## Facts

- Joellen Finn and Frank Finn divorced after a marriage of more than 20 years and had four children.
- Frank worked continuously at a large Dallas law firm organized as a partnership, ultimately becoming a senior partner.
- Most community-property values were agreed upon, but the value of the community interest in Frank’s law-practice/partnership interest was disputed.
- The partnership agreement specified compensation upon a partner’s withdrawal but provided no payment for firm goodwill upon withdrawal or death.
- The trial court instructed the jury to exclude the law firm’s goodwill and Frank’s future earning capacity from valuation of the community interest in the practice.
- Joellen sought discovery of partnership financial records used to support valuation (including financial statements and related records), but the trial court denied access.
- The trial court permitted the managing partner to testify about value using partnership records that were not produced to Joellen.
- The trial court entered a property division relying in part on that valuation testimony; Joellen appealed, primarily challenging discovery limits and goodwill treatment.

## Issues

1. Whether the trial court committed reversible error by denying discovery of partnership documents needed to prove and test the value of the community interest in the husband’s law-partnership interest.
2. Whether, and to what extent, goodwill associated with a professional law partnership may be considered in valuing a spouse’s partnership interest for community-property division when the partnership agreement provides no goodwill buyout.
3. Whether valuation testimony derived from unproduced partnership records was improperly admitted (including hearsay and lack of fair cross-examination).
4. Whether several additional aspects of the property division (including certain assets and fee allocations) required reconsideration on retrial.

## Decision

- The court reversed the trial court’s property division and remanded for a new trial on property-division issues.
- The court held Joellen was improperly denied discovery of documents essential to prove the value of the community interest in Frank’s law practice.
- Because the managing partner’s valuation testimony relied on records withheld from Joellen, the procedure impaired her ability to present valuation evidence and to cross-examine effectively, requiring retrial.
- The court indicated that any goodwill associated with the partnership could be relevant to valuation in concept, but its divisibility and quantification depended on the partnership agreement and controlling precedent; the court did not adopt a categorical rule treating all law-firm goodwill as divisible community property.
- Other contested items and fee allocations were left for reconsideration on remand under proper evidentiary development.

## Legal Principles

- In a divorce property division, a spouse must be allowed meaningful discovery of financial records necessary to value a community interest in a professional practice or partnership.
- Denying access to records used as the basis for an opposing witness’s valuation testimony can be reversible error because it prevents effective cross-examination and undermines reliability of the valuation evidence.
- Goodwill in a professional context may be conceptually distinct from future earning capacity, but whether it constitutes a divisible, quantifiable asset in a professional partnership may depend on contractual rights under the partnership agreement and applicable precedent.

## Conclusion

The appellate court ordered a new property-division trial because the wife was denied essential discovery needed to value the community’s interest in the husband’s law-firm partnership interest, and the trial court relied on valuation testimony grounded in records withheld from her; questions about goodwill and other disputed property items were to be reconsidered with an adequate evidentiary record.


Finn v. Finn, 658 S.W.2d 735 (Tex. App.—Dallas 1983)