Carr v. Carr

In Carr v. Carr, 108 Idaho 684, 701 P.2d 304, 307-10 (Idaho App. 1985), the appellate court was dealing with a third party purchaser because the parties were unable to agree on a division of a business (truck stop) they jointly owned. The validity of the covenant was not contested. The only issue decided by the appellate court was how the property was to be valued and whether husband should receive a larger share than wife of the proceeds of the sale (Idaho is a community property state). In that case, the husband and wife owned a truck stop, which the magistrate ordered to be sold during the parties' divorce proceedings. The magistrate determined that the truck stop had a net worth of $ 761,309 but assigned no value to the truck stop's goodwill. Prospective buyers insisted on a provision in the sales agreement limiting the husband's ability to open a competing business for five years and within ten miles of the truck stop. The husband eventually signed an earnest money agreement containing such a noncompetition provision. On appeal from the distribution of the community assets, this Court concluded that the goodwill of the truck stop had been sold by virtue of the husband entering into a covenant not to compete with the truck stop. Consequently, this Court held that the goodwill of the truck stop comprised a portion of the value of the truck stop which should have been valued and distributed by the magistrate.