In Re Marriage of Graham
574 p.2d 75, 1978 Colo. LEXIS 745, 194 Colo. 429 (1978)
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Rule of Law:
An educational degree, such as a Master of Business Administration (M.B.A.), is not considered marital property subject to division upon dissolution of marriage because it does not have the essential characteristics of property, such as an exchange value or transferability.
Facts:
- Anne P. Graham and Dennis J. Graham were married on August 5, 1968.
- Throughout their six-year marriage, Anne worked full-time as an airline stewardess, providing approximately seventy percent of the couple's financial support.
- For roughly three and a half years of the marriage, Dennis's primary pursuit was his education, during which he worked part-time.
- During the marriage, Dennis acquired both a bachelor of science degree in engineering physics and a master’s degree in business administration (M.B.A.).
- The funds provided by Anne were used for both family expenses and Dennis's education.
- Upon graduation, Dennis obtained a job as an executive assistant with a starting salary of $14,000 per year.
- The couple accumulated no marital assets during the marriage.
Procedural Posture:
- Anne and Dennis Graham jointly filed a petition for dissolution of marriage in the Boulder County District Court, the trial court.
- The trial court found that the M.B.A. was jointly-owned marital property, valued its future earning potential at $82,836, and awarded Anne $33,134.
- Dennis Graham, as appellant, appealed the trial court's decision to the Colorado Court of Appeals.
- The Court of Appeals, an intermediate appellate court, reversed the trial court's judgment, holding that an education is not property.
- Anne Graham, as petitioner, appealed the Court of Appeals' decision to the Supreme Court of Colorado.
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Issue:
Does a master's degree in business administration (M.B.A.) acquired by one spouse during a marriage constitute marital property subject to division in a dissolution proceeding under Colorado's Uniform Dissolution of Marriage Act?
Opinions:
Majority - Justice Lee
No. An educational degree is not marital property subject to division. While the term 'property' is intended to be broadly inclusive, it is limited to items that have an exchangeable value or which go to make up wealth or an estate. An M.B.A. degree lacks the essential attributes of property; it has no exchange value, cannot be sold, transferred, assigned, or pledged, and it terminates upon the death of the holder. It is a personal intellectual achievement that may potentially assist in the future acquisition of property, but it is not property in and of itself. A supporting spouse is not without remedy, as their contribution can be considered when dividing existing marital property or when determining an award of maintenance, neither of which were at issue here.
Dissenting - Justice Carrigan
Yes. While a degree is not property in the traditional sense, courts should use extraordinary remedies to prevent the extraordinary injustice that results from a narrow definition. The most valuable asset acquired during the marriage was the husband's increased earning capacity, which was a direct result of the wife's financial contributions and sacrifices. The law recognizes future earning capacity as a compensable asset in other contexts, such as tort and wrongful death cases, and it should be treated as such in a dissolution proceeding to equitably compensate the wife for her investment in her husband's education, especially when no other marital property exists to divide.
Analysis:
This landmark case establishes that a professional degree is not divisible marital property. It highlights a significant challenge in divorce law, often referred to as the 'sacrificing spouse' problem, where one spouse supports the other through a long educational process only to divorce before any significant assets are accumulated. The decision solidifies a traditional, tangible definition of 'property' and channels remedies for the supporting spouse towards alimony or the division of other assets, which may not be available or adequate. This ruling prompted many state legislatures and courts to develop alternative equitable remedies, such as reimbursement alimony or direct reimbursement for educational contributions.
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