McGowan v. McGowan

• Decision Date: 15 July 1987
• Citation: 518 N.Y.S.2d 346,136 Misc.2d 225
• Parties: , 56 USLW 2115, 40 Ed. Law Rep. 1258 Kathleen A. McGOWAN, Plaintiff, v. James F. McGOWAN, Jr., Defendant.
• Court: New York Supreme Court

Page 346

518 N.Y.S.2d 346

136 Misc.2d 225, 56 USLW 2115, 40 Ed.

Law Rep. 1258

Kathleen A. McGOWAN, Plaintiff, v. James F. McGOWAN, Jr., Defendant.

Supreme Court, Trial Term,

Suffolk County, Part XVI.

July 15, 1987.

E. Allan Riebesehl, Westbury, for plaintiff.

Freedman, Weisbein & Samuelson, P.C., Garden City (Martin Shaw, of counsel), for defendant.

WILLIAM R. GEILER, Justice.

Defendant in this divorce action governed by the Equitable Distribution Law moves for an order determining that plaintiff's teaching license is marital property subject to equitable distribution, and that the pension of both parties should be valued as of the date of the earliest retirement as provided by their respective plans.

BACKGROUND

The parties herein were married on August 17, 1963. Both are forty seven years of age while their two sons are both emancipated. It further appears that plaintiff received a Bachelor of Social Sciences Degree from LeMoyne College in 1961. Thereafter, and from June 1961 until August, 1963, the very month that the parties were married, plaintiff obtained the necessary thirty hours of graduate work to enable her to obtain her permanent certification as a Teacher of Kindergarten and Common Branch Subjects from the State Education Department of the University of the State of New York, which certification was effective on September 1, 1963. Plaintiff, in 1977, received a Master's Degree in Science in Reading, since it would mean a salary differential to her and it did result in a somewhat higher salary. Plaintiff is employed as a teacher with the Cold Spring Harbor School District, Cold Spring Harbor, New York earning an annual salary of approximately $48,000.00, while defendant is employed by the U.S. Postal Service in a branch office in Connecticut earning an annual salary of $26,000.00.

TEACHER'S CERTIFICATION AS A MARITAL ASSET

The court holds that a teacher's certification, acquired during marriage is a marital asset. In what has been characterized as a modern approach to compensation for spousal contributions to professional education (See, Comment, Professional Licenses and Marital Dissolution in O'Brien v. O'Brien: Expectation Returns in the Marital Partnership, 72 Iowa L.Rev. 444, 446 (1987)), the New York State Court of Appeals in O'Brien v. O'Brien, 66 N.Y.2d 576, 498 N.Y.S.2d 743, 489 N.E.2d 712 (1985) applied D.R.L. § 236(B) and determined that a medical license itself, gained in part through the sacrifices and support of the holder's spouse, constituted marital property subject to equitable distribution in divorce actions. Of great significance therein was the court's valuation of the wife's interest as a percentage of the present value of her husband's professional training, resembling an investment return (id. at 588-89, 498 N.Y.S.2d at 744, 489 N.E.2d at 713). The New York decision ran counter to the clear prevailing view held in other jurisdictions and was based upon a statute in which the court found a clear mandate by the Legislature to include an interest in a profession or professional career as marital property (id. at 588-89, 498 N.Y.S.2d at 749, 489 N.E.2d at 718). Since the landmark decision in O'Brien, four other jurisdictions have ruled to the contrary on the issue of whether a degree or license is a marital asset (Hodge v. Hodge, 520 A.2d 15 (Penna.Sup.Ct., 1986) (Medical license is not marital property; doctor's increased future earning capacity is also ruled out for purposes of equitable distribution); Drapek v. Drapek, 399 Mass. 240, 503 N.E.2d 946 (1987) (Spouse's professional degree and enhanced earning capacity, acquired during marriage, are not marital assets); Geer v. Geer, 84 N.C.App. 471, 353 S.E.2d 427 (1987) (While professional license is separate property, contribution to spouse's career is compensable); Petersen v. Petersen, 737 P.2d 237 (Utah Ct.App., 1987) (Medical degree not a marital asset; compensatory alimony award may be proper). The Petersen and Drapek opinions note that the New York Court of Appeals distinguished its analysis from that of other jurisdictions that have found a license or advanced degree not to be marital property by creating a new species of property previously unknown at common law or under prior statutes, and by recognizing that critical portions of the New York Equitable Distribution Law provide that in making property division, the court shall consider the efforts one spouse made to the other spouse's career or career potential and the difficulty of evaluating an interest in a profession (DRL §§ 236(B)(5)(d)(6) and 236(B)(5)(e)). The function of equitable distribution is to recognize that when a marriage ends, each of the spouses, based on the totality of the contributions made to it, has a stake in and right to a share of the marital assets accumulated while it endured, not because that share is needed, but because those assets represent the capital product of what was essentially a partnership entity (Wood v. Wood, 119 Misc.2d 1076, 465 N.Y.S.2d 475 (Sup.Ct., Suffolk Co., 1983)). As we are told in O'Brien, (id. at 588, 498 N.Y.S.2d at 749, 489 N.E.2d at 718), that a professional license has no market value is irrelevant. Its value is THE ENHANCED EARNING CAPACITY IT AFFORDS THE HOLDER (emphasis supplied).

Given the holding that the emphasis to be placed is whether one spouse made sacrifices and contributions to the other spouse's attainment of enhanced EARNING CAPACITY (emphasis supplied), the question becomes whether O'Brien is to be limited to professional licenses? The court answers this question in the negative.

To license means to confer on a person the right to do something which otherwise he would not have the right to do. It confers only a personal privilege to be exercised under restrictions existing at the time of the issuance of the license and such as may thereafter be reasonably imposed (12 N.Y. Jur.2d, Business and Occupations § 1). More than thirty-five state agencies issue permits affecting business (id.) For example, under the General Business Law, licenses are required of Collateral Loan Brokers (G.B.L. § 40), Junk Dealers (G.B.L. § 60), Private Investigators (G.B.L. § 70), Transportation Ticket Agents (G.B.L. § 150), Employment Agents (G.B.L. § 172), Aviation Pilots (G.B.L. § 241), Hairdressers and Cosmetologists (G.B.L. § 402), Barbers (G.B.L. § 432) and Crane Operators and Blasters (G.B.L. § 482). The Environmental Conservation Law requires a license to practice taxidermy (E.C.L. § 11-1733). The Real Property Law requires licenses for Real Estate Brokers and Salesmen (R.P.L. § 440-a). The Education Law, Articles 130 through 159 and the sections therein contain licensing requirements and regulations for certain occupations entitled "The Professions" (Education Law, Title VIII). Conspicuous by its absence therefrom is the Legal Profession, as well as teaching. This list is certainly not all inclusive. Could it rationally be concluded that, for purposes of equitable distribution upon divorce, the Court of Appeals intended to limit as marital property, licenses enumerated in the Education Law? Hardly, given the definition of a license's value as enunciated in O'Brien, as being enhanced earning capacity. Accordingly, the court holds that a teacher's certification is a marital asset subject to equitable distribution.

Having answered the academic question, the court cautions the parties that it does not answer such questions as to its valuation, whether defendant made any contributions to its acquisition, and whether the license has merged in a profession or career position with a school district (Vanasco v. Vanasco, 132 Misc.2d 227, 503 N.Y.S.2d 480 (Sup.Ct., Nassau Co., 1986). These issues will be taken up at trial.

EDUCATIONAL DEGREE AS A MARITAL ASSET

It further appears that plaintiff obtained a Masters Degree in Science in Reading from C.W. Post College at Greenvale, New York in 1977, during the marriage. Given the O'Brien criteria, the court holds that this too is a marital asset subject to equitable distribution.

In Conner v. Conner, 97 A.D.2d 88, 468 N.Y.S.2d 482 (2nd Dep't 1983), the court concluded "that an academic degree is not property susceptible of distribution pursuant to part B of section 236 of the Domestic Relations Law" (97 A.D.2d at p. 89, 468 N.Y.S.2d 482). In Conner, the husband held a Masters of Business Administration Degree from Harvard University. The court noted that "we may not indulge in the fiction that an academic degree can be evaluated as reified marital property". (97 A.D.2d at p. 102, 468 N.Y.S.2d at 492). The court in Conner had relied in part upon the Fourth Department's decision in Lesman v. Lesman, 88 A.D.2d 153, 452 N.Y.S.2d 935 (4th Dep't 1982), app. dism. 57 N.Y.2d 956 (1982), which had also held that an advanced degree was not marital property. This decision was followed in Cronin v. Cronin, 131 Misc.2d 879, 502 N.Y.S.2d 368 (Sup.Ct., Nassau Co., 1986). It should be noted, however, that the Conner decision was rendered prior to the decision in O'Brien.

In O'Brien, the Court of Appeals did not address the question of whether a degree, as distinguished from a license, could constitute marital property. Leading commentators, however, have opined that the same logic applied to licenses by the Court of Appeals in O'Brien seems to apply to degrees (see, Scheinkman, Practice Commentary, McKinney's Cons. Laws of N.Y., Book 14, Domestic Relations Law C 236B:6, pp. 202-205). For example in Conner, the lead opinion asserted that the degree itself was not divisible and that the non-degreed spouse was really seeking a percentage of the income that the degreed spouse would earn for the rest of his life by exercising the privileges conferred by the degree. These arguments seem very close to those raised unsuccessfully by the licensed spouse in O'Brien (id.). The essential difference between the license and the degree is that the degree does not constitute authority to...