Parlow v. Parlow

• Court: New York Supreme Court
• Writing for the Court: SONDRA M. MILLER
• Citation: Parlow v. Parlow, 548 N.Y.S.2d 373, 145 Misc.2d 850 (N.Y. Sup. Ct. 1989)
• Decision Date: 19 September 1989
• Parties: , 57 Ed. Law Rep. 544 Lelia PARLOW, Plaintiff, v. Stephen PARLOW, Defendant.

Page 373

548 N.Y.S.2d 373

145 Misc.2d 850, 57 Ed. Law Rep. 544

Lelia PARLOW, Plaintiff, v. Stephen PARLOW, Defendant.

Supreme Court, Westchester County.

Sept. 19, 1989.

Bender & Bodnar, White Plains, for plaintiff.

Albert J. Emanuelli, White Plains, for defendant.

SONDRA M. MILLER, Justice.

The novel issue of the value of a teaching license which has merged into a teaching career is before the court in this divorce proceeding.

Prior to trial, many of the issues concerning this long-term "no frills" marriage were settled by stipulation, including the grounds for divorce, joint custody of the parties' unemancipated ten year old son, the physical residence of the child with his father and a schedule of visitation with the mother, the waiver of all claims by both parties to child support and maintenance, the distribution of personal property and the value of various marital assets. Pursuant to their stipulation, the parties agreed that the marital residence is valued at $267,500, the husband's pension at $25,699, the husband's TDA benefits at $113,437. Although there was no agreement as to the value of the wife's pension, the sole testimony presented at the trial was on behalf of the husband who evaluated the wife's pension between $6,900 and $7,800. Each party agreed to pay his or her own legal fees. They agreed to divide their pensions and the husband's TDA benefits equally.

The issues remaining for determination are: 1) the value of the husband's teaching license, 2) the value of the improvements the husband made on the marital residence, 3) whether or not the wife dissipated marital assets by failing to contribute her earnings to the family or to her husband's education, 4) an equitable distribution of the marital residence and the husband's teaching license or career.

THE BACKGROUND

The parties were married in January, 1966. At the time of the marriage, the defendant husband was employed as a building superintendent in the Bronx. The parties established their initial marital residence in an apartment provided by the landlord in the building where the defendant was superintendent. Thereafter, he continued to be employed as superintendent from 1966 to 1974, and was a member of the Building Service Employees International Union, Local 32E. At the time of their marriage, he was attending Bronx Community College on a part time basis and was enrolled in a program in which he sought to receive an associate degree in engineering. He received this degree from the college in 1969 and thereafter continued to attend City College where he received a BS degree in 1973 and after that a Master's Degree from Hunter College in 1975. The defendant has been employed as an industrial arts teacher with the New York City Board of Education since 1973. He received his New York State permanent teaching certificate in September 1976.

At the time of the marriage, plaintiff wife was employed as a meat wrapper in a local supermarket. She was a high school drop-out. She continued working on a part time basis as a meat wrapper, but stopped working after the birth of the parties' first child, James, in 1969. She testified to assisting the defendant in various superintendent related jobs in connection with his duties at the building. She described these jobs as being substantial, he described them as being minimal. In the course of the marriage, she earned a high school equivalency degree and thirty college credits. She returned to the job market in 1981 when the younger child, Steven, was two years old. Her income and skills appreciated and by 1987 her gross income was $25,872 earned as an employee of the New York State Tax Commission, plus $90 per month in auto expenses.

VALUATION OF THE HUSBAND'S TEACHING LICENSE

Both parties agree that defendant's teaching license is marital property subject to equitable distribution. O'Brien v. O'Brien, 66 N.Y.2d 576, 498 N.Y.S.2d 743, 489 N.E.2d 712 (1985); McGowan v. McGowan, 136 Misc.2d 225, 518 N.Y.S.2d 346, mod. 142 A.D.2d 355, 535 N.Y.S.2d 990 (2nd Dept.1988). In the wake of the Court of Appeals landmark decision in O'Brien, supra, not only medical licenses, O'Brien v. O'Brien, supra; DeStefano v. DeStefano, 119 A.D.2d 793, 501 N.Y.S.2d 419 (1986); Maloney v. Maloney, 137 A.D.2d 666, 524 N.Y.S.2d 758 (1988); Raff v. Raff, 120 A.D.2d 507, 501 N.Y.S.2d 707 (1986), but law degrees Cronin v. Cronin, 131 Misc.2d 879, 502 N.Y.S.2d 368 (1986); Briger v. Briger, 110 A.D.2d 526, 487 N.Y.S.2d 756 (1985); Holihan v. Holihan, New York Law Journal, January 15, 1987, at 13, col. 2, accounting degrees Vanasco v. Vanasco, 132 Misc.2d 227, 503 N.Y.S.2d 480 (1986); Cohen v. Cohen, 104 A.D.2d 841, 480 N.Y.S.2d 358 (1984), a podiatry license Morton v. Morton, 130 A.D.2d 558, 515 N.Y.S.2d 499 (1987), a doctor's assistant certificate Morimando v. Morimando, 145 A.D.2d 609, 536 N.Y.S.2d 701 (1988), teaching certificates and academic degrees (McGowan v. McGowan, supra ) and even the celebrity type career of a model/actress Golub v. Golub, 139 Misc.2d 440, 527 N.Y.S.2d 946 (1988) have been held marital property subject to equitable distribution.

In this case, where the defendant has been employed as a teacher for 15 years, and his license has "merged" into his teaching career, this court must determine the novel issue of the value of the resulting career. The significance of merger of a teacher's license with a teaching career obviously differs from the merger of a professional license into a practice, where the courts have valued and distributed the practice. Marcus v. Marcus, 135 A.D.2d 216, mot. to amend remittitur granted 137 A.D.2d 131, 525 N.Y.S.2d 238 (2nd Dept.1988); Schoenfeld v. Schoenfeld, New York Law Journal July 6, 1988, at 27, col. 6 (Supreme Court, Nassau Co.); Vanasco v. Vanasco, supra.

In Marcus v. Marcus, supra, the court held the defendant husband's license had merged in and been subsumed into the doctor's thirty year medical practice. In Vanasco, supra, an accountant's license was held to have merged into the practice after nine years. In Schoenfeld, supra, the court found a partial merger of the doctor's license into his "fledgling practice" and subtracted the value of the practice from the license. In the aforesaid cases, the theory of merger was applied to avoid "two bites of the same apple" or double recovery to the non-titled spouse.

While the courts have recognized the merger of licenses into careers where no practice results and have held the careers are marital property, none of the cases have explored the methodology appropriate for valuation of careers. In recognizing that a teacher's certification is a marital asset, subject to equitable distribution, the court in McGowan, supra, explicitly stated that it "has not answered any questions as to valuation, contributions to the acquisition of the degree, and whether its value has been extinguished or diminished by a merger in a better paying position in a school district or elsewhere", 136 Misc.2d at 230, 518 N.Y.S.2d 346. In Tessler v. Tessler, Family Law Review, 1986, Rigler, J., (where the defendant husband doctor was a salaried hospital employee), the court stated "even were the license to be merged into a practice or as here in the absence of a practice into the husband's 'career', the question arises as to the method of evaluation of the husband's career choice or indeed whether that career is a marital asset." (In that case, the matter came before the court by motion of plaintiff's for expert fees to evaluate the husband's license, which was granted by the court). In Giannelli v. Giannelli, N.O.R. Vol. 20 No. 1 Family Law Review Page 21 March 1988, the court noted the wife had been employed "several years" as a teacher, but did not indicate the specific number of years she had been so employed. In Golub v. Golub, supra, the court recognized the wife's "celebrity status" as marital property, finding that there is "no rational basis upon which to distinguish between a degree, a license, or any other special skill that generates substantial income." Golub, 139 Misc.2d at p. 446, 527 N.Y.S.2d 946. However, the method by which that career was to be evaluated is not revealed in the reported decision.

Dr. David Zaumeyer, CPA, PhD, testified as the wife's expert. He concluded that the value of the husband's license ranged from $111,500 to $252,000 (depending upon valuation and retirement dates used). His method of valuation purported to mirror that of the expert in O'Brien (supra), in that he compared the defendant's earnings as a teacher to an "adjusted figure" (discussed below), intended to represent what the defendant's earnings would have been had he remained employed as a building superintendent. He projected the differential between the two income streams forward, and then discounted the result to present value. Although he agreed that the teaching license had "merged" in the course of the 15 years the defendant had been employed as a teacher, he valued the defendant's career as though it were a newly acquired license giving no effect to the fact of merger. He failed to reconcile the apparent contradiction of this position with a strikingly different one he had advanced in a publication (entered into evidence) Valuating Professional Practices and Licenses: The Merger of Professional Licenses and Practices Prentice Hall Business 1987 Chapter 4 Page 209 by David J. Zaumeyer, PhD, CPA. In that article, Dr. Zaumeyer wrote:

"As long as the license can be held out from its use and practice, it can be valued, but the time period of which one can value the license alone is limited. Eventually the degree and license become 'merged', with the private practice or corporate career positions and become virtually indistinguishable from them.

"There are few available statistics to just when the two merge. It would seem that five years is a reasonable length of time to mature in one's chosen field and after that experience,...