Case Title: Downs v. Downs

Citation: 

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 1989-06-01T00:00:00Z

Document:
NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
as well as formal revision before publication in the Vermont Reports.
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.
 
                                No. 88-283
 
 
 
Kevin A. Downs                               Supreme Court
 
     v.                                      On Appeal from
                                             Chittenden Superior Court
Susan A. Downs
                                             June Term, 1989
 
 
Thomas L. Hayes, J.
 
Blais, Cain, Keller & Fowler, Inc., Burlington, for plaintiff-appellee
 
Robert B. Hemley and Norman Williams of Gravel & Shea, Burlington, for
   defendant-appellant
 
 
 
PRESENT:  Allen, C.J., Peck, Gibson, Dooley and Morse, JJ.
 
 
 
     GIBSON, J.   Plaintiff and defendant both appeal from a provision in
their divorce decree that sought to compensate defendant Susan Downs for
funds contributed during the marriage toward plaintiff Kevin Downs'
attainment of a medical degree.  We reverse and remand the case for further
proceedings consistent with the views expressed herein.
                                    I.
     Kevin and Susan were married in August of 1976.  At that time, Kevin,
who had just graduated from college, and Susan, who had completed three
years of university study, agreed that she would leave school and work
while he attended medical school.  Susan worked as a clerk at a department
store from the fall of 1976 until March of 1980, a month before the birth of
the parties' first child.  Most of her salary was used to pay for living
expenses while Kevin attended school; Kevin borrowed money through various
loans to pay for his school expenses.  Susan did not work outside the home
after the birth of the parties' first child, and a second child was born in
1982, at which time Kevin was in the midst of a four-year medical residency
at the Medical Center Hospital of Vermont.  In August of 1983, Kevin moved
out of the family home, and later that year, moved in with another woman and
her two children.  Shortly thereafter, he filed for divorce.  After
finishing his residency in 1984, he began working as an obstetrician and
gynecologist in practice with another doctor at an initial salary of
approximately $60,000 a year, with an expectation of earning up to $200,000
a year in the near future.
     After a hearing in July of 1984, the court granted Kevin a divorce and
awarded custody of the children to Susan.  The court also awarded her $1000
worth of home furnishings and a partially paid family car, and ordered that
Kevin pay (1) $500 a month to Susan in rehabilitative maintenance for five
years, (2) $500 a month per child in child support, (3) the children's
health insurance, plus all reasonable medical, dental and hospital expenses
not covered by insurance, (4) all reasonable expenses for higher education
for the children, and (5) $50,590 to Susan within five years, a sum
representing the total salary earned by her during the years she worked
while Kevin attended medical school, plus interest at the rate of ten
percent compounded annually.
     In reaching the $50,590 figure, the court reasoned that an educational
degree is not property, but that "the increased earning potential made
possible by the degree is an asset to be distributed by the court."  The
court then proceeded to make its disposition of Kevin's enhanced earning
potential under the property settlement statute, 15 V.S.A. { 751.  The
court considered itself unable, however, to award Susan any portion of the
increase in Kevin's earning potential resulting from his medical degree
because, while there was expert testimony that he could expect future
earnings with a discounted present value of three million dollars, there was
no testimony regarding the differential in earning capacity between a person
with a four-year college degree and a person with a medical degree.  Because
of this, the court felt confined to making an award based on restitution,
which it determined to be $50,590.
     Following Susan's motion to alter or amend the order and for a partial
new trial, the court held a second hearing and issued a revised order,
awarding her $125,000 for Kevin's enhanced earning capacity and $77,281 for
her nonmonetary contributions to the marriage.  Kevin appealed the revised
order, and we reversed the judgment, reinstating the original order because
the revised order had not been issued until after the expiration of the nisi
period.  Downs v. Downs, 150 Vt. 647, 549 A.2d 1382 (1988).  Susan now
appeals the original order, seeking a property division or maintenance award
that reflects Kevin's increased earning potential resulting from his degree
and her nonmonetary contributions to the marriage.  In his cross-appeal,
Kevin claims that the court erred in making its property disposition,
arguing that, since he did not have the ability to pay the restitution
amount at the time of the divorce, the order amounted to an improper award
of property not acquired during the marriage.
                                    II.
     In a case of first impression in Vermont, we consider the "diploma
dilemma."  The issue is what remuneration is available to a spouse who
sacrifices career opportunities in order to further the other spouse's
attainment of a professional degree, only to see his or her expectations of
future financial security undermined when the student spouse, upon receiving
the degree, shortly thereafter seeks a divorce.  Although the trial court
retains wide discretion in fashioning property and maintenance awards,
Buttura v. Buttura, 143 Vt. 95, 99,