## Facts

- Harry Rufus “Butch” Statham (husband) and Marsha Jo “Jody” Statham (wife) married in 1970 and later divorced in 2005.
- The community property regime terminated on February 16, 2005, when Jody filed the divorce petition.
- During the marriage, Butch owned and operated P & S Benefits Consultants, Inc. (PSBC), a medical-insurance brokerage; the parties did not dispute PSBC was community property.
- In the community-property partition proceedings, a hearing officer conference produced recommendations on disputed items, including a diamond ring (about $17,000), the value of PSBC, and whether certain post-termination amounts received by Butch should be treated as community.
- Both parties filed objections to the hearing officer report, and the matter proceeded to a bench trial.
- Jody claimed a diamond ring purchased during the marriage for more than $15,000 was given to her as a birthday gift and therefore was her separate property.
- Jody presented testimony from Richard Guillot, a business-valuation witness, who valued PSBC at approximately $311,000 using a fair-market-value approach; his valuation did not separately quantify goodwill.
- Butch presented testimony from Albert Carlton Clark, III, who valued PSBC at approximately $34,000 for partition purposes after analyzing goodwill and concluding that most of PSBC’s value was goodwill tied to Butch personally.
- Clark attributed 90% of PSBC’s goodwill to Butch’s personal goodwill, citing customer loyalty, referral-based business, and the personal nature of Butch’s service; he also noted PSBC sold insurance products available through other brokers.
- After the community terminated, Butch continued operating PSBC and received distributions/income; Jody argued some of those post-termination distributions should be treated as community property.
- The trial court (1) classified the ring as community property, (2) treated post-termination distributions from PSBC to Butch as his separate property, and (3) valued PSBC at $34,000 for partition purposes.
- Jody appealed, challenging the ring classification, the post-termination distribution classification, and the valuation of PSBC.

## Issues

1. Did the trial court err in classifying the diamond ring acquired during the marriage as community property rather than Jody’s separate property based on an alleged gift?
2. Did the trial court err in classifying PSBC post-termination distributions paid to Butch as his separate property rather than community property?
3. Did the trial court err in valuing PSBC at $34,000 by accepting an approach that treated most goodwill as Butch’s personal goodwill rather than divisible business goodwill?

## Decision

- The Court of Appeal of Louisiana, Second Circuit affirmed the trial court’s judgment.
- The ring classification as community property was affirmed.
- The post-termination distributions classification as Butch’s separate property was affirmed.
- The $34,000 valuation of PSBC for partition purposes was affirmed, including the trial court’s acceptance of Clark’s goodwill analysis.

## Legal Principles

- Property acquired during marriage is presumed community; a spouse claiming separate ownership must prove the separate classification, including proof of a gift when gift is the basis for separateness.
- A trial court’s classification of property and credibility calls in a community partition are factual determinations reviewed for manifest error/clearly wrong.
- Business valuation in a community partition is a fact-intensive determination; when competing valuations are presented, the trial court may choose the valuation it finds more reliable, and that choice is reviewed deferentially.
- Goodwill in a closely held business may be evaluated as (a) goodwill tied to the business itself and (b) goodwill tied to the owner spouse’s personal relationships and service; a court may treat personal goodwill as not part of the divisible community value.
- Amounts received after termination of the community that are attributable to a spouse’s post-termination labor and ongoing personal efforts may be treated as that spouse’s separate property rather than as community property.

## Conclusion

Statham v. Statham affirmed a trial court’s community-property partition judgment arising from a long marriage, including the classification of an expensive ring as community property, the treatment of certain post-termination distributions from a former community business as the husband’s separate property, and a $34,000 valuation of the insurance brokerage based on a goodwill analysis that assigned most goodwill to the husband personally rather than to the transferable value of the company.


Statham v. Statham, 986 So. 2d 894 (2008)