Rathmell v. Morrison

732 S.W.2d 6 (1987)

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Rathmell v. Morrison

Texas Court of Appeals
732 S.W.2d 6 (1987)

  • Written by Whitney Kamerzel , JD

Facts

John Rathmell (defendant) owned an insurance company. Although Rathmell’s personality, social contacts, and specialized knowledge of insurance contributed to the company’s success, the company also had several competent employees who successfully handled client needs. One client stated that the insurance company was not a one-man show and that the client used the company not because of Rathmell’s participation, but because the company offered the client competitive prices. After Rathmell’s divorce from Mary Ann Rathmell Morrison (plaintiff), a trial court determined that Rathmell’s company had a market value of $4,857,000. The trial court did not make findings apportioning the company’s commercial goodwill that was separate from the personal professional goodwill associated with Rathmell’s personal knowledge and skills. Rathmell appealed.

Rule of Law

Issue

Holding and Reasoning (Junell, J.)

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Casebooks

Family Law

Key Terms

  • Community PropertyProperty accumulated during the course of a marriage that is subject to division upon divorce. During both spouses’ lifetimes, each has a one-half ownership interest in all community property.
  • Separate PropertyProperty acquired by one spouse before marriage or by gift or inheritance, in which the other spouse has no ownership interest. Property acquired by one spouse after the date of commencement of a divorce action is also considered separate property.
  • GoodwillAn intangible business asset composed of a good reputation with customers, suppliers, and the community at large; good employee morale; the ability to attract customers and clients; good management; and other positive aspects that are difficult to value monetarily but that contribute to the success of a business.

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