## Facts

- John McTiernan and Donna Dubrow married in November 1988 and separated in July 1997; dissolution was filed in August 1997.
- The dissolution was heavily litigated and tried over 21 days; the trial court entered judgment in 2002 after a detailed statement of decision.
- During the marriage, husband earned approximately $15 million as a motion picture director; wife earned approximately $1 million as a production executive/producer.
- The trial court valued husband’s alleged professional goodwill at $1.5 million using an excess-earnings approach and treated it as community property.
- After the dissolution petition was filed, husband sold community securities without wife’s consent while statutory automatic restraining orders were in effect; the court charged him with the resulting lost appreciation measured as of trial.
- The trial court ordered post-judgment spousal support of $30,000 per month for two years and terminated jurisdiction thereafter, and it made related rulings on interim payments and attorney’s fees.

## Issues

1. Whether husband’s career as a motion picture director included divisible community-property goodwill and whether the $1.5 million goodwill valuation was legally and factually supported.
2. Whether the trial court properly ordered husband to reimburse wife for lost appreciation after he sold community securities in violation of automatic restraining orders under Family Code § 2040(b).
3. Whether limiting post-judgment spousal support to two years and terminating jurisdiction constituted an abuse of discretion.
4. Whether certain pendente lite payments were mischaracterized as property distributions rather than temporary spousal support.
5. Whether the attorney’s fee award was improperly reduced based on errors in assessing wife’s post-dissolution resources.

## Decision

- Reversed the $1.5 million goodwill award; the record did not support a finding of transferable professional goodwill in husband’s directing work.
- Affirmed the reimbursement order for the securities sale; allocating the lost appreciation to the violating spouse was compensatory and within the court’s authority.
- Reversed the two-year limit on spousal support and the failure to retain jurisdiction; the support ruling required reconsideration under the statutory factors.
- Reversed or modified aspects of the rulings on interim payment characterization and attorney’s fees to the extent they depended on the support and resource-assessment errors.
- Otherwise affirmed the dissolution judgment.

## Legal Principles

- Professional goodwill is a divisible marital asset only when it exists as a transferable interest connected to an ongoing business or practice, not merely the individual’s reputation, skill, or expected future earnings.
- An excess-earnings methodology cannot be used to create a goodwill asset where no transferable goodwill exists; it may not repackage future earning capacity as community property.
- A spouse who disposes of community assets in violation of Family Code § 2040(b) may be charged with the economic consequences of the unauthorized disposition, including lost appreciation measured at trial; such relief is compensatory rather than punitive.
- In setting spousal support and deciding whether to terminate jurisdiction, the court must reasonably apply the statutory support factors; in longer marriages with a high marital standard of living and major income disparity, abrupt termination without adequate analysis may be an abuse of discretion.
- Errors in characterizing interim payments and in assessing a party’s post-dissolution resources can require recalculation of support obligations and need-based attorney’s fee orders.

## Conclusion

The Court of Appeal held that a highly paid film director’s personal reputation and earning power did not constitute divisible community goodwill, affirmed a compensatory remedy for violating statutory restraining orders by selling community securities, and required reconsideration of spousal support duration, jurisdiction, and related payment and fee determinations due to legal and factual errors.


In re Marriage of McTiernan & Dubrow, 35 Cal. Rptr. 3d 287 (Cal. Ct. App. 2005)