Caccamise v. Caccamise

RICHARD T. ROMBRO, Judge. The Circuit Court for Anne Arundel County (Hon. James C. Cawood, Jr. presiding) granted an absolute divorce to appellant, Joseph Caccamise, from Susan Caccamise, appellee, on the ground of desertion. Both parties appealed and present numerous questions for our review.

Appellant asks: I. Did the trial court err in awarding alimony to appellee when she had no grounds for divorce? ⁵¹⁰ II. Did the trial court err in failing to find an irrevocable trust to be marital property subject to equitable distribution?

III

Did the trial court err in failing to award to appellant retroactive child support, where there was no finding that such an award would produce an inequitable result?

IV

Did the trial court err in granting use and possession of a vehicle owned by appellant’s business to appellee? V. Did the trial court err in awarding attorney’s fees to appellee? Appellee’s cross-appeal presents the following questions: I. Did the circuit court err in failing to determine that the parties’ separation was mutual and voluntary?

II

Did the circuit court err in determining the amount and time period for the monetary award by not ordering that the award be paid with interest and by not providing a contingency for early payment?

III

Did the circuit court err in only awarding $100 per month in alimony to appellee?

IV

Did the circuit court err in its determination and' calculation regarding the contribution it ordered from appellee to appellant on the condominium and home? Factual Background The parties were married on January 10, 1981, and had one child, Maria, born February 29,1984. At the time of the trial, the husband was 52 and the wife was 51. When the parties were married, appellant owned a business with two other partners called Technigraphics, Inc. Testimony disclosed the business had gross revenues in excess of eight million dollars.

Appellant’s salary at the time of trial was approximately $90,000 per year. In 1984, appellant had started another business, SKW Leasing, which bought, sold, and leased equip ⁵¹¹ ment to Technigraphies, Inc. Appellee was employed at the Pentagon by the Department of Defense, making approximately $69,000 from the time of the marriage until 1988. Up until the parties separated, appellee held various small jobs, none equaling her salary from the Department of Defense. 1 The parties built a new home together, partly with the proceeds from appellee’s sale of her prior home, a loan from appellee’s friend, and some proceeds from the sale of appellant’s prior business. The house was titled in appellee’s name until 1988, when the home was refinanced and appellant’s name was added to the deed.

Appellee has not contributed to the mortgage or other payments since she left the marital home in October 1996. Appellant purchased a condominium in Tampa, Florida, during the marriage, for his daughters from a previous marriage to reside in while they attended college. It was sold in 1997, for $12,402. The proceeds of the sale were retained by appellant.

The marriage began to deteriorate in 1994. The parties argued about appellee re-acquiring her job at the Department of Defense, and appellant’s conduct of his business. As a result, they began to spend more time apart. Appellee attended counseling and appellant later joined the sessions.

The counseling sessions ended in 1994-5. Sexual relations ceased, and appellee finally left the marital home in October 1996. 2 The appellee has had the use and possession of a Jeep owned by appellant’s business with appellant’s permission since the separation. ⁵¹² At the time of trial, both parties were employed. Appellant was making approximately $90,000 a year and appellee earned around $39,000 with the State of Maryland legislature. Appel-lee was also the beneficiary of an irrevocable life insurance trust in the amount of $600,000 established by appellant.

The trust gives the trustee full discretion except he must distribute up to $5,000 annually to appellee upon her request. ■ Procedural History Appellant filed a complaint for a limited divorce in the Circuit Court for Anne Arundel County in January 1997, asserting as the cause of action desertion or, in the alternative, voluntary separation. Appellant sought joint legal custody of their daughter, child support, a marital property determination, use and possession of the family home, and attorney’s fees. Appellee’s answer conceded that she left the marital home 3 but asserted that appellant had constructively deserted her. Appellee requested custody, child support, use and possession, and attorney’s fees.

In December 1997, appellant filed a Supplemental Complaint for Absolute Divorce. 4 The complaint alleged the same causes of action and requests for relief as the Limited Divorce complaint. Appellee answered in January 1998, with the identical responses as her answer to the first complaint. 5 The Circuit Court Findings Trial was held in the Circuit Court for Anne Arundel County in February 1998, following which the court took the following action: ⁵¹³ 1. Granted the divorce to appellant on the ground of appellee’s desertion. 2. Valued the property, and the businesses, and awarded appellee a monetary award in the amount of $425,000, “to be paid at $30,000 per year, effective April 1,1998.” 3.

Found that the irrevocable trust was not marital property because it was “too contingent.” 4. Awarded appellee $100 per month in alimony with no termination date. 5. Awarded custody to appellee; ordered appellant to pay child support; declined to award appellant retroactive child support for the short period of time prior to trial that he had custody. 6. Granted appellee the use and possession of the family home, and of the Jeep for a three year period. 7.

Granted appellee attorney’s fees of $10,000. 8. Awarded full contribution to appellant for the Florida condominium, and 40% contribution for the marital home’s expenses. After various post-trial motions, none of which are relevant to this appeal, the court requested counsel to submit an order reflecting the court’s opinions. A Judgment of Absolute Divorce was signed in November 1998.

This appeal followed. Discussion I. Appellant Husband’s Appeal A. Justification for Awarding Alimony Appellant contends that the trial court erred in awarding alimony to appellee when she had no ground for divorce. We disagree. The standard of review for alimony awards is the clearly erroneous standard; the decision is upheld “unless the chancellor’s decision was arbitrary or his judgment was clearly wrong.” Freese v. Freese, 89 Md.App. 144, 154 , 597 A.2d 1007 (1992).

The trial court held that ⁵¹⁴ the question of alimony is greatly tempered by the monetary award. She is earning about 27% of what he does. The monetary award will put them about equal. We will award the minimal sum of $100.00 per month ... recognizing the need that if, and as when the monetary award is paid, she may then have a greater need.

The court cited Quigley v. Quigley, 54 Md.App. 45 , 456 A.2d 1305 (1983), and concluded that “just because she left doesn’t deprive us of the right to grant alimony. We have to have some grounds of divorce to somebody.” In Quigley , the Chancellor held that the wife had not shown a need for alimony and he therefore did not grant the reservation of alimony. On appeal, wife complained that the divorce should have been granted to her and she would then have had “grounds” for alimony. The Quigley court noted that prior to 1980, when the General Assembly enacted the new Maryland Alimony Law, the wife’s argument was sound.

However, in that year the legislature, after setting forth the factors to be considered in awarding alimony, provided: The existence of a ground for divorce against the party seeking alimony is not an automatic bar to the Court awarding alimony to that party. Art. 16 sec. 1(a), now codified in Md.Code, (1999) Fam.L. § 11-103. Clearly a trial court, in the exercise of its judgment, after considering the factors listed in Md.Code, Fam.L. § 11-106, may award alimony to a “guilty” party. Here, the trial judge explained his reasons for the award of alimony, and we perceive no abuse of discretion.

B. Irrevocable Life Insurance Trust Appellant asserts that the trial court erred in failing to declare the irrevocable life insurance trust as marital property subject to equitable distribution. This is an issue of first impression in Maryland. ⁵¹⁵ Appellant established the irrevocable trust in 1988, placing in the trust a $600,000 life insurance policy managed by Sovran Bank as Trustee. The trustee controls the policy, and has the discretion as to distribution of the proceeds. The trustee is to pay the net income of the trust to appellee during her lifetime, and also has the right to distribute any or all of the principal to appellee to provide for her care during her lifetime.

Upon the death of appellant and appellee, the proceeds of the trust are to be divided among appellant’s children. The trust is irrevocable and is not subject to any powers to “alter, amend, modify or revoke.” The trial court held that the irrevocable trust was not marital property: ... unlike a revocable trust, these are no longer the property of Mr. Caccamise. Lynch v. Lynch, [ 147 Vt. 574 ,] 522 A.2d 234 ... under the trust terms, she [appellee] receives payment from the insurance proceeds during her lifetime. The trustee has the right to distribute the property to her for health, medical care, etc. during her lifetime.

She can elect $5,000 per year. Upon her death the children are beneficiaries. These are all fairly standard provisions in an irrevocable trust ... we think the interest is too contingent to be included as marital property. She may not survive him, so the Trust will have no assets.

It may well not be expended before she dies. It is too contingent to be counted. If it were, and it should have been counted, its nature would preclude us, in our discretion, from making any monetary award based on this property [emphasis added]. Trial courts are required to go through a three step analysis in determining whether to make a marital property award: (1) determining if the property is marital; (2) the value of the marital property; and (3) decide whether a monetary award is appropriate and equitable.

Alston v. Alston, 331 Md. 496 , 629 A.2d 70 (1993). Marital property is “all property however titled acquired by one or both parties during the marriage.” Md.Code, Fam. Law § 8-201 (e). ⁵¹⁶ We agree with appellant that the irrevocable trust was marital property. The trust was started by appellant for the benefit of appellee during the marriage with funds accumulated during the marriage.

The trust was funded by life insurance policies, which are recognized as marital property. Mount v. Mount, 59 Md.App. 538 , 476 A.2d 1175 (1984). In Mount , the appellant argued “that the chancellor erred in failing to include as marital property either the value of appellee’s life insurance /retirement policy in the face amount of $20,000.00, or the value of his $60,000.00 life insurance policy.” Mount, 59 Md.App. at 550 , 476 A.2d 1175 . This court held Both of these policies should have been included in the evaluation of the marital property.

The life insurance retirement fund was initiated in 1964. The parties were married in 1974, and divorced in 1983. Since appellant made weekly payments of $11 on this policy from 1974 to 1983, it is clear that part of the value was acquired during the marriage. Applying the source of funds theory, Harper v. Harper, 294 Md. 54 , 448 A.2d 916 (1982) ..., that part of the value of the life insurance retirement fund acquired during the marriage should have been included as marital property.

Although the status of the $60,000 life insurance policy is not as clear, there is sufficient evidence in the record to indicate that some premiums were paid after the marriage and to the extent that they were, the value so established should be included as marital property. Id. at 550, 476 A.2d 1175 . The Mount Court remanded and stated that “it will be necessary for the chancellor to determine what the ratio is between the amounts of premiums paid on these policies during the term of the marriage, against the amounts paid before the marriage, and the relation of this to the cash values of the policies at the time of the divorce.” Id. (citing Harper, supra).

We are also persuaded by a recent case decided by the Supreme Court of North Dakota, Fox v. Fox, 592 N.W.2d 541 , ⁵¹⁷ 1999 N.D. 68 (1999). The North Dakota Supreme Court looked to the decision reached in Herrick v. Herrick, 316 N.W.2d 72 (1982) 6 in stating that “generally trusts are includable as marital property subject to equitable distribution by the trial court ... however, this court has also held when receipt of future benefits is too speculative, the potential benefits should not be valued as assets in the marital estate.” Fox, supra, 592 N.W.2d at 546 . See Herrick, supra. The Herrick court’s rationale, adopted in Fox, reasoned that despite the fact that the wife did not make financial contributions to the trust, her contributions by means of “employment, effort and support to establishing” the funds rendered the trust marital property because in making a division of the property, the marriage status and obligations arising therefrom, as a whole, must be considered.

Herrick, 316 N.W.2d at 74 (citing Keig v. Keig, 270 N.W.2d 558 (N.D.1978)). We agree with the North Dakota Supreme Court cases of Herrick and Fox and hold that an irrevocable life insurance trust created by one spouse for the other during the marriage is the marital property of the beneficiary spouse because of the parties “marital status and obligations.” We therefore vacate the judgment of the monetary award. On remand, the court should determine the value of the irrevocable life insurance trust to be included as marital property. C. Retroactive Child Support Appellant contends that the trial court erred in failing to award him retroactive child support.

The trial judge said: As indicated, he was paying for the property without assistance. She paid no child support. He paid no alimony. At this point we don’t believe we should make either of the latter retroactive.

Of course, future child support depends on the disposition of the child. ⁵¹⁸ “As a general rule, the amount of a child support award is governed by the circumstances of the case and is entrusted to the sound discretion of the trial judge, whose determination should not be disturbed unless he acted arbitrarily in administering his discretion or was clearly wrong.” John O. v. Jane O., 90 Md.App. 406 , 601 A.2d 149 (1992). In Voishan v. Palma, 327 Md. 318 , 609 A.2d 319 (1992), the Court of Appeals stated that “while [child support] awards ... will be disturbed only if there is a clear abuse of discretion, a reviewing court must also be mindful that the federal call for child support guidelines was motivated in part by the need to improve the consistency of awards.” Id. at 331 , 609 A.2d 319 . Maryland law provides for the awarding of retroactive child support in § 12-101 of the Family Law Article: The Court may award child support for a period from the filing of the pleading that requests child support [emphasis added]. Id.

Although retroactive support is allowed, it is by no means mandatory. The trial court has discretion whether to award support retroactively, and we do not believe that there was an abuse of discretion in the present case. Appellant had custody of the child; however, his income was considerably more than appellee’s and his financial