McReath v. McReath

Tracy McReath (plaintiff) filed a petition for divorce from Tim McReath (defendant) after approximately 19 years of marriage and the birth of three children. Tracy was a high-school graduate and held a few jobs from time to time, but was mainly a homemaker and caretaker of the children. Three years into the marriage, Tim received a dental degree and then a master’s degree in orthodontia. Tim worked as an associate at Orthodontic Specialists (OS) under the mentorship of Dr. Grady for two years. Thereafter, Tim purchased OS and its two locations for $930,000, which consisted of $100,000 for the physical assets and the business name and $830,000 for the goodwill generated by Dr. Grady; a non-complete clause Dr. Grady signed as part of the sale; and a temporary employment agreement with Dr. Grady to stay on and assist with the transition of the business. Tim reasoned that, without the non-compete clause, Dr. Grady could have opened up another dental practice nearby and resumed the same level of business that Dr. Grady had enjoyed. With the exception of OS, Tracy and Tim agreed to the value and division of the marital assets. After several hearings, the trial court valued OS at $1,058,000 and included OS as a marital asset subject to division. Based on the substantial discrepancy between Tim’s assets and Tracy’s assets, the trial court awarded Tracy a sum of nearly $800,000 and spousal support of $16,000 per month for 20 years. Tim appealed. The court of appeals affirmed. The Supreme Court of Wisconsin granted certiorari to review.