Case Overview

Under New York divorce law, enhanced earning capacity derived from a college degree acquired during a marriage is treated as a marital asset. However, as shown by the recent Appellate Division decision in Mallet v. Mallet, a spouse seeking a distributive award for the value of a degree must establish that he or she made a substantial contribution to the degree.

In Mallet, wife earned a bachelor degree during the marriage. The trial court valued the enhanced earning capacity and awarded the husband 10% or $14,720 as a distributive award. Both parties agreed on the valuation, however, wife appealed arguing that the husband was not entitled to any part of her degree.

Appellate Court's Findings

Husband had a 10th grade education and worked as a seasonal laborer. During nearly all of wife's college years, she took a full course load, was employed full time and was responsible for all of the household chores. Furthermore, the husband was frequently unemployed and had "substantial opportunity for hobbies such as boat building and salmon fishing". Based on the foregoing the Appellate Court concluded that the husband did not provide any non-economic contributions towards the wife's attainment of her degree.

As for his economic contributions to the wife's degree, the record established that the parties expended $4,690 in joint funds toward the wife's education. During this time however, the Appellate Court noted that the wife "personally earned in excess of $50,000". As a result, the Court found that the husband "failed to show that he made a substantial contribution" [citing Duspiva v. Duspiva (181 A.D.2d8 810, 811, 581 N.Y.S.2d 376, lv. Denied 80 N.Y.2d 752,587,N.Y.S.2d 904, 600 N.E.2d 631)] to the wife's attainment of her degree, which was earned solely through her own ability and Herculean effort [citing Small v. Small, (227 A.D.2.d 949,643 N.Y.S.2d842) and Daisernia v. Daisernia, (188A.D.2d 944,591 N.Y.S.2d 890)].

Thus the Trial Court's judgment was modified and the initial distributive award as a result of the Bachelor degree was reversed. The Mallet decision demonstrates the unique challenges that New York divorce law presents to litigants whose cases involve enhanced earning capacity. The decision by New York courts regarding the valuation and distribution of advanced degrees are fact-specific, and indicate that divorce litigants and attorneys must give careful attention to the facts.