Written by Chris Walton, JDTwo spouses co-owned a pediatric therapy company they had built together over eight years. Both retained valuation experts. The experts diverged on the two questions that mattered: what the business was worth, and how much of its goodwill was personal rather than enterprise. The trial court did not choose one expert over the other. It adopted the husband’s expert’s higher valuation — and the wife’s expert’s goodwill allocation, excluding 40% of the goodwill as personal to the wife. The Alaska Supreme Court let both choices stand.
Johnston v. Adkins, Nos. S-18975/18985, Mem. Op. & J. No. 2113 (Alaska Oct. 8, 2025), is a memorandum decision — entered under Alaska Appellate Rule 214, it creates no legal precedent and is citable only as Rule 214(d) allows. But as a recent, fully reasoned illustration of settled Alaska law, it should reframe how family law attorneys prepare their experts: the court may evaluate the headline value and the goodwill allocation as separate credibility contests and credit different experts on each. Your expert does not need to win every element — but the element where the opposing expert is more credible is the element the court will take from the other side. In Johnston, that cost the husband roughly half a million dollars. The decision also carries three quieter lessons the headline obscures: a valuation-date holding that turned on the parties’ failure to update their numbers, a post-trial insurance-audit episode that shows what valuation finality really means, and a prejudgment-interest reversal — the one issue on which the Supreme Court did not affirm.
Tiffany Adkins and Ryan Johnston married in 2004. In early 2012 they formed Playful Learning Pediatric Therapy, LLC (PLPT) in Eagle River, providing pediatric occupational, physical, and speech therapy. Adkins, a licensed occupational therapist, was the sole full-time therapy provider at founding — and was later described in expert testimony as “the driving force behind PLPT,” directing operations, facilitating growth, and overseeing other therapists and insurance billing. Johnston had worked as an electrician; a $60,000 workers’ compensation settlement he received after a workplace injury funded part of the startup, and about a year in he took over the company’s finances. By the time of trial, PLPT had grown to three clinics — Eagle River, Palmer, and Wasilla — and nearly 30 employees. A 2019 operating agreement made the spouses 50/50 members.
The couple separated on November 15, 2020; Adkins filed for divorce two days later. The court gave Adkins sole interim oversight of the company, while Johnston — no longer working at PLPT — continued to draw a $12,000 monthly salary. An eight-day property trial followed in late 2022 and early 2023. Until trial, Johnston maintained he wanted to keep PLPT; he ultimately asked that it be awarded to Adkins.
Adkins retained Jacquelyn Briskey, who determined PLPT’s fair market value to be $4,051,000, of which $2,671,000 was marketable. Briskey valued the company as of December 31, 2020, using the capitalization of excess earnings method — the approach the court’s own footnote, citing Kalcheim’s Illinois Bar Journal treatment, described as the most common method for valuing goodwill in marital property divisions. Her goodwill analysis distinguished enterprise goodwill (“associated with the business as a whole”) from personal goodwill (associated with the “personal efforts of [an] individual,” marketable only “if there is a perception that the earnings it generates will continue in the future independent of the time and effort involved”). She concluded 40% of PLPT’s goodwill was personal to Adkins and only 60% enterprise and marketable.
Johnston retained Susan Spyker, who estimated fair market value at $5,180,000, of which $4,140,000 was marketable — treating 80% of the goodwill as enterprise-related. Spyker valued the company as of the date of separation, using the capitalization of net cash flows method, which “uses the actual cash flows of the business to value it.”
The trial court split the difference in neither the lazy nor the expected way. It adopted Spyker’s valuation — “due in large part to the weight Spyker gave to PLPT’s tax returns from 2019, when all three business locations for PLPT were operational” — but adopted Briskey’s 40% personal-goodwill allocation, because Briskey “was much more familiar with the way the company operate[d] and better understood [Adkins’s] role in the company.” The blend produced a value of $3,109,800 as of November 2020, making Johnston’s marital interest $1,554,900. On reconsideration, the court emphasized that it “did not arbitrarily select 40% as personal goodwill — it considered the testimony of Ms. Adkins, Ms. Briskey, and Ms. Spyker,” and found Briskey the most credible and persuasive on that question.
The stakes of the allocation fight, in real numbers: under Spyker’s own 80/20 split, PLPT’s marketable value was $4,140,000; under the court’s blend, $3,109,800. The allocation question alone moved just over $1m of marketable value — roughly $515,000 of Johnston’s half. He won the headline number and lost more on the allocation than the two value conclusions were apart.
Johnston argued the 40% finding “was not supported by substantial evidence” and rested on “an erroneous interpretation of the evidence.” The Supreme Court disagreed — and the reason it disagreed is the practice lesson. Valuation is a question of fact reviewed for clear error; conflicts between “fairly evenly balanced” expert testimony are “for the superior court to resolve,” Hensel v. State, 604 P.2d 222, 236 (Alaska 1979); and the appellate court gives “particular deference” to findings based primarily on oral testimony, because the trial court judges credibility and weighs conflicting evidence. Josephine B. v. State, 174 P.3d 217, 222 (Alaska 2007). The trial court did not merely announce a blend — it explained which expert it credited on which component and why: Spyker on value (the 2019 tax-return weighting), Briskey on allocation (superior familiarity with operations and Adkins’s role). “Particularly where the court’s findings related to goodwill were based upon its evaluation of the testimony offered by dueling expert witnesses, and where the court explained why it credited this aspect of one expert’s opinion over the other,” the findings stood.
Component-level evaluation of competing experts is not unique to Alaska — Delaware appraisal courts routinely weigh competing experts input-by-input or blend their conclusions with explained weightings, as this series has discussed elsewhere. What Johnston adds for the matrimonial bar is the application to the goodwill allocation specifically: total value and personal/enterprise split are independently contestable, and a court that explains its reasoning on each is essentially unreviewable on both.
The opinion tells us what the trial court credited — operational familiarity and understanding of the owner’s role — without detailing the underlying operational record. So the following is offered as general engagement guidance rather than as a description of the Johnston record. In a practitioner-centered service business, the personal/enterprise allocation turns on questions an expert can only answer from operational knowledge: how the business acquires clients and whether referral relationships attach to the individual or the institution; how services are delivered and what revenue would follow the practitioner out the door; what infrastructure — staff, systems, locations, trade name, patient files, billing operations — would continue independently of any individual; and what actually happened to revenue when key people previously came or went. The expert who can testify to those mechanics with specificity will be “much more familiar with the way the company operate[s]” — the precise phrase that decided the allocation in Johnston. That is a different skill from selecting a capitalization rate, and it is built through interviews, site familiarity, and client-retention data, not from the financial statements alone.
The engagement implications follow directly. Do not assume the expert who wins the value wins the allocation: the court may prefer one expert’s methodology and the other’s operational understanding, and a strong value conclusion paired with a thinly grounded allocation can produce a Johnston outcome — your number, their split — which, depending on the goodwill base, can cost more than losing the number. Budget expert time for operations, not just financials: interviews with the practitioner and staff, mapping of referral sources to individual versus institution, retention analysis around prior departures, and documentation of the transferable infrastructure are what ground an allocation opinion in the record. And each side has homework. Owner-spouses should build the personal-goodwill record in discovery, not at trial — evidence of personally loyal referral sources and practitioner-dependent revenue is the raw material the expert needs. Non-owner spouses should attack the narrative with data: survival of prior staff departures, clients retained through transitions, and the institutional assets (locations, trade name, phone and web presence, staff, patient files, billing operations) that exist independently of the individual.
The valuation date was decided, again, by the parties’ evidentiary failure. Alaska’s default is valuation “as close[ly] as practicable to the date of trial,” with separation-date valuation reserved for special situations supported by specific findings. Ogard v. Ogard, 808 P.2d 815, 819-20 (Alaska 1991). The court here valued PLPT as of separation and awarded it to Adkins as of that date — and the Supreme Court affirmed for reasons that should sound familiar to readers of this series: the valuation the court primarily relied on (Spyker’s — Johnston’s own expert) used the separation date; Adkins had run the company singlehandedly since separation; the court cured the resulting inequity with prejudgment interest to Johnston; and, critically, neither party offered any evidence of PLPT’s value after December 2020, though trial began in November 2022. Under Brotherton v. Brotherton, 941 P.2d 1241, 1245 (Alaska 1997), a party who offers no evidence of value at any other date has “no basis” to challenge the date the court used. The same dynamic decided the valuation-date fight in Virginia’s Marhoum v. Fekkak this series covered: the statute or default rule points one way, but the party complaining about vintage must supply the newer number.
The BCBS audit shows what valuation finality means. After trial, Blue Cross Blue Shield audited claims paid to PLPT and sent more than 1,500 recoupment letters totaling $392,980.62, of which $320,155.41 related to services provided before separation — when Johnston was still an equal partner. Adkins moved to reopen the evidence to count it as marital debt. The court refused, and the Supreme Court affirmed: as of the separation date, PLPT — its profits and its risks — belonged to Adkins; “finality is very important” in divorce cases, and the analysis would “never end” if values were adjusted as “things pop up.” For valuation professionals, this is the cleanest recent statement of a principle worth internalizing: a valuation date is a risk-transfer date. The party who takes the business as of that date takes the unknown liabilities embedded in it — a six-figure insurance recoupment included. Engagement letters and expert reports in matrimonial matters should say so explicitly, and parties seeking award of an operating business should price that risk before asking for the asset.
The prejudgment-interest reversal was the one issue that did not survive. To compensate Johnston for receiving his share of the business late, the court awarded $165,948 in prejudgment interest (5.25%) on his full $1,554,900 marital interest from separation to trial. The Supreme Court vacated: Johnston had received $697,231 in salary and withdrawals from PLPT during that very period — piecemeal, but substantial and usable — and interest exists to compensate for lost use of money, Easley v. Easley, 394 P.3d 517, 522 (Alaska 2017), not to ignore money actually received. Recalculation must account for the $697,231. (The 7.5% post-judgment interest on the $812,175 equalization payment, payable over ten quarterly installments, was affirmed as compensatory, not punitive.) The arithmetic lesson generalizes: interim distributions, salaries, and draws received between the valuation date and judgment are part of the equalization math, and both sides’ experts should track them.
Two further notes for the appellate-minded. The overall 53/47 division — in Johnston’s favor — was affirmed: the court deviated from Alaska’s presumptive equal split because Adkins received the income-generating asset, while rejecting Johnston’s claimed inability to work on the strength of his own testimony about managing PLPT’s finances. And Johnston forfeited a string of arguments by failing to raise them below, abandoning them, or — remarkably — reversing position between briefs on whether PLPT was marital at all; arguments raised for the first time in a reply brief are waived. Position discipline across a long case is part of preserving the valuation fight.
Johnston pairs naturally with the Alaska Supreme Court’s published decision in May v. Petersen earlier the same year, which reaffirmed that only marketable goodwill may be divided on divorce — and held, on the evidence there, that a husband’s law practice had no marketable goodwill at all, so the firm was valued at its net assets (with the overall estate divided 60/40 in the wife’s favor). The two cases bracket the question for Alaska practitioners. May is the precedential baseline: where the evidence shows no goodwill that would survive the practitioner’s departure, the business is worth its tangible net assets, and the practitioner’s future income is earning capacity, not a divisible asset. Johnston is the allocation framework in operation: where goodwill exists, the enterprise/personal split is an expert-driven factual fight, won by operational credibility and reviewed only for clear error. Between them: no goodwill means net assets; some goodwill means the allocation is the case.
Johnston v. Adkins confirms — illustratively, not precedentially — that courts will mix and match expert components, taking the value from one expert and the goodwill allocation from the other, based on which expert is more credible on each specific question. The husband’s expert won the total value (on the strength of her treatment of the most representative tax year); the wife’s expert won the allocation (on the strength of her operational familiarity); and the blend, affirmed on clear-error review, moved about half a million dollars of the husband’s share. The value conclusion and the goodwill allocation are separate credibility contests: win both and you control the outcome; win one and you are in Johnston territory, where the number you wanted is applied to a split you didn’t. And the quieter holdings repay attention — update your valuation or lose the date fight; the valuation date transfers the unknown risks along with the upside; and money received along the way counts against the interest clock.
Chris Walton, JD, is the President & CEO of Eton Venture Services. He can be reached at [email protected].
If you’re handling a divorce involving a professional or practitioner-centered practice and need to determine the goodwill allocation between enterprise and personal, we’re glad to talk through the approach. The operational analysis that drives the allocation is usually more consequential than the methodology that produces the headline number — and as Johnston shows, the two are scored separately.
Johnston v. Adkins, Nos. S-18975/18985, Mem. Op. & J. No. 2113 (Alaska Oct. 8, 2025) (Carney, Borghesan, Henderson & Pate, JJ.; Maassen, C.J., not participating) (nonprecedential per Alaska R. App. P. 214; citation per Rule 214(d)), aff’g in part and vacating in part Super. Ct. No. 3AN-20-09125 CI (Crosby, J.).
May v. Petersen (Alaska 2025) (only marketable goodwill divisible on divorce; law practice without marketable goodwill valued at net assets).
Ogard v. Ogard, 808 P.2d 815 (Alaska 1991); Brotherton v. Brotherton, 941 P.2d 1241 (Alaska 1997); Stevens v. Stevens, 265 P.3d 279 (Alaska 2011); Martin v. Martin, 52 P.3d 724 (Alaska 2002).
Hensel v. State, 604 P.2d 222 (Alaska 1979); Josephine B. v. State, 174 P.3d 217 (Alaska 2007); Miles v. Miles, 816 P.2d 129 (Alaska 1991); Merrill v. Merrill, 368 P.2d 546 (Alaska 1962); AS 25.24.160(a)(4).
Easley v. Easley, 394 P.3d 517 (Alaska 2017); Morris v. Morris, 724 P.2d 527 (Alaska 1986); Cool Homes, Inc. v. Fairbanks N. Star Borough, 860 P.2d 1248 (Alaska 1993); AS 09.30.070(a); Snider v. Snider, 357 P.3d 1180 (Alaska 2015); Barnett v. Barnett, 238 P.3d 594 (Alaska 2010); Alaska R. App. P. 212(c)(3).
Kalcheim, M. W. (2000). Expert testimony and valuing goodwill at divorce. Illinois Bar Journal, 88, 652 (cited at Mem. Op. & J. No. 2113, n.1).
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