Is a professional license to practice medicine, acquired by one spouse during the marriage, marital property subject to equitable distribution under Domestic Relations Law § 236 (B)?

Plaintiff and defendant married on April 3, 1971, when both were teachers at the same private school. Defendant held a bachelor's degree and a temporary teaching certificate and gave up the chance to obtain permanent certification, which required about 18 months of postgraduate classes costing approximately $3,000, while plaintiff pursued his education. Plaintiff had completed only three and one-half years of college at the time of marriage; he then finished his bachelor's degree and premedical courses at night. In September 1973 the parties moved to Guadalajara, Mexico, where plaintiff attended medical school full time while defendant held teaching and tutorial positions and contributed her earnings to joint expenses. They returned to New York in December 1976 so plaintiff could finish medical school and internship, and defendant resumed teaching. Plaintiff was licensed to practice medicine in October 1980 and commenced this divorce action two months later. At trial he was a resident in general surgery. Defendant was gainfully employed throughout the marriage, contributed all her earnings to living and educational expenses, handled household work and finances, and contributed about 76% of the parties' income, excluding a $10,000 student loan she obtained. The license was the parties' only asset of consequence.

Plaintiff husband commenced the divorce action; he later withdrew his complaint and reply to defendant's counterclaim, and the wife received an uncontested divorce. Supreme Court held that plaintiff's medical license was marital property, received valuation evidence, awarded defendant 40% of its value ($188,800) payable in installments, and awarded maintenance arrears, $7,000 in counsel fees, and a $1,000 expert witness fee. A divided Appellate Division, relying on Conner v Conner and Lesman v Lesman, held that a professional license acquired during marriage is not marital property, struck the distributive award and the expert witness fee, and remitted the case to Supreme Court for determination of maintenance and a rehabilitative award. The Appellate Division granted leave, and the matter came to the Court of Appeals on cross appeals.

(Simons, J.)

Yes. A license to practice medicine acquired during marriage is marital property subject to equitable distribution under Domestic Relations Law § 236 (B).

The statute defines marital property broadly as all property acquired by either spouse during the marriage and before a separation agreement or commencement of a matrimonial action, regardless of how title is held (§ 236 [B] [1] [c]). Marital property is a statutory creation that deliberately goes beyond common-law property concepts, so whether a license has market value or is transferable is irrelevant. The statute itself directs courts to consider a nontitled spouse's contributions to the other's career or career potential (§ 236 [B] [5] [d] [6]), the difficulty of evaluating an interest in a profession (§ 236 [B] [5] [d] [9]), and distributive awards in lieu of distribution of an interest in a profession (§ 236 [B] [5] [e]). The words mean what they say: an interest in a professional career is marital property.

The legislative history confirms that marriage is an economic partnership and that dissolution should sever economic ties by distributing marital assets. Few joint efforts better fit that theory than a working spouse's support of the other's professional training. The statute does not limit its reach to established practices; a practice is merely the exercise of the license's privileges. A license is also a valuable property right that cannot be revoked without due process.

Normally, a working spouse should not be limited to maintenance or rehabilitative awards, or to reimbursement of direct financial contributions. They retain the economic dependence the Legislature meant to end, terminate on remarriage, and deny the working spouse an equitable share of the asset's value. The license's value is the enhanced earning capacity it affords, which is no harder to compute than tort damages or the value of a professional practice.

The trial court failed to state the factors it considered, but the Appellate Division may set them forth or remit. Marital fault is considered only in egregious cases that shock the conscience, and none was shown. Expert fees remain within the courts' discretion on remand. The Appellate Division order is modified, the trial judgment reinstated, and the case remitted.

Concurrence (Meyer, J.) A distributive award based on the license of a professional still in training carries a risk of unfairness that the Legislature should address. A distributive award under § 236 (B) (5) (e), once made, appears not to be modifiable, unlike maintenance or child support. A trainee not yet committed to a career may be locked into a practice area by payment obligations premised on the trial judge's prediction of that career. Here plaintiff was a surgery resident who had previously trained in internal medicine and sought to return to it, yet the award assumed a surgical career. The valuation expert admitted his assumptions were speculative. If the assumed career path proves false, the court should be able to revise the award, with either spouse able to seek reconsideration and counsel fees available to deter feigned changes.

Concurrence (Titone, J.) Titone joins the majority opinion and surrenders his contrary position in Conner v Conner to the more cogent view the majority adopts.