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Michael
O'Brien, Respondent-Appellant, v. Loretta
O'Brien,
Appellant-Respondent
[NO NUMBER
IN ORIGINAL]
Court of
Appeals of New York
66 N.Y.2d
576; 489 N.E.2d 712; 1985 N.Y. LEXIS 17941;
498
N.Y.S.2d 743
December 26,
1985, Decided
PRIOR HISTORY:
[***1]
Cross appeals,
by permission of the Appellate Division of the
Supreme Court in the Second Judicial Department,
from an order of said court, entered February 11,
1985, which modified, on the law, and, as so
modified, affirmed a judgment of the Supreme
Court at Special Term (Richard J. Daronco, J.;
opn 114 Misc 2d 233), entered in
Westchester County, inter alia, (a) granting a
divorce to defendant wife, (b) granting defendant
maintenance arrears against plaintiff, (c)
decreeing that the medical school degree and
license to practice medicine obtained by
plaintiff during the marriage are marital
property and subject to equitable distribution,
(d) making a distributive award to defendant in
the total sum of $188,800 as her equitable share
of said medical degree and license, (e) directing
plaintiff to maintain a life insurance policy for
the benefit of defendant to insure the payment of
the $188,800, and (f) awarding expert witness
fees to defendant's expert, and counsel fees to
defendant's counsel. The modification consisted
of deleting the decretal paragraphs which (1)
decreed that said medical degree and license are
marital property subject to equitable
distribution, (2) made [***2] the distributive
award to defendant, (3) directed plaintiff to
maintain a life insurance policy for the benefit
of defendant, and (4) awarded expert witness
fees. The Appellate Division remitted the matter
to Supreme Court for further proceedings. The
following question was certified by the Appellate
Division: "Was the order of this court dated
February 11, 1985 properly made?"
O'Brien v
O'Brien, 106 AD2d 223.
DISPOSITION:
Order modified, with costs to defendant, and case
remitted to the Appellate Division, Second
Department, for further proceedings in accordance
with the opinion herein and, as so modified,
affirmed. Question certified answered in the
negative.
HEADNOTES:
Husband and Wife -- Equitable Distribution --
License to Practice Medicine as Marital Property
1. In a divorce
action, plaintiff husband's license to practice
medicine, newly acquired during the parties'
marriage, is "marital property" within
the meaning of Domestic Relations Law § 236 (B)
(1) (c) and is, therefore, subject to equitable
distribution pursuant to section 236 (B) (5). An
interest in a profession or professional career
potential is marital property which may be
represented by direct or indirect contributions
[***3] of the non-titleholding spouse, including
financial contributions and nonfinancial
contributions made by caring for the home and
family. The contributions of one spouse to the
other's profession or career (see, Domestic
Relations Law § 236 [B] [5] [d] [6], [9]; [e])
represent investments in the economic partnership
of the marriage and the product of the parties'
joint efforts, the professional license, should
be considered marital property. Moreover, there
is no reason to restrict the plain language of
the statute to existing professional practices
for it is of little consequence in making an
award of marital property, except for the purpose
of evaluation, whether the professional spouse
has already established a practice or has yet to
do so. Further, the working spouse is entitled to
an equitable portion of the license, not a return
of funds advanced.
Husband and Wife
-- Equitable Distribution -- Statement of Factors
Considered in Making Distributive Award --
Authority of Appellate Division to Make Award or
Remit for that Purpose
2. In a divorce
action where the evidence before the trial court
supported its factual findings but its decision
does not [***4] indicate what factors it
considered, or the weight it attributed to them,
in making the distributive award to defendant
wife (see, Domestic Relations Law § 236 [B] [5]
[g]), the Appellate Division has the same
authority to make an award of marital property as
does the trial court, and may effectuate the
award and set forth the factors it considers
determinative and the reasons for its decision or
it may remit the matter to Special Term for that
purpose if it is unable to do so.
Husband and Wife
-- Equitable Distribution -- Marital Fault as
Factor for Consideration -- Fault Sufficient to
Shock Conscience of Court
3. In a divorce
action, marital fault is not a "just and
proper" factor for consideration on the
question of equitable distribution under Domestic
Relations Law § 236 (B) (5) (d) (10) except in
egregious cases which shock the conscience of the
court; thus, in the parties' divorce action,
there is no occasion to consider defendant wife's
marital fault on the question of equitable
distribution because there is no suggestion that
she was guilty of fault sufficient to shock the
conscience.
Husband and Wife
-- Equitable Distribution -- Expert Witness
[***5] Fees -- Attorney's Fees -- Discretion of
Appellate Division
4. In a divorce
action, the decision to award either expert
witness fees or attorney's fees lies, in the
first instance, in the discretion of the trial
court and then in the Appellate Division whose
discretionary authority is as broad as the trial
court's (see, Domestic Relations Law § 237 [a],
[c]). Thus, in the parties' divorce action,
because the Appellate Division's affirmance of
the award of defendant wife's counsel fees cannot
be characterized as an abuse of discretion as a
matter of law, the issue is beyond review by the
Court of Appeals. However, since the Court of
Appeals has concluded that plaintiff husband's
license to practice medicine is marital property,
the Appellate Division erred in deleting the
trial court's award of fees to defendant's expert
witness who evaluated the license, and on remand
the court may exercise its discretion to
determine whether an award of expert fees is
warranted and if so their proper amount.
COUNSEL: Albert
J. Emanuelli for appellant-respondent. I. A
medical license earned during marriage is
intended by the Legislature as "marital
property" within the meaning of Domestic
[***6] Relations Law § 236 (B) and has separate
value when there are no other marital assets to
distribute. (Kriger v Kriger, 115 Misc 2d 595;
Spaulding v Benenati, 57 NY2d 418; Conner
v Conner, 97 AD2d 88; Litman v Litman, 93
AD2d 695, 61 NY2d 918; Matter of Bender v
Board of Regents, 262 App Div 627; Conteh
v Conteh, 117 Misc 2d 42; Jolis v Jolis,
98 AD2d 692; Lee v Lee, 93 AD2d 221; Arvantides
v Arvantides, 64 NY2d 1033; Nehorayoff v
Nehorayoff, 108 Misc 2d 311.) II. The
uncontroverted valuation by defendant's expert
fixing the present value of Dr. O'Brien's medical
license should be left intact because it was
wholly credible by all acceptable standards of
proof. (Meiselman v Crown Hgts. Hosp., 285 NY
389; People v Sugden, 35 NY2d 453; Franchell
v Sims, 73 AD2d 1; Bartkowiak v St.
Adalbert's R. C. Church Socy., 40 AD2d 306; Zaninovich
v American Airlines, 26 AD2d 155; DeLong v
County of Erie, 89 AD2d 376; Mercado v
City of New York, 46 Misc 2d 358; Sanchez
v Denver & Rio Grande W. R. R. Co., 538 F2d
304; Heater v Chesapeake & Ohio Ry.
Co., 497 F2d 1243; Hirschfeld v
Hirschfeld, 96 AD2d 473.) III. The trial
[***7] court properly considered and set forth
the requisite Domestic Relations Law § 236 (B)
factors and CPLR 4213 (b) facts essential to its
decision. (Nielsen v Nielsen, 91 AD2d 1016;
Johnson v Johnson, 93 AD2d 855.) IV.
Objections to the present value methodology of
evaluating a medical license as property are
invalid. V. Foreign jurisdictional approaches to
the medical license syndrome are not controlling
because no other State has a statute comparable
to that of New York. VI. The trial court's award
to defendant could have exceeded 40% of the
present value of the doctor's medical license in
view of the uncontroverted proof. VII.
Reimbursement alone was not meaningful nor fair
financial redress to defendant for her
contributions to plaintiff's medical license. (In
re Spong, 661 F2d 6.)
Willard H. Da
Silva and Richard J. Keidel for
respondent-appellant. I. Knowledge is not
"property". (Erkenbrach v
Erkenbrach, 96 NY 456; Langerman v
Langerman, 303 NY 465; Matter of
Swedenborg Found. v Lewisohn, 40 NY2d 87; Fulton
Light, Heat & Power Co. v State of New York,
65 Misc 263, 138 App Div 931, 200 NY 400.)
II. The classification of a professional [***8]
license as "marital property" is a
fiction to produce a desired result. III. The New
York statute does not authorize money awards in
the abstract but limits the court to a division
of property. (De Brauwere v De Brauwere, 203
NY 460; Laumier v Laumier, 237 NY 357.)
IV. The vast majority of jurisdictions classify
neither an educational degree nor a license as
property but apply a different remedy. V.
Reimbursement is a possible remedy. VI.
Rehabilitative maintenance, not reimbursement for
general living expenses, is a remedy. (Lesman
v Lesman, 88 AD2d 153.) VII. The assignment
of future earnings is a distribution of separate
property. (Hickland v Hickland, 39 NY2d 1;
Lind v Lind, 89 AD2d 518; Corsell v
Corsell, 101 AD2d 766; Van Ess v Van Ess,
100 AD2d 848; Pederson v Pederson, 91 AD2d
818.) VIII. The mandated 10 factors were not
considered, and the basis for the award was not
stated. (Nielsen v Nielsen, 91 AD2d 1016; Johnson
v Johnson, 93 AD2d 855; International Salt
Co. v State of New York, 125 Misc 2d 939.)
IX. The courts below improperly refused to give
consideration to any evidence of appellant's
misconduct. (M.V.R. v J.M.R [***9] ., 115 Misc
2d 674; Giannola v Giannola, 109 Misc 2d
985; Librizzi v Librizzi, 112 Misc 2d 57;
Alford v Alford, 104 AD2d 390; Lentz v
Lentz, 103 AD2d 822; Van Ess v Van Ess,
100 AD2d 848; Wilson v Wilson, 101 AD2d
536; McMahan v McMahan, 100 AD2d 826; Pacifico
v Pacifico, 101 AD2d 709; Stevens v
Stevens, 107 AD2d 987; Nolan v Nolan, 107
AD2d 190.) X. The trial court's failure to
state the basis for its award is reversible
error. (Nielsen v Nielsen, 91 AD2d 1016.)
XI. The award of attorneys' fees and accountant's
fees was improper under the circumstances. (Cataldi
v Shaw, 93 AD2d 875; Matter of Gilman, 112
Misc 2d 452; Austin v Austin, 88 AD2d
649.)
Sally Weinraub,
Shirley Tolley and Brynne Haines for Westchester
Women's Bar Association, amicus curiae. I. The
trial court correctly construed respondent's
medical license as marital property under New
York's Equitable Distribution Law. (Litman v
Litman, 61 NY2d 918; Clarkson v Clarkson,
103 AD2d 964; Majauskas v Majauskas, 61
NY2d 481; Damiano v Damiano, 94 AD2d 132;
Reed v Reed, 93 AD2d 105.) II. The case
law of sister States cannot be determinative
[***10] since the statutes of those States do not
contain the unique provisions of New York's
Equitable Distribution Law. III. An award based
on the theory of restitution should consider all
the elements of spousal contribution. IV. The
trial court properly precluded testimony on the
issue of defendant's fault. (Blickstein v
Blickstein, 99 AD2d 287.)
JUDGES: Chief
Judge Wachtler and Judges Jasen, Meyer, Kaye,
Alexander and Titone concur with Judge Simons;
Judges Meyer and Titone concur in separate
concurring opinions.
OPINIONBY:
SIMONS
OPINION: [*580]
[**713] OPINION OF THE COURT
In this divorce
action, the parties' only asset of any
consequence is the husband's newly acquired
license to practice medicine. The principal issue
presented is whether that license, acquired
during their marriage, is marital property
subject to equitable distribution under Domestic
Relations Law § 236 (B) (5). Supreme Court held
that it was and accordingly made a distributive
award in defendant's favor. * It also granted
defendant maintenance arrears, expert witness
fees and attorneys' fees (114 Misc 2d 233).
On appeal to the Appellate Division, a majority
of that court held that plaintiff's [***11]
medical license is not marital property and that
defendant was not entitled to an award for the
expert witness fees. It modified the judgment and
remitted the case to Supreme Court for further
proceedings, specifically for a determination of
maintenance and a rehabilitative award (106
AD2d 223). The matter is before us by leave
of the Appellate Division.
* The action
was originally instituted by plaintiff
husband and defendant wife asserted a
counterclaim in her answer. Subsequently, the
husband withdrew his complaint and reply to
the counterclaim and the wife received an
uncontested divorce.
We now hold that
plaintiff's medical license constitutes [*581]
"marital property" within the meaning
of Domestic Relations Law § 236 (B) (1) (c) and
that it is therefore subject to equitable
distribution pursuant to subdivision 5 of that
part. That being so, the Appellate Division erred
in denying a fee, as a matter of law, to
defendant's expert witness who evaluated the
license.
I
Plaintiff and
defendant [***12] married on April 3, 1971. At
the time both were employed as teachers at the
same private school. Defendant had a bachelor's
degree and a temporary teaching certificate but
required 18 months of postgraduate classes at an
approximate cost of $3,000, excluding living
expenses, to obtain permanent certification in
New York. She claimed, and the trial court found,
that she had relinquished the opportunity to
obtain permanent certification [**714] while
plaintiff pursued his education. At the time of
the marriage, plaintiff had completed only three
and one-half years of college but shortly
afterward he returned to school at night to earn
his bachelor's degree and to complete sufficient
premedical courses to enter medical school. In
September 1973 the parties moved to Guadalajara,
Mexico, where plaintiff became a full-time
medical student. While he pursued his studies
defendant held several teaching and tutorial
positions and contributed her earnings to their
joint expenses. The parties returned to New York
in December 1976 so that plaintiff could complete
the last two semesters of medical school and
internship training here. After they returned,
defendant resumed [***13] her former teaching
position and she remained in it at the time this
action was commenced. Plaintiff was licensed to
practice medicine in October 1980. He commenced
this action for divorce two months later. At the
time of trial, he was a resident in general
surgery.
During the
marriage both parties contributed to paying the
living and educational expenses and they received
additional help from both of their families. They
disagreed on the amounts of their respective
contributions but it is undisputed that in
addition to performing household work and
managing the family finances defendant was
gainfully employed throughout the marriage, that
she contributed all of her earnings to their
living and educational expenses and that her
financial contributions exceeded those of
plaintiff. The trial court found that she had
contributed 76% of the parties' [*582] income
exclusive of a $10,000 student loan obtained by
defendant. Finding that plaintiff's medical
degree and license are marital property, the
court received evidence of its value and ordered
a distributive award to defendant.
Defendant
presented expert testimony that the present value
of plaintiff's medical license was [***14]
$472,000. Her expert testified that he arrived at
this figure by comparing the average income of a
college graduate and that of a general surgeon
between 1985, when plaintiff's residency would
end, and 2012, when he would reach age 65. After
considering Federal income taxes, an inflation
rate of 10% and a real interest rate of 3% he
capitalized the difference in average earnings
and reduced the amount to present value. He also
gave his opinion that the present value of
defendant's contribution to plaintiff's medical
education was $103,390. Plaintiff offered no
expert testimony on the subject.
The court, after
considering the life-style that plaintiff would
enjoy from the enhanced earning potential his
medical license would bring and defendant's
contributions and efforts toward attainment of
it, made a distributive award to her of $188,800,
representing 40% of the value of the license, and
ordered it paid in 11 annual installments of
various amounts beginning November 1, 1982 and
ending November 1, 1992. The court also directed
plaintiff to maintain a life insurance policy on
his life for defendant's benefit for the unpaid
balance of the award and it ordered plaintiff to
pay [***15] defendant's counsel fees of $7,000
and her expert witness fee of $1,000. It did not
award defendant maintenance.
A divided
Appellate Division, relying on its prior decision
in Conner v Conner (97 AD2d 88) and the
decision of the Fourth Department in Lesman v
Lesman (88 AD2d 153, appeal dismissed 57
NY2d 956), concluded that a professional
license acquired during marriage is not marital
property subject to distribution. It therefore
modified the judgment by striking the trial
court's determination that it is and by striking
the provision ordering payment of the expert
witness for evaluating the license and remitted
the case for further proceedings.
On these cross
appeals, defendant seeks reinstatement of the
judgment of the trial court. Plaintiff contends
that the Appellate Division correctly held that a
professional license is not marital property but
he also urges that the trial court failed to
adequately explain what factors it relied on in
making its decision, that it erroneously [**715]
excluded evidence of [*583] defendant's marital
fault and that the trial court's awards for
attorneys and expert witness fees were improper.
II
The [***16]
Equitable Distribution Law contemplates only two
classes of property: marital property and
separate property (Domestic Relations Law § 236
[B] [c], [d]). The former, which is subject to
equitable distribution, is defined broadly as
"all property acquired by either or both
spouses during the marriage and before the
execution of a separation agreement or the
commencement of a matrimonial action, regardless
of the form in which title is held"
(Domestic Relations Law § 236 [B] [1] [c]
[emphasis added]; see, § 236 [B] [5] [b], [c]).
Plaintiff does not contend that his license is
excluded from distribution because it is separate
property; rather, he claims that it is not
property at all but represents a personal
attainment in acquiring knowledge. He rests his
argument on decisions in similar cases from other
jurisdictions and on his view that a license does
not satisfy common-law concepts of property.
Neither contention is controlling because
decisions in other States rely principally on
their own statutes, and the legislative history
underlying them, and because the New York
Legislature deliberately went beyond traditional
property concepts when [***17] it formulated the
Equitable Distribution Law (see generally, 2
Foster-Freed-Brandes, Law and the Family -- New
York ch 33, at 917 et set. [1985 Cum Supp]).
Instead, our statute recognizes that spouses have
an equitable claim to things of value arising out
of the marital relationship and classifies them
as subject to distribution by focusing on the
marital status of the parties at the time of
acquisition. Those things acquired during
marriage and subject to distribution have been
classified as "marital property"
although, as one commentator has observed, they
hardly fall within the traditional property
concepts because there is no common-law property
interest remotely resembling marital property.
"It is a statutory creature, is of no
meaning whatsoever during the normal course of a
marriage and arises full-grown, like Athena, upon
the signing of a separation agreement or the
commencement of a matrimonial action. [Thus] [it]
is hardly surprising, and not at all relevant,
that traditional common law property concepts do
not fit in parsing the meaning of 'marital
property'" (Florescue, "Market
Value", Professional Licenses and Marital
Property: A Dilemma in Search [***18] of a Horn,
1982 NY St Bar Assn Fam L [*584] Rev 13 [Dec.]).
Having classified the "property"
subject to distribution, the Legislature did not
attempt to go further and define it but left it
to the courts to determine what interests come
within the terms of section 236 (B) (1) (c).
We made such a
determination in Majauskas v Majauskas (61
NY2d 481), holding there that vested but
unmatured pension rights are marital property
subject to equitable distribution. Because
pension benefits are not specifically identified
as marital property in the statute, we looked to
the express reference to pension rights contained
in section 236 (B) (5) (d) (4), which deals with
equitable distribution of marital property, to
other provisions of the equitable distribution
statute and to the legislative intent behind its
enactment to determine whether pension rights are
marital property or separate property. A similar
analysis is appropriate here and leads to the
conclusion that marital property encompasses a
license to practice medicine to the extent that
the license is acquired during marriage.
Section 236
provides that in making an equitable distribution
of marital property, "the court [***19]
shall consider: * * * (6) any equitable claim to,
interest in, or direct or indirect contribution
made to the acquisition of such marital property
by the party not having title, including joint
efforts or expenditures and contributions and
services as a spouse, parent, wage earner and
homemaker, and to the career or career potential
of the other party [and] * * * (9) the
impossibility or difficulty of evaluating [**716]
any component asset or any interest in a
business, corporation or profession"
(Domestic Relations Law § 236 [B] [5] [d] [6],
[9] [emphasis added]). Where equitable
distribution of marital property is appropriate
but "the distribution of an interest in a
business, corporation or profession would be
contrary to law" the court shall make a
distributive award in lieu of an actual
distribution of the property (Domestic Relations
Law § 236 [B] [5] [e] [emphasis added]). The
words mean exactly what they say: that an
interest in a profession or professional career
potential is marital property which may be
represented by direct or indirect contributions
of the non-titleholding spouse, including
financial contributions and [***20] nonfinancial
contributions made by caring for the home and
family.
The history
which preceded enactment of the statute confirms
this interpretation. Reform of section 236 was
advocated because experience had proven that
application of the traditional [*585] common-law
title theory of property had caused inequities
upon dissolution of a marriage. The Legislature
replaced the existing system with equitable
distribution of marital property, an entirely new
theory which considered all the circumstances of
the case and of the respective parties to the
marriage (Assembly Memorandum, 1980 NY Legis Ann,
at 129-130). Equitable distribution was based on
the premise that a marriage is, among other
things, an economic partnership to which both
parties contribute as spouse, parent, wage earner
or homemaker (id., at 130; see, Governor's
Memorandum of Approval, 1980 McKinney's Session
Laws of NY, at 1863). Consistent with this
purpose, and implicit in the statutory scheme as
a whole, is the view that upon dissolution of the
marriage there should be a winding up of the
parties' economic affairs and a severance of
their economic ties by an equitable distribution
of the marital assets. [***21] Thus, the concept
of alimony, which often served as a means of
lifetime support and dependence for one spouse
upon the other long after the marriage was over,
was replaced with the concept of maintenance
which seeks to allow "the recipient spouse
an opportunity to achieve [economic]
independence" (Assembly Memorandum, 1980 NY
Legis Ann, at 130).
The
determination that a professional license is
marital property is also consistent with the
conceptual base upon which the statute rests. As
this case demonstrates, few undertakings during a
marriage better qualify as the type of joint
effort that the statute's economic partnership
theory is intended to address than contributions
toward one spouse's acquisition of a professional
license. Working spouses are often required to
contribute substantial income as wage earners,
sacrifice their own educational or career goals
and opportunities for child rearing, perform the
bulk of household duties and responsibilities and
forego the acquisition of marital assets that
could have been accumulated if the professional
spouse had been employed rather than occupied
with the study and training necessary to acquire
a professional license. In this [***22] case,
nearly all of the parties' nine-year marriage was
devoted to the acquisition of plaintiff's medical
license and defendant played a major role in that
project. She worked continuously during the
marriage and contributed all of her earnings to
their joint effort, she sacrificed her own
educational and career opportunities, and she
traveled with plaintiff to Mexico for three and
one-half years while he attended medical school
there. The Legislature has decided, by its [*586]
explicit reference in the statute to the
contributions of one spouse to the other's
profession or career (see, Domestic Relations Law
§ 236 [B] [5] [d] [6], [9]; [e]), that these
contributions represent investments in the
economic partnership of the marriage and that the
product of the parties' joint efforts, the
professional license, should be considered
marital property.
The majority at
the Appellate Division held that the cited
statutory provisions do not refer to the license
held by a professional who has yet to establish a
practice but only to a going professional
practice (see, e.g., Arvantides v Arvantides,
64 NY2d 1033; [**717] Litman v Litman, 61
NY2d [***23] 918). There is no reason in law
or logic to restrict the plain language of the
statute to existing practices, however, for it is
of little consequence in making an award of
marital property, except for the purpose of
evaluation, whether the professional spouse has
already established a practice or whether he or
she has yet to do so. An established practice
merely represents the exercise of the privileges
conferred upon the professional spouse by the
license and the income flowing from that practice
represents the receipt of the enhanced earning
capacity that licensure allows. That being so, it
would be unfair not to consider the license a
marital asset.
Plaintiff's
principal argument, adopted by the majority
below, is that a professional license is not
marital property because it does not fit within
the traditional view of property as something
which has an exchange value on the open market
and is capable of sale, assignment or transfer.
The position does not withstand analysis for at
least two reasons. First, as we have observed, it
ignores the fact that whether a professional
license constitutes marital property is to be
judged by the language of the statute which
created this [***24] new species of property
previously unknown at common law or under prior
statutes. Thus, whether the license fits within
traditional property concepts is of no
consequence. Second, it is an overstatement to
assert that a professional license could not be
considered property even outside the context of
section 236 (B). A professional license is a
valuable property right, reflected in the money,
effort and lost opportunity for employment
expended in its acquisition, and also in the
enhanced earning capacity it affords its holder,
which may not be revoked without due process of
law (see, Matter of Bender v Board of Regents,
262 App Div 627, 631; People ex rel.
Greenberg v Reid, 151 App Div 324, 326). That
a professional license has no market value is
irrelevant. Obviously, a license may [*587] not
be alienated as may other property and for that
reason the working spouse's interest in it is
limited. The Legislature has recognized that
limitation, however, and has provided for an
award in lieu of its actual distribution (see,
Domestic Relations Law § 236 [B] [5] [e]).
Plaintiff also
contends that alternative remedies should be
employed, such as an award of rehabilitative
[***25] maintenance or reimbursement for direct
financial contributions (see, e.g., Kutanovski
v Kutanovski, 109 AD2d 822, 824; Conner v
Conner, 97 AD2d 88, 101, supra; Lesman v
Lesman, 88 AD2d 153, 158-159, supra). The
statute does not expressly authorize
retrospective maintenance or rehabilitative
awards and we have no occasion to decide in this
case whether the authority to do so may ever be
implied from its provisions (but see, Cappiello
v Cappiello, 66 NY2d 107). It is sufficient
to observe that normally a working spouse should
not be restricted to that relief because to do so
frustrates the purposes underlying the Equitable
Distribution Law. Limiting a working spouse to a
maintenance award, either general or
rehabilitative, not only is contrary to the
economic partnership concept underlying the
statute but also retains the uncertain and
inequitable economic ties of dependence that the
Legislature sought to extinguish by equitable
distribution. Maintenance is subject to
termination upon the recipient's remarriage and a
working spouse may never receive adequate
consideration for his or her contribution and may
even be penalized for the decision to remarry if
that [***26] is the only method of compensating
the contribution. As one court said so well,
"[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, 1079). [**718] The
Legislature stated its intention to eliminate
such inequities by providing that a supporting
spouse's "direct or indirect
contribution" be recognized, considered and
rewarded (Domestic Relations Law § 236 [B] [5]
[d] [6]).
Turning to the
question of valuation, it has been suggested that
even if a professional license is considered
marital property, the working spouse is entitled
only to reimbursement of his or her direct
financial contributions (see, Note, Equitable
Distribution of Degrees and Licenses: Two
Theories Toward [*588] Compensating Spousal
Contributions, 49 Brooklyn L Rev 301, 317-322).
By parity of reasoning, a spouse's [***27] down
payment on real estate or contribution to the
purchase of securities would be limited to the
money contributed, without any remuneration for
any incremental value in the asset because of
price appreciation. Such a result is completely
at odds with the statute's requirement that the
court give full consideration to both direct and
indirect contributions "made to the
acquisition of such marital property by the party
not having title, including joint efforts or
expenditures and contributions and services as a
spouse, parent, wage earner and homemaker"
(Domestic Relations Law § 236 [B] [5] [d] [6]
[emphasis added]). If the license is marital
property, then the working spouse is entitled to
an equitable portion of it, not a return of funds
advanced. Its value is the enhanced earning
capacity it affords the holder and although
fixing the present value of that enhanced earning
capacity may present problems, the problems are
not insurmountable. Certainly they are no more
difficult than computing tort damages for
wrongful death or diminished earning capacity
resulting from injury and they differ only in
degree from the problems presented when valuing a
professional [***28] practice for purposes of a
distributive award, something the courts have not
hesitated to do (see, Arvantides v Arvantides,
64 NY2d 1033, supra; Litman v Litman, 93
AD2d 695, affd 61 NY2d 918, supra; Billington
v Billington, 111 AD2d 203; Cohen v Cohen,
104 AD2d 841, appeal dismissed 64 NY2d
773; Nehorayoff v Nehorayoff, 108 Misc 2d
311). The trial court retains the flexibility
and discretion to structure the distributive
award equitably, taking into consideration
factors such as the working spouse's need for
immediate payment, the licensed spouse's current
ability to pay and the income tax consequences of
prolonging the period of payment (see, Internal
Revenue Code [26 USC] § 71 [a] [1]; [c] [2];
Treas Reg [26 CFR] § 1.71-1 [d] [4]) and, once
it has received evidence of the present value of
the license and the working spouse's
contributions toward its acquisition and
considered the remaining factors mandated by the
statute (see, Domestic Relations Law § 236 [B]
[5] [d] [1]-[10]), it may then make an
appropriate distribution of the marital property
including a distributive award for the
professional license if such an [***29] award is
warranted. When other marital assets are of
sufficient value to provide for the supporting
spouse's equitable portion of the marital
property, including his or her contributions to
the acquisition of the professional license,
[*589] however, the court retains the discretion
to distribute these other marital assets or to
make a distributive award in lieu of an actual
distribution of the value of the professional
spouse's license (see, Majauskas v Majauskas,
61 NY2d 481, 493, supra).
III
Three additional
issues remain for our consideration.
First, plaintiff
notes that the statute requires the trial court
to state the factors it considered and the basis
for its decision in making distribution and that
neither the parties nor counsel may waive that
requirement (see, Domestic Relations Law § 236
[B] [5] [g]). He contends that the court failed
to adequately do so in this [**719] case. We have
held recently that while section 236 (B) (5) (g)
does not require the court to analyze each of the
factors stated in subdivision (5) (d) and give
reasons as to each, it still must set forth all
the factors it considered and the reason for its
[***30] decision (Cappiello v Cappiello, 66
NY2d 107, supra). Unless the trial judge
reveals not only the factors he considered, but
also his reasoning for the award made,
intelligent review of the broad discretion
entrusted to him is not possible.
The evidence
before the trial court in this case supported its
factual findings but its decision does not
indicate what factors it considered, or the
weight it attributed to them, in making the
distributive award to defendant. Nevertheless,
the Appellate Division has the same authority to
make an award of marital property as does the
trial court (see, Majauskas v Majauskas, 61
NY2d 481, supra), and it may effectuate the
award and set forth the factors it considers
determinative and the reasons for its decision or
it may remit the matter to Special Term for that
purpose if it is unable to do so (see, Kobylack
v Kobylack, 62 NY2d 399).
Plaintiff also
contends that the trial court erred in excluding
evidence of defendant's marital fault on the
question of equitable distribution. Arguably, the
court may consider marital fault under factor 10,
"any other factor which the court shall
expressly find to be just and proper"
(Domestic [***31] Relations Law § 236 [B] [5]
[d] [10]; see, Scheinkman, 1981 Practice
Commentary, McKinney's Cons Laws of NY, Book 14,
Domestic Relations Law C236B:13, pp 205-206
[1977-1984 Supp Pamphlet]). Except in egregious
cases which shock the conscience of the court,
however, it is not a "just and proper"
[*590] factor for consideration in the equitable
distribution of marital property (Blickstein v
Blickstein, 99 AD2d 287, 292, appeal
dismissed 62 NY2d 802; see, Stevens v
Stevens, 107 AD2d 987; Pacifico v
Pacifico, 101 AD2d 709; McMahan v McMahan,
100 AD2d 826). That is so because marital
fault is inconsistent with the underlying
assumption that a marriage is in part an economic
partnership and upon its dissolution the parties
are entitled to a fair share of the marital
estate, because fault will usually be difficult
to assign and because introduction of the issue
may involve the courts in time-consuming
procedural maneuvers relating to collateral
issues (see, Blickstein v Blickstein, supra,
at p 292; McMahan v McMahan, supra, at p
827). We have no occasion to consider the
wife's fault in this action because there is no
suggestion that she was [***32] guilty of fault
sufficient to shock the conscience.
Finally,
plaintiff contends that the trial court erred in
allowing defendant an award of counsel fees and
defendant contends the Appellate Division erred
in deleting the trial court's award of expert
witness fees. The decision to award either expert
witness fees or attorney's fees lies, in the
first instance, in the discretion of the trial
court and then in the Appellate Division whose
discretionary authority is as broad as the trial
court's is (see, Domestic Relations Law § 237
[a], [c]; Majauskas v Majauskas, 61 NY2d 481,
493-494, supra). Because the Appellate
Division's affirmance of the award of counsel
fees cannot be characterized as an abuse of
discretion as a matter of law, the issue is
beyond our review (see, Majauskas v Majauskas,
supra, at p 494; Patron v Patron, 40 NY2d
582). Its decision to delete the award of
expert fees, as a matter of law, was apparently
based on the fact that the expert's testimony was
directed solely to the value of plaintiff's
license, evidence that was unnecessary in view of
its determination that the license was not
marital property. We have concluded that the
license [***33] is marital property, however, and
on remand the [**720] court may exercise its
discretion to determine whether an award of
expert fees is warranted and if so their proper
amount (see, Litman v Litman, 61 NY2d 918,
supra).
Accordingly, in
view of our holding that plaintiff's license to
practice medicine is marital property, the order
of the Appellate Division should be modified,
with costs to defendant, by reinstating the
judgment and the case remitted to the Appellate
Division for determination of the facts,
including the exercise of that court's discretion
(CPLR 5613), and, as so [*591] modified,
affirmed. Question certified answered in the
negative.
CONCURBY: MEYER;
TITONE
CONCUR: Meyer,
J. (concurring). I concur in Judge Simons'
opinion but write separately to point up for
consideration by the Legislature the potential
for unfairness involved in distributive awards
based upon a license of a professional still in
training.
An equity court
normally has power to "'change its decrees
where there has been a change of
circumstances'" (People v Scanlon, 11
NY2d 459, 462, on second appeal 13 NY2d
982). The implication of Domestic Relations
Law § 236 (B) [***34] (9) (b), which deals with
modification of an order or decree as to
maintenance or child support, is, however, that a
distributive award pursuant to section 236 (B)
(5) (e), once made, is not subject to change. Yet
a professional in training who is not finally
committed to a career choice when the
distributive award is made may be locked into a
particular kind of practice simply because the
monetary obligations imposed by the distributive
award made on the basis of the trial judge's
conclusion (prophecy may be a better word) as to
what the career choice will be leaves him or her
no alternative.
The present case
points up the problem. A medical license is but a
step toward the practice ultimately engaged in by
its holder, which follows after internship,
residency and, for particular specialties, board
certification. Here it is undisputed that
plaintiff was in a residency for general surgery
at the time of the trial, but had the previous
year done a residency in internal medicine.
Defendant's expert based his opinion on the
difference between the average income of a
general surgeon and that of a college graduate of
plaintiff's age and life expectancy, which the
trial judge utilized, [***35] impliedly finding
that plaintiff would engage in a surgical
practice despite plaintiff's testimony that he
was dissatisfied with the general surgery program
he was in and was attempting to return to the
internal medicine training he had been in the
previous year. The trial judge had the right, of
course, to discredit that testimony, but the
point is that equitable distribution was not
intended to permit a judge to make a career
decision for a licensed spouse still in training.
Yet the degree of speculation involved in the
award made is emphasized by the testimony of the
expert on which it was based. Asked whether his
assumptions and calculations were in any way
speculative, he replied: "Yes. They're
speculative to the extent of, will Dr. O'Brien
[*592] practice medicine? Will Dr. O'Brien earn
more or less than the average surgeon earns? Will
Dr. O'Brien live to age sixty-five? Will Dr.
O'Brien have a heart attack or will he be injured
in an automobile accident? Will he be disabled? I
mean, there is a degree of speculation. That
speculative aspect is no more to be taken into
account, cannot be taken into account, and it's a
question, again, Mr. Emanuelli, not for the
expert [***36] but for the courts to decide. It's
not my function nor could it be."
The equitable
distribution provisions of the Domestic Relations
Law were intended to provide flexibility so that
equity could be done. But if the assumption as to
career choice on which a distributive award
payable over a number of years is based turns out
not to be the fact (as, for example, should a
general surgery trainee accidentally lose the use
of his hand), it should be possible for the court
to revise the distributive award to conform to
the fact. And [**721] there will be no unfairness
in so doing if either spouse can seek
reconsideration, for the licensed spouse is more
likely to seek reconsideration based on real,
rather than imagined, cause if he or she knows
that the nonlicensed spouse can seek not only
reinstatement of the original award, but counsel
fees in addition, should the purported
circumstance on which a change is made turn out
to have been feigned or to be illusory.
Titone, J.
(concurring). I join in the majority opinion by
Judge Simons for the court, and, like Justice
Jackson, forthrightly surrender my contrary views
in Conner v Conner (97 AD2d 88, 105
[Titone, J. [***37] P., concurring]) to a more
cogent position (McGrath v Kristensen, 340
U.S. 162, 178 [Jackson, J., concurring]).
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