66 N.Y.2d 576 (1985)
A professional license acquired during a marriage is considered marital property subject to equitable distribution in a divorce proceeding, reflecting the economic partnership inherent in marriage.
Summary
In a divorce action, the New York Court of Appeals addressed whether a husband’s medical license, obtained during the marriage, constituted marital property subject to equitable distribution. The court held that it did, reasoning that the Equitable Distribution Law recognizes spouses’ equitable claims to marital assets. The court emphasized the contributions of the non-licensed spouse to the attainment of the license and ruled that the license’s enhanced earning capacity is a marital asset. The court remanded the case to the Appellate Division to determine the facts and exercise its discretion in making the distributive award.
Facts
The parties married in 1971, both working as teachers. The wife supported the husband while he obtained his bachelor’s degree, completed pre-medical courses, and attended medical school in Mexico. She contributed her earnings to their joint expenses and sacrificed her own educational goals. The husband obtained his medical license in 1980, and the divorce action commenced shortly thereafter. The wife’s expert valued the license at $472,000 based on projected earnings, and the trial court awarded her 40% of that value.
Procedural History
The Supreme Court (trial court) determined that the husband’s medical license was marital property and made a distributive award to the wife. The Appellate Division reversed, holding that a professional license is not marital property. The Court of Appeals granted leave to appeal.
Issue(s)
Whether a professional license acquired during a marriage constitutes marital property subject to equitable distribution under Domestic Relations Law § 236 (B) (5).
Holding
Yes, because a professional license acquired during marriage is marital property within the meaning of Domestic Relations Law § 236 (B) (1) (c) and is subject to equitable distribution.
Court’s Reasoning
The Court of Appeals reasoned that the Equitable Distribution Law contemplates two classes of property: marital and separate. Marital property is broadly defined as all property acquired during the marriage. The court noted that the statute explicitly refers to contributions to the career potential of the other party. The legislative history supports the interpretation that marriage is an economic partnership. The court stated, “[T]he Legislature has decided, by its 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 court rejected the argument that a professional license is not marital property because it lacks exchange value. It stated that “[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.” The court also rejected the argument that alternative remedies, such as rehabilitative maintenance, are sufficient, stating that “[l]imiting 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.”
The court further clarified that the working spouse is entitled to an equitable portion of the license’s value, not merely a return of funds advanced. The value is the enhanced earning capacity it affords. The court emphasized that valuing a professional license is similar to valuing a professional practice. The court remanded the case to the Appellate Division to determine the facts, exercise its discretion, and set forth the factors it considered in making the distributive award.