Petersen v. Petersen
| Decision Date | 18 May 1987 |
| Docket Number | No. 860007-CA,860007-CA |
| Citation | 737 P.2d 237 |
| Parties | Gary V. PETERSEN, Plaintiff and Appellant, v. Julie A. PETERSEN, Defendant and Respondent. |
| Court | Utah Court of Appeals |
Paul M. Belnap, Strong & Hanni, Salt Lake City, for plaintiff and appellant.
Pete N. Vlahos, Vlahos & Sharp, Ogden, for plaintiff and appellant.
Before ORME, JACKSON and BENCH, JJ.
The appellant seeks a reversal or readjustment of the property division and alimony awarded to his former wife upon their divorce. His challenge focuses on a $120,000 property settlement given to his ex-wife to reflect her interest in his medical degree. We affirm the trial court's basic disposition, but require amendment of the decree insofar as the $120,000 award is concerned.
The parties were married in September 1963 when they were both entering their senior year of college. Both graduated with Bachelor's degrees. Dr. Petersen continued his education and obtained a Master's degree, while Mrs. Petersen worked as an elementary school teacher to help finance her husband's education. After receiving his Master's degree, Dr. Petersen entered medical school. During medical school, Dr. Petersen earned approximately $1,000 per year in income. The couple also took out a student loan and received some money from Mrs. Petersen's parents. While her husband was in medical school, Mrs. Petersen worked one year on a full time basis and three years part time.
When Dr. Petersen began his internship, Mrs. Petersen stopped working to stay at home with their child. During the next fifteen years, Mrs. Petersen was not employed outside the home and her teaching certification expired.
By the time of their divorce, the parties had been married twenty years and had six children under the age of 18. The decree gave Mrs. Petersen custody of the six minor children, the family residence subject to the first mortgage, most of the family furniture, and two automobiles. She was awarded $300 per month per child as child support, $1,000 per month alimony, and the cash property settlement of $120,000, which Dr. Petersen was to pay in installments of $1,000 per month without interest.
Under the decree, Dr. Petersen received his professional corporation, the total interest in his pension and profit sharing plan, two condominiums, a boat, an undivided one-seventh interest in a cabin near Bear Lake, and other rental property. He also was given the right to claim all six children as dependents for income tax purposes.
The trial court explained the $120,000 cash settlement as follows:
The Court believes that this case is classic, in that defendant is entitled to a property award reflecting an ownership interest of the defendant in plaintiff's medical degree. It is abundantly clear that defendant helped plaintiff earn that degree during their marriage, and that plaintiff's ability to earn is based upon that degree. Further, that following the earning of the degree and the entry into the medical practice, by mutual agreement, defendant undertook the raising and nurturing of the children as her responsibility to the marital partnership, while plaintiff practiced medicine. It is difficult to find in the evidence presented any system for the measurement of the value of the degree, and the Court must therefore deal with the case mostly upon an alimony basis. To deal with the case fully upon an alimony basis is not fair to the defendant, inasmuch as any effort to restructure her life by seeking to better her employment opportunities or to re-marry will operate against her alimony rights. Defendant is therefore awarded $1,000 per month permanent alimony and a lump sum property award in respect to the medical degree in the amount of $120,000, payable in installments of $1,000 per month from the date of the decree.
On appeal, Dr. Petersen argues that the division of marital property was inequitable, particularly the $120,000 property settlement given to his wife. Dr. Petersen argues that it was error to characterize "his" medical degree as marital property and require him to cash out Mrs. Petersen's interest therein over a 10-year period.
Generally, the trial court is permitted considerable discretion in adjusting the financial and property interests of the parties to a divorce action, and its determinations are entitled to a presumption of validity. E.g., Burnham v. Burnham, 716 P.2d 781, 782 (Utah 1986). And although appellate courts may weigh the evidence and substitute their judgment for that of the trial court in divorce actions, as the Supreme Court stated in Turner v. Turner, 649 P.2d 6 (Utah 1982), 649 P.2d at 8.
In the present case, the trial court appropriately attempted to equalize the parties' respective standards of living. See Olson v. Olson, 704 P.2d 564, 566 (Utah 1985). Dr. Petersen was found capable of earning $100,000 per year while Mrs. Petersen's ability to obtain recertification and secure a teaching contract was found to be speculative at best. Even if she succeeded, she would earn only one-fourth to one-fifth of what Dr. Petersen would earn annually. The trial court spoke of the difficulty of measuring the value of Dr. Petersen's degree. The court chose to balance the inequalities between the parties partly with the alimony award. However, the trial court did not want Mrs. Petersen to lose all of her entitlement upon remarriage, so the trial court provided for an additional $120,000 as a property award, payable in $1,000 monthly installments. Characterization of these payments as a property award created the main issue for appeal.
The question of whether an advanced degree is a property interest subject to division upon divorce is one of first impression at the appellate level in Utah. 1 However, the majority of jurisdictions that have considered the issue have held that advanced degrees or professional licenses are not property. Wisner v. Wisner, 129 Ariz. 333, 631 P.2d 115, 122 (Ariz.App.1981) (); In re Marriage of Aufmuth, 89 Cal.App.3d 446, 152 Cal.Rptr. 668, 677 (1979) (); In re Marriage of Graham, 194 Colo. 429, 574 P.2d 75, 77 (1978) (); In re Marriage of Hortsman, 263 N.W.2d 885, 891 (Iowa 1978) (); Olah v. Olah, 135 Mich.App. 404, 354 N.W.2d 359, 361 (Mich.App.1984) (); Mahoney v. Mahoney, 91 N.J. 488, 453 A.2d 527, 536 (1982) (); Ruben v. Ruben, 123 N.H. 358, 461 A.2d 733, 735 (1983) (); Muckleroy v. Muckleroy, 84 N.M. 14, 498 P.2d 1357, 1358 (1972) (); Hubbard v. Hubbard, 603 P.2d 747, 750-51 (Okl.1979) (). 2
These cases and others are consistent with our understanding of what "property" is and what an educational degree is. Property can be bought, sold, and devised. Bona fide degrees cannot be bought; they are earned. They cannot be sold; they are personal to the named recipient. Upon the death of the named recipient, the certificate commemorating award of the degree might be passed along and treasured as a family heirloom, but the recipient may not, on the strength of that degree, practice law or medicine. In this case, the court awarded the parties' home to Mrs. Peterson. But it might have awarded the home to Dr. Petersen or it might have ordered the home sold and the net proceeds divided. The court had no such alternatives with the medical degree, precisely because the degree is not property. Consideration of some of the cases cited above and others supports our fundamental conclusion and demonstrates the range of related problems.
In Muckleroy v. Muckleroy, 84 N.M. 14, 498 P.2d 1357 (1972), it had been argued that the husband's education was the product of the joint labor and industry of both parties, so that after their marriage it was community property. The New Mexico Supreme Court rejected this argument and concluded:
A medical license is only a permit issued by the controlling authority of the State, authorizing the individual licensee to engage in the practice of medicine. The medical license may be used and enjoyed by the licensee as a means of earning a livelihood, but it is not community property because it cannot be the subject of joint ownership.
84 N.M. at 15, 498 P.2d at 1358.
The same issue arose as to an M.B.A. degree earned by the husband in In re Marriage of Graham, 194 Colo. 429, 574 P.2d 75 (1978). Again, the concept of an advanced degree being property was rejected:
An educational degree, such as an M.B.A., is simply not encompassed even by the broad views of the concept 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...
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