Appellate Division Enhanced Earnings Jurisprudence
In the 1985 case of
O'Brien v. O'Brien the New York Court of Appeals accepted the concept of
Enhanced Earnings Capacity. This decision has created an extremely complex area of litigation because the courts are valuing something that is intangible.
Enhanced earnings capacity is used to value licenses and degrees, that in and of them self have no concrete value. Thus the process of valuing them is extremely difficult, usually requiring the assistance of economic experts. Even with the assistance of experts, a Judge still must deduce exactly how much assistance the spouse seeking enhanced earnings gave towards the attainment of the degree or license at issue. There is no set formula or standard to assist a Judge in making such a deduction, leaving it to the discretion of the court. The problem with this, is it has created situations that are so complex, that it can be extremely difficult for the parties or the lawyers to have any indication of how a Judge will rule. By decreasing the predictability of litigation, the costs are often increased and litigation is prolonged where it could be settled earlier.
New York is currently the only state that handles enhanced earnings in this manner, and their have been calls for the legislature to change the law in this area. Although the legislature has not acted, it seems like the Appellate Division is taking matters into their own hands. In fifteen recent Appellate Division decisions, the court has shown a predilection for limiting or denying these awards all together. The chart below shows the percentage of the enhanced earnings that were awarded in recent Appellate Division decisions.
| Enhanced Earnings Cases (2007-2009) |
Award % |
| 1. Spreitzer v. Spreitzer, 40 A.D.3d 840, 837 N.Y.S.2d 658 (2nd Dept. 2007) |
20% |
| 2. Ochs v. Ochs, 40 A.D.3d 1061, 837 N.Y.S.2d 290 (2nd Dept. 2007) |
25% |
| 3. O'Donnell v. O'Donnell, 41 A.D.3d 447, 836 N.Y.S.2d 703 (2nd Dept. 2007) |
30% |
| 4. Midy v. Midy, 45 A.D.3d 543, 846 N.Y.S.2d 220 (2nd Dept. 2007) |
25% |
| 5. Judge v. Judge, 48 A.D.3d 424, 851 N.Y.S.2d 639 (2nd Dept. 2008) |
25% |
| 6. Higgins v. Higgins, 50 A.D.3d 852, 857 N.Y.S.2d 171 (2nd Dept. 2008) |
0% |
| 7. Kaplan v. Kaplan, 51 A.D.3d 635, 857 N.Y.S.2d 677 (2nd Dept. 2008) |
30% |
| 8. Wiener v. Wiener, 57 A.D.3d 241, 868 N.Y.S.2d 197 (1st Dept. 2008) |
10% |
| 9. Simmons v. Simmons, 57 A.D.3d 1400, 871 N.Y.S.2d 559 (4th Dept. 2008) |
15% |
| 10. O'Halloran v. O'Halloran, 58 A.D.3d 704, 873 N.Y.S.2d 87 (2nd Dept. 2009) |
20% |
| 11. Kriftcher v. Kriftcher, 59 A.D.3d 392, 874 N.Y.S.2d 153 (2nd Dept. 2009) |
10% |
| 12. Guha v. Guha, 61 A.D.3d 634, 877 N.Y.S.2d 151 (2nd Dept. 2009) |
5% |
| 13. Mairs v. Mairs, 61 A.D.3d 1204, 878 N.Y.S.2d 222 (3rd Dept. 2009) |
25% |
| 14. Jayaram v. Jayaram, 62 A.D.3d 951, 880 N.Y.S.2d 305 (2nd Dept. 2009) |
35%
|
|
|
This is an area of the law where one can potentially end up paying a large percentage to their former spouse. The case of
Holterman v. Holterman, 3 N.Y.3d 1 (2004) is an example of how the law can be applied in this area. In Holterman the Court of Appeals, sanctioned a decision which awarded a large amount of Enhanced Earnings along with maintenance and child support. The paying spouse in that case was left with approximately 20 percent of his income.