ÿWPCy …# VU:a %› 0(¡w@É4  , 4 0J< 0T† 0^Ú 0h8 0r  0| 0†Ž 0 1u¤ U, 0ÀE U,U*1B)[DC„ AMÇ Bß1v~vÓŽ D3a 0@” AOÔÆ# 0Dé D/- B\˜HP LaserJet 4Si/4SiMX PS 600dpiPSCRIPTÀÌÀääÀÀÌ0 ,†r‰AZ‹"Arial RegularX($¡¡ £-¤D¥¦{§D¨©Dª«Ó€µDÒ x3|xµ2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)< Œ 9p`(ModernPp ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓÑ\R€€\Ñ< Œ 9p`(Monaco< Œ 9p`(Arial% Line 7 d""""7Border 1dd€-#Cþÿ << Gÿÿ d ÕÝ ƒ!ÝÔ€ÔÔ€!ÔÝ  ÝÔ€!ÔÓ  Óò òÔ YYY ÔFILEDÔ€!XÔÌÌJuly€24,€1996ÌÌCecil€W.€CrowsonÌAppellate€Court€ClerkÔ  Ôó óPtPtStyl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑMonacoÑÑ ÑÒ  BA Op Monaco ÒÒ  BA Op Monaco Ò%%%%'ÿÿdxd("ÿÿ$££Ò  ÒÒ  Ò€-‚ƒCþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5($$””ò òÚ  Ú1Ú  Úó ó„„'÷ÿ dxdüÿP PdÝ ƒ!ÝÔ . ÔÔ€ÔÓ&€  X„d&ÓÑ#€  Xd#ÑÔ€!ÔÝ  ÝÓ  ÓÑ\R AØ'\ÑÑ7€ºXXdædÈ7Ñ›à@ àò òIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌà@ àWESTERN€SECTION€AT€NASHVILLEÌÌÌRAY€OWEN€ALSUP,à àà àà à)€€Ìà àà àà àà àà àà à)Ìà àà àó óPlaintiff/Appellant,à àà àò ò)€€€Wilson€Chancery€No.€9660Ìà àà àà àà àà àà à)ÌVS.à àà àà àà àà àà à)€€€Appeal€No.€01A01„9509„CH„00404Ìà àà àà àà àà àà à)ÌJUDITH€VANHOOK€ALSUP,à àà à)Ìà àà àà àà àà àà à)Ìà àà àó óDefendant/Appellee.à àò ò)ó óÌÌÌà@ àAPPEAL€FROM€THE€CHANCERY€COURT€OF€WILSON€COUNTYÌà@ àAT€LEBANON,€TENNESSEEÌà@ àTHE€HONORABLE€C.€K.€SMITH,€CHANCELLORÌÙ€€ÙœßL€$&#;+'h|­°` ç `€€Lߛ̜ÌÌÌÌÌÌ›ÌÌò òB.€KEITH€WILLIAMSó óÌLebanon,€TennesseeÌAttorney€for€œPlaintiff/Appellant›ÌÌÌò òSHARON€LINVILLEó óÌHartsville,€TennesseeÌAttorney€for€œDefendant/Appellee›ÌÌÌÌÌÌò òAFFIRMEDÌÌœÌÌÌÌÌ›Ìó óà àà àà àà àà àà àà àà àà àò òALAN€E.€HIGHERS,€J.ÌÌÌÌCONCUR:ÌÌW.€FRANK€CRAWFORD,€P.J.,€W.S.ÌÌDAVID€R.€FARMER,€J.ÌÌó óà àœÌÓÓà àThis›€is€a€divorce€case.€€The€trial€court€awarded€an€absolute€divorce€to€JudyÏAlsup€Ñ7€ºXXdæXXdæ7Ñ(ð ðWifeðð)€and€divided€the€marital€assets.€€Ray€Alsup€(ð ðHusbandðð)€has€appealedÏand€raised€the€following€issues€for€our€consideration:€(1)€whether€the€trial€court€erredÏin€failing€to€include€the€goodwill€value€of€the€partiesðð€business;€(2)€whether€the€trialÏcourt€erred€in€excluding€an€expert€witnessðð€testimony€relating€to€the€value€of€theÏbusiness;€and€(3)€whether€the€trial€court€erred€in€failing€to€credit€Husbandððs€portion€ofÏthe€marital€estate€with€the€value€of€certain€equipment€that€was€allegedly€located€on€theÏpremises€of€the€business.€€For€the€reasons€stated€below,€we€affirm€the€judgment€of€theÏtrial€court.ÌÌà àThe€parties€were€married€in€1962.€Throughout€the€marriage,€Husband€workedÏat€Pirelli€Armstrong€Rubber€Co.€and€its€predecessors.€€Wife€kept€children€in€the€partiesððÏhome€for€approximately€15€years.€€In€1984,€the€number€of€children€had€increasedÏsubstantially,€and€the€parties€purchased€additional€property€in€which€to€operate€a€day„care€center.€€In€1985,€the€parties€moved€the€day„care€business€into€an€even€largerÏbuilding.€€The€day€care€business,€ð ðMs.€Judyððs€Playschool,ðð€(ð ðMs.€Judyððsðð)€wasÍincorporated€in€1991.€€€Husband€and€Wife€each€owned€50%€of€the€stock.€€HusbandÏwas€named€as€president,€and€Wife€was€named€as€vice„president€and€director€of€Ms.ÏJudyððs.€ÌÌà àAt€the€hearing,€the€parties€stipulated€that€Wife€was€entitled€to€a€divorce€onÏgrounds€of€Husbandððs€inappropriate€marital€conduct.€€The€trial€court€divided€the€maritalÏproperty,€and€awarded€to€Wife€the€stock€in€Ms.€Judyððs,€and€the€vehicles€and€inventoryÏlocated€on€Ms.€Judyððs€premises.€Wife€was€also€awarded€the€partiesðð€house€and€farm,Ïall€bank€accounts€in€her€name,€and€the€balance€of€a€note€from€the€sale€of€a€building.€ÏHusband€was€awarded€the€building€in€which€Ms.€Judyððs€operated,€his€retirementÏaccounts,€all€bank€accounts€in€his€name,€horses,€and€farm€equipment.€€The€trial€courtÏdeclined€to€award€alimony.€ÌÌà àThis€appeal€involves€issues€solely€relating€to€the€trial€courtððs€valuation€of€Ms.ÏJudyððs.ÌÌà àAt€trial,€Husband€attempted€to€introduce€the€testimony€of€Mike€Flanagan,€C.P.A.,Ïwho€was€the€accountant€for€Ms.€Judyððs.€The€trial€court€ruled€that€Flanagan€was€notÏsufficiently€qualified€to€testify€as€an€expert€as€to€the€value€of€Ms.€Judyððs.€€Pursuant€to€anÏoffer€of€proof,€Flanagan€stated€that€in€his€opinion,€Ms.€Judyððs€was€worth€$200,000.00€toÏ$250,000.00.€€€Wife€introduced€the€testimony€of€Ray€Bowling,€C.P.A.,€who€testified€thatÏthe€fair€market€value€of€the€stock€in€Ms.€Judyððs€was€$58,156.00.€€In€contrast,€HusbandððsÏexpert,€David€Wood,€C.P.A.,€testified€that€the€fair€market€value€was€$280,000.00.€ÌÌà àThe€trial€court€stated€in€its€Finding€of€Facts€and€Final€Decree€as€follows:ÌÓÓà8 àà8 àThat€the€parties€own€all€of€the€stock€to€the€corporationÏknown€as€and€doing€business€under€the€name€Miss€JudyððsÏPlayschool€and€that€said€stock€is€valued€at€$58,000.00€toÏ$60,000.00.€€This€value€is€based€on:€case€law€that€makes€itÏclear€that€this€type€of€business€has€very€little€value€withoutÏMrs.€Alsup€working€there;€the€Courtððs€finding€that€there€is€noÏgoodwill€or€going€concern€of€this€business€without€Mrs.ÏAlsup€running€it;€that€the€business€is€a€result€of€theÏindividual€efforts€of€the€Defendant;€the€stipulation€of€theÏtestimony€of€several€parents€that€they€would€remove€theirÏchildren€if€Mrs.€Alsup€was€not€at€Miss€Judyððs€Playschool;Ïtestimony€of€expert€witnesses€of€the€parties;€the€fear€ofÏPlaintiff€that€Defendant€might€open€up€a€business€acrossÏthe€street€or€down€the€street€breaking€him,€contrary€to€theÏtestimony€of€Plaintiffððs€expert,€who€testified€that€competitionÏwould€not€be€a€factor€in€assessing€the€value€of€theÏbusiness;€the€formula€used€by€Plaintiffððs€expert€inÏcalculating€his€value€of€this€business.€€In€his€formula,ÏPlaintiffððs€expert€used€a€value€of€$15,000.00€as€officerððsÏsalary,€which€the€Court€found€ridiculously€low€based€onÏother€testimony€given€as€to€a€reasonable€€officerððs€salaryÏand€based€on€common€sense.€€The€Court€feels,€based€onÏother€testimony€heard€including€that€of€Michael€Flanagan,Ïthat€$24,000.00€to€$30,000.00€would€be€a€reasonableÏofficerððs€salary€to€use€in€this€formula.€€Plaintiffððs€expertððsÏformula,€at€line€E,€included€$19,700.00€for€nonbusinessÏexpenses.€€The€Court€found€that€there€has€been€noÏevidence€to€support€this€figure€and€if€taken€out€of€theÏformula€and€increasing€the€taxes€in€line€with€the€increase€inÏofficerððs€salary,€the€value€of€the€business,€based€onÏPlaintiffððs€expertððs€theory,€would€be€$58,000.00€toÏœ$60,000.00.ÌÌÓÓ›Ìà àHusbandððs€first€contention€on€appeal€is€that€the€trial€court€erred€in€finding€thatÏMs.€Judyððs€had€no€goodwill€value.€€At€the€outset,€we€note€that€the€trial€court€did€not€findÏthat€Ms.€Judyððs€had€no€goodwill€value.€€Rather,€the€trial€court€held€that€Ms.€Judyððs€hadÍno€goodwill€without€Wife€running€the€business.€€Therefore,€we€will€treat€the€issue€onÏappeal€as€whether€the€trial€court€erred€in€failing€to€include€the€goodwill€value€in€itsÏvaluation€of€Ms.€Judyððs€and€its€subsequent€distribution€of€the€marital€estate.ÌÌà àOur€courts€have€adopted€the€position€that€in€valuing€a€professional€practice,Ïgoodwill€may€not€be€included€as€part€of€the€marital€estate.€€òòSmith€v.€Smithóó,€709€S.W.2dÏ588€(Tenn.€App.€1985);€òòHazard€v.€Hazardóó,€833€S.W.2d€911€(Tenn.€App.€1991).€€ThisÏrule€has€been€applied€to€professional€practices€such€as€a€physicianððs€practice,€òòHazardóó,Ï833€S.W.2d€911,€an€attorneyððs€practice,€òòSmithóó,€709€S.W.2d€588,€and€an€accountantððsÏpractice.€òòEnoch€v.€Enochóó,€No.€1,€1987€WL€12042€(Tenn.€App.€June€10,€1987).ÌÌÓÓà àThe€Court€in€òòSmithóó€explained€the€reasoning€behind€this€rule€as€follows:ÌÌà8 àà8 àThe€concept€of€professional€œgoodwill›€evanesces€when€oneÏattempts€to€distinguish€it€from€future€earning€capacity.ÏAlthough€a€professional€businessððs€good€reputation,€whichÏis€essentially€what€its€œgoodwill›€consists€of,€is€certainly€aÏthing€of€value,€we€do€not€believe€that€it€bestows€on€thoseÏwho€have€an€ownership€interest€in€the€business,€an€actual,Ïseparate€property€interest.€€The€reputation€of€a€law€firm€orÏsome€other€professional€business€is€valuable€to€itsÏindividual€owners€to€the€extent€that€it€assures€continuedÏsubstantial€earnings€in€the€future.€It€cannot€be€separatelyÏsold€or€pledged€by€the€individual€owners.€€The€œgoodwill›€orÏreputation€of€such€a€business€accrues€to€the€benefit€of€theÏowners€only€through€increased€salary.ÌÌà8 àà àà à*€€€€€€*€€€€€€*€€€€€€*€€€€€*€€€€€*Ìà8 àà8 àThere€is€a€disturbing€inequity€in€compelling€a€professionalÏpractitioner€to€pay€a€spouse€a€share€of€intangible€assets€atÏa€judicially€determined€value€that€could€be€not€realized€by€aÏsale€or€another€method€of€liquidating€value.ÌÌà8 àà à309€N.W.2d€at€354„355.ÌÌà8 àà8 àThus,€the€professional€œgoodwill›€is€not€a€marital€asset€whichÏwould€be€accounted€for€in€making€an€equitable€distributionÏof€the€marital€estate.ÌÌòòId.óó€at€591„92€(quoting€òòHolbrook€v.€Holbrookóó,€309€N.W.2d€343€(Wis.€Ct.€App.€1981)).ÌÓÓÌÌà àThe€holdings€of€the€òòSmithóó€and€òòHazardóó€cases€have€been€extended€to€apply€toÏsole€proprietorships€and€partnerships,€as€well.€€In€òòKoch€v.€Kochóó,€874€S.W.2d€571Ï(Tenn.€App.€1993),€the€husband€was€a€self„employed€painter.€€The€court€held,€ð ðIn€ourÏview,€the€valuation€of€a€sole€proprietorship€is€analogous€to€the€valuation€of€aÏprofessional€practice.€€In€both€enterprises,€the€conduct€of€the€business€or€profession€isÏdependent€upon€the€owner€thereof.ðð€€òòId.óó€œat›€576.€€Consequently,€the€court€held,€theÏœgoodwill›€value€was€not€a€marital€asset€subject€to€distribution.€€òòId.óóÌÌà àIn€the€recent€case€of€òòLyle€v.€Lyleóó,€No.€03A01„9412„GS„00434,€1995€WL€324033Ï(Tenn.€App.€May€31,€1995),€husband€and€wife€owned€a€veterinary€clinic€as€aÏpartnership.€€The€court€noted€that,€ð ðif€the€[husband]€were€to€leave€the€business€and€goÏinto€competition€with€the€present€clinic,€the€œgoodwill›€would,€in€essence,€follow€him.€ÏTherefore,€the€œgoodwill›€is€an€asset€that€would€be€almost€valueless€without€theÏpresence€of€the€[husband].ðð€€òòId.óó€at€*3.€€The€court€held€that€the€œgoodwill›€value€of€theÏveterinary€clinic€was€not€marital€property€subject€to€division.€The€court€noted€that€theÏpartnership€was,€in€essence,€a€sole€proprietorship,€and€should€therefore€be€treatedÏaccordingly.€€òòId.óóÌÌà àHusband€argues€that€the€present€case€is€distinguishable€from€cases€involvingÏprofessional€practices€or€sole€proprietorships€because€Ms.€Judyððs€is€a€corporation.€€AtÏthe€hearing€in€this€matter,€Wife€submitted€the€stipulated€testimony€of€twenty„sevenÏindividuals€whose€children€attended€Ms.€Judyððs.€€All€of€these€individuals€testified€thatÏWife€was€the€reason€that€they€brought€their€children€to€Ms.€Judyððs€and€that€if€Wife€wasÏnot€there,€they€would€no€longer€bring€their€children€to€Ms.€Judyððs.€€€Husband€testifiedÏthat€he€had€not€been€involved€with€the€day€care€or€assisted€with€any€day„to„dayÏactivities€for€a€considerable€length€of€time.€ÌÌà àFrom€the€foregoing€evidence,€it€is€apparent€that€the€œgoodwill›€of€Ms.€JudyððsÏwould€be€valueless€without€Wifeððs€presence.€€Therefore,€the€œgoodwill›€value€of€Ms.ÏJudyððs€depends€solely€upon€the€reputation€of€Judy€Alsup,€as€is€true€in€the€cases€ofÏprofessional€practices€and€sole€proprietorships.€The€fact€that€Ms.€Judyððs€is€a€closelyÏheld€corporation€is€of€no€moment€under€the€circumstances€of€the€present€caseÏbecause,€for€all€practical€purposes,€Ms.€Judyððs€was€operated€as€a€sole€proprietorship.€ÏAccordingly,€we€hold€that€the€œgoodwill›€value€of€Ms.€Judyððs€is€not€a€marital€asset€subjectÏto€distribution€with€the€marital€property.ÌÌà àHusbandððs€second€contention€on€appeal€is€that€the€trial€court€erred€in€excludingÏthe€testimony€of€Mike€Flanagan,€the€accountant€for€Ms.€Judyððs.€€During€voir€dire,ÏFlanagan€testified€that€he€was€not€an€expert€in€the€area€of€business€valuation,€and€thatÏhe€had€no€experience€in€appraising€businesses.€€He€admitted€that€there€had€been€twoÍprevious€occasions€on€which€his€accounting€firm€had€given€the€sellers€of€certainÏbusinesses€an€opinion€as€to€what€the€businesses€were€worth.€€However,€he€stated€thatÏappraising€was€not€part€of€the€firmððs€practice€or€specialty€area.€€The€trial€court€held€thatÏFlanagan€could€not€testify€as€an€expert€in€appraising€businesses,€but€could€testify€asÏan€expert€in€accounting.€€Pursuant€to€an€offer€of€proof,€Flanagan€testified€that€Ms.ÏJudyððs€was€worth€approximately€$200,000.00€to€$250,000.00.€€These€figures€includedÏthe€œgoodwill›€value€of€Ms.€Judyððs.€€ÌÌà àA€trial€court€is€generally€afforded€considerable€latitude€in€the€admission€orÏexclusion€of€evidence,€and€will€be€reversed€only€upon€a€showing€of€an€abuse€ofÏdiscretion.€òòSteele€v.€Ft.€Sanders€Anesthesia€Group,€P.C.óó,€897€S.W.2d€270,€275€(Tenn.ÏApp.€1994).ÌÌà àWe€find€no€evidence€of€any€abuse€of€discretion€by€the€trial€judge€in€this€case.€ÏEven€if€we€were€to€find€such€an€abuse,€the€error€would€be€harmless€becauseÏFlanaganððs€figures€€included€the€œgoodwill›€value.€€We€have€held€that€œgoodwill›€may€notÏproperly€be€considered€in€valuing€Ms.€Judyððs.€ÌÌà àHusbandððs€final€issue€on€appeal€is€whether€the€trial€court€erred€in€failing€toÏcredit€his€portion€of€the€marital€estate€with€the€value€of€certain€equipment€that€heÏalleges€is€located€on€the€premises€of€Ms.€Judyððs.€€Husband€argues€that€both€the€WifeððsÏexpert€and€the€trial€court€failed€to€include€the€value€of€items€such€as€cabinets,Ïbookshelves,€food,€black€boards,€tables,€and€chairs,€which€Husband€estimates€is€worthÍ$30,000€to€$40,000.00.€ÌÌà àAt€the€conclusion€of€the€hearing,€the€chancellor€stated:ÌÓÓà8 àà8 àI€find€that...the€value€of€the€business€is€worth€somewhereÏaround€$60,000.00...That€is€the€value€of€the€business,€theÏvalue€of€the€assets€there.€€The€cash,€the€inventory€inside€theÏbuilding,€the€buses€outside,€thatððs€my€determination€as€theÏvalue€of€that€business.€ÌÌÓÓÌà àBecause€the€trial€judge€specifically€stated€that€the€figure€included€the€inventoryÏinside€the€building€and€because€the€trial€judge€stated€that€he€had€problems€withÏHusbandððs€credibility,€we€find€Husbandððs€final€contention€to€be€without€merit.€€InÏvaluing€marital€assets,€the€trial€court€may€consider€all€relevant€evidence.€€òòWallace€v.ÏWallaceóó,€733€S.W.2d€102€(Tenn.€App.€1987).€€At€the€court€stated€in€òòWallaceóó,ÌÓÓœà8 àà8 àThe›€burden€is€on€the€parties€to€produce€competentÏevidence€of€the€value,€and€the€parties€are€bound€by€theÏevidence€they€present.€€Thus€the€trial€court€in€its€discretion,Ïis€free€to€place€a€value€on€a€marital€asset€that€is€within€theÏrange€of€evidence€submitted.€(Citations€omitted)ÌÌòòId.óó€at€107.ÌÓÓÌÌà àThe€trial€courtððs€determination€as€to€the€value€of€Ms.€Judyððs€was€well€within€theÏrange€of€competent€evidence€submitted€both€by€Wifeððs€expert€and€Husbandððs€expert.ÌÌà àWe€do€not€deem€this€to€be€an€appropriate€case€for€imposition€of€sanctions€for€aÏfrivolous€appeal€and,€therefore,€respectfully€deny€Wifeððs€request€in€this€regard.ÌÌà àThe€judgment€of€the€trial€court€is€hereby€affirmed.€€Costs€on€appeal€are€taxed€toÏappellant,€for€which€execution€may€issue€if€necessary.ÌÓÓÌÌà àà àà àà àà àà àà àà àòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€Ïóóà àà àà àà àà àà àà àà àHIGHERS,€J.ÌœCONCUR:›ÌÌÌÌòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÌCRAWFORD,€P.J.,€W.S.ÌÌÌÌòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÌFARMER,€J.