Litman v Litman
May 31, 1983OUTCOME: Client successful
This appeal presented the question of whether a spouse's law practice is subject to equitable distribution upon the dissolution of a marriage. Special Term held that a law practice is not a proper subj ... ect for equitable distribution, and thereupon denied the defendant wife's application for funds to enable her to retain experts to determine the value of her husband's law practice. The Appellate Division reversed. It held that the Equitable Distribution Law (Domestic Relations Law, § 236, part B) was enacted in recognition of the fact that marriage is, among other things, an economic partnership and, upon its dissolution, property accumulated during the marriage should be distributed in a manner which reflects the individual needs and circumstances of the parties regardless of the name in which such property is held (Governor's memorandum of approval, McKinney's Session Laws of NY, 1980, p 1863). With this end in mind, the Legislature established the “distributive award” (Domestic Relations Law, § 236, part B, subd 1, par b) to cover situations where a division of the actual marital property between the spouses is impracticable, impossible, or illegal (Domestic Relations Law, § 236, part B, subd 5, par e). In such situations, the court may award a sum of money in lieu of an actual distribution of property. That the Legislature established the distributive award to cover situations such as in the instant case is made clear to us by the statutory language: “In any action in which the court shall determine that an equitable distribution is appropriate but ... where the distribution of an interest in a ... profession would be contrary to law, the court in lieu of such equitable distribution shall make a distributive award in order to achieve equity between the parties” (Domestic Relations Law, § 236, part B, subd 5, par e). While it may be difficult to determine the value of the law practice involved herein, nevertheless, in the face of the clear intent of the Legislature, it held that that a law practice is a proper subject for a distributive award. Based upon expert testimony, the trial court will be in a position to arrive at a proper formula for such evaluation appropriate to the facts before it.
