How Florida Courts have Applied the Goodwill Legitimate Business Interest

It is worth briefly mentioning that, prior to the enactment of the restrictive covenant statute, the term “goodwill” appears to have been used inconsis­tently especially when in discussed in the same line as The term had been used in the text of both F.S. §§542.12 and 542.33(2) (a), the predecessors to the restrictive covenant statute .20 On the one hand, the First  District  Court  of  Appeal, in Obi u. Singletary, 346 So. 2d 1239 (Fla. 1st DCA 1977), employed it in a manner consistent with its commonly understood, common law meaning. On the other hand, later courts used the term when describing protectable customer relationships. Regardless of the precise meaning of”goodwill/largofamilylaw” under prior statutes , the restrictive covenant statute decoupled customer relation­ ships from”goodwill”by making each its own unique business interest .

Although the restrictive covenant statute was enacted in 1996, no Florida court has yet defined “goodwill” with any precision. Instead, Florida’s courts have summarily dealt with the issue based upon the facts presented by each case, leaving practitioners to discern a working definition from the facts, cir­cumstances, and reasoning of the deci­sions as a whole. From the decisions in Florida that have dealt with the good­ will business interest in any meaningful way, two approaches emerge with time sharing in florida.

In one approach, several cases have taken an investment-centric approach to analyzing whether goodwill exists. Most recently, in Ansaarie, the First District Court of Appeal determined that the party seeking enforcement had established a business interest in patient, client, and customer goodwill solely on account of its “substantial investments in developing its existing patient, client, and customer base.” While the family law court did not elaborate on what would constitute a substantial investment, its reliance on Southem­ rrwst Foot & Ankle Specialists, P.A. v. Torregrosa ,891 So. 2d 591 (Fla. 3d DCA 2004),for this proposition suggests that the investment need not be all that”substantial.”In Torregrosa, the investment made by the former employer appeared to be entirely ordinary and usual; to wit, the former employer had developed its business , been in business for 20 years, and hired Dr. Torregrosa fresh out of medical school. Other cases also sug­gest that the substantiality requirement articulated by the Ansaarie court is, practically speaking, a low hurdle to clear in addition with divorceattorneystpete.