Gallagher v. Gallagher

CATHELL, Judge. John Gallagher appeals from a judgment of the Circuit Court for Baltimore County that granted Joan Gallagher, appellee, an absolute divorce, awarded her indefinite alimony, granted her a marital award, and awarded her attorneys’ fees. Mr. Gallagher’s appeal raises issues regarding the award of indefinite alimony, monetary award, and attorneys’ fees. We shall affirm the judgment of the trial court.

I. THE FACTS Appellant and appellee were married in 1987. At the time of their marriage, appellee had been married twice before and appellant had never been married. Appellant was a professional gambler and investor, and appellee worked as a secretary and sales clerk. While married, appellant continued to work as a professional gambler and investor.

There also was testimony that appellant acted as a “facilitator,” one who assists another in placing bets on sporting events. Appellant testified that he made approximately $50,000 per year from personal bets and as a facilitator. He stated he expected a decrease in his income because he would no longer be acting as a “facilitator,” as appellee’s counsel had informed him that such conduct was illegal. Appellee continued to work during the marriage and, ⁵⁷² at the time of the divorce, had a part-time job from which she earned $12,827 per year.

Appellee introduced, over appellant’s objection, the testimony of Regis Burke, a Certified Public Accountant. Mr. Burke was offered as an expert witness in the areas of taxation, accounting, finance, and asset valuation and was accepted as an expert by the court. Appellant never objected to Mr. Burke’s credentials as an expert witness; appellee’s objection related solely to the summaries that were prepared by the expert witness from the financial documentation and testimony given by appellant. Mr. Burke testified extensively regarding the summaries he had prepared relative to appellant’s cash flow and assets.

He testified that appellant “spent well in excess of what he reported as income in each given year.” For example, Mr. Burke testified that in 1995, appellant spent approximately $31,375 more than his reported income. Mr. Burke testified that some of his assets, however, were cashed in during that time period and that this would have given appellant additional liquidity. Mr. Burke testified that this added liquidity could have been used to pay for the personal expenditures that exceeded his income, but he could not make a determination as to “what proportion was spent on living expenses and what proportion was rolled over into an investment account.” In the court’s memorandum opinion, it granted appellee an absolute divorce on the grounds of adultery. The court also determined the parties’ marital and non-marital property and valued that property.

The court determined the parties’ respective incomes and ultimately made a monetary award. It noted it was difficult “to determine precisely Mr. Gallagher’s income given the nature of his business” and that “[sjeveral exhibits were introduced in an attempt to persuade the Court that Mr. Gallagher’s income exceeds that which is reported on his tax returns.” The court also stated: Mr. Gallagher testified that in the past, his personal wagering produced a $50,000 per year net income, but presently, the amount produced is only $25,000. He further ⁵⁷³ testified that his present income from “facilitating” is $30,-000 per year. The Court is persuaded that Mr. Gallagher has net income from personal wagering and “facilitating” in excess of $80,000 per year.

Mr. Gallagher is approaching social security benefits eligibility. However, considering the nature of his business, it is not likely he will be forced to retire any time soon, barring any “unforseen legal intervention.” Mr. Gallagher lists his monthly personal living expenditures at $3630.00. Ms. Gallagher attacks this figure, arguing that it is artificially low to conform to his grossly understated earnings. [Footnote omitted.] After considering the factors set forth in section 8-205 of the Family Law Article, the court granted appellee a monetary award of $175,000. In making this award, the court noted: 1) the “marriage came to an end because of the adultery committed by Mr. Gallagher;” 2) “Ms. Gallagher’s physical health is more limiting than Mr. Gallagher’s physical health;” 3) “[w]hen the parties lived together, Mr. Gallagher was the major monetary contributor while Ms. Gallagher used her earnings for her personal needs and desires;” 4) Ms. Gallagher relinquished her full-time employment at the insistence of Mr. Gallagher; and 5) “[b]oth parties made some nonmonetary contributions, mainly, the important contribution of companionship.” The trial court also awarded appellee indefinite alimony in the amount of $1,500 per month.

In doing so, the court acknowledged that both parties were accustomed to a high standard of living. The court also noted that, following the monetary award, appellee would have $380,778 in assets while Mr. Gallagher would hold assets totaling $267,117. It noted appellee’s income was $19,937 and her investment income would increase due to the monetary award while appellant’s would decline. The trial court further stated: “However, there is every reason to believe, and the court so finds, that ⁵⁷⁴ Mr. Gallagher’s earned income from his business will continue to be substantially greater than that of Ms. Gallagher.” It also found that the “respective living standards of the parties will be unconscionably disparate.” Finally, the court granted appellee attorneys’ fees of $20,-684.95.

It specified that appellee had substantial justification for prosecuting the proceeding and noted the financial resources of the parties. At a later hearing on April 23, 1997, after the judgment of divorce was entered and this appeal taken, appellee’s counsel requested that the court reduce the marital award and counsel fees to judgment. Appellant’s counsel asserted that the court lacked jurisdiction to do so because he had filed an appeal to this Court and such a filing had divested the trial court of jurisdiction. The court reduced the marital award to judgment, finding that doing so was collateral to the initial judgment which was appealed.

Appellant presents three questions on appeal: I. Did the circuit court err in making a monetary award and granting indefinite alimony?

II

Did the circuit court err in granting an award of attorney fees and other costs to Ms. Levine [appellee’s former counsel]?

III

Did the circuit court have jurisdiction to reduce the monetary award to judgment?

II

DISCUSSION In the resolution of this case, we shall examine A) the monetary award; B) the award of alimony; C) the award of counsel fees; and D) the reduction of the monetary award and counsel fees to judgment. A. Monetary Award Appellant’s primary assignment of error concerning the monetary award relates to the trial court’s determination that his income was approximately $80,000 per year. He gives ⁵⁷⁵ multiple reasons as to why the trial court erred in its determination of his then current income and argues that this error resulted in an exorbitant monetary award. We note initially that appellant has not raised any contention as to the characterization and valuation of the marital property.

His only argument relates to his income. Before addressing appellant’s various arguments, we shall state the law applicable to the granting of a monetary award. Maryland law requires that the trial court undertake a three-step process prior to granting a monetary award: (1) the trial court must initially characterize all property owned by the parties, however titled, as either marital or nonmarital; (2) the court shall then determine the value of all marital property; and, finally, (3) the court may then make a monetary award as an adjustment of the parties’ equities and rights in the marital property. Strauss v. Strauss, 101 Md.App. 490, 501 , 647 A.2d 818 (1994) (citations omitted), cert. denied, 337 Md. 90 , 651 A.2d 855 (1995); see also Md.Code (1984, 1991 Repl-Vol, 1997 Supp.), §§ 8-203 to 8-205 of the Family Law Article (FL).

With respect to this last step in the process, the court must consider the following factors: (1) the contributions, monetary and nonmonetary, of each party to the well-being of the family; (2) the value of all property interests of each party; (3) the economic circumstances of each party at the time the award is to be made; (4) the circumstances that contributed to the estrangement of the parties; (5) the duration of the marriage; (6) the age of each party; (7) the physical and mental condition of each party; (8) how and when specific marital property or interest in the pension, retirement, profit sharing, or deferred compensation plan, was acquired, including the effort expended by each party in accumulating the marital property or the ⁵⁷⁶ interest in the pension, retirement, profit sharing, or deferred compensation plan, or both; (9) the contribution by either party of property described in § 8-201(e)(3) of this subtitle to the acquisition of real property held by the parties as tenants by the entirety; (10) any award of alimony and any award or other provision that the court has made with respect to family use personal property or the family home; and (11) any other factor that the court considers necessary or appropriate to consider in order to arrive at a fair and equitable monetary award or transfer of an interest in the pension, retirement, profit sharing, or deferred compensation plan, or both. FL § 8-205(b). An appellate court, when an action has been tried without a jury, “will not set aside the judgment of the trial court on the evidence unless clearly erroneous, and will give due regard to the opportunity of the trial court to judge the credibility of the witnesses.” Md.Rule 8-131(c). The decision whether to grant a monetary award is generally within the sound discretion of the trial court.

Nevertheless, even with respect to a discretionary matter, a trial court must exercise its discretion in accordance with correct legal standards. It is important that courts not lose sight of th[e] history and purpose [of the equitable distribution statute] when making decisions about marital property. The “function [of the monetary award] is to provide a means for the adjustment of inequities that may result from distribution of certain property in accordance with the dictates of title.” Alston v. Alston, 331 Md. 496, 504-06 , 629 A.2d 70 (1993) (citations omitted) (footnotes omitted) (some alterations in original). We shall next examine appellant’s specific allegations of error regarding the trial court’s grant of a monetary award. ⁵⁷⁷ We note all of appellant’s assertions of error relate to his and appellee’s income, factors two and three of section 8 — 205(b) of the Family Law Article. 1.

Overestimation of Income Based on Condominium Sale Appellant argues the court erred in calculating his income because it failed to consider that the sale of his West Palm beach condominium resulted in a loss. In support of this argument, appellant notes the court stated: “Plaintiff exhibit 23 reveals that in 1995, he had a total income of $48,633 and net proceeds from the sale of stock in the amount of $117,702.” He argues that all of the $117,702 did not come from the sale of stock and that some of that amount came from the sale of his West Palm Beach home. The sale of this home, however, created a loss, as reflected on his tax return. We believe that whether the $117,702 came from the sale of stock or from the sale of the condominium is irrelevant.

While the court may have misspoken as to the amount and the nature of net proceeds that resulted from the two sales, it is clear the court did not consider these proceeds in setting appellant’s income. In making a determination as to appellant’s income, the court merely stated it was persuaded “that Mr. Gallagher has net income from personal wagering and ‘facilitating’ in excess of $80,000 per year.” The trial court did not refer to any sales of assets in setting appellant’s then current income. Accordingly, any argument relating to the $117,702 is not relative to the court’s determination of income. Additionally, appellant alleges no error in regard to his assets and characterization of those assets as marital or nonmarital property. 2.

Overestimation of income based on stock sales Appellant makes similar arguments as those made above relative to the sale of the condominium. He asserts the court erred in stating that appellant had net proceeds from the sale of stock in the amount of $117,702 because this amount resulted from both the sale of stock and the sale of the condominium. For the reasons noted above, we need not ⁵⁷⁸ address this argument. As we stated, the court did not consider the $117,702 in setting appellant’s income. 3.

Testimony of Mr. Burke Appellant next challenges the testimony of appellee’s expert, Mr. Burke. Appellant presents a two-fold argument; first he asserts that Mr. Burke did not testify as an expert witness and second, that Mr. Burke’s testimony was speculative. As initially noted, appellant never objected at trial to Mr. Burke’s qualifications. In fact, appellant did not elect to voir dire the witness prior to his testimony.

Appellant’s sole objection at trial related to the introduction of certain reports prepared by the expert that were used to explain the assets, cash flow, and income of appellant. As to these reports, appellant’s counsel argued they were inadmissible because they had not been presented to him prior to trial; appellant did not challenge the expert witness’ testimony. Accordingly, appellant’s argument is not preserved for our review. See Md.Rule 8-131(a).

Nevertheless, appellant’s arguments are without merit. We explain. As to his first argument, appellant asserts that the trial court stated: “ ‘[tjurns out [Mr. Burke] is only a fact witness. He hasn’t become one who gave an opinion as an expertf.]’ ” Appellant directs this Court to page 860 of the extract for this statement.

We have been unable to discern whether this statement was made by the trial court because the extract does not contain a page 860. We believe, however, the testimony of Mr. Burke was proper expert witness testimony. Although the court may have misstated that Mr. Burke did not testify as an expert witness, we believe his testimony was qualified as such. The numerous, complex, financial transactions in which appellant was involved required that an expert, such as a Certified Public Accountant, be consulted in order to determine the nature and extent of appellant’s income and expenditures.

It is clear that Mr. Burke testified as to ⁵⁷⁹ appellant’s income and expenditures and traced certain assets held in various bank accounts. He also took certain statements and income tax records and drew from them conclusions. This is precisely what experts do. Maryland Rule 5-702 provides: “Expert testimony may be admitted ... if the court determines that the testimony will assist the trier of fact to understand the evidence or to determine a fact in issue.” Mr. Burke’s testimony clearly did so in the instant case.

Accordingly, we believe Mr. Burke properly testified as an expert. As to the speculative nature of Mr. Burke’s testimony, the transcript clearly shows Mr. Burke was careful to draw only certain conclusions from the information he obtained. For example, Mr. Burke testified that appellant spent approximately $81,375 more than his income in 1995. The witness, however, carefully noted that he could not determine where this additional money may have come from and indicated that it could have come from proceeds that were obtained from the sale of other assets during that year.

There are many other instances where the witness refused to draw speculative conclusions and indicated merely what the accounts and records showed. We do not believe that the expert’s testimony was unfairly speculative. We also note that the court made no mention of this testimony when determining appellant’s income. Accordingly, the trial court did not err. 4.

Facilitating Income Appellant lastly asserts, as to the monetary award, that the trial court erred in determining his income because it considered income from facilitating, an endeavor he was not engaged in at the time of the granting of the marital award. Appellant testified that he was facilitating during the first few months of 1996. While he clearly denied facilitating at the time of the trial, the court was not required to accept his testimony. Under Maryland Rule 8-131(c), we shall “not set aside the judgment of the trial court on the evidence unless clearly erroneous, and will give due regard to the opportunity ⁵⁸⁰ of the trial court to judge the credibility of the witnesses.” We stated in Hollander v. Hollander, 89 Md.App. 156, 175 , 597 A.2d 1012 (1991) (quoting Shapiro v. Chapman, 70 Md.App. 307, 318 , 520 A.2d 1330 (1987)), that “ ‘[t]he trier of fact is not bound to accept the testimony of any witness even if it is uncontradicted.’ ” Additionally, appellee testified that the income reported on the parties’ tax returns did not adequately reflect the income appellant earned from his gambling activities.

Based on all this evidence, the court did not err in determining appellant’s income or determining a marital award was warranted. B. Indefinite Alimony Award Appellant also presents numerous arguments relating to- the trial court’s grant of indefinite alimony to appellee. A trial court may grant indefinite alimony if it finds that: (1) due to age, illness,' infirmity, or disability, the party seeking alimony cannot reasonably be expected to make substantial progress toward becoming self-supporting; or (2) even after the party seeking alimoñy 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 § ll-106(e).

In order to make a fair and equitable alimony award, the court considers: (1) the ability of the party seeking alimony to be wholly or partly self-supporiing; (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;