As a matter of law does W. Va. Code § 48-1-215 have any application to the valuation of a partnership? 

W. Va. Code § 48-1-215 is as follows:

(a) "Contingent fee agreement" means a contract under which an attorney may be compensated for work in progress, dependent on the occurrence of some future event which is not certain and absolute. As such, a contingent fee agreement is not an asset, but is potential income or income capacity. This potential income may have current value, and a portion of that current value, if any, may be considered to be a marital asset. In the event a party seeks to quantify the current value of a particular contingent fee agreement for the purpose of establishing the value of the agreement as marital property, the court must find that the party has proved such value by a preponderance of the evidence. Factors to be considered by the court include, but are not limited to, the following:

(1) The nature of the particular case or claim which underlies the agreement;
(2) The jurisdiction or venue of any projected trial or proceeding;

(3) Any historical data relevant to verdicts or settlements within the jurisdiction where the case or claim is pending or may be brought;

(4) The terms and particulars of the agreement;

(5) The status of the case or claim at valuation date;

(6) The amount of time spent working on the case or claim prior to the valuation date, and an analysis of the nature of how that time was spent, including, but not limited to, such activities such as investigation, research, discovery, trial or appellate practice;

(7) The extent of the person's active role in the work in process, whether as an actual participant or as an indirect participant such as a partner, local counsel or other ancillary role;

(8) The age of the case or claim;

(9) The expenses accrued or projected to bring the case or claim to resolution, including any office overhead attributable to case or claim; and

(10) The probable tax consequences attendant to a successful resolution of the case or claim.

(b) The provisions of this section as enacted during the regular session of the Legislature, one thousand nine hundred ninety-six, are to be applied prospectively and shall have no application to any action for annulment, divorce or separate maintenance that was commenced on or before June 7, 1996.

Partnerships and solo practitioners are clearly dissimilar in structure and composition. A partnership by definition requires at least two partners. A partnership is an entity that can sue and be sued. It has its own federal employer identification number. It files informational tax returns. It issues K-1's to distribute income to its partners. Partnerships may distinguish between equity and non-equity partners. Partners are not personally liable for partnership debts and liabilities. If clients contract with the partnership, rather than an individual partner or associate, the contract is a firm asset. When contingent fees arrive under a contract with the partnership, they are partnership assets. (If partners or associates contract with clients directly, the benefits under these contracts may be argued, depending on the facts, to nevertheless be partnership assets. It is not unusual to see partnership and operating agreements which require full time service.)

With respect to partnership property, W.Va. Code § 47B-2-3 states that, "[p]roperty acquired by a partnership is property of the partnership and not of the partners individually." Property is partnership property if it is acquired in the name of the partnership. W.Va. Code § 47B-2-4: "A partner is not a co-owner of partnership property and has no interest in partnership property which can be transferred, either voluntarily or involuntarily." W.Va. Code § 47B-5-1.

The guiding principle of statutory construction is to give effect to legislative intent. The doctrine of strict construction uses the plain meaning of the language employed. The West Virginia Courts have adopted this common sense rule and the WVSCA has invariably recognized that clear and unambiguous statutes are not subject to interpretation. The Supreme Court has observed that "where the language of a statute is free from ambiguity, its plain meaning is to be accepted and applied without report to interpretation. Syl. Pt. 2, Crockett v. Andres, 153 W. Va. 714, 172 S.E.2d 384 (1970). Where the language of a statute is clear and without ambiguity the plain meaning is to be accepted without resorting to the rules of interpretation. Syl. Pt. 3, Francis O. Day Co., Inc. v. Director, Div. of Envtl. Protection, 191 W. Va. 134, 191 W. Va. 602, 443 S.E.2d 602 (1994). Ambiguity is a term connoting doubtfulness, doubleness of meaning of indistinctness or uncertainty of an expression used in a written instrument. It has been declared that courts may not find ambiguity in statutory language which laymen are readily able to comprehend; nor is it permissible to create an obscurity or uncertainty in a statute by reading in an additional word or words."

Dunlap v. Friedman's, Inc., 213 W. Va. 394, 397-98, 582 S.E.2d 841, 844-45, 2003 W. Va. LEXIS 45 (2003).

As quoted, W. Va. Code § 48-1-215 states that a contingent fee agreement means a contract under which an attorney may be compensated. The Code section also states that "in the event a party seeks to quantify the current value of a particular contingent fee agreement for the purpose of establishing the value of the agreement as marital property, the court must find that the party" ... Furthermore, (a)(4) states that the terms and particulars of the contingent fee agreement must be considered.

This statute is remarkably clear and free from ambiguity. Consequently, its plain meaning should be accepted and applied. Obviously, the legislature intended to solve the solo practitioner valuation problem. If a sole proprietor wants to defer equitable distribution to his or her receipt of the fee, the legislature affords the option.

When an expert is attempting to place a fair market value on a partnership entity in a divorce, the analysis is quite different than that which would pertain sharing a sole practitioner's future income from existing contingent fee cases. Because partnerships do not marry under West Virginia law, they are never "a party" under Chapter 48. Partnerships are dissolved or their affairs are wound up-they do not divorce.

In West Virginia, the WVSCA held that "[c]ontingent and other future earned fees which an attorney might receive as compensation for cases pending at the time of a divorce should also be considered as marital property for purposes of equitable distribution." Metzner v. Metzner, 191 W. Va. 378, 446 S.E.2d 165, 1994 W. Va. LEXIS 69, 44 A.L.R.5th 883 (1994). It appears that Metzner as well as all of the WVSCA cases that utilize W. Va. Code § 48-1-215 deal with sole practitioners or sole proprietorships-not firms, partnerships, companies, etc.

Our Supreme Court has already determined how to value partnerships and other closely held corporations and business entities. In Signorelli v. Signorelli, 189 W. Va. 710, 434 S.E.2d 382 (1993) the Supreme Court states as follows: "[i]n Tankersley v. Tankersley, 182 W. Va. 627, 630, 390 S.E.2d 826, 829 (1990), we specifically approved the use of the 59-60 factors when valuing closely held corporations." In Signorelli the WVSCA stated that the courts have cautioned against inflexibility and have incorporated the factors utilized by the Internal Revenue Service in Revenue Ruling 59-60 when valuing closely held corporations. In note 6 of Tankersley, the WVSCA, set out the eight factors contained in Revenue Ruling 59-60. Regarding the element pertaining to goodwill the WVSCA, in May v. May, 214 W. Va. 394, 589 S.E.2d 536, 2003 W. Va. LEXIS 118 (2003), specifically addressed the valuation methodology in assessing enterprise goodwill or other intangible asset. In May, the Court adopted the majority view, i.e., that personal goodwill is not marital property, but that enterprise goodwill is marital property. The Court, also in May, also set forth the following five methods or formulas for calculating enterprise goodwill: (1) capitalization of earnings; (2) capitalization of excess earnings; (3) treasury method; (4) market value and (5) buy/sell agreement. 214 W. Va. at 406.

If a partnership, with a large contingent fee agreement/work in progress inventory, is valued, but contingent fee income is excluded (from the historical data used and the future revenue stream to be valued) then the partnership will necessarily be undervalued.