Walsh v. Walsh
230 Ariz. 486
Ariz. Ct. App.2012Background
- Husband and Wife are attorneys who married in 1986 and separated in 2010; they have three children with joint legal custody and Wife as primary residential parent for one child.
- During dissolution, parties disputed the community’s interest in Husband’s intangible professional goodwill.
- Husband claimed the only realizable value of his goodwill was the $140,000 stock redemption under the firm’s Agreement.
- Wife’s expert valued Husband’s professional practice at about $1.269 million using a capitalization approach, deeming extra value from reputation and client base.
- The family court held the community interest was limited to the $140,000 redemption value and ordered child support per guidelines, with no deviation.
- This appeal challenges both the goodwill valuation and the child support calculation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Valuation of goodwill as a community asset | Walsh contends goodwill extends beyond the stock redemption value. | Walsh argues realizable benefits under the Agreement cap the value at $140,000. | Goodwill may exceed $140,000; not limited to the stock redemption value. |
| Deviation from child support guidelines | Wife seeks upward deviation due to assets awarded and lifestyle implications. | Court may not deviate given guidelines and asset division supports standard of living. | Remand to consider deviation under §25-320(D)(1)-(7) and Guidelines §8, without using asset division as the sole basis. |
Key Cases Cited
- Molloy v. Molloy, 158 Ariz. 64 (App. 1988) (goodwill can derive from reputation and future patronage)
- Molloy v. Molloy, 158 Ariz. 65 (App. 1988) (future earning capacity alone is not goodwill; enhanced earning capacity due to goodwill may have value)
- Mitchell v. Mitchell (Mitchell II), 152 Ariz. 317 (Supreme Court/1992) (goodwill akin to pension rights; divisible community asset when enhanced by marital contributions)
- In re Marriage of Fenton, 184 Cal.App.3d 451 (App. 1982) (goodwill cannot be eliminated by corporate documents; not limited to agreements)
- In re Marriage of Kells, 182 Ariz. 480 (App. 1995) (restricting goodwill to a buy-sell agreement is inappropriate; consider broader goodwill)
- Wisner v. Wisner, 129 Ariz. 333 (App. 1981) (factors for determining professional goodwill (Wisner factors))