Coutant v. Coutant

BLOOM, Judge. In August 1985, the Circuit Court for Anne Arundel County granted appellant, Judith Coutant, a divorce a vinculo matrimonii from appellee, Norman Coutant, and awarded appellant custody of the parties’ minor child, use and possession of the family home, child support, alimony, and counsel fees. In February 1988, custody of the minor child was transferred from Mrs. Coutant to Mr. Coutant, who thereafter filed a Motion for Modification of the Divorce Decree. The court held that since appellant no longer had custody of the child she was no longer entitled to the use and possession of the former family home.

The court appointed a trustee to sell the property in lieu of partition and directed that the proceeds of sale be placed in escrow pending a further hearing to determine the distribution of such proceeds of sale as well as any remaining issues. After conducting a hearing to determine the distribution of the house sale proceeds, the court filed a “Memorandum of Opinion and Decree,” on 25 November 1988. 1 On 30 December 1988 Mrs. Coutant noted an appeal to this Court from the November 25th decree. We dismissed that appeal because the notice of appeal had been filed more than 30 days after the date of the judgment from which it was taken. The Court of Appeals granted certiorari to determine whether the judgment became final and appealable only ⁵⁸⁵ upon the later entry of the order fixing the trustee’s fee.

It was then discovered that the Clerk of Court for Anne Arundel County had failed to enter the order of 25 November 1988 on the docket, whereupon the Court of Appeals dismissed the appeal as premature, since there was no judgment of record. Judgment was docketed by the Clerk of Court on 6 April 1990, after which appellant took this timely appeal, in which she presents a pentad of issues: 1. Did the trial judge commit reversible error in refusing to hear evidence concerning a monetary award? 2. Did the trial judge commit reversible error by allowing non-enforceable loans to be considered marital debts? 3.

Did the trial judge commit reversible error by requiring appellant to pay contribution to appellee for mortgage payments made under court order? 4. Was the trial judge’s finding of waste by the appellant supported by the evidence? 5. Should the appellant have been granted post-judgment interest on the unpaid attorney’s fees which were reduced to a judgment? Facts The parties were married in Connecticut on 4 September 1971, and later moved to Maryland.

Their son was born on 19 October 1979. The parties separated in April 1984, with Mr. Coutant leaving the family home in Pasadena, Maryland. Slightly over a year later, Mrs. Coutant filed a complaint for an absolute divorce which was granted on 13 August 1985. The judgment of divorce granted her custody of the parties’ minor child, and she was awarded child support and the use and possession of the family home and family use personal property for a period of three years.

Mrs. Coutant was also awarded rehabilitative alimony in the amount of $350 per month for three years and permanent alimony in the amount of $100 per month thereafter. ⁵⁸⁶ Mrs. Coutant was ordered to pay “all maintenance expenses on the family home,” but Mr. Coutant was ordered to pay the mortgage, insurance, and taxes during the use and possession period. The judgment of divorce further provided that a final adjustment of the “equities and rights of the parties concerning the family home” would be made upon termination of the use and possession order. Finally, the court ordered Mr. Coutant to pay $2,000 toward Mrs. Coutant’s attorney’s fees. A monetary judgment for the $2,000 award of counsel fees was entered.

The court declined to grant a monetary award at the time of divorce, since the only marital property, with the exception of an automobile having no value that Mr. Coutant left with Mrs. Coutant, was the property subject to the use and possession order. According to the statute then in effect, § 8-203(c) of the Family Law Article of the Annotated Code of Maryland (1984), such property could not then have been considered by the court as marital property for the purpose of making an award. As a result of the change of custody in February 1988, the court terminated the use and possession order and appointed a trustee to sell the property in lieu of partition, with the proceeds of sale to be placed in escrow pending a further hearing to determine how they should be distributed. The house was sold in the summer of 1988 for $120,000, netting the sellers a total of $64,831.94.

Following the sale, the court conducted a hearing to determine how the proceeds of the sale should be distributed. According to the court, there were four sub-issues to be decided, all of which would have an impact on the distribution of the proceeds: (1) marital property/monetary award, (2) joint loans, (3) right of contribution, and (4) waste. The court declined to take additional evidence pertaining to a monetary award, insisting that it had “ruled on this issue at the hearing and held it had been determined in its Memorandum of Opinion and Decree of August 13, 1985, ⁵⁸⁷ that no award would be made.” The court also ruled that $11,000 be deducted from the proceeds of sale prior to distribution and paid to Mr. Coutant as the obligor on two notes to his mother for funds he had borrowed to acquire the parties’ first house in Connecticut. With respect to contribution, the court held that Mr. Coutant was entitled to be reimbursed by Mrs. Coutant for one-half the mortgage payments made by him from the date of the divorce judgment until the date the house was sold.

Concerning the issue of waste, Mr. Coutant claimed that he was entitled to reimbursement for the deterioration of the property during the use and possession by Mrs. Coutant since she had been ordered to maintain the property. The court took note that the appraiser had reduced the value of the property by $17,500 due solely to its poor condition and projected repairs, replacements, and remodeling. The only item addressed in the trustee’s report, however, that the court found attributable solely to appellant was a collapsed septic system. The court held Mrs. Coutant liable for $2,200, the estimated cost of repair to that system, by virtue of the requirement that she be responsible for maintenance of the house.

Both parties addressed one final issue at the hearing, attorney’s fees. Mrs. Coutant requested the court to direct the trustee to subtract from sums awarded to Mr. Coutant the amount awarded to her for attorney’s fees at the time of divorce, together with judgment interest thereon. The court directed that $2,000, without interest, be subtracted from appellee’s share of the proceeds. Furthermore, the court ordered Mrs. Coutant to “repay into the proceeds” the sum of $1,866, which had been paid out of the proceeds of sale at settlement to satisfy a lien against her.

As we address each of appellant’s assertions, further facts will be set forth as necessary to the discussion. I Appellant first asserts that the trial court’s failure to hear additional evidence concerning a monetary award ⁵⁸⁸ was reversible error. According to § 8-203(c) of the Family Law Article, 2 which was in effect at the time of the divorce, “the family home and family use personal property may not be considered marital property so long as the family home or family personal property is the subject of a use and possession order.” Furthermore, § 8-210(c) expressly authorizes the court to make a further adjudication of a marital award at the termination of the use and possession order. That subsection states: When a provision that concerns the family home or family use personal property terminates, the court shall treat the property as marital property if the property qualifies as marital property, and adjust the equities and rights of the parties concerning the property as set out in § 8-205 of this subtitle.

See also Barr v. Barr, 58 Md.App. 569, 586-87 , 473 A.2d 1300 (1984). Section 8-205(a) of the Maryland Family Law Article provides, in pertinent part: After the court determines which property is marital property, and the value of the marital' property, the court may grant a monetary award as an adjustment of the equities and rights of the parties concerning marital property, whether or not alimony is awarded. The court shall determine the amount and the method of payment of a monetary award after considering each of the following factors:____ (Emphasis added.) 3 ⁵⁸⁹ In the 13 August 1985 memorandum of opinion and decree, the court noted that, other than the family home, there was no evidence submitted concerning the existence of any other marital property. 4 Upon the termination of the use and possession order, the trial court declined to address the issue of a monetary award because, according to its memorandum of opinion and decree of 13 November 1988, it had considered that issue during the 13 August 1985 hearing wherein it determined that no award would be made. It is obvious, however, that since there was no marital property as of 13 August 1985 upon which any monetary award could have been based, the family home then being subject to a use and possession order, the court could not have considered and decided the issue in 1985.

The court erred, therefore, in refusing to consider any of the proceeds of the sale of the former marital home as marital property on the basis of which a monetary award could be granted. This is not to say that a monetary award should be granted, although our disposition of the “Crawford contribution” issue, Part III hereof, infra, may be a factor to consider in determining whether an award is appropriate. As we noted in Ward v. Ward, 52 Md.App. 336, 339, 449 A.2d 443 (1982), “It is important to recognize that the monetary award is purely discretionary.” Nor is ⁵⁹⁰ the court now required to hear evidence on the ten factors of § 8-205(a), as appellant asserts. Those factors need be considered only if the court decides to grant a monetary award.

In Ward, 52 Md.App. at 340 , 449 A.2d 443 , the chancellor determined that the only marital property was the couple’s home, that the net value was $32,000, and that a monetary award was necessary in view of the parties’ interest in the marital home and other circumstances. It was only then that he was bound to consider factors found in the statute. Id. We shall, therefore, remand this issue to the trial court and, as we mandated in Ward, 52 Md.App. at 344 , 449 A.2d 443 : “upon remand, the chancellor should reconsider the evidence or take new testimony to determine, first, if an award need be made at all, and if so, to set a single amount that would fairly adjust the parties’ equities in the marital property after considering the nine factors.” 5 II Appellant next asserts that the trial court committed reversible error when it ordered that $11,000 be deducted from the proceeds of the sale of the home and paid to Mr. Coutant in order to retire 18-year-old loans made to him by his mother.

It is apparent from the record that the chancellor and counsel for both parties shared the same misconception as to the meaning of the term “marital debt.” Appellee contended and the court ruled that the debts to appellee’s mother were payable out of the proceeds of sale because they were marital debts. Appellant argued vociferously that the debts, even if they were marital debts, were barred by limitations and, therefore, were not enforceable against her even though appellee had acknowledged the indebtedness. Obviously, the chancellor and both counsel mistakenly believed that a marital debt is a joint debt to be paid out ⁵⁹¹ of the proceeds of marital property. Whether a debt is classified as a “marital debt,” however, has nothing whatsoever to do with who owes it or how it is to be paid.

As we pointed out in Kline v. Kline, 85 Md.App. 28, 44-45 , 581 A.2d 1300 (1990): “Marital debt,” like “marital property” and “nonmarital property,” is a term that seems to invite confusion. “Debt,” like “property,” is a word quite familiar to almost everyone who can read, speak, or understand English. The most familiar connotations of “marital debt,” however, are (1) a debt incurred by husband and wife jointly or (2) a debt incurred by either spouse for any marital purpose. Within the purview of the Act, however, the phrase has an artificial meaning at variance with these familiar connotations. A marital debt is a debt incurred to acquire marital property, (citations omitted).

As with “marital property” or “nonmarital property,” this concept arises only as an incident of marriage and is significant only if and when there is a judicial dissolution of the marital relationship. The sole purpose of applying the concept of “marital debt” is to diminish the value of marital property, on the theory that to the extent it is encumbered by debt marital property has not been acquired within the contemplation of the Act. (Citations omitted.) Who owes the debt is as immaterial as who owns the property. And the debt need not be a lien or encumbrance on the property; it is sufficient that there is a debt outstanding and that it was incurred to acquire the property.

Finally, marital debt cannot be transferred from one item of marital property to another. The issue before us is whether the court erred in forcing Mrs. Coutant to pay half of Mr. Coutant’s debt to his mother by deducting the full amount of the debt, $11,000, from the proceeds of sale of the parties’ jointly owned property, before dividing the balance of the proceeds between the parties. The argument before the court centered on the viability of the debt as a marital debt, but that was because the court and counsel were laboring under the ⁵⁹² delusion that a valid marital debt, whether it was owed by one party or both and whether it constituted a loan or charge against the property or was totally unsecured, had to be paid out of marital property. A determination as to whether the debt, incurred to buy a house in Connecticut, the proceeds of sale of which were used to buy the home in Maryland, was a marital debt is relevant only with respect to the value of the