Friday, July 20, 2012

This article was originally featured in the Family Law Section Summer 2012 Newsletter.

 Marina W. CESAR vs. Richard R. SUNDELIN.

No. ll-P-351,

The question before the appeals court was whether “—in dividing a marital estate that includes a family business-a judge of the Probate and Family Court has the authority to enjoin the party that no longer will have any ownership in the business from operating a competing business.  We hold that a probate judge does have such authority and therefore remand this matter for further proceedings."

In the context of a divorce proceeding, the husband and the wife both sought sole ownership of a family business, a feed and grain store. The probate judge awarded the business to the husband. With the business and certain other property distributed to the husband, the judge declined to give the husband credit for a gift of equity worth approximately $200,000 that the husband's parents had given the couple.  In an effort to shore up the value of the existing good will in the business, the husband requested that the judge order the wife, a veterinarian, not to operate a competing business. The judge denied the request on the sole ground that he lacked authority to grant such relief.

On appeal, the appellate court cited the wide discretion of probate and Family Court Judges.  “We begin by noting that the Legislature has given probate judges broad authority with respect to the division of marital property.”  The court went on to cite cases from other jurisdictions upholding valid non-compete agreements.  The case was remanded for further proceedings as to whether the non-compete agreement was the appropriate remedy for protecting the husband's goodwill in this business.  “We state no position as to whether the husband is entitled to a non-compete order and, if so, how broad such an order should be.”  Further, the quote went on to say that they would not examine whether the non-compete issue was raised in a timely manner by the husband, as the wife argued that it was not and should be waived.