Head v. Head

⁵⁷² GETTY, Judge. Joan G. Head, appellant herein, has filed two appeals in one record from (1) an order of the Circuit Court for Baltimore City (Kaplan, J.) granting partial summary judgment that the marital settlement agreement between appellant and Howard Head, appellee, is valid and binding, and (2) from a final decree of divorce a vinculo. The partial summary judgment was granted, by oral opinion, on June 7, 1983; the divorce decree was signed August 1, 1983. Appellant raises two issues for our determination, namely: 1.

Did the chancellor err in granting appellee’s motion for partial summary judgment and in entering a judgment which held the marital settlement agreement of December 30, 1981, “valid, binding in all respects, and fully enforceable,” notwithstanding appellant’s fraud defense, on the ground that “as a matter of law,” Mrs. Head could not have been defrauded because of the provisions of paragraph eleven of the agreement? 2. Did the chancellor err in granting a divorce a vinculo on the ground of voluntary separation arising out of the agreement of the parties dated December 30, 1981, when there was a pending appeal from his order of June 16, 1983, which upheld the validity of the said agreement, and hence the validity of the alleged voluntary separation? Background Joan and Howard Head were married in Baltimore on June 11, 1968. At that time, Mr. Head retired as Chairman of the Board of Head Ski Company 1 and the company was then sold and moved to Colorado.

The parties to this action ⁵⁷³ bought a home and lived together in Maryland for the next thirteen years. During his retirement, Mr. Head developed and patented the oversized “Prince Racquet” that is now widely acclaimed by both professional and amateur tennis players. Mr. Head reorganized Prince Manufacturing, Inc., (PMI), a company engaged in building tennis practice machines, and began production of the Prince tennis racquet. PMI prospered and continued to be a closely held non-public, New Jersey corporation.

The controlling stock interest, royalties, and patents became the principal assets giving rise to the present controversy. Facts Immediately prior to the marriage, the parties executed an antenuptial agreement which provided that upon dissolution of the marriage by either death or divorce Mrs. Head would receive the lesser of a lump sum payment of $400,-000.00 plus one-half of the personalty, or one-third of Mr. Head’s estate in lieu of all other claims she might have. Mr. Head desired the agreement because of a prior difficult divorce proceeding and his desire to provide for a daughter by a previous marriage. During the marriage Mrs. Head pursued her professional education at the University of Maryland and became a member of the bar.

Thereafter, she was employed by the law firm of Fedder and Garten, P.A., who represent her in this appeal. The marriage was markedly less successful than the Prince racquet and in September, 1981, after being locked out of the residence, Mrs. Head filed a bill of complaint for divorce a mensa et thoro seeking alimony, use and possession of the home and other relief. Both parties retained counsel and began negotiations to resolve their differences. Mr. Head maintained that the 1968 antenuptial agreement and the entireties ownership of the home defined Mrs. Head’s rights upon divorce.

Mrs. Head countered that the ⁵⁷⁴ earlier agreement was void as against public policy, 2 and invalid, because Mrs. Head had not been independently represented at that time and there had not been full disclosure of Mr. Head’s assets. The legal skirmishing culminated in the marital settlement agreement of December 30, 1981, the validity thereof being the crux of the present case. The agreement, dated and executed December 30, 1981, provided for: 1. Voluntary separation without cohabitation with intent of terminating the marriage. 2.

Mutual waiver of alimony. 3. Payment to Mrs. Head by February 16, 1982, of $1,525,000.00 in cash. 4. Division of valuable chattels. 5. Income taxability to Mr. Head of the payments made to Mrs. Head. 6.

Payment by Mr. Head of $100,000.00 to counsel for Mrs. Head, plus payment of all divorce costs. 7. Mutual releases. It is undisputed that Mr. Head made all the payments and executed the division of chattels. Mrs. Head, although attacking the agreement, has retained all of the benefits received pursuant thereto.

The catalyst for the present litigation revolves around Mr. Head’s sale, six months after the execution of the December 30, 1981, agreement, of the controlling stock interest, patents and royalties in PMI to ChesebroughPond’s, Inc., effective June 30, 1982, for the approximate sum of $45,000,000.00. The provisions of the agreement which are particularly relevant here are as follows: ⁵⁷⁵ 9. "... The parties have made no provisions for Wife’s support since it is intended that the property settlement being made will generate sufficient income to provide . for Wife’s needs both now and in the future.” 10.

COUNSEL FEES. [In consideration of the payment of a designated fee to Miller, Rosenthal and Kaufman, P.A. by Howard] “the parties release each other from the payment of any other counsel fees for services, past, present or future, for any matter or thing whatsoever on behalf of either of them, except ... (2) any reasonable fees for services which either party may incur in effecting compliance with this Agreement in the event of a default by the other which shall be paid by the defaulting party ...” 11. “INDEPENDENT COUNSEL — FAIRNESS OF TERMS. This Agreement is being made without full and complete financial disclosure by Husband to Wife. It has been explained to Wife and she understands that such full disclosure is available to her if she should desire it, but she has expressly waived such disclosure for the reasons hereinafter set forth: A. The parties entered into an Ante-Nuptial Agreement dated June 10, 1968, copy of which is annexed as Exhibit D and incorporated hereby by reference.

Wife has contended that that Agreement is invalid and unenforceable, and Husband has contended that that Agreement is valid and enforceable. Wife has been advised by independent counsel of her own choice as to the respective strength of the parties’ contentions and of the hazards of litigation of that issue. B. This Agreement provides significantly more than the Wife would have received under the Ante-Nuptial Agreement and is in her judgment more than sufficient to care for her needs now and in the future. C. Wife recognizes that there may be no proportionality in the relationship of the amount herein provided for her and the total assets and resources of Husband, and further recognizes that the consideration passing ⁵⁷⁶ to her under this Agreement may not be a substantial part or may be a relatively insignificant fraction of Husband’s total worth.

D. . Each party, being independently advised by counsel of his or her own selection, regards the terms of this Agreement as being fair and reasonable, and fully satisfactory to each of them, and each of them has signed it freely and voluntarily without relying on any representations other than those expressly set forth herein.” 13. “FURTHER ASSURANCES. The parties for themselves and their respective heirs, personal representatives and assigns, do mutually agree to join in or execute any instruments and to do any other act or thing that may be necessary or proper to carry into effect each and every part of this Agreement, or to release any dower or other right in any property which either of said parties may now or hereafter acquire, including the execution and delivery of such deeds and assurances as may be necessary to carry out the purposes of this Agreement.” 14. “DIVORCE PROCEEDINGS. With the approval of any Court of competent jurisdiction in which any divorce proceeding may now be pending or which may hereafter be instituted, this Agreement shall be incorporated in any decree of absolute divorce which may be passed by said Court.

In the event the Court shall fail or decline to incorporate this Agreement, or any provision thereof, in said decree, then and in that event the parties, for themselves and their respective heirs, personal representatives and assigns, agree that they will nevertheless abide by and carry out all of the provisions thereof. It is further agreed that regardless of whether or not this Agreement or any part thereof is incorporated in any such decree, the same shall not be merged in said decree, but this Agreement and all the terms thereof shall continue to be binding upon the ⁵⁷⁷ parties and their respective heirs, personal representatives and assigns. In any divorce action brought by either party, the parties agree that they will apply to the Court to seal the Court’s file.” • 15. “INTEGRATION CLAUSE. This Agreement contains the final and entire understanding of the parties.

There are no representations terms, conditions, statements, warranties, promises, covenants or understandings, oral or written, other than those expressly set forth herein.” The Litigation Mrs. Head’s divorce complaint was filed, as previously stated, on September 25, 1981. Mr. Head’s answer, alleging that the alimony and personal property issues were moot by reason of the settlement agreement, was filed June 9, 1982. Contemporaneously, Mr. Head filed a cross complaint seeking a divorce a mensa el thoro alleging a voluntary separation commencing on December 30, 1981, the date of the agreement. On December 23, 1982, Mrs. Head answered the cross complaint setting forth that the agreement dated December 30, 1981, was procured by the fraudulent representations and concealment of assets by Mr. Head.

A supplemental cross bill was filed by Mr. Head on January 25, 1983, seeking a divorce a vinculo based upon voluntary separation. The response thereto was a re-filing of the answer to the earlier cross bill filed by Mr. Head for a divorce a mensa et thoro. Pursuant to Md.Rule 610, Mr. Head filed a motion for partial summary judgment on the issue of the validity of the agreement of December 10, 1981. This matter was heard by Judge Kaplan on June 7, 1983, and the agreement was upheld in an oral opinion by the court on the same day.

A final Order was signed by the court on June 16, 1983, ⁵⁷⁸ following reargument which had been requested by Mrs. Head. Mrs. Head appealed the ruling upholding the agreement on June 29, 1983, and the trial court granted Mr. Head an absolute divorce on August 1, 1983; a timely appeal was filed from the granting of the divorce. The Agreement We shall affirm the trial court’s conclusion that the agreement of December 30, 1981, was valid. Both parties were represented by independent and able counsel who crafted the agreement after two months of intense negotiation.

Mrs. Head alleges fraudulent concealment relating to the true value of her husband’s interest in PMI, coupled with his assertions that PMI was beset with patent infringement suits that imperiled both the patents and royalties. The record establishes that Mrs. Head filed a request for production of documents on March 18, 1983. No. 28 of the 56 items covered requested the