Langston v. Langston

HOLLANDER, Judge. This alimony modification dispute arises from an in banc review conducted by a three-judge panel of the Circuit Court for Montgomery County, pursuant to Maryland Rule'2-551, reversing the circuit court. The panel majority concluded that the separation agreement executed by Gary W. Langston, M.D., appellant, and Lori K. Langston, appellee, did not ²⁰⁹ authorize appellant unilaterally to reduce his alimony payments because of his decline in income, nor did it permit retroactive modification of appellant’s alimony obligation to a date preceding his filing of a petition requesting modification. From the in banc decision, appellant timely noted this appeal.

He presents one question for our review, which we have divided into two questions and rephrased: I. Does the separation agreement permit appellant unilaterally to modify his alimony obligation, without a court order, because of a decline in income?

II

Does the a) separation agreement or b) Maryland law permit retroactive modification of an alimony obligation to a date preceding the filing of a petition for modification? For the reasons that follow, we answer questions I and 11(a) in the negative, and question 11(b) in the affirmative. Therefore, we shall affirm in part, vacate in part, and remand for further proceedings. FACTUAL SUMMARY The parties were married in Montgomery County on November 7, 1988, and separated on January 8, 1997.

In between, the couple had four children, born between 1989 and 1995. Following their separation, the parties executed a Voluntary Separation and Property Settlement Agreement dated April 1, 1997, which was subsequently amended, on grounds not pertinent here, by the Amendment to Voluntary Separation Agreement, dated March 30, 1998 (collectively, the “Agreement”). The Agreement was incorporated, but not merged, into the Judgment of Absolute Divorce dated March 30,1998, and docketed on April 3,1998. The Agreement obligates Dr. Langston to pay alimony for a total of ten years, beginning on April 1, 1997.

Pursuant to the terms of the Agreement, Dr. Langston was supposed to pay monthly alimony of $8,000 for a two-year period, through March 31, 1999, with the amount of alimony decreasing thereafter and terminating after the tenth year. The amount of ²¹⁰ spousal support was calculated based on appellant’s annual income of $751,219.00 in the “base year” of 1996. If all of the alimony payments were made in accordance with the original terms of the Agreement, Dr. Langston would pay total alimony in excess of $750,000 over the ten-year period. Modification of alimony is governed by Section V of the Agreement.

Paragraph C of Section V is at issue here. It states: The alimony provisions of this paragraph are subject to the further order of the court and may be modified AS TO AMOUNT ONLY based proportionally on any increase or decrease in the Husbands [sic] gross income using calendar year 1996 as a base year. The alimony provisions with respect to terminating events or date may not be modified by any court of competent jurisdiction. (Emphasis added).

Just one month after the parties’ divorce, Dr. Langston’s attorney advised Ms. Langston’s attorney, by letter dated May 4, 1998, that appellant had experienced a substantial decrease in income and had decided to reduce his alimony payment. The letter stated, in relevant part: As your client is aware, Dr. Langston has suffered a serious loss in income as a result of his losing major clients. Pursuant to paragraph VC of the parties agreement, [sic] As you can see from the enclosed 1996 Tax return Dr. Langston’s gross income in 1996 was $751,219. His Gross income in 1997 was $4876,393. [sic] His projected 1998 Gross income from all sources ... is expected to be $205,000.

Dr. Langston has provided Mrs. Langston with the payment that he could make, and he will continue to make the payment of $2,160. His 1998 income is projected to be 27% of his 1996 income. ²¹¹ It is my hope that the parties can agree on this reduction without application to the court so that further expense and stress can be avoided. Please let me know at your earliest convenience. (Emphasis added).

Ms. Langston did not respond to the letter. Instead, on June 16, 1998, she filed a Motion for Contempt, claiming that appellant failed to pay alimony as required by the Agreement. According to appellee, she received only $2663.00 in May, and appellant thus owed an additional $5337.00 for the month. Dr. Langston filed an opposition to the contempt motion on August 18, 1998, claiming that he had experienced a substantial decrease in income and lacked the ability to comply with his alimony obligation.

He explained that he was paying 33% of the negotiated alimony amount, despite earning only 27% of his 1996 income, on which his alimony obligation was based. Appellant added: “[Dr. Langston] is finalizing a Counter-Motion for Modification of Alimony to be filed in these proceedings.” A month later, on September 18, 1998, Dr. Langston filed a Counter-Motion for Modification of Alimony. He averred that, due to “a material change in circumstances,” he was earning only 27 percent of his 1996 income and lacked the ability to make the required alimony payments. Further, appellant said that, prior to the proceedings, he had asked Ms. Langston to “agree to a modification of the alimony award, pursuant to the terms of their [Agreement and without the necessity of Court intervention.” In his attached Financial Statement, filed under oath, Dr. Langston listed monthly income of $11,250 and expenses of $14,928, including monthly alimony payments of $2475.

In her response, Ms. Langston asked the court to deny Dr. Langston’s request. She acknowledged, however, that appellant had contacted her to request a modification of his alimony payments, but she claimed he “provided no documentation to support that request.” ²¹² At the circuit court hearing on January 29, 1999, the parties advised the trial judge that they had reached an agreement regarding appellant’s prospective alimony obligation, and therefore were proceeding only with respect to the dispute concerning “the interpretation” of the Agreement and “the issue of arrearages.” Specifically, based on Dr. Langston’s representation that his income for 1998 was $152,699, the parties agreed that he would pay $1697.60 in alimony for February and March of 1999, and $1273 per month thereafter. The parties also agreed that if Dr. Langston’s income changed by more than 10 percent, he would notify Ms. Langston of the change in order for the parties to make “an upward or downward adjustment” in alimony. The adjusted alimony payment would commence at the time of notice, and neither party would be required “to come to the court for an order of modification.” Therefore, no evidence was presented as to appellant’s income.

Nevertheless, the parties continued to disagree about: 1) whether appellant had the right under the Agreement to resort to self help by reducing his alimony obligation unilaterally, without a court order; and 2) the effective date of any modification of alimony. Pursuant to Md.Code (1999 Repl.Vol.), § 8-103 of the Family Law Article (“F.L.”), appellant urged the court to abide by the parties’ Agreement, which he said did not require appellant to obtain court approval for the alimony reduction, and instead allowed appellant unilaterally to decrease his alimony, using 1996 as “the base year.” If a court order were required, Dr. Langston argued that the court should retroactively reduce his alimony obligation to a date prior to when he filed his petition for modification, because that would be consistent with the time when his decrease in income actually occurred and with the Agreement. Ms. Langston disagreed, arguing that § V.C. of the Agreement did not authorize Dr. Langston “to unilaterally reduce the support.” Rather, she claimed that appellant was required to obtain relief from the court before reducing support, and that neither the Agreement nor Maryland law permitted a reduction retroactive to a date prior to the time that Dr. ²¹³ Langston filed a petition requesting modification. Therefore, she sought total arrearages in excess of $20,000 for the period from May 1998 (when appellant first reduced the amount of alimony) through September 1998 (when appellant filed a petition for modification of alimony).

The trial court agreed with Dr. Langston’s interpretation of § Y.C. The court stated, in relevant part: I have considered Paragraph V(c) [sic] in the parties’ agreement and I think it doesn’t specifically state it, but it is certainly inferred and I think common sense would indicate that the parties would have the right to reach any agreement they could reach between themselves without having to come to court and ask the court to modify their agreement. Further, I believe that the meaning of this paragraph as it applies to the issue here is that if Dr. Langston is able to establish by the evidence the date of the decrease in his gross income, and it is the date of the decrease that is issued for modification purposes and it is not affected by when he filed with the court, so I would accept the argument of [Dr. Langston] on that issue. Accordingly, the court entered an order dated March 8, 1999, ruling that it “finds that the meaning” of § V.C., “as it applies to the issue of arrearages, is that the date of the decrease for modification is not affected by when [Dr. Langston] filed with the court.” Therefore, the court granted appellant’s motion for modification without assessing any arrearages. The order was amended on March 28, 1999, on grounds not relevant here.

Ms. Langston subsequently filed a request for In Banc Review, pursuant to Maryland Rule 2-551, stating that “[t]he sole issue in this case is whether [Dr. Langston] is entitled to reduce his alimony payments to [Ms. Langston] retroactive to a date prior to his filing a Court pleadings [sic] seeking such relief.” In her view, a modification could only be made retroactive to the date that appellant filed a petition seeking modification. In his opposition, Dr. Langston again asserted ²¹⁴ that § V.C. of the Agreement permitted him to modify his alimony obligation based on his change in income, without having to seek court relief to do so. He asserted that “the date of the modification of the amount of [Dr. Langston’s] alimony payment is dictated by the terms of the parties’ Agreement____ without application to the Court, [so] the modification is not limited to the date of the filing of [Dr. Langston’s] request.” At the in banc hearing on November 19, 1999, the parties again advanced their respective positions. To support her contention that appellant could not unilaterally modify his alimony payment, Ms. Langston’s attorney relied on the language of the Agreement, which provided that alimony was modifiable pursuant to “further order of the Court.” Further, appellee’s lawyer said: “We are not suggesting that this [A]greement precludes modification....

What we are saying is that the Court could not permit the retroactive modification of the alimony prior to the actual filing of a motion seeking that relief.” Appellant conceded that the Agreement did not expressly provide for modification of alimony retroactive to a date prior to filing a petition to modify alimony. Nevertheless, Dr. Langston insisted that the Agreement provided for a “built in reduction ... ”, and claimed that “there is no requirement that either party come to Court.” The following colloquy between the in banc panel and counsel for Dr. Langston is informative: JUDGE PINCUS: Where is the language which says it is retroactive prior to the date of filing of the petition to modify the alimony? Where does it say that? [APPELLANT’S COUNSEL]: It doesn’t say that, Your Honor. JUDGE PINCUS: I know. [APPELLANT’S COUNSEL]: But—but the plain meaning of the words—you are saying that the parties had to have intended that there be an affirmative requirement to do that, and—and it doesn’t say it, so there is no requirement that either party come to Court.

It says—it really— ²¹⁵ JUDGE PINCUS: But it is just like any other case, if they want to modify it— [APPELLANT’S COUNSEL]: Right. JUDGE PINCUS:—by consent they can, but in the event one party has to come to Court, which is what happened in this case, how do you make that leap that it is retroactive prior to the filing of the petition? [APPELLANT’S COUNSEL]: Because there is a provision, there is a built in reduction that says it may be modified, and then it tells everybody—it tells the parties how you do it. JUDGE PINCUS: What the formula is. [APPELLANT’S COUNSEL]: So to require him to come to Court, to file this, to do all those things when it is not in the agreement that he must do it, and then say, “Well, you can’t have a reduction till you do this, even though your agreement says it—it—it may be modified.” JUDGE PINCUS: It may be, but it doesn’t— [APPELLANT’S COUNSEL]: Right. JUDGE PINCUS:—say anything about if he has to come to Court that it is retroactive prior to the date of filing.

JUDGE PINCUS: ... I fail to see where [the Agreement] says it [is] retroactive prior to the date of filing of the petition. [APPELLANT’S COUNSEL]: Why does it have to say that? ... JUDGE PINCUS: Because that is the law. [APPELLANT’S COUNSEL]: [I]t isn’t the law, Your Hon- or, as to the interpretation of the contract, and the fact that this contract doesn’t have those [words], you are ... rewriting the contract. ²¹⁶ JUDGE PINCUS: No, I am not. I am trying to read it as it exists. [APPELLANT’S COUNSEL]: Well, if you read dt as it exists, there is no word anywhere that says ... you cannot have a reduction pursuant to the formula.

JUDGE PINCUS: It should have ... been written that way. [APPELLANT’S COUNSEL]: It wasn’t ... [APPELLANT’S COUNSEL]: ... [B]ut I think that the fact that it is not in there—you are requiring that it be in there, and you have a contract without it in there, and you may not like it, and you may think it doesn’t make—it is not a good procedural thing to do, but the fact is that it is a way by which parties can regulate a major decrease in income without the assistance of the court. JUDGE SCRIVNER: But they can always do that.... * * * JUDGE SCRIVNER: Every case in the State can ... agree to change their agreement. JUDGE PINCUS: Except—except in this case you cannot—the Court cannot modify a termination event. [APPELLANT’S COUNSEL]: Exactly. JUDGE PINCUS: ... or ... a date may not be modified A divided in banc panel reversed the trial court’s decision.

Speaking for the majority, Judge Scrivener stated, in relevant part: Maryland case law and Maryland statutes govern support and modification of support, and the law provides that parties to a divorce can enter into agreements as to support and modification of support, and in certain cases those ²¹⁷ agreements would supersede what the law otherwise provides. Unless the parties contract otherwise, the law provides that support is modifiable. In my opinion—the majority opinion is that under the terms of these parties!’] agreements, the only part of the law that they address was to limit the circumstances under which a Court could consider a modification of this support provision, that circumstance being a change in his income, and the wording is, I believe, as to changes in his income only—other changes and circumstances that might have occurred, for instance if she had had an increase or a decrease in income or a fatal illness or any other number of things. The parties contracted away any jurisdiction on the part of the Court to consider a modification of this support .... [I]f one party . . . wanted to extend the duration or shorten the duration, this Court would not have jurisdiction to do that.

They contracted that away. If the parties had said in this agreement that a change in the suppoH would be automatic, based on changes in his income, that would be one thing, but this agreement does not say that changes in support are automatic. It provides specifically that it is subject to further order of Court and that a Court may modify—that is not an automatic modification—though Maryland law is that a Court cannot modify support prior to the filing of a petition to do so, and nothing in this agreement changes that. In other words, they didn’t contract away that provision of the law by making it automatic based on certain things.

So it is the opinion of the majority that the Court did not have the jurisdiction to modify the amount of support prior to the filing of a petition requesting the Court to do so. (Emphasis added). Thus, the in banc review panel upheld the modification of appellant’s alimony obligation, but determined that the modification was only retroactive to the date appellant filed his petition to reduce alimony, and not to an earlier date when he ²¹⁸ suffered a decline in income. Therefore, by order dated January 28, 2000, the court ordered Dr. Langston to pay alimony arrearages in the amount of $29,200.00 for the period May 1998 through September 1998.

We shall include additional facts in our discussion. DISCUSSION I. We begin with a review of the procedural posture of this case, in order to clarify the applicable standard of our review and the standard of review that governed the in banc panel. Upon motion made within ten days of entry of judgment, Maryland Rule 2-551 provides for in banc review, as guaranteed by Article IV, § 22 of the Maryland Constitution. An in banc court acts as an appellate tribunal with respect to the circuit court.

See Board of License Comm’rs for Montgomery County v. Haberlin, 320 Md. 399, 406 , 578 A.2d 215 (1990); Estep v. Estep, 285 Md. 416, 421 , 404 A.2d 1040 (1979); Azar v. Adams, 117 Md.App. 426, 434 , 700 A.2d 821 (1997), cert. denied, 348 Md. 332 , 703 A.2d 1264 (1998); Green v. State, 96 Md.App. 601, 606 , 626 A.2d 975 , cert. denied, 332 Md. 702 , 632 A.2d 1208 (1993). Thus, its function is to review the findings and rulings of the trial judge. Dabrowski v. Dondalski, 320 Md. 392, 395-96 , 578 A.2d 211 (1990) (per curiam); see Haberlin, 320 Md. at 407 , 578 A.2d 215 ; Estep, 285 Md. at 420-421 , 404 A.2d 1040 . In Dabrowski, 320 Md. at 395 , 578 A.2d 211 , the Court recognized that “the decision of the court in banc [is] a final order appealable to the Court of Special Appeals under Maryland Code (1974, 1989 Repl.Vol.), § 12-301 of the Courts and Judicial Proceedings Article and Art. IV, § 22, of the Maryland Constitution.” As the Court in Estep explained: “[T]he court in banc acts only as an appellate tribunal so that its decisions are not those of a reconsidering trial court but are reviewable as final appellate judgments.” Estep, 285 Md. at 421 , 404 A.2d 1040 ; see Montgomery County v. McNeece, 311 ²¹⁹ Md. 194, 200, 533 A.2d 671 (1987); Dean v. State, 302 Md. 493, 497 , 489 A.2d 22 (1985) (recognizing that there is no “different standard of appealability to a court in banc from that to the Court of Special Appeals.”).

Nevertheless, under Md. Rule 2-551(h), “any party who seeks and obtains [in banc! review under this Rule has no further right of appeal.” This means that the decision of an in banc panel may not be appealed by the party who sought in banc review. In their briefs, neither side addressed the standard of review that applies here, or that governed the in banc review panel. For example, the parties have not discussed whether the in banc panel, given its appellate role, was bound by the rules and practices that generally govern appellate review, requiring it to uphold factual findings of the circuit court that are not clearly erroneous, and to uphold the trial judge’s discretionary decisions in the absence of abuse of discretion. Nor have the parties attempted to elucidate for us whether we must review the record and decision of the in banc court, the trial court, or both.

In response to our inquiry at oral argument, appellant’s counsel merely urged us to review the trial judge’s decision, while appellee’s lawyer counseled us to review the in banc panel’s decision. We look to Azar, 117 Md.App. 426 , 700 A.2d 821 , for guidance. There, we considered, inter alia, the “scope” of our review of an in banc court’s decision. Id. at 433 , 700 A.2d 821 .

The Azar Court sought to resolve whether the Court reviews only the action of the in banc court on the record before it, or the findings of the trial court on its record, or both. Writing for the Court, Judge Cathell thoughtfully analyzed the in banc process, but acknowledged that he found no cases “delineating or limiting the scope of our review” of an in banc proceeding. Id. at 432 , 700 A.2d 821 . In analyzing Rule 2-551(h), the Azar Court observed, 117 Md.App. at 433 , 700 A.2d 821 : This rule does not resolve the quandary, i.e., are we, when reviewing a decision of an in bane court, limited to the record presented to the in bane court, or may we consider the transcripts, pleadings, and evidence from the trial court proceedings.

We have found no rule governing the scope of ²²⁰ our review of an in banc court’s action. An in banc court is, however, an appellate tribunal. It is subordinate to this Court just as we are subordinate to the Court of Appeals. When the appellate process commences via the in banc court route, that court is, as to this Court, in the case where an appellee at the in banc level files a further appeal, an intermediate appellate court.

That fact, however, also offers little help in resolving what it is that we are reviewing and what constitutes the record upon which our review is to be based. The issue is whether our review is limited to the record before the in banc panel or whether we may review the entire record of the trial court proceedings. In regard to the standard of review applicable to the in banc court’s consideration of the trial court’s rulings, Judge Cathell explained: An appeal to an in banc panel is an alternative avenue of appellate review. The forum may be different, but the restraints upon the process are the same.

Neither the in banc panel nor we may relevantly ask whether we would have reached the same decision as that reached by the circuit court. Neither it nor we have any independent or de novo fact-finding responsibility or prerogative. As to fact finding, we should both be concerned only with whether [the trial judge] was legally in error. Id. at 434 , 700 A.2d 821 (quoting General Motors Corp. v. Bark, 79 Md.App. 68, 70-71 , 555 A.2d 542 (1989)).

Fortunately for the Azar Court, it did not have to resolve the “quandary” that it identified. It said, at 117 Md.App. at 434-35 , 700 A.2d 821 : Thankfully, we need not now resolve that difficult question [of what this Court must review in an appeal from an in banc panel]. We perceive that if we are reviewing the decision of the in banc court on either the evidence before it or the evidence as supplemented by additional portions of the trial court record presented to us, its decision was appropriate. Alternatively, based upon the portions of the trial court record presented in the extract, if we are merely ²²¹ repeating an appellate review of the trial court’s action, we hold that it erred....

We conclude from Azar , and the cases on which it relied, that the in banc panel functions like an intermediate appellate court. This means that it must review the circuit’s factual findings and discretionary rulings. But, it may not set aside factual findings of the trial court unless clearly erroneous, nor disturb the trial judge’s discretionary rulings absent a finding of abuse of discretion. The in banc panel does not make de novo factual findings, however.

Moreover, like any appellate court, the in banc panel does not defer to the circuit court with respect to questions of law, just as we do not defer to a lower tribunal’s resolution of a legal question. We also rely on Azar to explain our role. If the in banc panel functions like an intermediate appellate court, then our role is akin to the Court of Appeals, in the sense that we provide an additional level of appellate review. We reason by analogy to those cases that are tried in the circuit court and then reviewed by this Court and later by the Court of Appeals.

When issues are raised on appeal concerning a trial court’s factual findings, which are first considered by this Court and then by the Court of Appeals, the Court of Appeals essentially reviews our review of the factual findings made by the circuit court as the original tribunal. (Peeling the layers of an onion seems like an apt description here.) In the process, the Court of Appeals must also examine the trial court’s decision. Similarly, in our review of the in banc panel’s opinion addressing an issue about the factual findings of the circuit judge, we assess the correctness of the in banc panel’s ruling by analyzing the factual findings of the circuit judge in light of the record. In the same way, when an appeal from an in banc panel concerns an issue regarding a discretionary ruling of the trial judge, we must consider the in banc panel’s review of the trial judge’s discretionary ruling.

But, this necessarily requires us to consider the trial judge’s exercise of discretion, for we must be satisfied that the trial court ²²² properly exercised its discretion and did not abuse its discretion. In the case sub judiee, we are not required to determine whether any factual findings were clearly erroneous. That is because the material facts that were presented were not in dispute. On the other hand, as our discussion, infra, indicates, we are not satisfied that all material facts were presented.

Nor are we called upon to determine if the circuit judge properly exercised his discretion. That is because he did not exercise his discretion. But, as we discuss, infra, we believe the case ultimately turns on the exercise of discretion. In any event, we are satisfied that the in banc panel correctly construed the Agreement with respect to