Bryant v. Bryant

NAZARIAN, J. Troy Bryant (“Husband”) appeals four of the Circuit Court for Anne Arundel County’s many decisions in a divorce proceeding initiated by his (now ex-)wife, Roxanna Bryant (‘Wife”). He claims that the trial court abused its discretion when it awarded Wife indefinite alimony, and that it erred in finding that payments he characterizes as “loans” made to him by his employer constituted income during the marriage, and therefore marital property for purposes of calculating indefinite alimony. He also argues that the court wrongly failed to create a “constructive trust” or other vehicle to vest him with a full ownership interest in property at issue in the divorce, even though it was titled in Wife’s name. Finally, he appeals the trial court’s finding that he was in contempt after he failed to pay child support.

Wife filed a cross-appeal arguing that the court relied on an incorrect alimony figure when it calculated child support. We find no errors and affirm. I. BACKGROUND 1. The marriage and the parties’ careers.

Husband and Wife were married on June 26, 1992 and had two children, both of whom are now over the age of eighteen. Although neither Husband nor Wife graduated from college, ¹⁵¹ both have had successful careers. After serving in the Marines, Husband worked as a financial advisor for several institutions, and he accepted his current position with UBS in 2010. His salary agreement with UBS was complex, and the subject of much disagreement by the parties.

Husband entered into a Letter of Understanding with UBS on November 8, 2010, under which he received what the Letter characterized as a “cash loan” or “transition loan” in the amount of $1,305,000 within thirty days. Husband also signed a series of “Transition Agreements” and promissory notes with UBS on November 17, 2010 and thereafter. Unlike more conventional loans, UBS made “payments” (by forgiving one-ninth of each loan) on Husband’s anniversary dates with the company as long as he continued to work there, and they would be forgiven in full after nine years. 1 Husband took the position at trial that the “loans” were, in fact, loans, not signing bonuses or compensation, because after the divorce he would remain responsible to repay them, and in any event they could not be considered “property acquired during the course of the marriage” (the term of art that we discuss below) to the extent he would not have done the work entitling him to forgiveness until after the divorce. Husband asserted generally that although he received the loan proceeds and a commission-based salary, he really only netted about $65,000 in income each year.

Wife, on the other hand, contended that the $1.3 million payment was a “retention bonus” that UBS structured, for tax purposes, as a loan with payments due over a period of years. Wife testified that Husband had referred to these payments at the outset as a “signing bonus,” and only began calling the payments a “loan” once the divorce proceeding was underway. ¹⁵² (For clarity, we refer to the payments that Husband received from UBS through the course of the marriage as the “UBS payments.”) Wife worked as a secretary after graduating from high school, and continued to work after they married and through the birth of their two children. By 2000, she was earning about $60,000 a year. In 2001, she and three friends started a company, Intuitive Business Concepts, Inc. (“IBC”), that was successful: each partner received an annual salary of $104,000, along with partnership distributions and other benefits that, at their peak, yielded a salary of $145,000.

After she tried to sell her interest in the business in 2006, she became embroiled in a dispute with her partners and ultimately settled with IBC, exchanging her interest for a series of payments totaling $280,000 over three years. Wife testified that she and Husband put all this money toward living expenses. Wife took a year off from working to comply with a non-compete she signed with IBC. 2 In September 2008, she took a job as an independent contractor for the Accrediting Council for Independent Colleges and Schools (“ACICS”). At the time of trial, she worked approximately twenty-four hours a week and billed $125 an hour, but received no benefits or reimbursements.

Wife testified that she has looked for a full-time job, and the maximum potential full-time salary she had found was about $110,000 a year — approximately $15,000 more than she was making. She also spent about sixteen hours a week working (unpaid) at the bar she and Husband acquired years ago which, as we discuss next, became a significant problem in the parties’ relationship. 2. Park Place Adventures, LLC & its investments. To realize his “life long dream” of owning his own bar, Husband formed, on January 1, 2010, a limited liability compa ¹⁵³ ny, Park Place Adventures, LLC (“Park Place”) that purchased a Severna Park restaurant called Snyder’s.

(The business later changed the name of the bar, and we refer to it generally as “the bar.”) Husband intended to share ownership in Park Place with two of his UBS clients, Mark Tinordi and Jeffrey Kogok, but discovered shortly before forming it that UBS prohibited him from investing with his clients. To circumvent this problem, he placed a fifty-one percent interest in Park Place in Wife’s name and he held no membership share at all. Ironically, Wife had no interest in buying the bar, and testified that she “knew it would tear the family apart” because, as she saw it, it would give Husband opportunities to stay out late and drink with friends. She allowed Husband to put Park Place (and by extension, the bar) in her name, though, because she was concerned that even more problems would follow if the ownership share went to one of their children.

Park Place purchased Snyder’s on December 31, 2010. Husband financed the purchase by obtaining a UBS equity line of credit using his UBS payments as collateral and then borrowing about $1.4 million from the line of credit. The haphazard organization of Park Place may have contributed to the problems that followed. As Mr. Kogok explained, “the whole partnership agreement was sort of a last-minute thrown together [deal], as far as I can tell.” Mr. Kogok testified that he initially invested a quarter-of-a-million dollars in Park Place, and put in another $150,000 within the year-and-a-half before trial.

He did not investigate the details of the partnership or its management of the bar. When asked about whether he had approved the provision in the partnership documents that prevented members from selling their shares without unanimous consent, he admitted to signing off on it: “Again, I did a sloppy job and I just signed off on the thing because it was kind of after the fact and, again, I had complete faith in [Husband].” Everyone agrees that Husband changed the bar’s name in 2011 to “Hot Rodz & Rydz,” but they dispute many of the facts surrounding its management and finances. Wife says that she found out when the parties began the divorce pro ¹⁵⁴ ceeding that employees’ paychecks were bouncing, and she had major concerns about how it was run. At that point, she took over the bar, cut a number of other benefits, and cleaned up the bar’s finances.

Mr. Tinordi, who had been a client of Husband for about ten years, testified that once Wife took over, the restaurant (whose name changed again, this time to the “Severna Park Tap House”) started making money. Mr. Tinordi had a falling-out with Husband about Husband’s poor management of the bar, 3 and at the time of trial Mr. Tinordi was working there about five days a week, without salary, in an effort to help turn it around. Husband argued at trial that Park Place had a fair market value of $800,000 (based largely on its ownership of the Severna Park Tap House and the land on which it sat). He claimed that he was entitled to 77 percent of Wife’s interest in the value of Park Place (which, he claimed, was purchased with a loan collateralized by the proceeds of the UBS payments), reasoning that he had not yet repaid 77 percent of the UBS payments as of the date of the divorce. 3.

The parties’ lifestyle. As Husband’s earnings increased, the couple’s lifestyle changed too. The court described it as “lavish,” and their purchases backed up that characterization. Husband also appears to have displayed great magnanimity in sharing his wealth, both before and after the marriage ended; the former time period mattered to the parties’ standard of living during the marriage, and the latter period bore on the court’s analysis of whether Husband had dissipated marital assets after they separated: Pre-separation • The parties bought their house in May 2007 for $900,000, and bought the adjoining lot in order to build a swimming ¹⁵⁵ pool.

As of the time of trial, neither Husband nor Wife was making mortgage payments on the house. • The parties owned thirteen vehicles valued at nearly $250,000. • The parties bought permanent seat licenses to Ravens’ games worth $20,000. • The family enjoyed luxury vacations to Jamaica, the Bahamas, and ski resorts, as well as regular summer vacations. Post-separation • In September 2011, Husband bought a house for a daughter by his first marriage, which she transferred to his first wife, who took out a mortgage on the property. Husband bought the house back from his ex-wife after it went into foreclosure. • Husband bought a car for a friend’s use and paid the insurance on it. • Husband gave a boat to his son, who then sold it for $10,000, a price Husband thought was far too low. • Wife testified that after the divorce proceedings were underway, Husband began to cash in his retirement accounts. He withdrew nearly $50,000 each in April and May 2011, and withdrew over $180,000 in September that he gave to his daughter and son-in-law to buy a house. • The court found that Husband spent over $2,500 a month on “dining out and alcohol,” and noted that at trial, Husband could not account for more than $90,000 that he had spent between February 2013 and July 2013, other than to call them “living expenses.” The court also found that he spent several thousand dollars on jewelry for himself and his girlfriend.

The parties carried significant debt and Husband used the UBS payments to pay it off. The court found that “[i]t is clear that this money received [from UBS] was used by the parties during their marriage to support their lifestyle.” ¹⁵⁶ 4. The marriage dissolves. The parties disagreed about which of them brought about the deterioration of the marriage, but the trial court attributed it largely to Husband’s partying, drinking, and philandering.

Although Wife conceded that she had used drugs with Husband on occasion, she said that this took place only when he brought drugs into the house. (Husband argued that Wife, too, lived well, but the trial court did not appear to find his testimony in this regard significant or credible. 4 ) Wife testified that Husband had “another life going on [that she] didn’t know about,” which included heavy drinking, drug use, and affairs. He was rarely home at night, and she testified that she suspected he was with other women. The marriage was volatile well before the couple separated for the last time.

Wife testified that in 2006, she got a phone call in the middle of the night from a woman claiming to be Husband’s girlfriend. Husband was out of the house, and Wife tracked him down by calling another romantic interest of Husband, with whom he was out at the time. Wife threw his belongings onto the front lawn and he moved out of the house, but they reconciled several months later. Mr. Kogok recalled admonishing Husband at one point that he should not be staying out so late, and should be spending evenings at home with his family.

The parties separated for good on July 1, 2011. 5 Wife filed for divorce in June 2012. 5. Proceedings in the trial court. The court held a four-day hearing in July 2013, at which Husband, Wife, and numerous other witnesses testified, and issued a written opinion that was docketed on October 9, 2013. ¹⁵⁷ The court granted Wife’s request for divorce, and considered separately child support, alimony, marital property, dissipation of assets, and use and possession of the home, along with Wife’s claim for attorney’s fees. The court’s forty-one page written opinion made detailed findings of fact and decided numerous disputed issues by the parties.

Among other things, the court found that Husband “lack[ed] credibility” overall, pointing out that “[h]is testimony was substantially challenged.” It lay the blame for the marriage’s deterioration almost solely at Husband’s feet: “The Court also finds that this is a rare case in which the ‘circumstances that contributed to the estrangement of the parties’ weighs heavily in that, but for [Husband’s] actions and mistakes, particularly his substance abuse, proclivity for other women, and late night partying, the marriage might still be intact.” We discuss the trial court’s specific factual findings in greater detail as necessary for our analysis, but highlights included the following decisions: • The court awarded use and possession of the family home to Wife, at least until their youngest daughter graduated from high school or turned nineteen; • The court found that Husband had failed to disclose and had dissipated assets, spending over $2,000 per month on food and drink for the six months leading up to trial, and over $90,000 in that same time period on undefined “living expenses”; • The court valued Wife’s interest in Park Place at $76,710 (adopting Wife’s expert’s proposed valuation, as opposed to Husband’s expert, who put the value of her interest in the business at over $400,000). • The court awarded Wife $78,000 to account for Husband’s decision to finance the purchase of a home for his daughter with proceeds from his IRA/Retirement account, and nearly $132,000 “as an adjustment of the equities between the parties” (which the court backed up with a chart explaining its rationale); ¹⁵⁸ • The court awarded indefinite alimony to Wife of $4,500 per month; • The court ordered Husband to pay child support of $4,927 per month; and • The court awarded attorney’s fees to Wife in the amount of $65,000. Husband filed a Motion to Reopen the Case, along with a Motion to Alter or Amend. The court denied both on November 18, 2013. Husband filed a timely Notice of Appeal on December 9, 2013, and Wife filed a cross-appeal on December 13, 2013.

II

DISCUSSION Husband attacks the circuit court’s first- and second-level findings of fact and conclusions of law. The standard of review differs for these varied conclusions, and we look at the decisions through different lenses depending on their character. But overall, Husband attacks the trial court’s decisions— from the character of the UBS payments to its broader decision to award indefinite alimony — as punitive rather than grounded in fact, and that theme runs through his whole brief. 6 We disagree. As Husband contends, it would have ¹⁵⁹ been improper for the court to award indefinite alimony as punishment for how he behaved over the course of the marriage.

But that is not what happened; instead the court made credibility findings that it then used to support its legal conclusions. Specifically, the court found Husband’s testimony not to be credible in a number of areas: first, his lifestyle (both when he was married and after the separation); second, his role in Park Place and the limited success of the bar; and third, his assertions that the UBS payments constituted loans that Husband never considered income. The court’s view of Husband’s credibility in all those areas necessarily, and appropriately, affected its conclusions (and therefore we recount Husband’s testimony in those areas in some detail here and above). Because the court’s factual findings were not clearly erroneous, and because its disposition of the case — including those issues raised in Wife’s cross-appeal — fell within the bounds of the circuit court’s discretion, we affirm.

A. The Trial Court Did Not Abuse Its Discretion When It Awarded Wife Indefinite Alimony. Maryland’s statutory scheme favors fixed-term, “rehabilitative” alimony rather than indefinite alimony. See Blaine v. Blaine, 336 Md. 49, 68 , 646 A.2d 413 (1994). But a court may award indefinite alimony in two different circumstances, one of which is at issue here: where, “even after the party seeking alimony will have made as much progress toward becoming self-supporting as can reasonably be expected, the respective standards of living of the parties will be unconscionably disparate.” FL § 11 — 106(c)(2). ¹⁶⁰ We review indefinite alimony awards at more than one level.

First, we review the trial court’s findings of fact as to questions such as what a party’s income is (referred to as “first-level” facts) and reverse them only if clearly erroneous. Wenger v. Wenger, 42 Md.App. 596, 607 , 402 A.2d 94 (1979). Second, while the question of whether the standards of living between spouses will be unconscionably disparate is a factual one as well, Whittington v. Whittington, 172 Md.App. 317, 337 , 914 A.2d 212 (2007), it is not a “first-level” fact: It is a second-level fact ... that necessarily rests upon the court’s first-level factual findings on the factors [in FL § 11 — 106(b) ] that ... are relevant to all alimony determinations, and “all the factors ... necessary for a fair and equitable award”; and upon how much weight the court chooses to give to its various first-level factual findings. Id. at 337-38, 914 A.2d 212 (quoting FL § 11 — 106(b)).

Whether or not economic disparity will exist in the future requires the trial court to “projec[t] forward in time to the point when the requesting spouse will have made maximum financial progress, and compar[e] the relative standards of living of the parties at that future time.” Francz v. Francz, 157 Md.App. 676, 692 , 853 A.2d 839 (2004) (citing Roginsky, 129 Md.App. at 146, 740 A.2d 125 ); see also Blaine, 336 Md. at 64 , 646 A.2d 413 (noting that the statutory language “in effect requires] ... the court [to] make a prediction as to the success of the dependent spouse’s efforts to become self-sufficient”). A mathematical disparity, standing alone, does not mandate indefinite alimony — the FL § 11-106(b) factors drive the analysis. Ware v. Ware, 131 Md.App. 207, 232 , 748 A.2d 1031 (2000). “The interplay of those factors may frequently have a strong bearing on whether a particular disparity can fairly be found to be an unconscionable disparity.” Id. at 232-33 , 748 A.2d 1031 ; see also Innerbichler v. Innerbichler, 132 Md.App. 207, 248 , 752 A.2d 291 (2000) (affirming indefinite alimony award, noting that “unconscionable equitable disparity is more than a numerical calculation” (citing Ware, 131 Md. App. at 229 , 748 A.2d 1031 ), and affirming trial court’s “careful ¹⁶¹ analysis of the various equitable considerations”). The factors cover a wide range of considerations about the parties and their earning capacity: (1) the ability of the party seeking alimony to be wholly or partly self-supporting; (2) the time necessary for the party seeking alimony to gain sufficient education or training to enable that party to find suitable employment; (3) the standard of living that the parties established during their marriage; (4) the duration of the marriage; (5) the contributions, monetary and nonmonetary, of each party to the well-being of the family; (6) the circumstances that contributed to the estrangement of the parties; (7) the age of each party; (8) the physical and mental condition of each party; (9) the ability of the party from whom alimony is sought to meet that party’s needs while meeting the needs of the party seeking alimony; (10) any agreement between the parties; (11) the financial needs and financial resources of each party, including: (i) all income and assets, including property that does not produce income; (ii) any award made under §§ 8-205 and 8-208 of this article; (iii) the nature and amount of the financial obligations of each party; and (iv) the right of each party to receive retirement benefits; and (12) [other considerations not relevant here.] FL § 11-106(b).

Husband attacks several parts of the court’s decision on indefinite alimony, and we organize his complaints slightly ¹⁶² differently than he did in his brief. We look first at whether the trial court’s finding that the UBS payments were not loans but actually incentive bonuses was clearly erroneous; second, whether the court erred in finding (as part of its examination of the FL § 11 — 106(b) factors) that Wife was partially self-supporting and that Husband had the ability to pay alimony, and whether it examined the correct standard of living; and third, whether the court abused its discretion in finding an unconscionable disparity, which supported the ultimate decision to award indefinite alimony under § 11 — 106(c). 1. The trial court’s characterization of the UBS payments. Husband contends that the trial court erred in finding that the UBS payments constituted marital property rather than a loan.

He claims specifically that UBS characterized the payments as loans, and that portions of the loan would only be forgiven if he continued to work at UBS. He points to Schedule F, which he introduced at trial, as demonstrating that 77 percent of the UBS loan paid to him as of the date the parties separated ($1.67 million) remained outstanding ($1,286,720). That is, he had yet to pay back this money, and in his view, it does not constitute marital property because he will not actually acquire ownership of those funds until the entirety of the loan is forgiven, something that would not happen until November 2019, and only then if he remains employed by UBS. He complains that the court simply did not believe him, and from there the court’s characterizations of the UBS payments were clearly erroneous.

Wife counters that whatever label attaches to the UBS payments, the fact is that UBS paid Husband “over $2.2 million between November 2010 and February 2013,” and that the payments were structured for tax purposes. She also points out that the trial court’s findings regarding Husband’s income were bolstered by the fact that he earned additional income above and beyond the UBS payments — for example, his paystub from July 2013 reflected that he earned over $238,000 in the first half of that year. ¹⁶³ The trial court did not err when it characterized the UBS payments as income. The court became keenly aware of the unusual circumstances surrounding this unusually large payment and its complicated structure, and considered the testimony of Husband’s experts, but also looked through that testimony to conclude that the payments really served as an incentive rather than a loan: This case presents a special issue of how to treat the extra or additional income received by [Husband] with his work at UBS. After the testimony of the parties and both parties’ experts, it is the Court’s opinion that these payments are in fact “bonuses” or “incentive payments” and should therefore be treated as an asset. [Husband’s] own expert, Mr. Estabrook, stated that [Husband’s] so-called “loan” is “forgiven for services rendered” each year.

Furthermore, after review of the relevant documents and testimony, the Court is aware that the actual amount of money [Husband] owes under the terms of the “Promissory Note” is actually offset by the amount he receives on a concurrent date under the relevant “Transition Agreement,” which includes the accrued interest. Under the terms of the Transition Agreement, UBS actually pays [Husband] an amount to cover both the “loan” payment and the applicable interest that is owed on such payments on the date it becomes due.... [Husband] is therefore paid to pay back the loan, and does not expend anything out of his own funds, except the taxes on the year the transition payment is received. [Husband] himself stated that “we always lived off the loan, ” indicating that the parties used it as a source of income. (Emphasis added.) Husband claims that the trial judge erred in not crediting his version of the loan, and that the judge “made it clear he did not believe a thing that Husband said.” But this was the trial court’s prerogative. Husband presented an expert who attempted to establish that the loans were “debts,” but the court was free to discount his testimony or not to credit it at all.

Walker v. Grow, 170 Md.App. 255, 275 , 907 A.2d 255 ¹⁶⁴ (2006) (“The weight to be given the expert’s testimony is a question for the fact finder.”) We agree with Husband that “only assets acquired during the marriage are marital.” FL § 8-201(e)(1). But we disagree with his claim that under Harper v. Harper, 294 Md. 54 , 448 A.2d 916 (1982), he “obtained possession of the ... loan during the marriage, [but] did not acquire ownership in that portion of the funds until the anniversary date over the next nine years.” Nor does the label UBS and Husband put on the payments compel us to override the circuit court’s findings, particularly when Husband and Wife did not just “possess,” but actually spent the proceeds during the marriage, a reality that