Heit v. Stansbury

GRAEFF, J. Gary Heit, appellant, and Kathryn Stansbury, appellee, were married on August 1, 2005. On December 24, 2008, the Circuit Court for Montgomery County issued a Judgment of Absolute Divorce. Since that time, the parties have remained embroiled in litigation, including previous appeals to this Court, Heit v. Stansbury, Nos. 9 & 990, Sept. Term, 2009 (filed Jan. 15, 2010) and Heit v. Stansbury, No. 354, Sept. Term, 2010 (filed June 10, 2011). In the latter appeal, this Court reversed the $82,340 monetary award in favor of Ms. Stansbury, as well as a money judgment in the amount of $15,000, and we vacated the June 11, 2009, Qualified Domestic Relations Order (“QDRO”) and the judgment awarding Ms. Stansbury attorneys’ fees of $76,571.53.

On remand, the circuit court denied Ms. Stansbury’s request for a monetary award and attorneys’ fees, and it denied “all other requests for relief by either party.” Mr. Heit then filed a post-judgment motion for restitution, seeking the return of monies already received by Ms. Stansbury from his 401(k) plan and from wage garnishments. He also moved to have the case specially assigned to the circuit court judge who conducted the remand hearing. The court denied Mr. Heit’s motion for special assignment, and after a hearing before a different judge, the court granted Ms. Stansbury’s motion to dismiss on the ground that res judicata barred Mr. Heit’s claim. ⁵⁵³ On appeal, Mr. Heit raises two questions for our review, which we have rephrased: 1. Did the circuit court err in granting Ms. Stansbury’s motion to dismiss Mr. Heit’s motion for restitution on res judicata grounds? 2.

Did the Administrative Judge abuse his discretion by failing to specially assign the case? For the reasons set forth below, we shall affirm the judgment of the circuit court. FACTUAL AND PROCEDURAL BACKGROUND The background facts concerning the parties’ marriage and the proceedings leading up to the first two appeals were set forth in detail in our prior opinions and need not be repeated. We shall set forth only the facts and proceedings relevant to the issues raised on this appeal and for purposes of context.

In the first Judgment of Absolute Divorce, dated December 24, 2008, the court awarded a monetary award to Ms. Stansbury in the amount of $173,911.53, including $76,900 for repayment of a joint home equity line of credit (“HELOC”), $15,000 for unpaid spousal support, $5,440 for a Cadillac Escalade, and $76,571.53 for attorneys’ fees. The court also ordered a transfer of 50% of the total value of Mr. Heit’s Oracle 401(k) plan as of the date of divorce. The court found that the total value of the 401 (k) was $132,741; thus, Ms. Stansbury was entitled to $66,370.50. Mr. Heit did not file a supersedeas bond, and on January 6, 2009, Ms. Stansbury sought a writ of wage garnishment against Oracle, Mr. Heit’s employer, in the amount of $173,911.53.

On February 26, 2009, she moved for entry of the QDRO to obtain her 50% interest in Mr. Heit’s 401(k). Mr. Heit opposed Ms. Stansbury’s motion for entry of a QDRO, arguing that the court had erred in classifying the entire value of the Oracle 401 (k) plan as marital property. The court denied the motion on June 9, 2009. Mr. Heit appealed this ruling, as well as the Judgment of Absolute Divorce, contending that the court erred: (1) in granting Ms. ⁵⁵⁴ Stansbury a divorce on cruelty grounds; and (2) in entering the money judgment in Ms. Stansbury’s favor.

We consolidated Mr. Heit’s appeals and reversed the Judgment of Absolute Divorce, agreeing that the court erred in granting the divorce on the ground of cruelty. We further opined that, in the absence of the divorce itself, it was premature to make any decision with respect to a marital award. Thus, we remanded the case to the circuit court for “possible further proceedings.” On March 31, 2010, the circuit court held a remand hearing. On April 16, 2010, the court entered a “Judgment of Absolute Divorce Nunc Pro Tunc, ” the second divorce judgment, granting a divorce on the ground of voluntary separation.

In addition, the court awarded attorneys’ fees to Ms. Stansbury in the amount of $76,571.53, granted Ms. Stansbury a monetary award of $82,340, ordered that Ms. Stansbury was entitled to 50% of Mr. Heit’s Oracle 401(k) plan, which was valued at $132,741 as of December 24, 2008, and ordered that Mr. Heit pay Ms. Stansbury $15,000 in accordance with the prior agreement of the parties. On April 19, 2010, Mr. Heit noted his appeal. On May 26, 2010, Fidelity Investments issued Ms. Stansbury a check in the amount of $88,217.32. On June 10, 2011, we issued our opinion with respect to the second divorce judgment.

We vacated the QDRO, holding that the court erred in classifying the entire value of the 401(k) as marital property. We reversed the monetary award in the amount of $82,340 on several grounds, including that the court did not have jurisdiction to use a monetary award as a judgment on a tort and contract claim. We also reversed the $15,000 judgment in favor of Ms. Stansbury, holding that the court did not have authority to enter judgment for arrearages for non-payment of monies pursuant to an agreement that was not for alimony or support. Because we reversed the “monetary award,” we also vacated the $76,571.53 award of attorneys’ fees, for re-evaluation. ⁵⁵⁵ On June 4 and 5, 2012, the circuit court held a hearing.

The court clarified the issues before it on remand: (1) what portion of the Oracle 401 (k) constituted marital property; (2) the value of the marital portion of the Oracle 401 (k) as of December 24, 2008, the date of divorce; (3) what, if any, of the marital portion of the Oracle 401 (k) should be the subject of an equitable monetary award to Ms. Stansbury; and (4) attorneys’ fees. Counsel for Mr. Heit informed the court that the 401(k) had been depleted and no longer existed. He advised that the parties had reached a stipulation, for purposes of recalculation of a monetary award, that the marital portion of the 401 (k) was $58,382.34, and the non-marital portion was $93,297.06. He argued, however, that no monetary award should be granted because Ms. Stansbury had already received $88,217.32 as a result of the “erroneous QDRO,” and she “succeeded in garnishing approximately $24,000” from his wages prior to the reversal of the money judgments.

The following colloquy then ensued: [COUNSEL FOR MR. HEIT]: So ... the facts show that Ms. Stansbury despite the reversal or vacator on every issue in these divorce proceedings and despite the two appeals on which she’s lost, has amassed some $112,000 from Mr. Heit’s wages and the 401K earnings. That’s money she’s already received. And awarding a monetary award from the hypothetical of $58,000 of marital property that was in the 401K as of December 2008, we maintain ... that would not seem equitable in light of that windfall already obtained.

THE COURT: Well, are you entitled to get that back or is that just sort of gone forever? [COUNSEL FOR MR. HEIT]: Do you want to issue an order to disgorge, I don’t think you can. THE COURT: I’m just asking you what— [COUNSEL FOR MR. HEIT]: We would like to get some of that back, of course. ⁵⁵⁶ THE COURT: Well, I’m sure you would like to, I’m just asking you what’s the vehicle for getting it back if you can get it back or is it just too late to get back?

THE COURT: ... I’m just asking you as a legal matter, that’s all, just curious. [COUNSEL FOR MR. HEIT]: Well, you know once upon a time, you don’t see this very often, but once upon a time in the late 1800’s, and it hasn’t been overturned, there’s such a thing as called the cause of action for reimbursement. That’s what happens when you win on appeal but you can’t post a supercedes [sic] bond so you’re never protected and you lose your money.

And you sue to get it back if you’re successful. So that’s the deal. Does that make any sense to you? THE COURT: Sure.

I’m just asking if there is any legal authority or what the bottom line is. But as of now— [COUNSEL FOR MR. HEIT]: You realize that can’t take place, right now, right, because that’s dependent on what happens here. THE COURT: Right, right. [COUNSEL FOR MR.

HEIT]: Right, okay. But let’s suppose the [c]ourt closed its eyes to that kind of elephant in the room about the $112,000 being in her possession, the facts still show that awarding even a [de] minimus percentage of this $58,000 is extremely difficult to justify. Ms. Stansbury’s counsel explained that Mr. Heit had not posted a supersedeas bond, and therefore, Ms. Stansbury properly proceeded to collect on the judgments. Ms. Stansbury testified that she had been issued a check from Fidelity Investments in the amount of $88,217.32, dated May 26, 2010. 1 ⁵⁵⁷ Counsel for Mr. Heit introduced into evidence copies of checks that had been received by Ms. Stansbury from 2009 through 2011 as a result of the wage garnishment.

The total amount was $24,597.31. Ms. Stansbury stated that she had used the money she received from the garnishments to pay “a lot of bills that were Mr. Heit’s bills that [she] was still paying on,” such as credit card debt in the amount of $100,000. Other than the garnishment payments, Ms. Stansbury received no money from Mr. Heit for any joint obligations. Mr. Heit’s counsel argued that the court’s initial determination that Ms. Stansbury receive 50% of the marital property “can’t stand” on remand.

Noting that the marital property was worth $58,000, he asserted that “Ms. Stansbury has already mistakenly received 88,000 plus another 24,000,” a total of $112,000 “that should never have been transferred over to her.” With respect to the possibility of the court ordering a monetary judgment in Ms. Stansbury’s favor, counsel stated: I don’t understand how that could possibly be equitable in any way. She’s already received this windfall and that’s why even awarding 10 percent of that $58,000 makes no sense to me when she’s already received 112 and that’s in the record. In response to the court’s question, counsel confirmed that his “basic bottom line argument is that there should be a zero award of the marital property and a zero award of attorney’s fees” based on “what’s happened since” the initial ruling. Counsel for Ms. Stansbury acknowledged that Ms. Stansbury had received $112,000.

She argued, however, that there were big inequities in the case, including the HELOC and undisputed monies distributed for Mr. Heit’s benefit that he was not repaying. She asserted that the balance of the HELOC was approximately $246,000. In rebuttal, counsel for Mr. Heit reiterated his argument that Ms. Stansbury already ⁵⁵⁸ had been “amply compensated or had adjustments made.... [b]oth with respect to the marital property of $58,000 and the attorney’s fees. If anything, that she’s ... already received her due.” On June 7, 2012, the circuit court issued an oral ruling.

It reiterated the task on remand as follows: So essentially what the task was on remand was to determine what portion of the 401(k) was marital property, then to determine the value of the marital property as of the date of the divorce in December of 2008, and then to determine what, if any, of the marital portion should be the subject of an equitable award to Ms. Stansbury, looking to the [FL §] 8-205 factors. Based on the parties’ stipulation, the court found “that the marital portion of the plaintiffs Oracle 401 (k) plan as of December 2008 [was] $58,382.34, and the non-marital portion [was] 93,297.06.” It then turned to “the real issue ... what’s an equitable thing to do.” The court then addressed each factor in Maryland Code (2006 Repl. Yol.) § 8-205(b) of the Family Law Article (“FL”). 2 With respect to marital property, it reiterated that ⁵⁵⁹ the only marital property was the Oracle 401(k) plan. With respect to factor eleven, “any other factor that the [c]ourt considers necessary or appropriate to consider in order to arrive at a fair and equitable monetary award or transfer of an interest in property,” the court stated that it had “to look to what’s happened over the course of the whole proceedings,” noting that “there was a QDRO that was executed” and a “garnishment that happened during the course of time between December 24th, 2008, and today.” The court continued: Ms. Stansbury received a total of $88,217.32, which was decreased from the 92,000 by some mysterious means, somebody took $4,000, but in any event she got 88,000-plus that represented her half of the Oracle plan valued on December 24th, 2008, and, of course, that was because the ... non-marital portions hadn’t been valued.

All right. So that amount was the 66,000, plus the earnings I guess. Okay. So then in addition over the course of the last couple years, Ms. Stansbury received a total of $24,597.30 from garnishments of Mr. Heit’s wages that were taken for the other judgments that [the trial court] awarded that I think totaled about $173,911.53, which, of course, those judgments were ultimately reversed.

Okay. So it looks like the defendant, Ms. Stansbury, has already received a total of $112,814.62 from Mr. Heit. So those factors, I think, have to be taken into account in terms of what’s equitable. ⁵⁶⁰ All right. So based on everything, my finding is that it would be, in other circumstances, equitable to do essentially what [the trial court] did, which would be to give Ms. Stansbury 50 percent of the marital portion of the Oracle plan as of the date of December 24th, 2008, which, of course, that would have been $29,191.17, but, as I’ve already said, she’s already received from that plan 88,000-plus, plus she’s already received ... the other 24,000-plus, so she’s already received $112,814.

So in light of that, I am not going to make any monetary award. I don’t think it would be equitable under all these circumstances to make any award, so there will be ... no monetary award based on ... all those factors. With respect to Ms. Stansbury’s request for attorneys’ fees, the remand court noted that the divorce court initially awarded $76,571.53. It stated, however, that “in light of everything that’s gone on in this case,” and “based on all the factors and all the equities,” it would deny the request for attorney’s fees.

The remand court reiterated that its order was “based on all of the factors that were previously considered in the 8-205 factors, but in particular as they relate to the resources and needs of the parties.” On June 11, 2012, an order was entered denying Ms. Stansbury’s request for a monetary award, denying her request for attorneys’ fees, and denying “all other requests for relief by either party.” Neither party appealed the ruling. On October 9, 2012, Mr. Heit filed a Post-Judgment Motion for Order of Restitution and Other Relief. He asserted that, because the court’s order on remand denied Ms. Stansbury any monetary award or attorneys’ fees, the amount that “stood in her favor” at the time of the final judgment was “legally zero, in contrast to the at least $112,814.63 ($88,217.32 + $24,597.31) she had amassed, by way of execution, pending Mr. Heit’s appeals of [the divorce court’s] erroneous and reversed judgments.” He argued that, what he “lost under the compulsion of judgments ... should be restored to him by Ms. Stansbury ... given that the judgments were reversed or ⁵⁶¹ vacated on appeal, and the [c]ourt on second remand adjudged that Ms. Stansbury was entitled to nothing.” Mr. Heit sought restitution in the amount of $92,751.24, plus lost gains, for the Oracle 401(k), as well as restitution in the amount of $24,597.31, plus interest, for the amount obtained through garnishments. On November 13, 2012, Ms. Stansbury filed a motion to dismiss Mr. Heit’s post-judgment motion for failure to state a claim upon which relief may be granted.

She argued that the circuit court had already considered the transfers to Ms. Stansbury in determining not to grant her a monetary award or attorneys’ fees, and in denying all other requests for relief. She asserted that Mr. Heit “cannot have it both ways,” i.e., arguing at the remand hearing that Ms. Stansbury had already received a $112,000 “windfall,” and therefore, the monetary and attorneys’ fees award should be zero, and then after the remand order was entered, request that the $112,000 “windfall” be refunded as restitution. Ms. Stansbury asserted that the court’s ruling on remand resolved all issues related to the parties’ outstanding claims, including the monetary award, attorneys’ fees award, and the prior QDRO and money transfers to Ms. Stansbury, and therefore, res judicata applied. On December 3, 2012, Mr. Heit filed an opposition to Ms. Stansbury’s motion to dismiss.

He argued that the matter of restitution could not have been presented earlier because “it was only after the hearing [during which it] was ... finally determined that Ms. Stansbury was entitled to ... no award whatsoever” that the matter of restitution could be raised. He asserted that the remand court never ruled that Ms. Stansbury was entitled to keep the monies she received from the QDRO, or that Mr. Heit was precluded from seeking that amount in restitution, but rather, it determined only that Ms. Stansbury was not entitled to a monetary award given that she already had received $112,000 by way of executed-upon judgments. Thus, he argued, Ms. Stansbury’s res judicata argument was baseless. ⁵⁶² Mr. Heit also filed a motion to specially assign the judge who heard the remand proceedings to the restitution case. In support, he cited that judge’s knowledge of the “five- and [a] half year old case,” and his knowledge of his own decision on remand.

On