Title: Denton and Denton
Citation: N/A
Docket Number: S43977
State: Oregon
Issuer: Oregon Supreme Court
Date: January 8, 1998

Filed:  January 8, 1998

IN THE SUPREME COURT OF THE STATE OF OREGON

In the Matter of the Marriage of

SAMUEL JONATHAN DENTON,

	Respondent on Review,

	and

EDNA FLEISCHMANN DENTON,

	Petitioner on Review.

(CC 93C-35739; CA A86943; SC S43977)

	In Banc

	On review from the Court of Appeals.*

	Argued and submitted September 5, 1997.

	J. Michael Alexander, of Burt, Swanson, Lathen, Alexander,
McCann &amp; Smith, P.C., Salem, argued the cause and filed the
briefs for petitioner on review.

	Russell Lipetsky, Salem, argued the cause and filed the
briefs for respondent on review.

	GILLETTE, J.

	The decision of the Court of Appeals is reversed in part and
affirmed in part.  The judgment of the circuit court is reversed
and the case is remanded to the circuit court for further
proceedings. 

	*Appeal from Marion County Circuit Court,
	 Paul J. Lipscomb, Judge.
	 145 Or App 381, 930 P2d 239 (1996).

		GILLETTE, J.

		In this marital dissolution action, the issue presented
is whether wife's contribution to husband's acquisition of a
medical license was sufficiently "material," "substantial," and
"prolonged," as those terms are used in ORS 107.105(1)(f,) to
entitle wife to receive an equitable portion of husband's
enhanced earning capacity resulting from that license as part of
the property distribution in the case.  The trial court held that
wife's contribution met those statutory criteria, and awarded
wife $15,000 per year for as long as she survives and husband
continues to work.  On appeal by husband, the Court of Appeals
reversed, holding that wife's contribution was not sufficient to
justify an award for enhanced earning capacity.  Denton and
Denton, 145 Or App 381, 930 P2d 239 (1996).  We allowed wife's
petition for review to consider whether the Court of Appeals
applied the appropriate legal standard in assessing the type of
contribution to enhanced earning capacity that is necessary for
such an award under the statute.  We conclude that it did. 
However, because we disagree with that court's application of
that standard to the facts of the present case, we reverse the
decision of the Court of Appeals in part and affirm it in part. 
The judgment of the circuit court is reversed and the case is
remanded to the circuit court for further proceedings.  

		The Court of Appeals reviewed the facts in this case de
novo.  Pursuant to ORS 19.125(4), this court also may review the
facts de novo, or it may limit its review to questions of law. 
The facts relevant to the resolution of the issue before us are
not in dispute, although their legal significance is.
Accordingly, there is no reason to review de novo.  The following
facts are taken from the findings of the Court of Appeals and
from undisputed additional facts in the record.  

		Husband and wife were married in October 1976.  By the
time of the marriage, husband had earned a bachelor's degree in
zoology and a master's degree in wildlife ecology at Oregon State
University (OSU) in Corvallis.  During the early years of the
marriage, husband tried and failed several times to gain
admission to medical school.  Husband began taking various
graduate-level courses at OSU in an effort to make himself a more
attractive medical school candidate.  He also worked at two or
three temporary, part-time jobs in the medical field toward the
same end.  

		When the parties married, wife was a licensed practical
nurse with a high-school education who worked full time at a
local hospital.  During the period in which husband took the
graduate courses, wife continued to work full time and also did
all the cooking, cleaning, laundry, shopping, and home
maintenance, and she paid all the bills.

		In 1978, husband gained admission to the medical school
at the Oregon Health Sciences University (OHSU) in Portland. 
Wife quit her job, and the parties moved to Portland.  Soon
thereafter, wife found a full-time position at a Portland clinic. 
From 1978 to 1982, while husband was in medical school, wife
continued to work full time and to perform all the homemaking
duties as well.  The parties paid for husband's medical school
tuition and related expenses primarily through student loans,
grants, and scholarships.  

		When husband graduated from medical school, he took a
one-year paid internship at St. Vincent's Hospital in Beaverton,
followed by a staff position at Good Samaritan Hospital.  For
most of that time, wife continued to work full time, although
husband's income eventually exceeded hers by a substantial
margin.  She also continued to perform all household tasks.  

		Husband then decided to undertake a three-year
dermatology residency in Iowa.  Wife cut down on her hours and
eventually quit her job in May 1984 to prepare the family for the
move.  In Iowa, wife did not work outside the home.  She took
classes at a local community college, paid for completely out of
husband's income, underwent numerous medical procedures in an
unsuccessful attempt to conceive and bear a child, and continued
to perform all household duties.  

		At the completion of husband's dermatology residency,
the parties returned to Oregon, where husband became a
shareholder in a dermatology practice in Salem.  Wife began
taking college courses at OSU, again financed by husband's
income, earning a bachelor's degree in sociology in 1991.  

		The parties separated in 1990, and husband commenced
this dissolution action in September 1993.  By the time of the
trial in 1994, husband was earning $12,300 per month in salary
and bonuses at the dermatology clinic.  Wife was working part
time as a hospital clerk.

		The trial court divided the parties' tangible assets
roughly equally and more or less in accordance with the parties'
wishes.  In addition, it assigned a goodwill value to husband's
dermatology practice and awarded wife half that amount.  It
further awarded wife $2,000 in permanent spousal support and
separately awarded wife $15,000 per year for each year that
husband continues to work and wife survives, for "husband's
enhanced earnings, less wife's enhanced earning capacity, and
after considering spousal support award, property division,
including goodwill, etc." 

		Husband appealed the trial court's order, assigning
error to the inclusion of awards for goodwill and enhanced
earning capacity, and to the award of indefinite spousal support. 
A divided Court of Appeals eliminated the award for enhanced
earning capacity, holding that, under the controlling statute,
wife's contribution to husband's acquisition of his medical
license was not "material," nor was it sufficiently "substantial"
or "prolonged," to justify the award.  Denton, 145 Or App at 403. 
The Court of Appeals also modified the support award, increasing
the monthly payment due wife but limiting the duration of the
award to 10 years, and allowed the amount allocated by the trial
court for goodwill to stand.  Id. at 408-09.

		The only issue before this court concerns the propriety
of the Court of Appeals' decision to eliminate the award for
enhanced earning capacity.  We begin our analysis with an
examination of the statutory wording pertaining to property
awards for enhanced earning capacity, ORS 107.105(1)(f):

		"Whenever the court grants a decree of marital
annulment, dissolution or separation, it has power
further to decree as follows:

		"* * * * *

		"(f) For the division or other disposition between
the parties of the real or personal property, or both,
of either or both of the parties as may be just and
proper in all the circumstances. * * * The present
value of, and income resulting from, the future
enhanced earning capacity of either party shall be
considered as property.[(1)] The presumption of equal
contribution to the acquisition of marital property,
however, shall not apply to enhanced earning capacity. 
A spouse asserting an interest in the income resulting
from an enhancement of earning capacity of the other
spouse must demonstrate that the spouse made a material
contribution to the enhancement.  Material contribution
can be shown by, among other things, having
contributed, financially or otherwise, to the education
and training that resulted in the enhanced earning
capacity.  The contribution shall have been substantial
and of prolonged duration."

		In interpreting that wording, we first consider the
text of the statute to discern the intent of the legislature. 
PGE v. Bureau of Labor and Industries, 317 Or 606, 610-11, 859
P2d 1143 (1993).  Although the text of the statutory provision
itself is the best evidence of the legislature's intent, we also
consider, at this first level of analysis, the context of the
statutory provision at issue, which includes other provisions of
the same statute and other related statutes, ibid., as well as
the preexisting common law and the statutory framework within
which the law was enacted, Goodyear Tire &amp; Rubber Co. v. Tualatin
Tire &amp; Auto, 322 Or 406, 415-17, 908 P2d 300 (1995), modified on
recons, 325 Or 46, 932 P2d 1141 (1997).  If the legislature's
intent is clear after this analysis, further inquiry is
unnecessary.  PGE, 317 Or at 611.

		As did the Court of Appeals' majority below, we
conclude that the legislative intent in enacting ORS
107.105(1)(f) is clear from the text of the statute.  Indeed, we
find the Court of Appeals' majority's analysis and interpretation
of the pertinent provisions of that statute to be both accurate
and useful.  We therefore repeat it here:

"[T]he statute regards the term 'contribution' broadly
to include those of both financial and nonfinancial
nature; indeed, ORS 107.105(1)(f) expressly declares
that the contribution of a homemaker spouse is a
'contribution' to marital assets generally, and there
is no mention of an intention to use the term more
narrowly with respect to the particular asset of
enhanced earning capacity.  But the statute does not
stop there.  It goes on to say that not all
contributions, however broadly defined, will trigger an
enhanced earning capacity award.  Only those that are
'material,' that are 'to the education and training'
that produces the enhancement, that are 'substantial'
and of 'prolonged' duration suffice. * * *

		"The legislature did not define the precise
contours of the terms 'substantial' or 'prolonged.'  It
is apparent that it intended the courts to exercise
some measure of judgment in the light of the particular
facts of individual cases. * * * The general thrust of
the legislature's intentions, however, [is] fairly
clear:  Not just any contributions will suffice.  To
justify an award of enhanced earning capacity, there
must be evidence of material contributions that are
sufficiently sizeable and over a sufficiently long
period of years as to justify treating the intangible
asset of enhanced earning capacity as a form of marital
property and awarding the contributing spouse a share
of it as property, instead of compensating the spouse
for those contributions through spousal support.  That
is the only interpretation of the statute that comports
with all of its language, both in text and context." 

Denton, 145 Or App at 392-93 (emphasis in original).  While we
endorse that general articulation of the prerequisites for an
award to a spouse in consideration of enhanced earning capacity,
we do not agree with the Court of Appeals' application of that
analysis to the facts of the case before us.  

		In concluding that wife did not make contributions to
the enhancement of husband's earning capacity that were
"material," "substantial," or "prolonged," the court found
persuasive the facts that (1) wife did not contribute directly to
husband's educational expenses, in that those were covered by
student loans, grants, and scholarships; (2) wife did not alter
her own goals to accommodate husband's education; (3) although
wife moved to Iowa, that move did not force wife to alter her
plans in any way; (3) wife did not need to work to enable husband
to go to medical school; (5) wife worked outside the home for
only a relatively small portion of the 15-year period between the
time when husband started medical school and the time when he
commenced the dissolution action; (6) wife did not need to take
any particular action to facilitate husband's career; and (7)
there was no evidence that wife's performance of all household
tasks was required to enable husband to complete his education. 
Denton, 145 Or App at 401-03.  We conclude that the Court of
Appeals' reliance on those factors was misguided, insofar as it
unduly emphasized what wife may or may not have "given up" during
husband's pursuit of his medical degree while, at the same time,
it minimized wife's contribution, both financial and otherwise,
to husband's acquisition of that asset.  

		Under ORS 107.105(1)(f), those contributions that are
"material" "to the education and training" that produce the
enhancement, that are "substantial," and that are of "prolonged
duration" will justify an award for enhanced earning capacity. 
During the period when husband was attempting to gain admission
to medical school, and while husband was in medical school, wife
worked full time, putting food on the family's table and a roof
over their heads.  Moreover, wife performed all domestic tasks
during the entire period in which husband prepared himself for
medical school, attended medical school, and performed his
dermatology residency in Iowa.  That freed husband to devote all
his energy and concentration to his studies, which directly
facilitated his acquisition of the medical degree as well as his
dermatology specialty.  

		Wife also contributed directly to husband's educational
expenses during medical school.  The bulk of the financial aid
that husband received during his attendance at OHSU was in the
form of student loans that were later repaid with marital assets
out of husband's salary after he graduated.  However, those loans
were lower than otherwise would have been the case, because wife
supplied the income that kept the couple from having to borrow to
pay living expenses while husband attended school.  Additionally,
although wife may not have sacrificed career opportunities in
quitting her job and moving from Corvallis to Portland so that
husband could attend medical school, her continuing willingness
to uproot, to relocate, and to find new employment constituted
nonfinancial contributions to the enhancement. 

		In rejecting wife's arguments that her contributions
were material and substantial, the Court of Appeals erroneously
looked at each factor for which wife argued and held that that
particular factor alone was insufficient.  Denton, 145 Or App at
402-03.  In any given case, the individual components of a
spouse's contribution may not seem substantial when viewed
separately, especially when the contribution is nonfinancial.  As
in this case, however, the contribution as a whole nevertheless
may be quite substantial.  The foregoing contributions, when
considered together, as they must be, were both material and
substantial.  

		In reaching its contrary conclusion, the Court of
Appeals also emphasized wife's failure to demonstrate that
husband could not have achieved his enhanced earning capacity
"but for" her help.  But we do not find in the statutory wording
any requirement that the contribution be essential to the
acquisition of the enhancement.  The statute expressly provides
that a material contribution may be nonfinancial in nature.  In
our view, the requirement of a material and substantial
contribution to enhanced earning capacity is met whenever the
contribution facilitates the acquisition of the enhancement in a
major, as opposed to an incidental, way.  

		We turn now to the third prong of the analysis:  Was
the contribution "of prolonged duration"?  ORS 107.105(1)(f)
provides that the contribution to the enhancement must have been
of prolonged duration.  Therefore, in determining whether the
duration of a spouse's material contribution was sufficiently
prolonged to justify an award of enhanced earning capacity, a
court must confine its examination to conduct that occurred
during the period when one spouse acquired the enhancement. 
Wife's contributions in this case continued throughout the entire
period when husband was attempting to gain admission to medical
school, was attending medical school, and was completing the
dermatology residency -- that is to say, in terms of the statute,
throughout the entire period during which husband was engaged in
"the education and training that resulted in the enhanced earning
capacity."  Those contributions were, by definition, of a
"prolonged" duration.(2)

		Based on the foregoing, we hold that wife has
demonstrated that she "made a material contribution to the
enhancement" of husband's earning capacity.  She is, therefore,
entitled to a portion of the "present value of, and income
resulting from, [husband's] future enhanced earning capacity." 
To the extent that the Court of Appeals' decision holds
otherwise, it is reversed.  

		In the light of our decision that wife is entitled to
some compensation for enhanced earning capacity, we examine the
trial court's award to determine whether we simply should
reinstate it.  The trial court's "Judgment of Dissolution of
Marriage" awards wife judgment against husband "as and for her
contribution to the enhanced earning capacity acquired by
[husband], to be paid in the form of annual installments in the
amount of $15,000 per year for each calendar year that [husband]
continues to work and [wife] survives."  In a letter sent to the
parties before the issuance of the judgment, the trial court
described the purpose of that award as being "on account of
husband's enhanced earnings, less wife's enhanced earning
capacity, and after considering spousal support award, property
division, including goodwill, etc."  It is impossible to discern
from those statements the factual basis for the trial court's
award.  The court did not indicate the present value of either
husband's or wife's enhanced earning capacity.  Neither did it
disclose what portion of husband's enhanced earning capacity it
allocated to wife.  Perhaps even more importantly, the award as
crafted by the trial court does not specify the total amount that
husband will be required to pay.  For those reasons, we do not
simply reinstate the trial court's enhanced earning capacity
award but, instead, reverse the judgment and remand the case to
the trial court for further consideration.

		Because we believe that the issue will arise on remand,
we address one further question, viz., husband's contribution to
wife's enhanced earning capacity.  Wife entered the marriage as a
licensed practical nurse with a high-school education.  By the
time husband initiated dissolution proceedings, wife had earned a
bachelor's degree in social work.  As discussed above, the
enhanced earning capacity statute, as it existed at the time of
trial, provided that "the future enhanced earning capacity of
either party shall be considered as property" when a party raised
the issue.  Thus, because husband raised the issue, the trial
court must consider wife's enhanced earning capacity in
calculating the award, if husband's contribution to the
acquisition of that asset was material, substantial, and of
prolonged duration.  

		The evidence at trial was undisputed that wife's
education took eight years to complete and was financed entirely
out of husband's income.  Husband's financial contribution
significantly facilitated wife's acquisition of the enhancement
and, therefore, it was a material and substantial contribution. 
Moreover, husband's contribution was of prolonged duration,
insofar as it continued throughout the period during which wife
was engaged in the education and training necessary to acquire
the asset.  Based on the foregoing, we conclude that husband is
entitled on remand to be credited with an equitable portion of
wife's enhanced earning capacity.

		In summary, we hold that the case must be remanded to
the trial court for reconsideration in the light of this
decision.  The goal continues to be the establishment of a
property distribution that is just and proper.  ORS
107.105(1)(f).  Wife's portion of the present value of her own
enhanced earning capacity should be considered along with her
portion of the present value of husband's enhanced earning
capacity to arrive at an award that, in the light of all the
other circumstances, will be just and proper.  

		The decision of the Court of Appeals is reversed in
part and affirmed in part.  The judgment of the circuit court is
reversed and the case is remanded to the circuit court for
further proceedings.  

1. 	The wording of this sentence was changed by the 1997
legislature by substituting the word "may" for the word "shall." 
Although consideration of enhanced earning capacity as property 
no longer is mandatory, the remainder of the text remains
unchanged.  Therefore, our analysis of how to value a supporting
spouse's contribution to the acquisition of enhanced earning
capacity will continue to apply in every case in which the trial
court deems it "just and proper" to consider a spouse's enhanced
earning capacity as property.  Moreover, as we note elsewhere,
the way in which the parties made enhanced earning capacity a
centerpiece of the present litigation essentially requires that
it continue to be so on remand, even if the new statutory wording
theoretically might apply.

2. 	Under the circumstances, two of the factors considered
by the Court of Appeals in reaching its conclusion that wife was
not entitled to an enhanced earning capacity award -- viz., that
wife did not have to take any particular action to facilitate
husband's career after husband joined the dermatology clinic and
that she did not work outside the home after husband began to
make money -- do not detract from the cumulative weight of the
other factors already discussed.