Rome LLP, New York (Caroline Krauss-Browne and Heidi A.
Tallentire of counsel), for Ning-Yen Yao, appellant.
Chemtob Moss & Forman, LLP, New York (Nancy Chemtob of
counsel), for Chemtob Moss & Forman, LLP, appellant.
Hyman, P.C., Bronx (Julie Hyman of counsel), for respondent.
Friedman, J.P., Renwick, Saxe, Gische, JJ.
Supreme Court, New York County (Laura E. Drager, J.), entered
March 10, 2015, to the extent appealed from as limited by the
briefs, awarding defendant equitable distribution of 10% of
plaintiff's enhanced earning capacity, maintenance of $5,
000 per month, retroactive to June 1, 2009 and for one year
following entry of the judgment of divorce, and counsel fees
of $200, 000, unanimously modified, on the law and the facts,
and the matter remanded to Supreme Court for entry of an
amended judgment that conforms with the court's decision
dated October 15, 2013 and is in accordance herewith, and
otherwise affirmed, with costs.
plaintiff appeals from several aspects of Supreme Court's
judgment of divorce, the single most divisive issue between
the parties is the court's decision to distribute an
equitable share of plaintiff's enhanced earning capacity,
due to his attainment of a medical license during the
marriage.  Plaintiff contends there was a failure
of proof because defendant's expert was unreliable, and
even if reliable, plaintiff's enhanced earnings are
solely due to his own efforts without any contribution
whatsoever, whether economic or noneconomic, by defendant. We
conclude that Supreme Court correctly relied upon
defendant's expert in determining the value of
plaintiff's enhanced earnings. We conclude further that
the Supreme Court did not abuse its discretion in awarding
defendant 10% of this marital asset for her noneconomic
contributions (Holterman v Holterman, 3 N.Y.3d 1, 8
; see O'Brien v O'Brien, 66 N.Y.2d 576');">66 N.Y.2d 576
parties were married on May 27, 2000. They have two children,
born in August 2002 and November 2004. This divorce action
was commenced on October 11, 2007. By the time the parties
met in December 1998, plaintiff had completed medical school
and was in the middle of a one year internship at a local
hospital in New York. He had already completed one year of
his residency at a hospital in Boston. Plaintiff completed
two out of three parts of the United States Medical Licensing
exam during medical school, and passed the third part in
February 2001, nine months after the parties married.
Although plaintiff enrolled in an unaccredited fellowship
program after graduation, he did not complete the program. In
July 2003 he accepted employment with Lenox Hill
Anesthesiology PLLC (LHA). Plaintiff has yet to pass the oral
component of his medical boards for anaesthesiology, although
he has taken the exam twice. LHA was aware of this fact when
they offered him partnership track employment. Plaintiff
remains employed by LHA and although his employment agreement
expired in 2007, he works under an "evergreen"
renewal of the agreement, meaning he is working under the
same terms and conditions.
took some college courses before marriage, but did not
complete her bachelor's degree (in East Asian Studies)
until May 2007. She has sporadically worked at various office
jobs that pay $15 or less an hour. She also works as a
Mandarin language tutor and for which she is paid $30 per
hour. Throughout the marriage, however, defendant did not
work outside the home. The parties maintained a fairly frugal
lifestyle and vacations consisted mostly of visiting family.
Frequently, defendant took the children on extended visits to
China and on at least one occasion spent the summer there.
Plaintiff did not always accompany the family on these
of equitable distribution, maintenance, and counsel fees were
referred to a Special Referee to hear and report. This appeal
involves the court's decision and order dated October 15,
2013, confirming in part and partly modifying and rejecting
the Referee's recommendations in her January 22, 2013
at trial included the parties, their parents, James Richter,
M.D., LHA's manager, and David Gresen, CPA/ABV, who was
qualified as an expert in forensic accounting. Gresen was
called as defendant's expert witness to value that part
of plaintiff's enhanced earning capacity attained during
the parties' marriage. Plaintiff did not call any expert
on this valuation issue.
preparing his report, Gresen relied on various documents,
including plaintiff's W-2 forms, information about
plaintiff's license to practice medicine, and his
employment agreement with LHA dated July 14, 2003. Much of
this information is not in dispute. Plaintiff obtained his
New York State medical license on May 5, 2003 and he had
income of $122, 516 in 2003; $258, 210 in 2004; $454, 492 in
2005; $715, 313 in 2006; and in 2007 his income was $837,
253. Plaintiff was on a partnership track at LHA and was
compensated the first year at an amount equal to 50% of what
a representative full member of that partnership would
receive; the second year, his compensation was 70%; the third
year at 90%; and the fourth year and final year of the
contract, which was 2007, also his earning year as of the
date of trial, he received compensation equal to 100% of what
a representative partner of LHA was paid. In valuing
plaintiff's enhanced earnings, Gresen stated in his
report and testified at trial, that he was not provided with
information regarding how plaintiff is paid or a breakdown
between his basic compensation and any bonuses. Gresen could
only state that plaintiff's compensation was determined
by the accumulation of "points."
used a methodology commonly employed in determining the value
of a medical license earned during a marriage (Grunfeld v
Grunfeld, 94 N.Y.2d 696, 702 ). He first
determined that plaintiff would have earned $173, 000 per
annum as a typical family practitioner, without the
enhancement (baseline earnings). He then determined what
plaintiff's earnings were with the license (topline
earnings). Although Gresen proposed two different
possibilities for topline earnings, the court accepted the
lower value of $733, 000, based upon a three-year weighted
average of plaintiff's earnings from 2005 to 2007. Gresen
deducted baseline earnings from topline earnings, detailed
how tax impacted the amount, and made other adjustments,
including a calculation of earnings over a work life
expectancy, which was then reduced to reflect present value.
He also applied a coverture fraction to reflect the fact that
the enhancement was attained partly during the marriage and
partly before. Based upon his mathematical calculations,
Gresen valued plaintiff's enhanced earning capacity as
$3, 740, 000.
trial, plaintiff challenged some of Gresen's assumptions
and Gresen made some further adjustments to his calculations.
He reduced the coverture fraction from 75% to 69%, to account
for the incomplete fellowship and a seven month leave of
absence that plaintiff took from his residency (July 2000 -
February 2001) when he decided to explore a nonmedical career
path. Gresen acknowledged that he had not known about the
leave of absence, or realized plaintiff had not completed his
fellowship. These adjustments resulted in a lower valuation
of $3, 440, 000, which was ultimately accepted by the court.
trial, plaintiff's employer, Dr. Richter, was called to
testify about plaintiff's work habits and compensation.
Apparently a primary purpose of Dr. Richter's testimony
was to establish that Gresen's topline earnings
calculation was incorrect. Dr. Richter testified that LHA
doctors are compensated according to a formula using
"units" and "compensation points, "
rather than straight hours worked, resulting in unpopular
shifts, such as holidays, nights and weekends being worth
more, and earning higher compensation, than more conventional
days and hours. Dr. Richter also testified that he could not
continue to employ plaintiff if he does not become board
certified, and that plaintiff is the only doctor on staff at
LHA who is not board certified. Dr. Richter testified,
however, that he has afforded plaintiff flexibility, because
plaintiff is a valuable asset to the group. Plaintiff remains
employed with LHA on the same employment terms and
conditions, notwithstanding ...