Kelly v. Kelly

²⁶² SALMON, J. The marriage of Beth and Robert Kelly was dissolved by a judgment of absolute divorce entered in the Circuit Court for Baltimore County on May 16, 2002. The- divorce was granted after a one-day trial conducted on January 23, 2002. On March 25,' the chancellor filed a memorandum opinion and order in which he denied Ms. Kelly’s request for indefinite alimony, denied her request for attorney’s fees, granted Mr. Kelly’s request for use and possession of the marital home for three years, and granted Ms. Kelly a monetary award. Mr. Kelly thereafter filed a motion to alter or amend the judgment, which was granted on April 23, 2002.

As revised, the court ordered that Ms. Kelly was to receive a monetary award in the amount of $66,472, and that Mr. Kelly was to transfer to his ex-spouse one-half of the value of a 401K plan valued at $141,378 on an “as[,] if[,] and when basis.” No other changes were made. Ms. Kelly filed this timely appeal and raises four questions, phrased ás follows: 1. Did the lower court err in awarding Husband use and possession of the family home for a period pf three (3) years following the date of the absolute divorce [i.e., through May 16, 2005] when the youngest child would attain the age of eighteen on March 19, 2004? 2. Did the lower court err in failing to include $89,000 in a savings account, titled solely to Husband, and earned during the course of marriage as “marital property” and, thereafter, fail to consider same in conjunction with the granting of a monetary award? 3.

Did the lower court abuse its discretion in denying Wife’s request for indefinite alimony based upon an unconscionable disparity of incomes and standards of living between the parties when [h]usband earned $305,000 in the year immediately preceding the divorce and Wife earned $37,000 in that year? 4. ' Did the lower court err in denying Wife’s claim for contribution for counsel fees? ²⁶³ I. BACKGROUND FACTS Beth and Robert Kelly married in 1980. Two sons were born of the marriage: Matthew, born December 5, 1983, and David, born March 19,1986. Mr. Kelly, aged forty-four, has a degree in biological sciences from the University of Maryland. During the first few years of marriage, he worked for the United States Federal Guaranty Company and later for the Chesapeake and Potomac Telephone Company, earning a modest income.

In 1985, he joined Alex. Brown, Inc., and commenced working in its technology division. At the time of the trial, he was a director of Alex. Brown and the Chief Technology Officer for its Correspondence Services Business Units.

In 1986, the Kellys built a four-bedroom home on one acre of land in Carroll County^ Maryland. While living in that home, the couple enjoyed an upper-middle-class lifestyle. Ms. Kelly moved out of the marital home in October of 1999. Since that date she and Mr. Kelly have lived separate and apart.

Mr. Kelly, who has had physical custody of the children since the separation, still lives in the marital home. Between 1997 and 2001, Mr. Kelly’s income at Alex. Brown averaged $250,831 per year. His best year was 2001, when he earned $305,000.

Of that last-mentioned amount, $180,000 was a bonus, and $125,000 was his base salary. At the January 2002 hearing in this matter, Mr. Kelly testified that his annual bonus is based on performance during the previous year. Therefore, the $180,000 bonus he was paid in 2001 was based on his year 2000 performance. Mr. Kelly testified that bonuses based upon 2001 performance were to be paid in February 2002 and that it was his “firm belief’ that he would receive no bonus for that year.

He founded his belief upon the fact that Alex. Brown’s losses for 2001 exceeded “six figure millions of dollars.” Moreover, Mr. Kelly served on an Alex. Brown cost-cutting committee that proposed that senior management, in which he apparently is ²⁶⁴ included, would receive no 2001 bonuses. In this regard, he further testified: Q. [W]hat will your total compensation be in the year 2002, this year?

A. Okay. It’ll be one hundred and twenty-five thousand dollars. Q. Which is your salary? A. Which is my salary.

The compensation structure was designed specifically for that. Salaries are paid based on a, kind of a cost of living to give everyone a comfortable living. Our Managing Director’s making x, Directors make x and then the rest is based on a bonus structure, depending on how well the firm does. Q. And what is the status of your job right now?

A. Actually, my job, quite frankly, is in jeopardy, unless I have an interest in moving to New York, which I do not. We have recently gone through an organizational restructuring, and I now work for a management team out of New York. We are having conversations around what portions of our team might be left in Baltimore and what portions are not. The, given that, given that I am—work on the technology side of the house, they’re talking about segregating the technology back out to, to the IT Organization proper, and that organization is domiciled in New York City.

Q. Right. And you’re not interested in moving to New York, right? A. I will not move to New York. Q. Because of what?

A. Because I have no interest in living there or raising two kids there. Ms. Kelly, aged forty-three, 1 is a graduate of Loyola College. She holds a bachelor’s degree in business administration. For three years after her graduation from college, Ms. Kelly ²⁶⁵ worked as a customer representative for Blue Cross/Blue Shield.

She stopped working in 1983 when Matthew was born. Prior to the parties’ separation, she worked, both full and part-time, in a number of office-type jobs. At the time of the January 2002 hearing, Ms. Kelly was employed as a landscaper. She earned $37,601 in 2001.

In the four years immediately prior to 2001 her earnings were: 2000-$27,635; 1999-$16,236; 1998-$9,612; 1997-$16,228. Presently, the parties’ older child, Matthew, is in community college. His tuition of $250 a month is paid for, exclusively, by his father. David, who will turn eighteen on March 19, 2004, is a high-school student.

His plans are not definite at this point, but he currently intends to either attend a four-year college or, perhaps, go to a technical school. During their marriage, the parties, anticipating that their children would go to college, created two Uniform Gifts to Minors Act accounts. Presently, there is approximately $30,000 in each account. Marital Property The parties have $146,000 (total) equity in the marital home in which Mr. Kelly presently resides.

The parties also own, jointly, approximately 200 shares in a company known as “Farmers & Mechanics” worth approximately $7,000. Marital property, titled in Mr. Kelly’s name alone, is: American Century Investment Account $ 50,349 Alex. Brown Account # 295-90030 98,592 Savings Account with proceeds provided exclusively by a 2001 bonus paid by Alex. Brown 89,000 Coleman Grandview Camper 4,500 1999 Suburban 17,250 2000 Ford Mustang 16,695 Motor Cycle 4.885 Subtotal $281,271 Bankers Portfolio 401(k) 141,576 Total $422,847 Marital property in Ms. Kelly’s name alone: ²⁶⁶ American Century IRA $23,892 Equity in 1998 Lexus 8,450 Total $32,342 The proceeds from the 401K plan, which was in Mr. Kelly’s name alone, as mentioned earlier, were ordered to be divided equally on an “if, as, and when basis.” In arriving at a monetary award, the chancellor used the following methodology.

Excluding the value of the 401K plan in the “Bankers Portfolio,” and excluding the $89,000 savings account, which was the after-tax remainder of Mir. Kelly’s bonus paid in 2001, the court added the total value of all marital property in Mr. Kelly’s name alone; then divided that amount by two and arrived at $98,814. From that latter figure, he deducted the value of the marital property in Ms. Kelly’s name alone, which was valued at $32,342, and arrived at $66,472 ($98,814-$32,342). At the January 2002 hearing, both parties introduced financial statements.

Mr. Kelly’s statement showed that he had total monthly expenses of $6,658. His largest expense was the $1,220 monthly mortgage payment he makes on the marital home. His gross income is shown on the financial statement as $10,416 per month ($125,000 per year); his net income, after deduction of federal, FICA, medicare, and state taxes, together with deductions for his retirement ■ savings plan, is $6,251. The financial statement shows that he is running a slight monthly deficit, although some of the expenses appear to be either temporary {e.g., $360 per month payment for a therapist/counselor, or, at least arguably, excessive, e.g., $870 a month for recreation and entertainment).

Ms. Kelly’s financial statement shows that her total net monthly income is $2,239.59. She lists, her expenses as $4,655.59, and claims a $2,426 monthly deficit. Included in her expenses, however, are expenditures that she would like to make, but does not, such as the cost of a telephone, which she ²⁶⁷ estimated would cost $50 per month; 2 tennis lessons, $258 per month; and gym membership, $79 per month. Ms. Kelly lives in an apartment and pays $1,022 per month in rent.

Some of the expenses on her financial statement appear to be temporary, such as storage, $150 per month, and a charge for therapist/eounselor, $195 per month. Her major debts are attorney’s fees, $1,469; together with about $13,000 in credit card debt. In addition, she lists as debts the money owed on her Lexus ($7,900) and $3,000 for notes payable to relatives.

II

THE CHANCELLOR’S WRITTEN DECISION DENYING ALIMONY The trial judge’s discussion of Ms. Kelly’s alimony request read, in material part, as follows: The [pjlaintiff [Mr. Kelly] is employed as a computer analyst with Alex. Brown, Incorporated. His salary last year was $125,000.00 with a $89,000.00 [sic] bonus.... The rdjefendant has requested alimony in this case.

Pursuant to Md.Code Ann., Family Law (“FL”) § 11-101, et seq., the present function of alimony is rehabilitation. When awarding alimony, the [c]ourt must consider such factors as the age and health of the parties, their standard of living, their respective financial situations, the duration of the marriage, and the contribution of each party to the well-being of the marriage. Also important in the case analysis is the ability of the party seeking alimony to be fully or partially self-supporting. Tracey v. Tracey, 328 Md. 380 , 614 A.2d 590 (1992); Turrisi v. Sanzaro, 308 Md. 515 , 520 A.2d 1080 (1987).

The [pjlaintiff and the [defendant are currently 44 and 43 years old, respectively, and in good health. They were married for nineteen (19) years before separating on October 3, 1999. During their marriage, they appeared to have ²⁶⁸ enjoyed a comfortable, upper middle class life style. According to the testimony of both parties, they appeared, however, to save and to be financially secure.

The [plaintiff contributed more financially to the well-being of the family, as the [defendant's employment was at a rate of $15.00 an hour. The [plaintiff's salary as a computer analyst is now more than twice that of the [defendant's as a landscaper, but that may well change as thirty (30) workers in the technology department in Alex. Brown Incorporated have been downsized. Also [pjlaintiff will not likely receive the $89,000.00 [sic] bonus he was awarded last year due to the poor state of' the dot.com industry. 1 Further, the [defendant has the ability to be wholly self-sufficient and will be able to pay off her debts.

The parties point the finger at each other in terms of the breakup of the marriage, but for this [c]ourt it was clear that marriage was ended by the [defendant's abandonment of the [pjlaintiff and their two children. The [p]laintiff has had sole responsibility of the two children and has neither received nor requested child support. The [pjlaintiff is also taking responsibility for the children’s college expenses. The [djefendant is able to meet all of her recoverable expense; where one party is sufficiently self-supporting no alimony is required.

Hull v. Hull, 83 Md.App. 218 , 574 A.2d 20 cert. denied, 321 Md. 67 , 580 A.2d 1077 (1990). Therefore, the [djefendant is denied alimony. 1 Plaintiff is entitled to the full amount of his $89,000.00 [sic] bonus he received February 2001, after the breakup of the marriage as the [djefendant abandoned the family prior to the time the bonus was earned.

III

ANALYSIS Issue 1 Section 8-206 of the Family Law Article (“FL”) of the Maryland Code (1984,1999 Repl.Vol.), permits the court to exercise its power to “enable any child of the family to • continue to live in the environment and community that are ²⁶⁹ familiar to the child” and “to provide for the continued occupancy of the family home ... by a party with custody of a child who has a need to live in that home.” The word “child” is defined as a person under the age of eighteen years. FL § 8-201(b). In the case at hand, the trial judge awarded Mr. Kelly use and possession of the family home for three years after the date of the divorce, ie., until May 16, 2005. The Kellys’ younger son, David, will turn eighteen on March 19, 2004.

Therefore, as of March 19, 2004, there will be no “minor child” living in the marital home. Ms. Kelly contends that the award of use and possession by the trial court extended for a period of fourteen months “beyond the youngest child’s eighteenth birthday” and therefore is “not permissible under the statute.” Although he admits that David will turn eighteen on March 19, 2004, appellee points out that on that date his younger son will still be a senior in high school. Appellee argues: Because of legislative amendments to Article 1, § 24 of the Maryland Code and § 5-203 of the Family Law Article of the Maryland Code in 2002, parents’ obligation for child support now continues past the child’s arrival at the age of 18 if the child is enrolled in high school; presumably, the right to use and possession of the family home is extended as well. At oral argument, appellant’s counsel agreed with appellee that the statute should be interpreted so as to allow the use and possession order to remain in effect until David graduates from high school, which he is scheduled to do in early June 2004.

We also agree. Accordingly, this case shall be remanded. On remand, the circuit court should enter an order directing that Mr. Kelly’s use and possession of the marital home shall terminate on the date in June 2004 that David Kelly graduates from high school. Issue 2 The appellant argues that the chancellor erred in failing to include in his calculation of marital property the ²⁷⁰ $89,000 in appellee’s savings account, titled solely in Mr. Kelly’s name, that was earned during the course of the marriage.

Appellant points out, correctly, that marital property is defined as “property, however titled, acquired by 1 or both parties during the marriage.” FL § 8-201. 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). Gallagher v. Gallagher, 118 Md.App. 567, 575 , 703 A.2d 850 (1997).

As mentioned earlier, the $89,000 bonus (net), which Mr. Kelly received from his employer as a bonus in 2001, was placed by him in a savings account. That money, as all parties agree, was marital property. In performing Step 1, the trial judge said: “[T]he marital property is valued at $329,204, excluding the $89,000.” Earlier in a footnote, the chancellor said, “Plaintiff [Mr. Kelly] is entitled to the full amount of his $89,000 bonus he received February 2001, after the break-up of the marriage as the [defendant abandoned the family prior to the time the bonus was earned.” Appellant contends, and we agree, that it was error to exclude the $89,000 as marital property in performing Step 1. The case of Alston v. Alston, 331 Md. 496 , 629 A.2d 70 (1993), is instructive.

Viola and Herman Alston were separated in 1985, after a twenty-one-year marriage; while the parties were separated, Mr. Alston won the “Lotto” with an annuity value of over $1,000,000. In Alston , the trial court granted ²⁷¹ Mrs. Alston a divorce and also granted her a monetary award. In calculating the amount of the award, the trial court divided equally all of the marital property, including the Lotto winnings. The Court of Appeals held that the trial court had appropriately considered the lottery winnings as marital property.

Id. at 505 , 629 A.2d 70 . The Court, nevertheless, held: While no hard and fast rule can be laid down, and while each case must depend upon its own circumstances to insure that equity be accomplished, generally in a case such as this the eighth factor should be given greater weight than the others. Where one party, wholly through his or her own efforts, and without any direct or indirect contribution by the other, acquired a specific item of marital property after the parties have separated and after the marital family has, as a practical matter, ceased to exist, a monetary award representing an equal division of that particular property ■would not ordinarily be consonant with the history and purpose of the statute. The trial judge found that the annuity was acquired because Mr. Alston “took the time and effort and money, whatever it cost, to purchase the lottery ticket.” While the amount of effort itself may not have been great, the annuity was acquired entirely through Mr. Alston’s efforts.

This is not a case in which one party has facilitated the other’s acquisition of property, directly or indirectly. Mr. Alston, using his own funds, purchased the ticket and won the Lotto. This event was not dependent in any way on the parties’ joint efforts or shared life, past or present. At the time, the marriage was, for all practical