Many of you might be expecting me to discuss the Court of Appeals’ Bloomfield decision, (2001 WL 1512095) but, as my firm is counsel to Ms. Bloomfield and the matter has been remanded, it would be inappropriate to do so now. Rest assured that I have opinions on the subject and that I will share them with my readers when that case is completed.
Instead, I want to discuss some 2001 developments in the area of equitable distribution of intangible assets such as licenses and enhanced earning capacity. Following the Court of Appeals’ decision in O’Brien v. O’Brien, 66 N.Y. 2d 576, 498 N.Y.S. 2d 743 (1995) that held that a professional license was marital property subject to equitable distribution, courts extended the holding to other types of intangible property including celebrity status. The concept of marital property subject to distribution was further expanded to include “enhanced earning capacity.” The First Department, in Hougie v. Hougie, 261 A.D. 2d 161, 689 N.Y.S. 2d 490 (1st Dept. 1999), held that the increase in the husband’s ability to earn (as an investment banker) over the course of the marriage was marital property. That “increase” was then to be capitalized and distributed as if it were an actual asset, without regard to whether or not any formal license had been obtained during the marriage. That decision was much criticized at the time both because it created what many viewed to be an inappropriately broad extension of the O’Brien doctrine, and because it seemed not to take into account the fact that people’s incomes almost universally increase with time and that there might well not be any actual “enhancement” during the marriage. [See also Moll v. Moll, 722 N.Y.S. 2d 732 (Sup. Ct. Monroe Co. 2001) citing Hougie without comment and finding that a stockbroker's good will was a distributable asset.]
