MCNULTY v. MCNULTY (2026)

Daniel J. McNulty (“Husband”) appeals the circuit court's judgment dissolving his marriage to Emily R. McNulty (“Wife”). Husband claims the circuit court erroneously valued Wife's business and erred by awarding her attorney's fees. The circuit court's judgment is affirmed, in part, and reversed, in part.

Background

Husband and Wife married in May 2005 and separated in December 2023. During their marriage, they had three children. Wife filed a petition for dissolution and Husband filed a counter-petition. They each filed statements of property and statements of income and expenses.

Husband and Wife settled all custody and child support issues prior to trial. The circuit court adopted their agreements in its final judgment.

During their marriage, Wife was employed as an event planner. Wife, and another co-employee, formed a new corporate event planning business, Moxi Events, LLC. Moxi has one principal client, Toyota. Wife and her co-owner were able to secure Moxi a place on Toyota's preferred vendor list due to their prior relationships with Toyota, which were created while working for their former employer. Moxi's work for Toyota accounts for the majority of its business.

At trial, Husband and Wife presented expert testimony regarding the value of Wife's business, Moxi. Husband's expert, Christopher Volz, testified he believed Moxi should be valued between $5.6 and 6.3 million. Wife's expert, Kevin Summers, testified he believed Moxi should be valued at $2.07 million and that this valuation included goodwill, if there were any. Wife testified that she did not believe Moxi was worth anything without her personal involvement in the company.

The circuit court's judgment classified and divided Husband's and Wife's separate property as well as the marital property and debt. The circuit court found Volz was not a credible witness, and the valuation methods Volz and Summers used were flawed. The circuit court awarded the marital home to Wife and valued Wife's ownership in Moxi at one dollar. The circuit court also awarded Wife $25,000 in attorney's fees. Husband appeals.

Standard of Review

The circuit court's judgment in a court-tried case will be affirmed unless it is not supported by substantial evidence, it is against the weight of the evidence, or it erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). “All fact issues upon which no specific findings are made shall be considered as having been found in accordance with the result reached.” Rule 73.01(c). The circuit court “can believe all, part, or none of the evidence presented.” Wilkerson v. Wilkerson, 707 S.W.3d 79, 84 (Mo. App. 2025) (quoting Herd v. Herd, 537 S.W.3d 414, 416 (Mo. App. 2018)). “This Court does not review credibility determinations or resolutions of conflicting evidence.” Lollar v. Lollar, 609 S.W.3d 41, 46 (Mo. banc 2020). “This Court applies de novo review to questions of law decided in court-tried cases.” Pearson v. Koster, 367 S.W.3d 36, 43 (Mo. banc 2012).

Analysis

Misapplication of the Law

Husband claims the circuit court erred by concluding that Moxi is a professional service business. Husband argues that because Moxi is not a highly skilled personal service company, the circuit court misapplied Hanson v. Hanson, 738 S.W.2d 429 (Mo. banc 1987), in determining there was no goodwill which could be divided in the marital estate.

Goodwill may exist in any business and is considered property. Hanson, 738 S.W.2d at 434. Goodwill exists in a business entity itself, and does not depend on “the reputation and skill of an individual entrepreneur” or professional. Id. Loosely defined, goodwill is “nothing more than the probability, that the old customers will resort to the old place.” Id. In a professional practice, acquired goodwill is marital property subject to division in a dissolution and is described as “the value of the practice which exceeds its tangible assets and which is the result of the tendency of clients/patients to return to and recommend the practice irrespective of the reputation of the individual practitioner.” Id. In other words, the value of goodwill that can be attributed specifically to the business is marital property, but the value of goodwill that is attributed to the reputation of the spouse is not.

Husband's argument is premised on his assertion that the circuit court should not have found Moxi to be a professional service business. Husband recognizes that “[d]ental, chiropractic, accounting, and veterinary practices, a real estate brokerage, a custom tailor business, and an art studio have been held to be professional practices or businesses involving highly skilled personal services.” Knigge v. Knigge, 903 S.W.2d 225, 227 (Mo. App. 1995). However, he argues that Moxi should not be classified as a professional service business because unlike those businesses, Moxi did not have any specialized licensure. Husband argues that because the circuit court improperly found Moxi to be a professional service business, it should not have relied on Hanson.

Husband's argument the circuit court misapplied the law by relying on Hanson fails because the reliance on Hanson rested on the circuit court's factual finding that Moxi is a professional service business. When determining mixed issues of law and fact, this Court reviews the application of law de novo but defers to the circuit court's factual findings that are supported by competent evidence. Pearson, 367 S.W.3d at 43-4.

Moxi did not have any specialized licensure. However, Wife's creative talents in designing events could be analogized to an artist's studio. Wife's personal talents, rather than Moxi's name recognition, attracted Moxi's client base. It is conceivable that, at some point in time, Moxi will grow into a business that is sought after due only to its name. There is, however, no evidence supporting that conclusion on the record at this time. Any goodwill in Moxi was attributable to Wife's talent rather than Moxi's commercial reputation.

To the extent Husband intended to argue that the circuit court misapplied Hanson’s valuation method because there was commercial goodwill to be divided in the marital estate, this argument also fails. To prove there is divisible goodwill in a professional practice involving highly skilled personal services, there must be evidence of “a recent actual sale of a similarly situated professional practice, an offer to purchase such a practice, or expert testimony and testimony of members of the subject profession as to the existence of goodwill in a similar practice in the relevant geographic and professional market.” Hanson, 738 S.W.2d at 435. While there was some testimony that a similar professional event planning business sold recently, there was no evidence of its valuation or terms of sale to demonstrate this type of business has commercial goodwill.

The circuit court did not misapply Hanson.

Against-the-Weight-of-the-Evidence Challenges

Husband raises two points on appeal claiming the circuit court's valuation of Moxi was against the weight of the evidence. “A challenge to the weight of the evidence presupposes that substantial evidence exists to support the judgment.” Matter of A.L.R., 511 S.W.3d 408, 414 (Mo. banc 2017). “The against-the-weight-of-the-evidence standard serves only as a check on a circuit court's potential abuse of power in weighing the evidence, and an appellate court will reverse only in rare cases, when it has a firm belief that the decree or judgment is wrong.” Bowers v. Bowers, 543 S.W.3d 608, 615 (Mo. banc 2018) (quoting S.S.S. v. C.V.S., 529 S.W.3d 811, 816 (Mo. banc 2017)).

A judgment will be reversed as “against the weight of the evidence only if the circuit court could not have reasonably found, from the record at trial, the existence of a fact that is necessary to sustain the judgment.” Weeks v. City of St. Louis, 721 S.W.3d 873, 877 (Mo. banc 2025) (quoting Ivie v. Smith, 439 S.W.3d 189, 206 (Mo. banc 2014)). When raising an against-the-weight-of-the-evidence challenge, an appellant is required to:

(1) identify a challenged factual proposition necessary to sustain the judgment; (2) identify all favorable evidence in the record supporting the challenged factual proposition; (3) identify the evidence in the record contrary to that proposition, resolving all evidentiary conflicts in accordance with the circuit court's implicit and explicit credibility determinations; and (4) demonstrate the favorable evidence, and the reasonable inferences therefrom, is so lacking in probative value it fails to induce belief in that proposition when considered in the context of the entire record.

Id.

First, Husband claims the circuit court's valuation of Moxi was against the weight of the evidence because there were two expert witnesses who testified to multimillion-dollar valuations. Husband argues the circuit court disregarded both experts’ testimony and adopted its own valuation based on Wife's testimony.

The challenged factual proposition is the circuit court's conclusion Moxi was worth one dollar. Evidence supporting this proposition includes: Wife's testimony that without her personal connections to their clients, she believed Moxi was worth nothing. Wife testified that Moxi's deposits less expenses incurred exceed cash on hand by more than two million dollars. Summers confirmed Moxi had negative retained earnings and the circuit court independently reviewed Moxi's accounts. The valuation by both experts assumed that Wife would enter into either a noncompete agreement or an employment agreement as a condition of Moxi's sale. And finally, Wife testified that Moxi's customers would be unlikely to return if she sold her portion of the business because the customers returned as a result of Wife's work and relationships.

Husband identifies some evidence in the record contrary to the circuit court's valuation. He points to the expert testimony and Wife's lack of experience in valuing a business. However, not all of this evidence can be considered in Husband's against-the-weight-of-the-evidence claim. The circuit court specifically found Volz's testimony to lack credibility. The circuit court also found both experts’ valuation methods flawed. Because this Court defers to the circuit court's credibility determinations, this testimony is not considered as evidence contrary to the challenged proposition. See Id. at 876-77. Accordingly, for purposes of reviewing Husband's against-the-weight-of-the-evidence claim, the only evidence in the record contrary to the circuit court's valuation is the fact Wife did not have experience in valuing a business.

The circuit court's determination that Moxi's valuation is one dollar because it has no value exceeding its tangible assets is supported by the record and not “so lacking in probative value it fails to induce belief in that proposition when considered in the context of the entire record.” Id. at 877. When taking Hanson into account, the record firmly supports the circuit court's determination that Moxi lacked any goodwill value. Even had the circuit court accepted the experts’ opinions as valid, each of those opinions necessarily would have required Wife to agree to sign a noncompete agreement, further supporting a determination that the value of the company is attributable to Wife and her partner, as opposed to Moxi itself. Husband's against-the-weight-of-the-evidence claim is without merit.

Second, Husband claims the circuit court's valuation of Moxi was against the weight of the evidence because its finding that Moxi had no net assets was based on treating “deferred revenue” as a liability. Husband argues there was unrefuted evidence that some events already occurred, which would convert the deferred revenue into a positive net asset.

The circuit court relied upon Summers’ testimony and Moxi's balance sheets to support its finding. Wife testified she did not believe there was enough money to pay back expenses to clients if future events were cancelled. Summers also testified that the deferred revenue could not be considered as a positive surplus for events that had taken place.

Husband identifies Volz's testimony as evidence contrary to the circuit court's finding. However, the circuit court specifically found Volz's testimony not credible. Because this Court must resolve “all evidentiary conflicts in accordance with the circuit court's implicit and explicit credibility determinations[,]” Id. at 877, Volz's testimony does not support Husband's against-the-weight-of-the-evidence challenge.

Abuse of Discretion

Husband raises three claims on appeal that the circuit court abused its discretion by valuing Moxi at one dollar. Husband claims that the circuit court erred by treating the “deferred revenue” as a liability, failing to find goodwill, and finding that a hypothetical sale required noncompete or employment agreements from Wife and her co-owner.

“The standard of review in civil cases contemplates two types of arguments regarding the factual basis for a [circuit] court's judgment: a challenge that the decision is not supported by substantial evidence, and a challenge that the decision is against the weight of the evidence.” In re Marriage of Sivils, 526 S.W.3d 375, 384 (Mo. App. 2017). Because these are the only reasons to reverse a court-tried case on factual grounds, each point on appeal should indicate a standard upon which relief could be granted. Hagan v. Hagan, 530 S.W.3d 608, 610 (Mo. App. 2017). “Abuse of discretion” is not a recognized basis for challenging the circuit court's factual findings in a court-tried case. As a result, the Court will not reverse the circuit court's judgment for this reason.

Award of Attorney's Fees

Husband claims the circuit court erred by ordering him to pay a portion of Wife's attorney's fees. Husband argues the circuit court abused its discretion in awarding Wife attorney's fees because its findings were unsupported by evidence in the case.

“Parties to a domestic relations case are generally responsible for paying their own attorney's fees.” Goins v. Goins, 406 S.W.3d 886, 891 (Mo. banc 2013). However, a circuit court is authorized to award attorney's fees “after considering all relevant factors including the financial resources of both parties, the merits of the case and the actions of the parties during the pendency of the action ․” Section 452.355.1, RSMo 2016. This Court will reverse the circuit court's award of attorney's fees only when its determination “is so arbitrary and unreasonable as to indicate indifference or a lack of consideration in the trial court.” Langston v. Langston, 615 S.W.3d 109, 122 (Mo. App. 2020) (quoting Collins v. Collins, 586 S.W.3d 282, 296 (Mo. App. 2019)).

The circuit court considered the relevant factors in section 452.355.1, finding: (1) Husband and Wife's income and assets were substantially equal; (2) Wife prevailed on the issues regarding Moxi's valuation and ownership of the marital home, Husband's desire to remain in the marital home was unreasonable, Husband's expert's high valuation of Moxi was unreasonable; and (3) Wife incurred additional attorney's fees because Husband changed counsel during the litigation. The circuit court then awarded Wife $25,000 for attorney's fees.

The circuit court's decision to award Wife attorney's fees was an abuse of discretion. First, although a finding that one spouse's greater ability to pay may support an award of attorney's fees, Katsantonis v. Katsantonis, 245 S.W.3d 925, 929 (Mo. App. 2008), the circuit court found Husband and Wife had substantially equal income and assets. This rationale does not support the award of attorney's fees.

Second, nothing about the merits of the claims in this litigation suggest any unreasonable litigation by either party. Parties regularly turn to the judicial system to resolve disagreements. Merely disagreeing with a spouse's position in a contested dissolution matter cannot support an award of attorney's fees. If the circuit court found Husband's expert credible or found that Moxi would still command business even in Wife's absence, the case could easily have come out differently. There is nothing inherently unreasonable about Husband wanting to remain in the marital home or asking the court to determine the correct value of marital property. Litigation of merit-based disputes, without some evidence these disputes were inappropriate or frivolous, cannot support an award of attorney's fees.

Third, a finding that attorney's fees increased due to the other party's improper conduct may support an award. In re Marriage of Geske, 421 S.W.3d 490, 499 (Mo. App. 2013). “The ‘conduct of the parties’ is not defined, but given the context of the statute, it is obvious that conduct that would cause the other party to incur more attorney fees is a valid consideration.” Goins, 406 S.W.3d at 890. In general, for a party's conduct to justify an award of attorney's fees, the conduct at issue should be fairly characterized as misconduct or at least something beyond normal and expected expenses of litigation. In re Marriage of Geske, 421 S.W.3d at 499.

Wife stated she spent money to contest Husband's positions at trial and had to hire an attorney for Moxi. Contested litigation is expensive. Wife could have chosen to settle, but she did not. Additionally, any money spent by Moxi was not money attributable to Wife. As an LLC, Moxi “is considered a separate legal entity that is distinct from its members or owners, and members are generally not liable for the entity's debts.” State ex rel. Fam. Support Div. v. Steak'm Take'm LLC, 524 S.W.3d 584, 592 (Mo. App. 2017). There was nothing in the record to support the finding that Husband's change of attorney was improper, caused a delay, or caused Wife to incur any additional legal fees.

While the circuit court has discretion to award attorney's fees, “the court must base its decision upon careful consideration of all relevant factors bearing on the propriety of the award and must exercise the discretion with which it is invested within the confines of the law and the evidence.” Davis v. Schmidt, 210 S.W.3d 494, 512 (Mo. App. 2007) (internal citation and quotation omitted). Because the circuit court failed to articulate a factor supporting the award of attorney's fees, that determination is reversed.

Conclusion

The judgment is affirmed, in part, and reversed, in part.

John P. Torbitzky, Judge

Michael E. Gardner, Judge, and James M. Dowd, Judge, concur.