Duty v. Duty
2007 Okla. Civ. App. LEXIS 24, 162 P.3d 939, 2007 OK CIV APP 43 (2007)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Unvested stock options granted to a spouse during the marriage are considered marital property subject to division upon divorce, even if their vesting is contingent upon future events such as continued employment.
Facts:
- Clinton Neal Duty (Husband) and Polly Rae Duty (Wife) were married for 19 years.
- During the marriage, Husband's employer granted him the right to purchase 20,000 shares of company stock at a set price on February 10, 2005.
- The stock options were scheduled to vest in one-third increments over the subsequent three years, contingent upon Husband remaining an employee of the company.
- Husband's skills, education, and experience, which were factors in him receiving the options, were acquired during the marriage.
- Throughout the marriage, Wife contributed to the marital estate as a homemaker, cared for their children, and relocated the family at least nine times to support Husband's career, putting her own career aside.
Procedural Posture:
- Polly Rae Duty (Wife) filed a petition for dissolution of marriage against Clinton Neal Duty (Husband) in an Oklahoma trial court.
- The trial court entered a Decree of Dissolution of Marriage and, in its division of property, found that Husband's unvested stock options were marital property.
- The trial court awarded Wife one-third of the net value of these stock options, to be paid if and when Husband chose to exercise them.
- Clinton Neal Duty (Husband), as Appellant, appealed the trial court's order to the Oklahoma Court of Civil Appeals, naming Polly Rae Duty (Wife) as the Appellee.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Are unvested stock options, granted to one spouse during the marriage but contingent on continued future employment, considered marital property subject to division in a divorce?
Opinions:
Majority - Mitchell, V.C.J.
Yes. Unvested stock options granted during the marriage are marital property subject to division. The court reasoned that such options are analogous to unvested pension benefits, which are considered marital property in Oklahoma under the precedent set in Carpenter v. Carpenter. The court held that a stock option is a valuable right 'purchased through joint efforts of the spouses' to the extent it was acquired during the marriage. The fact that the options are contingent on a future event, like continued employment, does not strip them of their nature as jointly acquired property. The court distinguished this case from Ettinger v. Ettinger, where the options at issue did not even exist at the time of the divorce, whereas here, the right to the options was granted during the marriage. The court found that Wife's contributions to the marriage enabled Husband to gain the skills and experience that led to the options being granted, thus making them a product of their joint industry.
Analysis:
This case establishes a significant precedent in Oklahoma by clarifying that unvested stock options are divisible marital property. It extends the existing legal framework for unvested pensions to modern forms of executive compensation, ensuring that non-employee spouses are not deprived of assets earned through joint marital efforts simply because they have a future vesting requirement. This decision brings Oklahoma in line with the majority of other jurisdictions and provides clear guidance for family law practitioners in dividing complex assets. The ruling reinforces the principle of 'joint industry,' recognizing the non-monetary contributions of a spouse as essential to the acquisition of marital assets.
Unlock the full brief for Duty v. Duty