Mr. and Mrs. O'Brien were both
substitute teachers when they met, but Mr. O'Brien decided to go to med
school. They stayed together throughout his training, with Mrs. O'Brien
paying the majority of the bills with her teaching jobs.
Mr. O'Brien went to med
school in Mexico, which disrupted Mrs. O'Brien's career.
As soon as Mr. O'Brien
finished med school, the couple got a divorce.
The couple did not have many
tangible assets, but they did have Mr. O'Brien's medical degree.
Mrs. O'Brien argued that
the medical degree was the result of their partnership and was thus marital
property that should be equitably
divided upon divorce.
Mr. O'Brien didn't claim
that the degree was separate property not subject to distribution, instead he argued that it wasn't property at all.
The Trial Court awarded Mrs.
O'Brien $189k for her share of Mr. O'Brien's medical degree. He appealed.
The Trial Court calculated
the difference in earnings that a doctor makes over a non-doctor. Then
they calculated the present value of that difference in earnings over a
lifetime.
The Appellate Court reversed.
The Appellate Court found
that a medical license was not property and therefore couldn't be marital property and was thus not subject to distribution.
The New York Supreme Court
reversed and found that a degree was indeed property and thus subject to distribution.
The New York Supreme Court
looked to the State divorce Statute (Domestic Relations Law
§236[B][5][d][6]), and found that
"joint efforts or expenditures...to the career or career potential
of the other party..." were included.
The Court read that to mean
college degrees.
The Court found that Mrs.
O'Brien had made sacrifices to her own career for Mr. O'Brien's
education, and had made substantial contributions towards it. It would
be equitable for her to recover some of that.
The Court noted that it was
not possible to come up with an exact value for the degree, but that an
estimate would be equitable.
The Court likened the
situation to determining the valuation of lost earning potential in a
wrongful death tort lawsuit.
Generally courts would
rather to a lump sum distribution, but if they have to they can do a
pay-as-you-go, which helps alleviate this problem.
The Court found that even
though the degree produced income after the period of marital property
has ended, it was earned during the
marriage.
New York is the only State
that considers a college degree to be marital property that can be divided.
