O'Brien v. O'Brien

106 A.D.2d 223, 485 N.Y.S.2d 548, 1985 N.Y. App. Div. LEXIS 52059

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: February 11, 1985
• Status: Published

Opinions

OPINION OF THE COURT

O’Connor, J.

MARITAL PROPERTY

The threshold question, simply put, is whether a professional license acquired by one spouse during the marriage but attributable to the combined efforts, in varying degrees, of both spouses, constitutes marital property subject to equitable distribution. More specifically, the crucial issue is whether the plaintiff husband’s medical license¹ constitutes marital property within the intent of Domestic Relations Law § 236 (B).

The issue was first presented in the appellate courts of the State in 1982, in the Fourth Department case of Lesman v Lesman (88 AD2d 153, appeal dismissed 57 NY2d 956), and it was there concluded that an advanced educational degree or professional license earned during the marriage is not marital property. Although new to New York, the issue had been considered in many other jurisdictions, the vast majority of which held that neither an educational degree nor a license is marital property (In re Wisner v Wisner, 129 Ariz 333, 631 P2d 115; In re Aufmuth, 89 Cal App 3d 446, 152 Cal Rptr 668; Todd v Todd, 272 Cal App 2d 786, 78 Cal Rptr 131; In re Graham v Graham, 194 Col 429, 574 P2d 75; In re Goldstein, 97 111 App 3d 1023, 423 NE2d 1201; In re McManama v McManama, 272 Ind 483, 399 NE2d 371; Wilcox v Wilcox, 173 Ind App 661, 365 NE2d 792; Leveck v Leveck, 614 SW2d 710 [Ky]; In re DeLaRosa v DeLa Rosa, 309 NW2d 755 [Minn]; Mahoney v Mahoney, 91 NJ 488, 453 A2d 527; Stern v Stern, 66 NJ 340, 331 A2d 257; Muckleroy v Muckleroy, 84 NM 14, 498 P2d 1357; Nastrorn v Nastrom, 262 NW2d 487 [ND]; Lira v Lira, 68 Ohio App 2d 164,428 NE2d 445; Hubbard v Hubbard, 603 P2d 747 [Okla]; Frausto v Frausto, 611 SW2d 656 [Tex Civ App]; DeWitt v DeWitt, 98 Wis 2d 44, 296 NW2d 761).²

The court in Lesman v Lesman (supra, p 157) flatly stated that “[a] professional education, degree or license does not fall within the traditional concepts of property”, and followed with an interesting quote from a Colorado report which, although hardly controlling, is relevant: “It does not have an exchange value or any objective transferable 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 advance 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 Graham v Graham, 194 Col 429, 432, 574 P2d 75, 77, supra).

It would defy all law, logic and reason to declare, as we did in Conner v Conner (97 AD2d 88), that a college degree is not marital property, and to now hold, as suggested by the minority, that a professional license is marital property. In my opinion neither a license nor a degree is property, either at common law or by statute.

Moreover, it seems to me that if it be sustained that a professional license is marital property — then we must declare, as a matter of law, that the future enhanced earning capacity of the holder thereof likewise is marital property! But clearly, enhanced earning capacity is not marital property. It is not vested; it has but, at best, a speculative and uncertain expectancy, dependent almost entirely upon the continued existence, good health, perseverance, diligence, and intellectual capacity, not to mention intellectual integrity, of the holder of the license.

In short, a license, even under its most liberal construction (for example, the 1936 Restatement of Property’s adoption of the concept of all property as a combination of “legal relations between persons with respect to a thing” [Restatement of Property, Introductory Note, at 3]), is hardly property. It may well be that the holder of a license has the potential, under favorable circumstances, to amass property in futuro,³ but that is a far cry from designating the license itself (or the highly speculative and uncertain future earning capacity of its holder) as property.

Obviously, what is taking place here is that the wife seeks a reification of the husband’s surgical license, so as to buttress her claim to a goodly percentage of his enhanced earnings potential which is determined, at least in part, by his work expectancy of some 30 years.

For two simple reasons this court cannot accede to the wife’s request for a distribution of the husband’s future earnings as though such earnings were marital property:

First, there is nothing in the Equitable Distribution Law or its legislative history that suggests an intention by the Legislature, upon these facts, to vest a proprietary right in one spouse to the other spouse’s very person. As we said in Conner (supra), a license is a nonassignable personal privilege conferred upon an individual by operation of State law (see, Education Law §§ 224, 6506, 6512; Judiciary Law §§ 90, 478, 484; see also, Kocourek, The Hohfeld System of Fundamental Legal Concepts, 15 111 L Rev 24, 32). The privilege itself is not a resource to which a spouse may make a legally cognizable claim. The privilege is alienable by no one but the granting authority, and it can be conferred on a claimant such as the defendant wife in this case only if she complies with the requirements fixed by that authority, the State of New York.

Nevertheless, the resource actually sought to be controlled by the wife to the exclusion of all others, including the husband, is a percentage of his future labors that utilize that nonassignable privilege. In short, the privilege has no pecuniary value susceptible of ascertainment by the wife’s expert apart from such labor. Labor, however, is merely the use by the husband of his own best asset, his chief capital — the property of his own person (see, Tribe, American Constitutional Law § 15-14, at 948, citing Lynch v Household Fin. Corp., 405 US 538, 552 [opn by Stewart, J.]; 1 Callman, Unfair Competition, Trademarks and Monopolies § 1.23, n 11 [4th ed]; 3 Pound, Jurisprudence § 83, at 33; § 84, at 69, 86; § 87, at 155-57; cf. Savigny, System of Modern Roman Law, at 272-76 [Holloway translation]).

Hence, there is a real distinction between being obliged to pay maintenance or transfer marital property and being owned in part by a former spouse. Such a distinction rarely becomes important except in a case such as this, in which there is strong temptation to substitute for a careful evaluation of the statutory factors relevant to maintenance and equitable distribution of marital property a mechanical analysis that simplistically demarcates the husband’s obligation to share the fruits of his future labors by a fictional partition of the res of his surgeon’s license.

Second, despite Conner and Lesman (supra), the minority and Special Term have determined that there is a legal distinction between a college degree and a license.⁴ I fail to appreciate the difference. It is difficult for me to agree that a license granted after graduation from a trade school, be it for barbers or beauticians, plumbers or physicians, or whatever, constitutes marital property, but that an advanced graduate degree, i.e., an M.B.A. from Harvard University, does not.

What kind of property are we all talking about? If it be property at common law it conjures up all kinds of problems, constitutional and otherwise. Not alone a spouse, but every judgment creditor of a debtor would be in a position to attach and execute against such property. Such a proposition is filled with indescribable mischief and cannot seriously be entertained.

If, on the other hand, it be suggested that by operation of statute a license is marital property, the pressing question is immediately presented, where in the statute is such a proposition explicitly, or for that matter, implicitly set forth? To the contrary, a careful reading of Domestic Relations Law § 236 (B) fails to disclose any such legislative intent.

For example, section 236 (B) (1) (c), under “[d]efinitions”, says in substance that “[t]he term ‘marital property’ shall mean all property acquired by either or both spouses during the marriage”. But as already noted, a license is a nonassignable personal privilege and surely if there was any intent to include a degree or a license as property was this not the precise place to so indicate? If indeed, future earnings are henceforth to be regarded as present marital property, would not the bill drafters at this point have clearly indicated their thoughts on this novel, sui generis concept?

Section 236 (B) (5) (d) (6), in substance, indicates that the court shall consider any equitable claim to marital property by the party not having title. Almost as a second thought the section goes on to say that in awarding maintenance, the court shall consider any efforts, expenditures or contributions and services made by one spouse “to the career or career potential of the other party”. But if it was ever intended to give to a spouse (here the wife) a percentage of the present value of the other spouse’s life income, predicated upon the latter’s life expectancy, could it not, and would it not, and should it not have been clearly so stated?

In any event, in the absence of any such guidelines, it seems to me that we are bound to give the words of the statute their plain, clear meaning and the conclusion inexorably follows that future earnings are not present marital property and neither is a license nor a degree.

BROKEN DREAMS

The widely heralded reform contained in Domestic Relations Law § 236 (B) came about as a result of widespread dissatisfaction with the then existing common-law title theory of property division, which, in substance, provided that upon dissolution of the marriage, each spouse retained that property that he or she held solely in his or her own individual name. Unlike today, there were then comparatively few women in the marketplace and, generally speaking, the husband was the sole breadwinner and usually title to all property accumulated during the marriage was vested in his name. When such parties separated, gross inequities and great injustices flowed from the title theory and change was in the wind. It came in 1980 when, after long study and research, the Legislature passed the New York equitable distribution statute, which was heralded far and wide as a giant step in the right direction. The law states that upon termination of a marriage the court must equitably divide all property acquired by either or both spouses during the marriage regardless of which one holds the title (Domestic Relations Law § 236 [B] [1] [c]).

A special problem arises where, as here, except for a few dollars in the bank, the parties possess no property of any kind and one spouse therefore seeks an interest in the other spouse’s professional license.

The wife has expended time (nine years), rendered services (homemaker, companion), contributed funds (principal fund raiser, living expenses, tuition, books, etc.), and, at first blush, it seems grossly unfair that she should not, now, as they stand on the threshold of achieving their common goal, fully share in the material success they both have worked so hard to achieve.

At this point, the temptation is almost irresistable to conclude that the wife has been woefully abused in that the husband, through the long years of college and medical school, accepted her help, financial and otherwise, and then, shortly after receiving his medical license, walked out on her and sued for divorce.

But, once we succumb to that line of thought — even if it be true — we are immediately confronted with a second temptation, equally compelling, and that is to either distort the concept of property or to apply our own notions of equity in order to right this perceived wrong (see, Lesman v Lesman, 88 AD2d 153, appeal dismissed 57 NY2d 956, supra). I fear that the minority, with the loftiest of intentions, is doing precisely that.

In Blickstein v Blickstein (99 AD2d 287), the question was squarely presented as to whether marital fault is a “just and proper” consideration in determining distribution of marital property in view of the over-all purpose of the Equitable Distribution Law. This court unanimously held that marital fault, except in the most egregious case, is not a relevant consideration in the equitable distribution of marital property.

At the time the bill providing for equitable distribution was passed (L 1980, ch 281), the Governor and the legislative leaders were in accord that under its provisions modern marriage was recognized, at least in part, as a partnership — of coequals. This, of course, is true in the sense that each partner, subject to varying equities, is a coequal owner of all marital property (see, Governor’s memorandum of approval, 1980 McKinney’s Session Laws of NY, at 1863; see, Assembly memorandum in support of new law in 11C Zett-Kaufman-Kraut, NY Civ Prac, Appendix B, at App B-l; see also, Conner v Conner, 97 AD2d 88, 96-97, n 2, supra).

Even in these days of no-fault conversion divorce, marriage is more, much more, than just an economic venture.

When a marriage is terminated, for whatever reason, the law seeks not to determine which partner is the more or the less to blame. The law is fully preoccupied as it struggles to equitably distribute the marital property, if there be any. It is not for the court to fix the guilt nor to be endlessly tied up seeking to determine whether one spouse unwisely — and to what extent — dissipated his or her assets. It is enough that the dreams are now broken and that the marriage is no more.

But let us, for the moment, return to Lesman v Lesman (supra), and reflect upon what that court had to say about property at pages 159 and 160: “The Legislature has now provided for equitable distribution of ‘property’. It has not provided for equitable distribution of future earnings and we should not do so, either by distorting the concept of property or by applying our own notions of equity. In most cases the courts can accomplish equity by awarding maintenance to a wife who requires it, or by granting her an equitable share of whatever marital property has accumulated. In fixing the amount of maintenance, and in distributing the marital property, the courts must consider the contributions made by the wife to the husband’s ‘career or career potential’ (Domestic Relations Law, § 236, part B, subd 5, par d, cl [6]; subd 6, par a, cl [8])”.

This sound advice is preceded at page 157 with the warning: “Gross inequities may result from predicating distribution awards upon the speculative expectation of enhanced future earnings, since distributive awards, unlike maintenance, once fixed may not be modified to meet future realities. It is almost impossible to predict what amount of enhanced earnings, if any, will result from a professional education. The degree of financial success attained by those holding a professional degree varies greatly. Some, even, may earn less from their professional practices than they could have earned from nonprofessional work. Moreover, others, due to choice or factors beyond their control, may never practice their professions”.

In this regard, it might appear that the conclusions of the court in Litman v Litman (93 AD2d 695, affd 61 NY2d 918) are in conflict with our holding in the case before us. However, in Litman, the court was dealing with a going law practice and its conclusions were founded upon the specific language of Domestic Relations Law § 236 (B) (5) (e) which provides that “where the distribution of an interest in a business, corporation or profession” would be impractical, burdensome or contrary to law, the court, in lieu of making a distribution of an interest in such, shall make a distributive award in order to achieve equity between the parties.

It thus seems clear that the language of that statute, which is directed at a going business or profession, established during the marriage, may not properly be stretched to encompass a professional degree or license where the possessor has not, as yet, embarked upon his career and where, in fact and in law, there is no marital property to distribute.

We cannot, however, emphasize too strongly that despite the new law’s emphasis on rehabilitation and the substitution of maintenance and equitable distribution of marital property for alimony, the Legislature did not intend to repudiate the traditional practice of taking into consideration a spouse’s prospective income growth for purposes of awarding alimony in cases in which the other spouse had temporarily deferred higher marital living standards in the expectation of such growth (see, Contrubis v Contrubis, 46 AD2d 615; Winkler v Winkler, 13 AD2d 924, affd 11 NY2d 693; Hunter v Hunter, 10 AD2d 291, 295; Millner v Millner, 60 Misc 2d 122, 124-125).

Further, it is abundantly clear that the law does not propose to permit the student spouse to walk away from the marriage, taking with him, as here, a medical degree, a medical license and a sharply increased earning potential, and leaving the working spouse behind, holding a bag filled with nothing but broken dreams and a judgment of divorce.

Obviously, this court cannot, and should not, remain aloof and oblivious to the apparent and, in fact, real inequities that exist between the parties at this point, and, indeed, it does not. A simple reading of the law and an analysis of its legislative history, reviewed above, makes it abundantly clear that Domestic Relations Law § 236 (B) provides a proper alternative to the problem which is rational and reasonable and does not strain to classify as “property” something which does not fall within any accepted definition of that term.

We bring this discussion to a conclusion as we briefly explore that solution.

CONCLUSION

There is before us the classical “student-spouse, working-spouse” syndrome wherein the wife has contributed the major portion during the course of the marriage, in the role of homemaker and principal financial supporter of her student husband. It was precisely such a situation that was of particular concern to the drafters of the new law and so, abandoning the partnership analogy at this point which would leave the parties where they happen to lie at the termination of their marriage, the Legislature chose to confer upon the dependent spouse an equitable rather than an arbitrary equal share of marital property (nonexistent here), sufficient maintenance for his or her reasonable needs (for a short or long term), and, if appropriate, rehabilitation so that that spouse might become an independent and contributing member of society (see, Lesman v Lesman, 88 AD2d 153, 160, supra; Leibowits v Leibowits, 93 AD2d 535, 544 [concurring opn]; Foster and Freed, Virtue Is Not The Only Reward For Spousal Contributions, NYLJ, Jan. 17, 1983, p 1, col 1; cf. Posner, Economic Analysis of Law § 5.3, at 108-11).

In keeping with the intent of the law, the facts at bar recommend in a very particular and appropriate way an award for both proper maintenance (see, Domestic Relations Law § 236 [B] [1] [a]; [6] [a]) and rehabilitation in preparation for respondent wife’s return to the labor market. First of all, we have established that there is virtually no marital property available for equitable distribution. The record further indicates that at the time of trial the wife was 36 years of age and a college graduate with a provisional teacher’s certificate who had been married for nine years but had no children. Her testimony was that it would require some 15 months of postgraduate studies for her to earn a permanent teacher’s certificate. It is quite clear that the wife has sacrificed her marketable skills as a teacher, and the inference is logically valid and compelling that she has lost opportunities in her chosen profession,⁵ in order to advance the husband’s career.

We therefore suggest that Special Term fashion a maintenance award to the wife which will take into consideration the contributions she made to the future increased capacity of the husband. To that end, and taking into full consideration the prospective income growth of the husband with its attendant upgrading of life-style, such award should be sufficient in amount to cover all reasonable living expenses necessary to sustain such advanced life-style and should continue for a reasonable time under all of the surrounding circumstances. Such award shall be paid in a lump sum or in stated amounts at stated intervals (cf. Lynn v Lynn, 91 NJ 510, 453 A2d 539; Lira v Lira, 68 Ohio App 2d 164, 428 NE2d 445, supra; In re Lundberg v Lundberg, 107 Wis 2d 1, 318 NW2d 918).

It is further suggested that Special Term fashion a rehabilitative award in favor of the wife which will cover all reasonable costs of her postgraduate studies leading towards a permanent teacher’s certificate. Included in such award should be all proper expenses connected with such studies, including, but not limited to, tuition, books, fees, transportation and incidental expenses. Such award should be paid in a lump sum or in stated amounts at stated intervals and in the event the wife remarries prior to the expiration of the time reasonably required to complete such graduate studies, any balance of payments then remaining unpaid, should be due and payable immediately (cf. Hill v Hill, 91 NJ 506, 453 A2d 537).

An award of expert witness’ fees to the wife we find inappropriate in view of the fact that she is gainfully employed and the husband has significant additional debts and support obligations to meet. We find that the award of maintenance arrears was proper and we also approve the award of attorney’s fees.

Accordingly, the judgment appealed from should be modified, on the law, by deleting the fourth, fifth, sixth and seventh decretal paragraphs thereof. As so modified, the judgment should be affirmed insofar as appealed from by the plaintiff, without costs or disbursements, and the matter should be remitted to the Supreme Court, Westchester County, for further proceedings consonant with the views herein expressed. Since defendant’s brief concludes with the request that the judgment appealed from should “be affirmed as written”, and since she has raised no issues in that brief in support of her cross appeal, the cross appeal should be dismissed as abandoned, without costs or disbursements.

1 . In October 1980, the plaintiff husband received a license to practice medicine. In January 1982, at trial, he was a first-year resident in surgery, but would not be eligible to practice as a surgeon until 1985. Yet Special Term computed the present-day value of the plaintiff husband’s license predicated upon the average projected income of a practicing surgeon.

2 . It is noted that the weight of such decisions is de minimis because the equitable distribution statutes differ widely in different jurisdictions.

3 . Domestic Relations Law § 236 (B) (1) (c) specifically defines marital property as property acquired during the marriage.

4 . It is interesting that Special Term found that “plaintiff’s education and degree constituted a property right * * * [which] is subject to equitable distribution” (114 Misc 2d 233, 241; emphasis added).

5 . Contrary to our colleagues of the minority, the record suggests that respondent fully intends to continue as a teacher. Indeed, Special Term, over appellant’s objection, permitted respondent to testify in some detail as to the cost, in time and expense, for respondent to receive a permanent teacher’s license. The court said: “This would be in connection with attempting to rehabilitate so as to have the spouse in the position to be self sufficient” (emphasis supplied).