In The Court of Appeals Seventh District of Texas at Amarillo
No. 07-23-00202-CV
IN THE MATTER OF THE MARRIAGE OF JEFFREY WAYNE MAYNARD AND TIFFINI SWEET MAYNARD
On Appeal from the 47th District Court Randall County, Texas Trial Court No. 79774-A, Honorable Dan L. Schaap, Presiding
June 26, 2024 MEMORANDUM OPINION Before QUINN, C.J., and PARKER and DOSS, JJ.
This appeal from a final decree of divorce dividing marital property tests the
distinction between one’s personal goodwill and commercial goodwill. Personal goodwill,
which includes the value of one’s confidence in a professional’s skills and abilities, for
example, is not a property right that is subject to division on divorce.1 Commercial
goodwill, which is subject to division upon divorce, “exists separate and apart from a
professional’s personal skills, ability, and reputation.”2 Appellant, Tiffini Sweet Maynard
1 Nail v. Nail, 486 S.W.2d 761, 764 (Tex. 1972).
2 Keith v. Keith, 763 S.W.2d 950, 952 (Tex. App.—Fort Worth 1989, no pet.). (Wife), presents three issues challenging the trial court’s division of the community estate.
Appellee is Jeffrey Wayne Maynard (Husband). For the reasons set forth below, we
overrule Wife’s issues and affirm the judgment of the trial court.
Background
Husband and Wife married in 1998 and ceased living as spouses in 2021.
Husband began a career as a financial advisor in the early 2000s. On December 15,
2014, Husband and MKD Financial Services, LP, entered into an agreement
memorialized in a document titled “Non-Compete Representative Agreement.” According
to the agreement, Husband, as MKD’s independent contractor, would “solicit[] purchases
of securities.” Husband’s compensation for services rendered under the agreement was
stated to be commission-based. For business written by Husband after June 1, 2014, he
would receive “35% on 401(k) and Individual Client net revenue.”
For business written before April 1, 2014, Husband would receive “52% on 401(k)
and Individual Client net revenue generated by [Husband’s] efforts.” An “override
agreement” for business written before April 2014, allowed Husband to increase his
compensation percentage from 52% to 64% if “net GDC” exceeded $700,001. A
paragraph entitled “Client Relationship,” the agreement stipulated that “[o]nly those clients
listed and agreed upon on Exhibit B . . . are deemed clients of [Husband] and with whom
[Husband] shall be entitled to continue business following termination of this agreement.”
It is undisputed that Exhibit B was never generated.
The trial court rendered a divorce on January 4, 2023, and signed the decree on
February 28, 2023. On Wife’s request, the court made numerous findings of fact and
2 conclusions of law, which included the following regarding the non-compete agreement
between Husband and MKD:
[T]he right to receive a greater share of revenue in the future for business written prior to 4/1/2014 in paragraph 2 of the 2014 Non-Compete Representative Agreement is not a marital asset for which division is appropriate. There was no commercial goodwill transferred to MKD by virtue of [Husband’s] personal employment with the company or by virtue of the Agreement. The right to receive a greater share of revenue for business written prior to 4/1/2014 in paragraph 2 of the 2014 Non-Compete Representative Agreement is income earned for services and is Husband’s future separate property.
This appeal followed.
Analysis
Through three issues, Wife argues the trial court abused its discretion 3 in dividing
the marital estate because it failed to make a just and right division of property regarding
the agreement’s sale of commercial goodwill. The Texas Family Code requires a “just
and right” division of the community estate when spouses divorce. TEX. FAM. CODE ANN.
3 The Fort Worth Court of Appeals recently discussed the applicable standard of review for family
law community division questions:
In family-law cases, the traditional sufficiency standards of review overlap with the abuse- of-discretion standard of review; therefore, legal and factual insufficiency are not independent grounds of error but are relevant factors in our assessment of whether the trial court abused its discretion. To determine whether there has been an abuse of discretion because the evidence is legally or factually insufficient to support the trial court’s decision, we must determine (1) whether the trial court had sufficient evidence upon which to exercise its discretion and (2) whether the trial court erred in its application of that discretion. The applicable sufficiency review comes into play with regard to the first question.
Rice v. Rice, No. 02-21-00413-CV, 2023 Tex. App. LEXIS 39, at *23 (Tex. App.—Fort Worth 2023, no pet.) (mem. op.) (internal citations omitted).
3 § 7.001. As noted above, there is a distinction between personal goodwill (which is not a
part of community property) and commercial goodwill (which may be). Relevant here, we
examine whether goodwill exists independent of the personal ability of the professional
spouse, and if so, whether that goodwill has a commercial value attributable to the marital
estate. Hill v. Hill, No. 02-12-00332-CV, 2014 Tex. App. LEXIS 292, at *15 (Tex. App.—
Fort Worth Jan. 9, 2014, no pet.) (mem. op.). Determining the existence of goodwill and
its value are fact questions for the trier of fact, which in this case is the trial court. Hill,
2014 Tex. App. LEXIS 292, at *23.
The trial court was asked to answer this question: is any part of the compensation
paid to Husband for business written before April 1, 2014, properly attributed as
commercial goodwill? Wife argues, “The Agreement [] unambiguously calls for the
conveyance of Husband’s commercial goodwill to MKD.” Wife contends the non-compete
agreement’s two-tier compensation arrangement – which pays “almost twice as large a
share of revenue” for “Legacy” (i.e., pre-April 2014) clients – constitutes proof that such
compensation serves as consideration for obtaining Husband’s clients (commercial
goodwill).
Wife supports her position with the expert testimony of Owen Dahl. Dahl compared
the percentage to be paid to Husband for Legacy versus new clients and found that pre-
2014 clients carry a 32-point premium. He attributes this portion to a sale of Husband’s
client book to MKD, adding that the percentage is “the industry norm” for a sale of clients.
However, as to why Husband would receive the same percentage for a sale of clients as
obtaining and maintaining clients, Dahl equivocated, testifying, “[A]s I said, I don’t know if
that’s coincidental or purposeful, but it’s interesting for sure.”
4 Husband denied bringing a list of clients to MKD and responded “I don’t know”
when asked about receiving proceeds from any sale. He testified that the purpose for the
agreement’s payment terms was “[t]o get a revenue split more in line with a typical
advisor.”4 Husband initially explained the differential between payment for “Legacy” and
“new” clients as “[j]ust the agreement we came up with.” However, he later added that
because the agreement paid roughly 65% for pre-April 2014 clients and “flopped” to
approximately 35% for new clients, he and MKD are reaching an intended overall revenue
formula “closer to 50/50.”
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In The Court of Appeals Seventh District of Texas at Amarillo
No. 07-23-00202-CV
IN THE MATTER OF THE MARRIAGE OF JEFFREY WAYNE MAYNARD AND TIFFINI SWEET MAYNARD
On Appeal from the 47th District Court Randall County, Texas Trial Court No. 79774-A, Honorable Dan L. Schaap, Presiding
June 26, 2024 MEMORANDUM OPINION Before QUINN, C.J., and PARKER and DOSS, JJ.
This appeal from a final decree of divorce dividing marital property tests the
distinction between one’s personal goodwill and commercial goodwill. Personal goodwill,
which includes the value of one’s confidence in a professional’s skills and abilities, for
example, is not a property right that is subject to division on divorce.1 Commercial
goodwill, which is subject to division upon divorce, “exists separate and apart from a
professional’s personal skills, ability, and reputation.”2 Appellant, Tiffini Sweet Maynard
1 Nail v. Nail, 486 S.W.2d 761, 764 (Tex. 1972).
2 Keith v. Keith, 763 S.W.2d 950, 952 (Tex. App.—Fort Worth 1989, no pet.). (Wife), presents three issues challenging the trial court’s division of the community estate.
Appellee is Jeffrey Wayne Maynard (Husband). For the reasons set forth below, we
overrule Wife’s issues and affirm the judgment of the trial court.
Background
Husband and Wife married in 1998 and ceased living as spouses in 2021.
Husband began a career as a financial advisor in the early 2000s. On December 15,
2014, Husband and MKD Financial Services, LP, entered into an agreement
memorialized in a document titled “Non-Compete Representative Agreement.” According
to the agreement, Husband, as MKD’s independent contractor, would “solicit[] purchases
of securities.” Husband’s compensation for services rendered under the agreement was
stated to be commission-based. For business written by Husband after June 1, 2014, he
would receive “35% on 401(k) and Individual Client net revenue.”
For business written before April 1, 2014, Husband would receive “52% on 401(k)
and Individual Client net revenue generated by [Husband’s] efforts.” An “override
agreement” for business written before April 2014, allowed Husband to increase his
compensation percentage from 52% to 64% if “net GDC” exceeded $700,001. A
paragraph entitled “Client Relationship,” the agreement stipulated that “[o]nly those clients
listed and agreed upon on Exhibit B . . . are deemed clients of [Husband] and with whom
[Husband] shall be entitled to continue business following termination of this agreement.”
It is undisputed that Exhibit B was never generated.
The trial court rendered a divorce on January 4, 2023, and signed the decree on
February 28, 2023. On Wife’s request, the court made numerous findings of fact and
2 conclusions of law, which included the following regarding the non-compete agreement
between Husband and MKD:
[T]he right to receive a greater share of revenue in the future for business written prior to 4/1/2014 in paragraph 2 of the 2014 Non-Compete Representative Agreement is not a marital asset for which division is appropriate. There was no commercial goodwill transferred to MKD by virtue of [Husband’s] personal employment with the company or by virtue of the Agreement. The right to receive a greater share of revenue for business written prior to 4/1/2014 in paragraph 2 of the 2014 Non-Compete Representative Agreement is income earned for services and is Husband’s future separate property.
This appeal followed.
Analysis
Through three issues, Wife argues the trial court abused its discretion 3 in dividing
the marital estate because it failed to make a just and right division of property regarding
the agreement’s sale of commercial goodwill. The Texas Family Code requires a “just
and right” division of the community estate when spouses divorce. TEX. FAM. CODE ANN.
3 The Fort Worth Court of Appeals recently discussed the applicable standard of review for family
law community division questions:
In family-law cases, the traditional sufficiency standards of review overlap with the abuse- of-discretion standard of review; therefore, legal and factual insufficiency are not independent grounds of error but are relevant factors in our assessment of whether the trial court abused its discretion. To determine whether there has been an abuse of discretion because the evidence is legally or factually insufficient to support the trial court’s decision, we must determine (1) whether the trial court had sufficient evidence upon which to exercise its discretion and (2) whether the trial court erred in its application of that discretion. The applicable sufficiency review comes into play with regard to the first question.
Rice v. Rice, No. 02-21-00413-CV, 2023 Tex. App. LEXIS 39, at *23 (Tex. App.—Fort Worth 2023, no pet.) (mem. op.) (internal citations omitted).
3 § 7.001. As noted above, there is a distinction between personal goodwill (which is not a
part of community property) and commercial goodwill (which may be). Relevant here, we
examine whether goodwill exists independent of the personal ability of the professional
spouse, and if so, whether that goodwill has a commercial value attributable to the marital
estate. Hill v. Hill, No. 02-12-00332-CV, 2014 Tex. App. LEXIS 292, at *15 (Tex. App.—
Fort Worth Jan. 9, 2014, no pet.) (mem. op.). Determining the existence of goodwill and
its value are fact questions for the trier of fact, which in this case is the trial court. Hill,
2014 Tex. App. LEXIS 292, at *23.
The trial court was asked to answer this question: is any part of the compensation
paid to Husband for business written before April 1, 2014, properly attributed as
commercial goodwill? Wife argues, “The Agreement [] unambiguously calls for the
conveyance of Husband’s commercial goodwill to MKD.” Wife contends the non-compete
agreement’s two-tier compensation arrangement – which pays “almost twice as large a
share of revenue” for “Legacy” (i.e., pre-April 2014) clients – constitutes proof that such
compensation serves as consideration for obtaining Husband’s clients (commercial
goodwill).
Wife supports her position with the expert testimony of Owen Dahl. Dahl compared
the percentage to be paid to Husband for Legacy versus new clients and found that pre-
2014 clients carry a 32-point premium. He attributes this portion to a sale of Husband’s
client book to MKD, adding that the percentage is “the industry norm” for a sale of clients.
However, as to why Husband would receive the same percentage for a sale of clients as
obtaining and maintaining clients, Dahl equivocated, testifying, “[A]s I said, I don’t know if
that’s coincidental or purposeful, but it’s interesting for sure.”
4 Husband denied bringing a list of clients to MKD and responded “I don’t know”
when asked about receiving proceeds from any sale. He testified that the purpose for the
agreement’s payment terms was “[t]o get a revenue split more in line with a typical
advisor.”4 Husband initially explained the differential between payment for “Legacy” and
“new” clients as “[j]ust the agreement we came up with.” However, he later added that
because the agreement paid roughly 65% for pre-April 2014 clients and “flopped” to
approximately 35% for new clients, he and MKD are reaching an intended overall revenue
formula “closer to 50/50.”
In addition, Husband testified he must continue to “service the client” to maintain
relationships and earn commissions. He agreed that once a client invests with him, he
cannot just “sit back in a chair” but must continue to provide services. Husband offered
the testimony of Nick Mears who opined, “any goodwill attributable to [Husband’s] client
list would be related to [Husband] . . . in his capacity as an expert in his field.”
Wife’s argument on appeal is that because Husband is being paid more for existing
clients than new clients, “the only reasonable interpretation of the Agreement and the
surrounding circumstances” is that Husband is being paid for assigning such clients to
MKD. There are two problems with this position. First, even if we agreed with Wife’s
theory, there is no evidence that Husband actually earned additional compensation under
the override agreement. We decline to speculate how the right to receive community
4 Husband testified that due to a prior agreement, he had been “paid much higher than a typical
advisor” at the time he entered into the agreement with MKD.
5 property materially affects the just and right division of the estate in the absence of
evidence regarding actual property value.5
Second, we disagree with Wife’s assumption that a greater percentage of
compensation paid to Husband for Legacy client revenue necessarily represents sale
value. The trial court possessed the sole prerogative to assess the weight and credibility
of the witnesses and their conflicting evidence. Such evidence included a non-sale
explanation for why Husband and MKD calculated different income formulas for pre-April
2014 clients and new clients. Moreover, Husband’s testimony permitted the trial court to
conclude that any sale to MKD would have no value unless Husband continued to use
his personal skills and abilities (i.e., personal goodwill) to maintain the accounts. When
evidence of a substantive and probative character supports its decision, the trial court
does not abuse its discretion. See Debrock v. Debrock, No. 03-21-00308-CV, 2022 Tex.
App. LEXIS 9454, at *38 (Tex. App.—Austin Dec. 28, 2022, pet. denied) (mem. op.).
Finding no abuse of discretion, we overrule Wife’s three issues.
Conclusion
We affirm the judgment of the trial court.
Lawrence M. Doss Justice
5 The trial court was free to disregard Dahl’s estimates of what Husband might collect in the future.