CORNELL ECON 4040 - Haugan (11 pages)

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Haugan



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Haugan

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19


Lecture number:
19
Pages:
11
Type:
Lecture Note
School:
Cornell University
Course:
Econ 4040 - Economics and the Law
Edition:
1
Unformatted text preview:

Econ 4040 1st Edition Lecture 19 Outline of Previous Lecture I Peevyhouse Current Lecture II Haugan The couple Patricia and Gordon Haugan were married on August 4 1973 About a month later the husband entered medical school and the wife began gainful employment Each already had a bachelor s degree For the first four years of their marriage the wife taught elementary school while the husband attended medical school in South Dakota and then in Minnesota The wife s total earnings of between 26 187 and 28 974 supported the couple during these four years The husband received a stipend of 2 200 and borrowed money to pay education expenses 117 Wis 2d 203 The wife continued to teach school for the next three years of their marriage while the husband having graduated from medical school was in a medical residency in Chicago The husband s aggregate earnings for that three year period were between 49 254 and 49 548 and the wife s were between 43 339 and 45 056 In addition to working full time outside the home the wife performed virtually all of the household duties over the seven years In 1980 in anticipation of the husband s completing his medical training and beginning this practice of medicine the couple bought a house in Green Bay Wisconsin and the wife resigned from her teaching job On May 13 1980 however about two months before the husband completed his medical residency the couple separated In August 1980 the husband began practicing pediatric medicine in Green Bay at an annual salary of 48 000 4 000 a month plus bonuses for a total annual compensation of 55 498 The wife was unemployed until February 1981 when she began a job with IBM in Green Bay at an annual salary of 19 680 1 640 a month Between August 1980 and August 1981 the husband voluntarily paid the wife a total of 10 150 817 a month in temporary maintenance plus half of a joint income tax refund of 693 The wife testified that at the time of the marriage she and her husband shared the expectation that she would support him while he obtained his medical education and that he would support her after he began his medical practice allowing her to pursue the career of a homemaker wife and mother The husband argued that the record did not establish a mutual agreement since it contained no evidence These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute of a written or formalized agreement The trial court concluded that no mutuality of such contract had been established and that the wife s expectation was not an express or implied contractual 117 Wis 2d 204 arrangement Nonetheless cognizance must be taken of the fact that the husband had a general idea of the wife s expectations Roberto v Brown 107 Wis 2d 17 20 318 N W 2d 358 1982 At the time of the divorce the couple had acquired few assets and substantial liabilities The couple s assets included cars valued at 4 650 furniture valued at 10 675 an interest in a teacher s retirement fund valued at 2 808 shares of stock in the clinic where the husband worked valued at 4 000 and the house in Green Bay valued at 102 000 The couple s total assets were valued at 124 133 The couple s liabilities included debts the husband incurred before marriage 1 365 debts incurred during marriage for living expenses and acquisition of property 28 529 debts incurred for the husband s medical education 13 457 1 the land contract on the Green Bay home 80 013 and the 1981 real estate taxes 2 812 The couple s total liabilities at the time of the divorce amounted to approximately 126 176 thus exceeding the value of the assets 2 The trial court divided the parties assets as follows It treated the 20 000 equity in the house as an asset subject to property division and awarded the wife 10 000 payable by the husband in four equal annual 117 Wis 2d 205 installments with interest at 10 percent The husband was awarded the other 10 000 equity by being awarded the house subject to the land contract liability The trial court divided the tangible personal property as follows It awarded the wife one car valued at 1 800 and furniture valued at 7 300 it awarded the husband two cars valued at 2 850 and furniture valued at 3 375 The wife received the interest in the teacher s retirement funds valued at 2 808 before taxes the husband received the clinic stock valued at 4 000 Thus she received assets valued at 11 908 plus the 10 000 payable in installments that represented one half of the equity in the house he received assets valued at 10 225 plus one half of the equity in the house valued at 10 000 All of the debts of the parties the debts the husband incurred before marriage the debts the parties incurred during marriage and the debts the husband incurred for medical education were assigned to the husband The trial court s explanation of its division of the marital property assets and liabilities was limited The trial court stated that although it was not enumerating all the factors set forth in secs 767 255 and 767 26 Stats 1981 82 it had considered all the statutory factors and it intended to award the wife more than 50 percent of the marital property The trial court denied the wife s request for maintenance payments on the grounds that her post divorce income would exceed her pre divorce income and she would not be in financial need after the divorce On appeal from the portion of the judgment denying maintenance and awarding property division the court of appeals affirmed the judgment of the circuit court It concluded that the circuit court had not abused its discretion in denying maintenance since the wife was employed and in good health It concluded that the property 117 Wis 2d 206 division was equitable because the marital estate had a negative value the husband s net property award was a negative figure because he had to pay the debts and the wife s share of the assets valued at 21 908 was greatly in excess of the 50 50 marital property division set forth in the statutes The problem this case poses is not uncommon 3 University degree divorce decree cases are frequent In many marriages while one spouse pursues an undergraduate graduate or professional degree or license the other works to support the couple and foregoes his or her own education or career and the immediate benefits of 117 Wis 2d 207 a second income which the student spouse might have provided The couple typically expects that the degree will afford them a


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