Summary
The Supreme Court of Arkansas affirmed a circuit court’s classification of goodwill in a jointly owned restaurant as corporate goodwill and marital property subject to division in a divorce. The court also rejected the appellant’s argument that awarding a share of the business goodwill and alimony impermissibly constituted double dipping. The court denied the motion to dismiss the appeal and vacated the Arkansas Court of Appeals’ opinion.
Topics
Practice areas
Questions Presented
- Whether the circuit court clearly erred by characterizing the goodwill of Brave New Restaurant as corporate goodwill and dividing it as marital property.
- Whether the circuit court impermissibly double counted Peter's future income by dividing the restaurant's goodwill and awarding Marie alimony.
- Whether Peter's partial payments toward the judgment constituted voluntary acquiescence barring his appeal.
Holdings
- Goodwill may be treated as marital property when the evidence establishes that it is a saleable or marketable business asset with value independent of the presence or reputation of a particular individual. Under the circumstances, the circuit court did not clearly err in finding that Brave New Restaurant's goodwill was corporate goodwill and divisible marital property.
- The circuit court did not abuse its discretion by dividing the restaurant's corporate goodwill while awarding alimony because Peter's argument depended on the goodwill being personal future earning capacity, and the court had found it to be corporate goodwill. The circuit court also expressly considered the double-dipping argument when reducing the alimony award.
- Peter's payments did not constitute voluntary acquiescence barring the appeal because he announced his intent to appeal, sought a stay, did not admit that the payments were voluntary, and the circuit court expressly found that the payments were involuntary.
Key quotations
“We believe the view expressed in Taylor is a sound one, and conclude that, for goodwill to be marital property, it must be a business asset with value independent of the presence or reputation of a particular individual—an asset which may be sold, transferred, conveyed or pledged.” (at 8)
“The purpose of alimony is to rectify economic imbalances in earning power and standard of living in light of the particular facts in each case.” (at 9)
“As such, we do not think that Peter’s actions were a voluntary acquiescence to the judgment to bar this appeal, and we deny the motion to dismiss the appeal.” (at 7)
Factual background
Peter and Marie Brave were married for more than twenty years, had two children, and co-owned Brave, Inc., doing business as Brave New Restaurant. The circuit court valued the business and its goodwill as marital property and awarded Marie a share of the restaurant, along with child support and long-term alimony. An expert's valuation treated the goodwill as part of the business's value if sold on the open market and accounted for replacing Peter as an operator. Peter argued that the goodwill was personal to him and that dividing it while also awarding alimony impermissibly duplicated his future income.
Procedural history
The Pulaski County Circuit Court entered a divorce decree dividing the marital interests in Brave New Restaurant, awarding Marie Brave alimony, and ordering Peter Brave to make payments attributable to the restaurant division. The circuit court later denied Peter's motion for additional findings and reconsideration but reduced monthly alimony from $5,000 to $4,000 after considering his double-dipping argument. The court of appeals reversed and remanded; the Arkansas Supreme Court denied the motion to dismiss, vacated the court of appeals' opinion, and affirmed the circuit court.