Stevens v. Stevens

• Decision Date: 23 April 1986
• Docket Number: No. 85-552,85-552
• Citation: 492 N.E.2d 131,23 OBR 273,23 Ohio St.3d 115
• Parties: , 54 USLW 2627, 23 O.B.R. 273 STEVENS, Appellant, v. STEVENS, Appellee.
• Court: Ohio Supreme Court

Page 115

23 Ohio St.3d 115

492 N.E.2d 131, 54 USLW 2627, 23 O.B.R. 273

STEVENS, Appellant, v. STEVENS, Appellee.

No. 85-552.

Supreme Court of Ohio.

April 23, 1986.

Syllabus by the Court

A professional degree or license is not marital property and the present value of the projected future earnings of the degreed spouse is not a marital asset subject to division upon divorce. Although not an asset, the future value of a professional degree or license acquired by one of the parties during the marriage is an element to be considered in reaching an equitable award of alimony in accordance with R.C. 3105.18.

Sandra B. Stevens, appellant herein, and Robert O. Stevens, appellee, met in high school and were married in 1967. By mutual agreement, Sandra attended secretarial school rather than college so that she could support Robert while he obtained his undergraduate degree and his Doctor of Veterinary Medicine degree. In 1973 their daughter Cassandra was born. In 1975, after eight years of school, Robert was awarded his degree from Auburn University School of Veterinary Medicine. Throughout the first eight years of their marriage, Sandra supported the household and paid Robert's educational expenses while working in various secretarial and administrative positions.

In 1977, Robert began work as a staff veterinarian and assistant curator at Sea World in Aurora, Ohio at a salary of approximately twenty-two thousand dollars per year. While Sandra resumed work in 1978, she was periodically laid off and Robert assumed virtually all the family support.

In July 1983, Robert transferred to the Sea World in Orlando, Florida where he began living with a young woman whom he later married subsequent to the divorce.

In March 1984, the trial court granted a divorce based on evidence that the parties had lived separate and apart for over one year. There were few assets to divide. Appellant, who was unemployed at the time of the divorce trial, was awarded the family home subject to the mortgage thereon and one of the two family cars, also subject to a lien. The trial court further awarded to appellant sustenance alimony of four hundred dollars per month subject to termination upon the happening of the following events, whichever occurred first:

1) three years from date,

2) appellant remarried,

3) appellant lived in a state of concubinage, or

4) appellant became gainfully employed.

Custody of the child was awarded to appellant and the court ordered appellee to pay child support in the amount of sixty dollars per week.

On appeal, appellant contended that appellee's veterinary degree was marital property, subject to division upon divorce, in which she was entitled to share. Appellant further contended that the award of alimony and the conditions attached were inequitable, grossly unfair, and an abuse of discretion, given the enhanced future earning ability of appellee.

The court of appeals held that appellee's professional degree was not a marital asset and stated that the future value of the degree should instead be considered as an element in reaching an equitable award of alimony pursuant to R.C. 3105.18. The court of appeals also concluded that the trial court's alimony award of four hundred dollars per month was equitable.

The cause is now before this court pursuant to the allowance of a motion to certify the record.

Nicely & Wagner and Judith A. Nicely, for appellant.

McDowall & Whalen and Robert H. McDowall, for appellee.

CELEBREZZE, Chief Justice.

This court is now asked for the first time to resolve an issue quite aptly referred to as "the diploma dilemma," that is, whether a spouse's professional degree obtained during a marriage is marital property subject to division and distribution upon divorce. This dilemma typically arises in those (unfortunate) situations in which a wife supports her husband while he obtains a professional degree and then, just as the husband stands on the verge of affluence, the parties divorce. Often, the standard of living during the marriage is fairly minimal and there are few assets to divide, other than the professional degree itself. In the instant case, appellant shouldered a majority of the living and education costs for her former husband while he obtained his veterinary degree. This case is somewhat atypical, however, in that the marriage continued for several years after her husband began his career and thus appellant was able to share in some of his professional earnings.

Courts which have faced the issue of whether a professional degree or license is marital property acknowledge that it would be unfair not to recognize the contribution of the supporting spouse, but differ in the manner in which that spouse is to be compensated for her efforts. The challenge is to strike a balance somewhere between subjecting the husband to a life of professional servitude and leaving the wife in near penury, without sufficient financial resources with which to improve her station in life.

With this balancing process in mind, we must reject appellant's contention that her former husband's veterinary degree and the enhanced value of his future earnings as a result of obtaining that degree are marital assets in which she is entitled to share. ¹ In our view, a professional degree cannot be categorized as "property." This was most eloquently explained by the court in In re Marriage of Graham (1978), 194 Colo. 429, 432, 574 P.2d 75, 77:

" * * * It [a professional degree] 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 expenditure of money. It is simply an intellectual achievement that may potentially assist in the future acquisition of property. * * * [I]t has none of the attributes of property in the usual sense of that term."

Second, we cannot agree that the worth of a professional degree or license is subject to precise valuation and division at divorce. The amount of speculation attendant to reducing the future value of a professional degree to its present value, as appellant urges us to do, is unacceptably high. Economists can only predict the future earnings of a "typical" professional in a given field and must assume that the degreed spouse will continue in a certain career path. ² In reality, however, after a divorce a person may choose not to practice his or her chosen profession, may later change to a less lucrative specialty, or may fail in the chosen profession. ³ Such developments cannot be anticipated at the time of divorce. A division of property based on the estimated value of a professional degree or license would be particularly unfair to a professional who wishes to change careers, because a property award cannot be modified after divorce to reflect a change in circumstances. Wolfe v. Wolfe (1976), 46 Ohio St.2d 399, 350 N.E.2d 413 , paragraph one of the syllabus; Colizoli v. Colizoli (1984), 15 Ohio St.3d 333, 334, 474 N.E.2d 280. We therefore conclude that the future value of a professional degree or license does not constitute marital property. Accord In re Marriage of Goldstein (1981), 97 Ill.App.3d 1023, 1027-1028, 53 Ill.Dec. 397, 400, 423 N.E.2d 1201, 1204; Frausto v. Frausto (Tex.Civ.App.1980), 611 S.W.2d 656, 659; Ruben v. Ruben (1983), 123 N.H. 358, 361, 461 A.2d 733, 735; Hughes v. Hughes (Fla.App.1983), 438 So.2d 146 147-150; Grosskopf v. Grosskopf (Wyo.1984), 677 P.2d 814, 822; Lovett v. Lovett (Ky.1985), 688 S.W.2d 329, 332.

The better approach, we feel, was taken in Gebhart v. Gebhart (1984), 14 Ohio App.3d 107, 108, 470 N.E.2d 205, where the court stated that in making an award of alimony, the future value of a medical degree acquired by one of the parties during the marriage was not subject to division or transfer upon divorce, but should be considered an element in reaching an equitable award of alimony pursuant to R.C. 3105.18. ⁴ Accord Pacht v. Jadd (1983), 13 Ohio App.3d 363, 469 N.E.2d 918; Colizoli v. Colizoli (Oct. 7, 1983), Cuyahoga App.No. 45557, unreported, reversed in part on other grounds (1984), 15 Ohio St.3d 333, 474 N.E.2d 280. The dilemma regarding an equitable award to the supporting spouse in cases such as this is best resolved by applying our existing statutory scheme and treating the professional degree as relevant to the parties' earning abilities, education, expectancies, and the contribution of the spouse as homemaker. Another relevant factor in cases such as this, where the marriage has continued after the husband obtained his degree, is the relatively high standard of living established during the marriage as a result of the husband's professional career. R.C. 3105.18(B)(7).

The court in Pacht, supra, observed that the earning ability of the parties was a factor more pertinent to an award of sustenance alimony than to a division of property. Indeed, in the instant case, appellant requests this court to order that she receive equitable compensation payable as sustenance alimony. This is a particularly appropriate technique in situations such as this where appellant, after failure of her marriage, seeks to enhance her future earning capacity by pursuing higher education with a view to a professional career of her own.

Consistent with the foregoing, we hold that a professional degree or license is not marital property and the present value of the projected future earnings of the degreed spouse is not a marital asset subject to division upon divorce. Although not an asset, the future value of a professional degree or license acquired by one of the parties during the marriage is an element to be considered in reaching an equitable award of alimony in accordance with R.C....