Goldstein v. Goldstein

414 S.E.2d 474, 262 Ga. 136, 1992 Ga. LEXIS 243

• Court: Supreme Court of Georgia
• Decided: March 19, 1992
• Docket: S91A1385
• Status: Published

Opinions

Clarke, Chief Justice.

In this divorce action wife requested discovery from husband regarding the assets of his law practice, including information about pending cases. Husband refused to comply with certain requests. Specifically, he would not reveal retainer agreements for pending cases and client ledgers. He also refused to respond to the request that he reveal settlement offers in pending contingent fee cases, and refused to estimate the value of pending contingent fee cases. He did, however, reveal that he had incurred $70,942.60 in expenses related to pending contingent fee cases. Wife filed a motion to compel discovery.

In resisting wife’s motion to compel, husband did not argue that she is not entitled to equitable division of the assets of the law firm. Rather, he asserted that the value of contingent fee cases is too speculative to be included as an asset, and that revealing information about these cases would violate attorney-client privilege. The trial judge granted the motion to compel. We reverse.

1. Division of property in a divorce action is a two-step process. First the property must be classified as either marital or non-marital. Second, the marital property must be divided, not necessarily equally, but equitably. Thomas v. Thomas, 259 Ga. 73, 75 (377 SE2d 666) (1989). The first step is a question of law; the second step is a matter held in the trial court’s discretion. Id. Any particular asset may have both marital and non-marital portions. Id. Marital property is defined as assets acquired from the labor and investments of the parties during the marriage. White v. White, 253 Ga. 267 (319 SE2d 447) (1984); Halpern v. Halpern, 256 Ga. 639 (352 SE2d 753) (1987).

We agree with husband that contingent fee agreements are not marital assets. Although we held in Courtney v. Courtney, 256 Ga. 97 (344 SE2d 421) (1986) that an unvested pension plan represents important contractual rights that may be considered in making an equitable division of property, we have not held that all unvested rights are subject to equitable division. Courtney involved an unvested pension plan that would vest during the normal course of the husband’s employment over the next few years. We found that the pension was far less speculative in nature than the possibility of an inheritance. Id. at 98-99, comparing Meeks v. Kirkland, 228 Ga. 607 (187 SE2d 296) (1972). It was clear that the pension would vest two years after the divorce and would yield a certain benefit. In contrast, it is impossible to know in advance whether any specific contingent fee case will ultimately yield a fee — or, if it does, how much the fee will be. It is also nearly impossible to gauge how much work and expense will be required after the date of the divorce to become entitled to collect a contingent fee. These qualities of contingent fee agreements make them too remote, speculative and uncertain to be considered marital assets in making an equitable division of property. Accord In re Marriage of Zells, 554 NE2d 289 (197 Ill.App.3d 232) (1990).

2. Because of our holding in Division 1, we need not address husband’s other enumerations of error.

Judgment reversed.

Clarke, C. J., Benham and Fletcher, JJ., concur; Chief Judge John W. Sognier concurs specially; Weltner, P. J., Bell and Hunt, JJ., dissent; Sears-Collins, J., not participating.