Hodge v. Hodge

486 A.2d 951, 337 Pa. Super. 151
CourtSupreme Court of Pennsylvania
DecidedAugust 5, 1985
Docket416 and 417
StatusPublished
Cited by20 cases

This text of 486 A.2d 951 (Hodge v. Hodge) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hodge v. Hodge, 486 A.2d 951, 337 Pa. Super. 151 (Pa. 1985).

Opinions

DEL SOLE, Judge:

This is an action in divorce pursuant to the Pennsylvania Divorce Code, 23 P.S. §§ 101 et seq.

The parties were divorced by a decree entered October 9, 1981. Economic issues were reserved for future determination. Claims for alimony, equitable distribution, counsel fees and expenses were subsequently heard by a Special Master. Both parties filed Exceptions to the Master’s findings. On November 24, 1982, the Court of Common Pleas entered a final decree which included an award of alimony of $100 per week until September 26, 1994, when the parties’ youngest child will reach majority. Both parties have appealed from that final decree.

[154]*154The issue on appeal is what compensation, if any, is Mrs. Hodge entitled to under the Pennsylvania Divorce Code (the Code) for her contributions to her husband’s medical education and license.

The factual situation of the case is as follows. Arthur Hodge was born on February 28, 1945, and Patricia Hodge was born on May 22, 1940. The parties met while Arthur was a medical technology student and Patricia was a clinical instructor at St. Lukes Hospital in Bethlehem, Pennsylvania. They were married on July 15, 1967. That same year, Arthur applied for a Commission in the United States Army Medical Service Corps. From 1967 through 1970, the parties lived at Fort Hood, Texas. The couple lived on Arthur’s salary as a laboratory officer, while saving Patricia’s earnings from her job as a laboratory technologist. Their first child, Laura, was born on September 28, 1968.

After his discharge from the Army, Arthur worked for approximately nine months as a serologist with Ortho-Phar-maceuticals of Raritan, New Jersey, earning $6,938.00.

Being unable to gain admission to an American medical school, in January of 1971, Arthur entered the Medical School of the University of Guadalajara, Mexico. During 1971, his family remained in Pennsylvania so that Patricia would be able to continue contributing earnings and savings to the expenses of Arthur’s medical education.

From 1972 through 1974, Patricia and the child joined Arthur in Mexico. Their living conditions were far below those to which they were accustomed in the United States.

In 1975, the family returned to Pennsylvania and Arthur began a final year of student training at Harrisburg Polyclinic Hospital. A second child, Arthur, was born on June 30 of that year. In 1976, Arthur took an internship at , Harrisburg Polyclinic Hospital. The parties’ third child, Melanie, was born September 26 of that year.

Upon their return to the United States in 1975, the parties rented a small house in Schuylkill County for Patricia and Laura. Arthur lived in the physicians’ residence at the [155]*155hospital. Patricia and the children are still living in that rented home.

In January of 1977, Arthur began a two year residency in Internal Medicine and received his license to practice medicine the following month. On August 27, 1977, Arthur announced that he no longer wished to continue in the marriage and moved in with a registered nurse named Julie Paland. Arthur completed his residence in December of 1978 and began the private practice of medicine.

Arthur is employed by another physician in a practice grossing $300,000 per year. He is paid $52,000 per year plus fringe benefits and bonus, plus $7,200 per year rental on his office, which is in the home he shares with Ms. Paland. Ms. Paland, as his office manager, is paid $15,900 per year, plus medical benefits.

Patricia is not employed. She has custody of the parties’ three children. At the time of the hearing, her only income was $275 per week support from Arthur.

In her appeal, Patricia Hodge argues that the court should have equitably divided the value of Arthur Hodge’s medical education, since the joint efforts and investment of the parties substantially increased Arthur’s earning capacity and the marriage terminated before Patricia could enjoy the fruits of her investment.

A clear majority of courts that have considered the question of whether the advanced degree itself, or the increased earning capacity it represents, are divisible marital assets, have concluded that they are not. Mahoney v. Mahoney, 91 N.J. 488, 453 A.2d 527 (1982); Frausto v. Frausto, 611 S.W.2d 656 (Tex.Civ.App.1981); DeWitt v. DeWitt, 98 Wis.2d 44, 296 N.W.2d 761 (Ct.App.1980); In re: Marriage of Graham, 194 Colo. 429, 574 P.2d 75 (1978); Wilcox v. Wilcox, 173 Ind.App. 661, 365 N.E.2d 792 (1977). We agree with the majority view.

23 P.S. § 401 provides the framework for our analysis of the distribution of “marital property”. Section 401(f) provides that “all property whether real or personal acquired [156]*156by either party during the marriage is presumed to be marital property ...” (emphasis supplied).

The question then becomes: Is potential increased earning capacity marital property if developed during the time of the marriage?

First, it is important to note that such a potential to earn more in the future is not limited to situations involving formal education. Rather, this potential can be a result of on-the-job training, in-job experience, apprenticeships or a host of other factors which make the labor of an individual more valuable in our society. Thus, the decision reached today is not limited to formal educational situations.

Clearly, increased earning capacity is neither real or personal property in any classic sense of the word. In the case of an advanced degree, the Colorado Supreme Court noted:

An educational degree, such as an M.B.A., is simply not encompassed even by the broad views of the concept of “property”. It does not have an exchange value or any objective transferrable value on an open market. It is personal to the holder. It terminates on death of the holder and is not inheritable. It cannot be assigned, sold, transferred, conveyed, or pledged. An advanced degree is a cumulative product of many years of previous education, combined with diligence and hard work. It may not be acquired by the mere expenditure of money. It is simply an intellectual achievement that may potentially assist in the future acquisition of property. In our view, it has none of the attributes of property in the usual sense of that term.

In re: Marriage of Graham, supra, 574 P.2d at 77.

Our analysis of the Divorce Code also supports the conclusion that the legislature did not intend increased earning capacity to be a divisible asset. Section 401(d)(4) provides that one of the factors to be considered in distributing marital property is “the contribution by one party to the education, training, or increased earning power of the [157]*157other party” ... It is logical to conclude from that statement that increased earning power itself is not marital property.

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