Marriage of Denton, Matter of

• Decision Date: 08 January 1998
• Docket Number: C-35739
• Citation: 951 P.2d 693,326 Or. 236
• Parties: In the Matter of the MARRIAGE OF Samuel Jonathan DENTON, Respondent on Review, and Edna Fleischmann Denton, Petitioner on Review. CC 93; CA A86943; SC S43977.
• Court: Oregon Supreme Court

Page 693

951 P.2d 693

326 Or. 236

In the Matter of the MARRIAGE OF Samuel Jonathan DENTON Respondent on Review and Edna Fleischmann Denton, Petitioner on Review.

CC 93C-35739; CA A86943; SC S43977.

Supreme Court of Oregon In Banc.

Argued and Submitted Sept. 5, 1997.

Decided Jan. 8, 1998.

J. Michael Alexander, of Burt, Swanson, Lathen, Alexander, McCann & Smith, P.C., Salem, argued the cause and filed the briefs for petitioner on review.

Russell Lipetsky, Salem, argued the cause and filed the briefs for respondent on review.

GILLETTE, Justice.

In this marital dissolution action, the issue presented is whether wife's contribution to husband's acquisition of a medical license was sufficiently "material," "substantial," and "prolonged," as those terms are used in ORS 107.105(1)(f,) to entitle wife to receive an equitable portion of husband's enhanced earning capacity resulting from that license as part of the property distribution in the case. The trial court held that wife's contribution met those statutory criteria, and awarded wife $15,000 per year for as long as she survives and husband continues to work. On appeal by husband, the Court of Appeals reversed, holding that wife's contribution was not sufficient to justify an award for enhanced earning capacity. Denton and Denton, 145 Or.App. 381, 930 P.2d 239 (1996). We allowed wife's petition for review to consider whether the Court of Appeals applied the appropriate legal standard in assessing the type of contribution to enhanced earning capacity that is necessary for such an award under the statute. We conclude that it did. However, because we disagree with that court's application of that standard to the facts of the present case, we reverse the decision of the Court of Appeals in part and affirm it in part. The judgment of the circuit court is reversed and the case is remanded to the circuit court for further proceedings.

The Court of Appeals reviewed the facts in this case de novo. Pursuant to ORS 19.125(4), this court also may review the facts de novo, or it may limit its review to questions of law. The facts relevant to the resolution of the issue before us are not in dispute, although their legal significance is. Accordingly, there is no reason to review de novo. The following facts are taken from the findings of the Court of Appeals and from undisputed additional facts in the record.

Husband and wife were married in October 1976. By the time of the marriage, husband had earned a bachelor's degree in zoology and a master's degree in wildlife ecology at Oregon State University (OSU) in Corvallis. During the early years of the marriage, husband tried and failed several times to gain admission to medical school. Husband began taking various graduate-level courses at OSU in an effort to make himself a more attractive medical school candidate. He also worked at two or three temporary, part-time jobs in the medical field toward the same end.

When the parties married, wife was a licensed practical nurse with a high-school education who worked full time at a local hospital. During the period in which husband took the graduate courses, wife continued to work full time and also did all the cooking cleaning, laundry, shopping, and home maintenance, and she paid all the bills.

In 1978, husband gained admission to the medical school at the Oregon Health Sciences University (OHSU) in Portland. Wife quit her job, and the parties moved to Portland. Soon thereafter, wife found a full-time position at a Portland clinic. From 1978 to 1982, while husband was in medical school, wife continued to work full time and to perform all the homemaking duties as well. The parties paid for husband's medical school tuition and related expenses primarily through student loans, grants, and scholarships.

When husband graduated from medical school, he took a one-year paid internship at St. Vincent's Hospital in Beaverton, followed by a staff position at Good Samaritan Hospital. For most of that time, wife continued to work full time, although husband's income eventually exceeded hers by a substantial margin. She also continued to perform all household tasks.

Husband then decided to undertake a three-year dermatology residency in Iowa. Wife cut down on her hours and eventually quit her job in May 1984 to prepare the family for the move. In Iowa, wife did not work outside the home. She took classes at a local community college, paid for completely out of husband's income, underwent numerous medical procedures in an unsuccessful attempt to conceive and bear a child, and continued to perform all household duties.

At the completion of husband's dermatology residency, the parties returned to Oregon, where husband became a shareholder in a dermatology practice in Salem. Wife began taking college courses at OSU, again financed by husband's income, earning a bachelor's degree in sociology in 1991.

The parties separated in 1990, and husband commenced this dissolution action in September 1993. By the time of the trial in 1994, husband was earning $12,300 per month in salary and bonuses at the dermatology clinic. Wife was working part time as a hospital clerk.

The trial court divided the parties' tangible assets roughly equally and more or less in accordance with the parties' wishes. In addition, it assigned a goodwill value to husband's dermatology practice and awarded wife half that amount. It further awarded wife $2,000 in permanent spousal support and separately awarded wife $15,000 per year for each year that husband continues to work and wife survives, for "husband's enhanced earnings, less wife's enhanced earning capacity, and after considering spousal support award, property division, including goodwill, etc."

Husband appealed the trial court's order, assigning error to the inclusion of awards for goodwill and enhanced earning capacity, and to the award of indefinite spousal support. A divided Court of Appeals eliminated the award for enhanced earning capacity, holding that, under the controlling statute, wife's contribution to husband's acquisition of his medical license was not "material," nor was it sufficiently "substantial" or "prolonged," to justify the award. Denton, 145 Or.App. at 403, 930 P.2d 239. The Court of Appeals also modified the support award, increasing the monthly payment due wife but limiting the duration of the award to 10 years, and allowed the amount allocated by the trial court for goodwill to stand. Id. at 408-09, 930 P.2d 239.

The only issue before this court concerns the propriety of the Court of Appeals' decision to eliminate the award for enhanced earning capacity. We begin our analysis with an examination of the statutory wording pertaining to property awards for enhanced earning capacity, ORS 107.105(1)(f):

"Whenever the court grants a decree of marital annulment, dissolution or separation, it has power further to decree as follows:

" * * * * *

"(f) For the division or other disposition between the parties of the real or personal property, or both, of either or both of the parties as may be just and proper in all the circumstances. * * * The present value of, and income resulting from, the future enhanced earning capacity of either party shall be considered as property.[ ¹] The presumption of equal contribution to the acquisition of marital property, however, shall not apply to enhanced earning capacity. A spouse asserting an interest in the income resulting from an enhancement of earning capacity of the other spouse must demonstrate that the spouse made a material contribution to the enhancement. Material contribution can be shown by, among other things, having contributed, financially or otherwise, to the education and training that resulted in the enhanced earning capacity. The contribution shall have been substantial and of prolonged duration."

In interpreting that wording, we first consider the text of the statute to discern the intent of the legislature. PGE v. Bureau of Labor and Industries, 317 Or. 606, 610-11, 859 P.2d 1143 (1993). Although the text of the statutory provision itself is the best evidence of the legislature's intent, we also consider, at this first level of analysis, the context of the statutory provision at issue, which includes other provisions of the same statute and other related statutes, ibid., as well as the preexisting common law and the statutory framework within which the law was enacted, Goodyear Tire & Rubber Co. v. Tualatin Tire & Auto, 322 Or. 406, 415-17, 908 P.2d 300 (1995), modified on recons., 325 Or. 46, 932 P.2d 1141 (1997). If the legislature's intent is clear after this analysis, further inquiry is unnecessary. PGE, 317 Or. at 611, 859 P.2d 1143.

As did the Court of Appeals' majority below, we conclude that the legislative intent in enacting ORS 107.105(1)(f) is clear from the text of the statute. Indeed, we find the Court of Appeals' majority's analysis and interpretation of the pertinent provisions of that statute to be both accurate and useful. We therefore repeat it here:

"[T]he statute regards the term 'contribution' broadly to include those of both financial and nonfinancial nature; indeed, ORS 107.105(1)(f) expressly declares that the contribution of a homemaker spouse is a 'contribution' to marital assets generally, and there is no mention of an intention to use the term more narrowly with respect to the particular asset of enhanced earning capacity. But the statute does not stop there. It goes on to say that not all contributions, however broadly defined, will trigger an enhanced earning capacity award. Only those that are 'material,' that are 'to the education and training' that produces the enhancement, that are 'substantial' and of 'prolonged' duration suffice. * * *

"The legislature did not define the precise contours of the terms 'substantial' or 'prolonged.' It is apparent that it intended the courts to exercise some measure of judgment in the light of the...