Bell v. Bell

Thompson, J., delivered the opinion of the Court. Diane M. Bell, the appellant, appeals from an order from the Circuit Court for Montgomery County which dismissed her bill of complaint for cancellation of a separation and property settlement agreement between her and her husband, Stanley A. Bell, the appellee, and the cancellation of eleven deeds executed pursuant to that agreement. She raises three questions on appeal: (1) was the chancellor’s decision clearly erroneous when he found that the agreement and deeds were not obtained by duress or undue influence, (2) was there an error in the admission of evidence, and (3) was the chancellor clearly erroneous in finding that the appellant ratified the agreement and the deeds. The facts that gave rise to this suit are as follows.

Diane Bell consulted an attorney in July of 1975, concerning the preparation of a separation agreement. The agreement was prepared and Mrs. Bell presented it to Mr. Bell at home on the morning of August 27, 1975. After examining the agreement at his place of business Mr. Bell inserted several changes and gave it to his secretary for retyping. Two ¹² significant changes were made in the agreement.

The original provided for child support in the amount of $700 per month. This figure in the amended agreement was reduced to $300. Mr. Bell’s agreement also provided for the disposition of the eleven houses owned by the parties as tenants by the entireties. Under his agreement Mrs. Bell was to receive one of the houses while he retained the other ten.

After his agreement was completed he telephoned the appellant and asked her to come to his office in Wheaton to sign the agreement. At that time no mention was made of the changes. When Mrs. Bell arrived, Mr. Bell suggested that they go to the nearby offices of Ralph Duane Real Estate Co. so that they could discuss the agreement in private. Prior to Mrs. Bell’s arrival Mr. Bell had prepared a series of sixteen 3x5 cards containing phrases such as “the man,” “the kids,” “his carrer,” “your name,” and “Ingrid (accessory).” During the course of the meeting he used these cards to inform the appellant of an investigation of her activities by private detectives and his knowledge of her adulterous affair with a police lieutenant.

He also informed her that he knew that many of the contacts occurred at the apartment of her friend, Ingrid Gibson. He then presented his version of the separation agreement and made it clear that unless she signed it he would reveal her relationship to the Internal Affairs section of the police department and to the newspapers. Several times during the course of the conversation Mrs. Bell threatened to leave or requested an opportunity to consult with her attorney, but on each occasion, Mr. Bell threatened to “start the ball rolling” if such attempts were made before the agreement was signed. Mr. Bell placed a tape recorder in the office and recorded the entire conversation without the knowledge of Mrs. Bell.

The tape was introduced into evidence. After Mrs. Bell registered several protests, she read through the agreement and negotiated with Mr. Bell to make several changes. Among these changes was the receipt of a total of $15,000 in cash in addition to the one house. Under the agreement that was signed Mr. Bell received ¹³ approximately $163,000 worth of property that was previously owned as tenants by the entireties while Mrs. Bell settled for approximately $45,000 in cash and property. 1 The appellant argues that a confidential relationship existed between the parties and the burden was on the appellee to show the agreement was fair in all respects.

In order to establish a confidential relationship one must show that by virtue of the relationship between them, he is justified in assuming the other party will not act in a manner inconsistent with his welfare. Unlike many jurisdictions, Maryland does not presume the existence of a confidential relationship in transactions between husband and wife. Owings v. Currier, 186 Md. 590 , 47 A. 2d 743 (1946). In Maryland there has been a presumption that the husband is the dominant figure in the marriage.

In Manos v. Papachrist, 199 Md. 257, 262 , 86 A. 2d 474 (1951), the Court noted: “Ordinarily the relationship of husband and wife is a confidential one. Of course, in any given case it is a question of fact whether the marital relationship is such as to give the husband dominance over his wife or to put him in a position where words of persuasion have undue weight. Generally, however, on account of the natural dominance of the husband over the wife, and the confidence and trust usually incident to their marriage, a court of equity will investigate a gift from a wife to her husband with utmost care, especially where it strips her of all her property; and the burden of proof is on the husband to show that there was no abuse of confidence, but that the gift was fair in all respects, was fully understood, and was not induced by fraud or undue influence.” We noted the questionable foundation upon which this presumption rests in light of Article 46 of the Maryland Declaration of Rights, better known as the Equal Rights ¹⁴ Amendment, in Trupp v. Wolff, 24 Md. App. 588, n. 15 , 335 A. 2d 171 (1975), cert. denied, 275 Md. 757 . Since that decision, the Court of Appeals has held that sex classifications are no longer permissible under the amendment.

Rand v. Rand, 280 Md. 508 , 374 A. 2d 900 (1977). Consequently, the presumption of dominance cannot stand. When the presumption is disregarded the question of whether a confidential relationship exists between husband and wife becomes a question of fact. Among the various factors to be considered in determining whether a confidential relationship exists are the age, mental condition, education, business experience, state of health, and degree of dependence of the spouse in question.

Treffinger v. Sterling, 269 Md. 356 , 305 A. 2d 829 (1973); Hoffman v. Rickell, 191 Md. 591 , 62 A. 2d 597 (1948); Gaggers v. Gibson, 180 Md. 609 , 26 A. 2d 395 (1942); Gaver v. Gaver, 176 Md. 171 , 4 A. 2d 132 (1939). The testimony shows that Mrs. Bell was born in Europe, moved to this country when she was eleven years old, and left school at the age of fifteen. Although she is employed as a beautician, she has relatively little experience or expertise in business matters. On the other hand, Mr. Bell is an experienced businessman, possesses a real estate license, and has a college degree.

The chancellor considered these facts, but found that no confidential relationship existed primarily because Mrs. Bell negotiated several changes in the agreement and questioned other provisions, as is clearly shown by the tape recording. He found there was a lack of trust and confidence in the other party necessary to the establishment of a confidential relationship. We are unable to say his decision on this issue was clearly erroneous. Md. Rule 1086.

Absent proof of a confidential relationship between the parties, separation agreements, not disclosing any injustice or inequity on their face, are presumptively valid and the burden is on the party challenging the agreement to show its execution resulted from coercion, fraud, or mistake. Cronin v. Hebditch, 195 Md. 607 , 74 A. 2d 50 (1950); Owings v. ¹⁵ Currier, supra; Jackson v. Jackson, 14 Md. App. 263 , 286 A. 2d 778 (1972). The only inequity claimed by the appellant is that she relinquished her one half interest in approximately $210,000 worth of real estate for approximately $45,000 in property and cash. This disparity in consideration is not sufficient to show that the agreement was unjust or inequitable.

The cases which have found agreements to be unjust or inequitable on their face involved agreements that were completely lacking in any reasonable consideration. Cronin v. Hebditch, supra; Eaton v. Eaton, 34 Md. App. 157 , 366 A. 2d 121 (1976). In Cronin the wife signed an agreement releasing all her rights in property totalling more than $700,000 for a mere $10,000 and the Court of Appeals voided the agreement. More recently, in Eaton we struck down an agreement in which rights in $200,000 to $250,000 worth of property were released for $4,300.

There we said: “ ‘[The] defendant in this case has ostensibly purchased far more cheaply than a Court of Equity can condone all of the plaintiff’s rights “of whatsoever kind or nature originating in and growing out of the marriage status.” ’ ” 34 Md. App. at 162 . As we are unable to say the agreement in question was lacking in any reasonable consideration, Cronin and Eaton cannot be used to relieve the appellant from proving the agreement was the product of duress or undue influence. 2 ¹⁶ The appellant’s claim of duress or undue influence rests on the threats of Stanley Bell to notify the Internal Affairs section of the Police Department and the newspapers of her adulterous relationship unless the agreement was signed. Mr. Bell also stated that such disclosures would ruin the career of her lover and Ingrid Gibson, as well as her reputation in the community. The chancellor construed these statements as being no more than a threat to institute a divorce action on the grounds of adultery.

In order to establish duress there must be a wrongful act which deprives a person of the exercise of his free will. See Central Bank v. Copeland, 18 Md. 305 (1862); Restatement (Second) of Contracts § 316-318 (Tent. Draft No. 12, 1977); 13 Williston on Contracts, §§