust securing a note, the unpaid balance of which was $111,994. ¹

During the interval between the separation and the trial Gary purchased a home in which he, Kyle and Gretchen were residing at time of trial. That property was valued by the trial court at $49,900 and, at time of trial, was subject to an "outstanding mortgage" of $39,400. Additionally, Gary testified that at the time he bought the property he borrowed a total of $6,000 from three individuals to use as part of his down payment. At time of trial, according to Gary, he still owed those individuals a total of $4,350.

The trial court divided the marital real estate by (1) awarding the lien-free home to Mary and (2) awarding the office building and Gary's newly purchased residence to Gary.

The trial court awarded Mary marital personal property valued by the trial court at an aggregate net worth (according to our arithmetic) of $30,986. Included in that property were two motor vehicles and $5,350 in an individual retirement account.

Gary presented evidence that the value of the medical equipment used by him in his chiropractic practice was $22,460, against which there was a $13,537.57 lien, leaving a net value of $8,922.43. Other office contents and furnishings used by Gary in his chiropractic practice had, according to Gary's evidence, an aggregate net value of $8,865. The overall net worth of the assets described in this paragraph was, consequently, $17,787.43. In its amended decree the trial court assigned that value to such property and awarded it to Gary. We henceforth refer to that property as the "chiropractic office contents."

Gary also had numerous accounts receivable owed him by his patients at time of trial. The trial court valued the accounts receivable, in the aggregate, at $12,500 and awarded them to Gary.

In addition to the chiropractic office contents and the accounts receivable, the trial court awarded Gary other marital personal property valued by the trial court (according to our arithmetic) at a net worth of $41,803. We henceforth refer to such property as "miscellaneous personal property." Included in the miscellaneous personal property was a motor vehicle driven by Gary and $8,500 in an individual retirement account. The miscellaneous personal property also included an organ that Mary acknowledged belonged to Kyle and a sewing machine that Mary conceded belonged to Gretchen. The value of the organ and sewing machine aggregated $6,000. Reducing the total of the miscellaneous personal property awarded Gary by deducting the $6,000 leaves $35,803 as the net value thereof.

No complaint is lodged here by either party regarding the values assigned by the trial court to the property heretofore discussed.

We now turn to the item that gives rise to Gary's contention that the trial court erred in dividing the marital property. Gary carries on his chiropractic practice under the name Parker Chiropractic Centre. Copies of income tax returns received in evidence at trial established that Gary's practice is a sole proprietorship. The amended decree, in enumerating the marital property awarded to Gary, listed the following item: "Goodwill of Parker Chiropractic Centre [$]58,000.00."

Gary, in component "A" of his first point, avers the trial court erred in finding that the value of "the goodwill of the chiropractic practice" was $58,000, as the only evidence to support such value was "without proper foundation and was speculative" and did not meet the standards of proof required by Hanson v. Hanson, 738 S.W.2d 429 (Mo. banc 1987).

Hanson, as modified on denial of rehearing, was handed down October 13, 1987, almost a year after the instant case was tried ² but seven weeks before the amended decree of December 2, 1987, was entered. So far as we can determine from the record furnished us, neither party called Hanson to the attention of the trial court prior to entry of the amended decree.

However, on December 11, 1987, Gary's lawyer filed a motion praying the trial court to amend the amended decree of December 2, 1987, by determining that the evidence was "insufficient to find any goodwill in the chiropractic practice other than through speculation and conjecture." In support of the motion, Gary's lawyer informed the trial court of Hanson. The trial court denied the motion, leaving the amended decree intact.

In Hanson the Supreme Court of Missouri stated:

"We granted transfer to determine whether our dissolution of marriage laws recognize the existence of goodwill in a professional practice as a marital asset and to determine the extent to which those laws permit the division of such goodwill upon dissolution of marriage." Id. at 430.

Hanson held that goodwill in a professional practice is a marital asset subject to division in dissolution proceedings. Id. at 431. Hanson defined goodwill within a professional setting as the value of the practice which exceeds its tangible assets and which is the result of the tendency of "clients/patients" to return to and recommend the practice irrespective of the reputation of the individual practitioner. Id. at 434. Hanson cautioned, however:

"Professional goodwill may not be confused with future earning capacity. We have not declared future earning capacity to be marital property. We do not now do so." Id. at 435.

Hanson acknowledged that proof of the existence of goodwill is particularly troublesome in a professional context, as the reputation of the individual practitioner and the goodwill of his enterprise "are often inextricably interwoven." Id. Consequently, said Hanson:

"Because of the difficulties inherent in separating the reputation of the professional from that of his enterprise, evidence that other professionals are willing to pay for goodwill when acquiring a practice is, in our view, the only acceptable evidence of the existence of goodwill. Thus, as a matter of proof, the existence of goodwill is shown only when there is evidence of a recent actual sale of a similarly situated professional practice, an offer to purchase such a practice, or expert testimony and testimony of members of the subject profession as to the existence of goodwill in a similar practice in the relevant geographic and professional market. Absent such evidence, one can only speculate as to the existence of goodwill. Divisions of marital property may not be based on speculation as to the very existence of the property being divided." Id. at 435 (footnote omitted).

Hanson then went on to discuss how the value of goodwill is proved once its existence has been established. As shall become apparent infra we need not in this opinion address the problem of proving value because, as we shall henceforth explain, we find the evidence in the instant case insufficient under the Hanson rules to establish the existence of goodwill in Parker Chiropractic Centre.

Mary's evidence regarding the existence of goodwill in Parker Chiropractic Centre consisted of testimony from two witnesses: herself and Edwin Gene Denham, a certified public accountant.

Mary, on direct examination, was asked her opinion of the value of the "practice" of Parker Chiropractic Centre exclusive of the (1) accounts receivable, (2) chiropractic office contents, and (3) real estate where the office is situated. She answered: "My opinion as to its value. Its worth $75,000.00." On cross-examination Mary was asked how she had gone about...