Lesman v. Lesman

• Court: New York Supreme Court — Appellate Division
• Writing for the Court: BOOMER
• Citation: Lesman v. Lesman, 88 A.D.2d 153, 452 N.Y.S.2d 935 (N.Y. App. Div. 1982)
• Decision Date: 09 July 1982
• Parties: Alan J. LESMAN, Respondent-Appellant, v. Hedy LESMAN, Appellant-Respondent. Fourth Department

Page 935

452 N.Y.S.2d 935

88 A.D.2d 153

Alan J. LESMAN, Respondent-Appellant, v. Hedy LESMAN, Appellant-Respondent.

Supreme Court, Appellate Division,

Fourth Department.

July 9, 1982.

Markel & Marshall, Buffalo, for respondent-appellant; Sheldon M. Markel, Buffalo, of counsel.

Cunningham & Pares, Buffalo, for appellant-respondent; William Cunningham, Buffalo, of counsel.

Before DILLON, P. J., and HANCOCK, DENMAN, BOOMER and MOULE, JJ.

BOOMER, Justices.

The principal issue on these cross appeals from a judgment of divorce is whether a license to practice medicine or a medical degree, earned during the marriage, is marital property within the meaning of the Equitable Distribution Law (Domestic Relations Law, § 236, Part B). The trial court granted judgment to the wife on the grounds of cruel and inhuman treatment, but denied her application for an award in lieu of equitable distribution of the husband's medical license, holding that the license was not an item subject to equitable distribution. We agree with the trial court and we affirm the judgment in that respect.

The parties were married in Brooklyn, New York, on August 8, 1971, and two days later they went to Guadalajara, Mexico where the husband attended medical school. During their three and one-half year stay in Mexico, the wife did not work because, she said, Mexican law did not allow her to do so. The full cost of tuition, books, and other school expenses for the husband's medical education was approximately twenty-five to thirty thousand dollars. This was paid for by the husband from his savings, a New York State Higher education loan and other personal loans. In 1972 or 1973, the wife went to New York for a period of five months where she worked and earned $25 per week. There is no indication that she contributed any of this amount to her husband.

After the husband completed medical school in January, 1975, the parties returned to New York where the husband worked for one year as a non-salaried medical clerk. During this time and until her first child was born in May of 1976, the wife worked as a computer operator earning a gross wage of $115 per week. She has not worked since. After he served his clerkship, the husband was employed at Elmhurst City Hospital where he completed one year of internship and two years of residency. He supported his family from his earnings as an intern and resident. After the husband completed his residency in June of 1979, the parties went to Buffalo so the husband could accept a fellowship in gastroenterology. The parties separated in December, 1979.

At the time of the trial in July, 1981, the husband had signed a contract to start work as a staff physician at a hospital in New York City at a salary of $45,000 a year with the possibility of earning some extra income from private practice. His highest gross income for any year during the marriage was $21,000. At the time of the trial the wife was attending a training program operated by CETA which would qualify her as a medical receptionist. During her training she was receiving $192 every two weeks. The program was scheduled to end in January, 1982, but after that she intended to take more courses leading to employment as a medical assistant. These courses will last until June or September, 1982, and will not be paid for by CETA.

Two children were born of this marriage, one in May, 1976, and one in January, 1979.

In addition to granting a divorce to the wife, the trial court granted her custody of the children and awarded her $200 a week for maintenance and $100 a week for child support. The wife appeals from the trial court's denial of her application for an award in lieu of equitable distribution of her husband's license to practice medicine which she claims is marital property.

The question whether an advanced education or a professional license earned during the marriage is property subject to distribution upon divorce is one of first impression in the appellate courts of this state. ¹ Appellate courts in other states, however, have passed upon the issue. ² The majority view is that these items are not property and that a wife who contributes to her husband's professional education may not, upon divorce, receive an award for her contributions (Wisner v. Wisner, 129 Ariz. 333, 631 P.2d 115; Todd v. Todd, 272 Cal.App.2d 786, 78 Cal.Rptr. 131; In re Marriage of Aufmuth, 89 Cal.App.3d 446, 152 Cal.Rptr. 668; In re Marriage of Graham, 194 Col. 429, 574 P.2d 75; In re Marriage of Goldstein, 97 Ill.App.3rd 1023, 53 Ill.Dec. 397, 423 N.E.2d 1201; Wilcox v. Wilcox, 173 Ind.App. 661, 365 N.E.2d 792; In re Marriage of McManama, 399 N.E.2d 371 (Ind); Leveck v. Leveck, 614 S.W.2d 710 (Ky); Stern v. Stern, 66 N.J. 340, 331 A.D.2d 257; Mahoney v. Mahoney, 182 N.J.Super. 598, 442 A.2d 1062; Muckleroy v. Muckleroy, 84 N.M. 14, 498 P.2d 1357; Nastrom v. Nastrom, 262 N.W.2d 487 (ND); Frausto v. Frausto, 611 S.W.2d 656 (Tex); DeWitt v. DeWitt, 98 Wis.2d 44, 296 N.W.2d 761).

Four cases treat the license or its potential for increase in earning capacity as property (In re Marriage of Horstmann, 263 N.W.2d 885 (Iowa); In re Sullivan, (decided January 8, 1982); Inman v. Inman, 578 S.W.2d 266 (Ky); Daniels v. Daniels, 185 N.E.2d 773 (Ohio)). The Iowa and California cases seem to give the contributing spouse a share in the value of the education (In re Marriage of Horstmann, supra, p. 891; In re Sullivan, supra), while the Kentucky case limits the recovery to "his or her monetary investment in the degree." (Inman v. Inman, supra, p. 269.) The Ohio case holds that the license can be considered in awarding alimony (Daniels v. Daniels, supra, p. 775).

The Kentucky Court of Appeals applies the property concept only under limited circumstances. It holds that a professional education or degree is property only when it is necessary to treat it as such to do equity to the contributing spouse, that is, where the marriage dissolves shortly after the degree is attained, there is no property to distribute and the contributing spouse does not qualify for alimony (Inman v. Inman, supra). ³ Where, however, the parties live together for several years after the graduation and the contributing spouse qualifies for maintenance, then the license or degree is not treated as property (Leveck v. Leveck, 614 S.W.2d 710, supra).

Other appellate courts, while deciding that an advanced degree or professional license is not property, nevertheless hold that the spouse contributing to the education of the other is entitled, on equitable principles, to restitution of the amounts expended (DeLa Rosa v. DeLa Rosa, 309 N.W.2d 755 (Minn); Hubbard v. Hubbard, 603 P.2d 747 (Okla)). One court, under the guise of granting alimony, awarded the wife a lump sum of $15,000 which "fairly represent(ed) the wife's contributions to the acquisition of (the husband's medical degree) acquired during coveture." Normally, this award of alimony would have been improper since the wife was self-supporting and was earning more than the husband (Moss v. Moss, 80 Mich.App. 693, 264 N.W.2d 97).

Most of the arguments against categorizing professional education as property are recited in the recent New Jersey case of Mahoney v. Mahoney, 182 N.J.Super. 598, 442 A.2d 1062, supra, and in the cases it cites. We find those arguments persuasive.

A professional education, degree or license does not fall within the traditional concepts of property.

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 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, 194 Col. 429, 432, 574 P.2d 75, supra).

By classifying an education or degree as property, the courts, in reality, treat as property the future enhanced earning capacity that may result from the education. Enhanced earning capacity is not property. It is not vested; it is only an uncertain expectancy, for it is dependent upon the future success and efforts of the degree holder.

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 non-professional work. Moreover, others, due to choice or factors beyond their control, may never practice their professions.

The property concept does not fit the situation where the parties have lived together for some period of time after graduation. In the typical case the wife works and contributes her income to enable the husband to continue his schooling and earn his professional degree. In making this contribution the wife expects that she will benefit from the increased income her husband will earn from the practice of his profession. Since this expectation is aborted when the parties are divorced shortly after the husband graduates, some courts apply the property concept to restore to the wife the amount she has invested. However, where the parties live together for a number of years after the husband enters his profession, the wife's expectation is realized, in part at least, and by participating in her husband's income, she receives a...