McGowan v. McGowan

• Decision Date: 30 December 1988
• Citation: 535 N.Y.S.2d 990,142 A.D.2d 355
• Parties: , 57 USLW 2467, 51 Ed. Law Rep. 188 Kathleen A. McGOWAN, Appellant, v. James F. McGOWAN, Jr., Respondent.
• Court: New York Supreme Court — Appellate Division

Page 990

535 N.Y.S.2d 990

142 A.D.2d 355, 57 USLW 2467, 51 Ed.

Law Rep. 188

Kathleen A. McGOWAN, Appellant, v. James F. McGOWAN, Jr., Respondent.

Supreme Court, Appellate Division,

Second Department.

Dec. 30, 1988.

Freedman, Weisbein, Samuelson & Rieger, P.C., Garden City (Elliot D. Samuelson, Martin Shaw and Anthony Yovino, of counsel), for respondent.

E. Allan Riebesehl, Westbury, for appellant.

Before BRACKEN, J.P., and WEINSTEIN, RUBIN and KOOPER, JJ.

BRACKEN, Justice Presiding.

It is now settled that where, during a marriage, one spouse begins and completes a medical education, the professional license which is conferred in recognition of the completion of that education qualifies as marital property which is subject to equitable distribution pursuant to Domestic Relations Law § 236(B)(5) (O'Brien v. O'Brien, 66 N.Y.2d 576, 498 N.Y.S.2d 743, 489 N.E.2d 712). In the present case, two questions have arisen, both of which require determination of the scope of the rule of the O'Brien case. First, it is necessary to decide whether a teaching certificate, conferred during the parties' marriage but as the result of an educational program which had been completed prior to the marriage, may constitute marital property. Second, we must decide whether an academic degree may, for the purposes of equitable distribution, be considered analogous to a professional license.

Any difficulty that may be thought to exist in deciding these issues is markedly diminished by considering that the rationale espoused by the O'Brien court is essentially founded upon the concept that a professional license is a thing of value mainly, if not solely, because of the "enhanced earning capaci it affords the holder" (O'Brien v. O'Brien, supra, at 588, 498 N.Y.S.2d 743, 489 N.E.2d 712). Since an academic degree may, under various circumstances, similarly enhance the earning potential of its holder, we see no valid basis upon which to distinguish such degrees from the professional licenses which pursuant to O'Brien are subject to equitable distribution. Also, considering that the enhancement of one spouse's earning capacity is the thing of value subject to equitable distribution pursuant to the O'Brien case, we conclude that such enhancement of earning capacity is acquired when it is actually achieved, that is, when the work that gave rise to it is finally completed, not at some later point when the completion of that work is formally recognized by the conferral of a degree or license.

We therefore hold that the teaching certificate conferred upon the plaintiff wife in the present case, which reflects certain achievements which she had attained before her marriage to the defendant, is not marital property. We also hold that the Masters Degree which was subsequently conferred upon her is marital property, since it reflects the successful completion of a course of study undertaken during the marriage.

I

The plaintiff wife graduated from LeMoyne College in 1961. Between June 1961 and August 1963, she completed certain graduate work at the State University of New York in Oswego. Completion of this course of graduate study enabled her to obtain permanent certification as a teacher. The parties were married in August 1963.

In 1977 the plaintiff wife obtained a master's degree. This entitled her to a higher salary in her position as a teacher.

In the present action for divorce, the defendant husband moved, inter alia, for an order "determining that the teaching license acquired by the plaintiff is marital property". This request for relief was based upon the defendant's mistaken belief that the plaintiff had not obtained permanent teaching certification until 1977. The defendant husband also sought an order vacating a prior payroll deduction order which had been issued against him and cancelling his own pendente lite maintenance obligations, as well as an order directing the plaintiff wife to pay him $75 per week as pendente lite maintenance. The extent of the marital property held by the plaintiff wife is, of course, a factor that relates to the maintenance or temporary maintenance that should be awarded the defendant husband (see, Domestic Relations Law § 236[B][6][a][1] ).

The plaintiff wife opposed this motion, and stated, inter alia, that "my education towards obtaining the permanent [teaching] certification was completed before my marriage to the defendant and, even though the permanent certification was issued approximately two weeks after the marriage ceremony, the defendant had nothing whatsoever to do with my obtaining the education necessary for the permanent certification". This assertion is not contradicted anywhere in the record.

The Supreme Court, in a decision dated July 15, 1987, 136 Misc.2d 225, 228, 518 N.Y.S.2d 346, held that "a teacher's certification [may be] a marital asset subject to equitable distribution". It is not altogether clear that the court decided whether the teaching certificate at issue in this particular case constituted marital property, that is, a thing of value acquired during the parties' marriage. The Supreme Court also determined that the master's degree obtained by the plaintiff in 1977 constituted marital property. These determinations were incorporated in an order, also dated July 15, 1987, from which the plaintiff wife has taken this appeal.

II

The master's degree obtained by the plaintiff wife in 1977, after the completion of studies which took place during the course of the parties' marriage, is, in our opinion, marital property. We therefore affirm the conclusion reached by the Supreme Court in this respect.

The central theme of O'Brien v. O'Brien, 66 N.Y.2d 576, 498 N.Y.S.2d 743, 489 N.E.2d 712, supra, is that a professional degree may constitute a marital asset because it reflects the enhancement of the future earning potential obtained by one spouse as a result of years of education completed only with the assistance and support of the other spouse. This is a recurrent theme throughout the O'Brien opinion, in which it is stated, for example, that "[a] professional license is a valuable property right, reflected in the * * * enhanced earning capacity it affords its holder" (O'Brien v. O'Brien, supra, at 586, 498 N.Y.S.2d 743, 489 N.E.2d 712), and that the license's "value is the enhanced earning capacity it affords the holder" (O'Brien v. O'Brien, supra, at 588, 498 N.Y.S.2d 743, 489 N.E.2d 712). The monetary value of the license is to be determined by calculating the present value of the enhancement of the future earning potential of the holder of the license (O'Brien v. O'Brien, supra; see also, Matsuo v. Matsuo, 124 A.D.2d 864, 865, 508 N.Y.S.2d 630; Raff v. Raff, 120 A.D.2d 507, 508-509, 501 N.Y.S.2d 707). ^*

We recognize that it is possible to identify certain distinctions between licenses and academic degrees. Generally, an advanced academic degree signifies that its recipient has become proficient in some scientific, artistic, or scholastic discipline, but such an advanced degree does not necessarily confer the legal right to engage in a particular profession. The completion of law school, for example, will be reflected by the granting of an academic degree which, as many recent graduates of law school realize all too well, does not carry with it the right to engage in any profession.

It is clear from a review of the O'Brien opinion, however, that the status of the professional license as a marital asset in that case did not depend on the fact that it entitled its holder to practice any particular profession. Rather, the critical factor was the existence of proof, in the form of expert testimony, that the license had a discernible monetary value because it enhanced substantially the future earning capacity of the holder. It is evident that in many circumstances an academic degree may also have such value. In the present case, in fact, the plaintiff wife forthrightly admits that her earning capacity increased as the result of her having obtained the master's degree. It makes little sense to construe the Domestic Relations Law in such a way as to exempt from equitable distribution an MBA from the Harvard School of Business, which in real terms could be worth hundreds of thousands of dollars, and yet to subject to equitable distributi a license to operate a junk yard (see, General Business Law § 60), upon the theory that the latter instrument, but not the former, entitles its holder to engage in a particular trade or profession.

None of the several arguments which were marshaled in opposition to the theory that a professional license may constitute marital property and which were rejected by the Court of Appeals in O'Brien, are significantly more cogent when applied to a case involving an academic degree. One argument made in opposition to the recognition of professional licenses as marital property is based upon an anticipation of the practical difficulties which, it is foreseen, will plague the trial and intermediate appellate courts in their efforts to place a concrete monetary value on such licenses. A second argument focuses on the extremely unjust consequences which may result from an overestimation of the present monetary value of the enhancement of a matrimonial litigant's potential future earnings attributable to the knowledge, skill and ability signified by a professional license, particularly since such an overestimation of value will result in a substantial monetary judgment, which will be enforceable by all of the coercive procedures authorized by law, and which, unlike an order directing maintenance or child support, will not be subject to change (see, Domestic Relations Law § 236[B][9][b]; cf., Domestic Relations Law § 236[B][5][e]; O'Brien v. O'Brien, supra, 66 N.Y.2d at 591-592, 498 N.Y.S.2d 743, 489 N.E.2d 712 [Meyer, J., concurring]; Siegel v. Siegel, 132 A.D.2d 247, 254, 523 N.Y.S.2d 517, appeal dismissed 71 N.Y.2d 1021, 530 N.Y.S.2d 108, 525 N.E.2d...