Langston v. Langston

BATTAGLIA, Judge. We granted a writ of certiorari to determine whether alimony payments may be modified retroactively, i.e. to a date prior to the filing of a pleading seeking such modification. The petitioner, Lori K. Langston, here challenges the decision of the Court of Special Appeals which held that respondent, Gary W. Langston, M.D., could obtain such retroactive modification of alimony payments. I. Facts Gary W. Langston, M.D., respondent, and Lori K. Lang-ston, petitioner, were married in Montgomery County on November 7, 1988.

Lori did not work outside the home while married, but instead cared for the four children who were born during the course of their marriage. The parties voluntarily separated on January 8, 1997, and entered into a Separation and Property Settlement Agreement ⁴⁹⁵ on June 10, 1997. 1 As a part of the Agreement, the respondent received sole custody of the couple’s four children, while the petitioner received visitation. The parties agreed to pay child support jointly, commensurate with their abilities. The Agreement also established the following schedule of alimony payments from respondent to petitioner: ... the sum of $8,000.00 per month for the first year; the sum of $7,000.00 per month for the second year; the sum of $6,000.00 per month for the third year; the sum of $5,000.00 per month for the fourth and fifth years; and the sum of $4,000.00 per month [for] the sixth through tenth years.

Alimony payment[s] shall account from and the first payment shall be due on April 1, 1997. The alimony payments shall continue only as long as the parties live separate and apart and shall terminate (except as to accrued arrears, if any) upon the first to occur of any one of the following events: the death of Wife, the remarriage of Wife, death of Husband, or the expiration of ten years. Section V(a) of the Separation Agreement (June 10, 1997). The Agreement further provided: 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. Section V(c) of the Separation Agreement (emphasis in original). On August 12, 1997, the respondent filed in the Circuit Court for Montgomery County for an absolute divorce and requested that the Separation and Property Settlement Agreement be incorporated into the judgment of absolute ⁴⁹⁶ divorce. The Circuit Court granted the absolute divorce and respondent’s request for incorporation on March 30, 1998.

Within a few weeks, on May 4, 1998, respondent’s counsel sent a letter to petitioner’s counsel, stating that the respondent had experienced a substantial decrease in income during 1998. As a result of his diminished financial status, the respondent hoped to reach an agreement with petitioner on a reduction in alimony so as to avoid further expenses associated with an application to the court. The petitioner did not respond to the letter. Instead, she filed a Motion for Contempt against the respondent on June 16, 1998, asserting that he failed to make complete payments of the $8,000.00 per month alimony award.

The respondent answered the motion by iterating that he had experienced a substantial loss in income in 1998 relative to the level of income reported as the base year (1996) in the parties’ Separation Agreement. The respondent contemporaneously filed a Counter Motion for Modification of Alimony on September 18, 1998, wherein he requested, pursuant to Section 11 — 107(b) of the Family Law Article, that the court retroactively modify the amount of alimony payable to the petitioner under the Separation Agreement, from the time of his initial income diminution in 1998. The trial court heard arguments on the parties’ motions on January 29, 1999. At that time, the parties agreed that the respondent would make reduced payments of alimony beginning in February of 1999.

What remained for the trial court’s determination was the amount for which the respondent was accountable for the period of May 1998 to February 1999, in light of the respondent’s assertion that his 1998 income ($152,-699.00) was a substantial reduction from his 1996 annual income ($751,219.00), the base income level under the terms of the Separation Agreement. 2 ⁴⁹⁷ The trial court ruled that Section V(c) of the Separation Agreement did not prohibit retroactive modification of the alimony payments irrespective of when the respondent filed his motion for modification with the court. The court stated that so long as the respondent “is able to establish by the evidence the date of decrease in his gross income, and it is the date of 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 [respondent] on that issue.” 3 Therefore, on March 8, 1999, 4 the trial court entered an order stating that the respondent did not owe the petitioner any arrearage in alimony payments; the court further established that for January and February of 1999, the respondent should pay $1,697 per month in alimony, and commencing on March 1, 1999, he should pay $1,273 in alimony per month. The petitioner filed a Notice for In Banc Review of the trial court’s decision that she was not entitled to recoup arrearages in alimony for the period from May of 1998 through September of 1998, and that the respondent could retroactively modify his alimony payments to a period prior to his filing a formal request for such relief. ⁴⁹⁸ A hearing was held on November 19,1999 in front of a three judge panel. 5 The in banc court, in a 2-1 decision, reversed the trial judge’s finding regarding the arrearage owed under the Separation Agreement. The majority stated: 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 agreements would supersede what the law otherwise provides.

The parties contracted away any jurisdiction on the part of the Court to consider a modification of this support. If the parties had said in this agreement that a change in the support 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 ... [it] is not an automatic modification ... 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. The majority of the in banc panel found that the only effective date for modification of the alimony payments would be the date that the respondent actually filed his petition to reduce alimony (i.e. September of 1998), rather than the May, 1998, starting point.

Therefore, on February 8, 2000, the in banc panel ordered that the respondent pay the petitioner ⁴⁹⁹ $29,200.00, representing alimony for the period of May, 1998, through September, 1998. The respondent appealed this decision to the Court of Special Appeals, asking the court to consider whether a party could unilaterally modify his alimony payments without a court order based on the party’s decline in income or, in the alternative, whether the court could order modification of the alimony payment to a date preceding the filing of a formal petition seeking such modification. Langston v. Langston, 136 Md.App. 203, 209 , 764 A.2d 378, 381 (2000). The Court of Special Appeals set forth its holding as follows: ... we agree with the in banc panel that the Agreement does not permit Dr. Langston to reduce his alimony obligation without a court order.

We also concur with the in banc panel that the terms of the Agreement do not permit modification of alimony retroactive to a date preceding the filing of a request. Therefore, we reject the trial judge’s conclusion to the contrary. To be sure, the parties could have included such terms in their Agreement, but they failed to do so. We disagree, however, with the in banc panel’s conclusion that Maryland statutory law bars modification of alimony retroactive to a date preceding the filing of a request.

Although that view seems to be the general perception among lawyers and the bench, we believe that Maryland law makes such a determination a matter for the trial court in the exercise of its discretion. Id. at 222 , 764 A.2d at 388 . Thus, the Court of Special Appeals affirmed in part the in banc panel’s decision that the terms of the Separation Agreement did not permit retroactive modification and vacated in part the in banc panel’s determination that retroactive modification was not permissible under Maryland statutory law, remanding the case to the trial court for further proceedings. Id.

Dissatisfied with the Court of Special Appeals’s holding, the petitioner filed a Petition for a Writ of Certiorari, which we granted to consider whether alimony may be modified to a ⁵⁰⁰ date prior to the filing of a pleading seeking such relief. For the reasons set forth below, we hold that under Maryland law, although a party may not unilaterally modify an alimony award retroactively, absent a contractual provision permitting such, a trial court, in its discretion, may modify an alimony award retroactive to a date preceding the filing of a formal motion for modification when the party seeking modification files an appropriate motion with the court and sufficiently demonstrates the need for such modification. • In the exercise of its discretion to allow modification, either retroactively or prospectively, the trial court must balance the needs of the party seeking modification with the interests of the other party.

II

Discussion A. Procedure Following In Banc Review As a preliminary matter, we address whether the issuance of a writ of certiorari was appropriate in this case. The issue arises because normally a party who requests in banc review cannot appeal from the final decision of the in banc panel. In the matter before us, petitioner initiated the appellate process by filing a notice for in banc review in the Circuit Court for Montgomery County to challenge the trial court’s order allowing for retroactive modification of alimony. Pursuant to Maryland Rule 2-551, a party may file a notice seeking in banc review of any issue which was preserved by making an appropriate objection at trial.

Once the notice has been filed, the Circuit Administrative Judge designates a three judge panel from the circuit,, other than the original trial judge, to hear the issue. Article IV, Section 22 of the Maryland Constitution specifically allows for in banc review as follows: Where any Term is held, or trial conducted by less than the whole number of said Circuit Judges, upon the decision or determination of any point, or question, by the Court, it shall be competent to the party, against whom the ruling or decision is made, upon motion, to have the point, or question reserved for the consideration of the three Judges of the ⁵⁰¹ Circuit, who shall constitute a court in banc for such purpose; and the motion for such reservation shall be entered of record, during the sitting, at which such decision may be made; and the several Circuit Courts shall regulate, by rules, the mode and manner of presenting such points, or questions to the Court in banc, and the decision of the said Court in banc shall be the effective decision in the premises, and conclusive, as against the party, at whose motion said points, or questions were reserved; but such decision in banc shall not preclude the right of Appeal, or writ of error to the adverse party, in those cases, civil or criminal, in which appeal, or writ of error to the Court of Appeals may be allowed by Law. The right of having questions reserved shall not, however, apply to trials of Appeals from judgments of the District Court, nor to criminal cases below the grade of felony, except when the punishment is confinement in the Penitentiary; and this Section shall be subject to such provisions as may hereafter be made by Law. Maryland Code (1958, 1981 Repl.Vol.), Article IV, § 22 of the Maryland Constitution; See generally, John J. Connolly, Maryland’s Right of In Banc Review, 51 Md. L.Rev. 434 (1992).

A decision rendered by an in banc panel “is conclusive, final, and non-appealable by the party who sought the in banc review, and as to that party a reservation of points or questions for consideration by a court in banc is a substitute for an appeal to the Court of Special Appeals.” Montgomery County v. McNeece, 311 Md. 194, 198 , 533 A.2d 671, 673 (1987); Md. Rule 2-551(h). Maryland Rule 2-551(h) also provides that, “[t]he decision of the panel does not preclude an appeal to the Court of Special Appeals by an opposing party who is otherwise entitled to appeal.” Thus, respondent was not precluded from filing his appeal with the Court of Special Appeals. See Estep v. Estep, 285 Md. 416, 420-21, 404 A.2d 1040, 1042-43 (1979). The right of the adverse party to appeal the decision of the in banc panel to the Court of Appeals is specifically recognized in Article IV, Section 22 of the Maryland Constitution.

However, the Maryland Constitution also states that the decision of the in banc panel “shall be the effective decision in ⁵⁰² the premises, and conclusive” with regard to the party who originally sought review by the in banc panel. Md. Const., Art, IV, § 22. The question remains as to whether petitioner could file a petition for a writ of certiorari in this Court following respondent’s successful appeal to the Court of Special Appeals. Although Rule 2-551(h) limits who may appeal the in banc panel’s decision to the Court of Special Appeals, it does not place any restrictions on seeking additional review by the Court of Special Appeals to this Court.

Section 12-201 of the Courts and Judicial Proceedings Article specifically states that any party may file a petition for certiorari in the Court of Appeals for review of a decision rendered by the Court of Special Appeals. Md.Code (1974, 1998 Repl.Vol.), § 12-201 of the Courts and Judicial Proceedings Article (emphasis added). In the present case, petitioner would have been precluded effectively from exercising her opportunity to seek review of a partially adverse ruling were we to have dismissed her petition as unauthorized. Neither the Maryland Constitution, Maryland Rule 2-551, nor Section 12-201 of the Courts and Judicial Proceedings Article mandates such preclusion.

Previously this Court has decided the merits of a case traveling an identical route from a final decision of an in banc panel. See In Re: Adoption / Guardianship No. A91-71A, 334 Md. 538, 551-54 , 640 A.2d 1085 , 1091-93 (1994)(adoptive parents filed Notice for In Banc Review; natural father appealed to the Court of Special Appeals; adoptive parents along with natural mother and baby filed joint petition for a writ of certiorari granted by this Court). B. Retroactive Modification of Alimony Awards 1. Maryland Statutory Provisions The statutory framework for alimony is silent concerning retroactive modification, stating only: (a) Where available. — The court may award alimony: (1) on a bill of complaint for alimony; or (2) as part of a decree that grants: ⁵⁰³ (i) an annulment; (ii) a limited divorce; or (in) an absolute divorce.

(b) Award to either party. — The court may award alimony to either party. (c) Effect of agreement — If a final disposition as to alimony has been made in an agreement between the parties, the court is bound by that agreement as the agreement relates to alimony. Md.Code (1984, 1999 Repl.Vol.), § 11-101 of the Family Law Article. Subsection (c) mandates that the court is bound by the terms of a separation agreement entered into by the parties, which allows parties to customize their separation agreements to suit best their personal needs and circumstances.

In addition to the basic framework for alimony awards contained in Section 11-101, the Maryland Code sets forth two other statutory provisions regarding modification of alimony awards. Section ll-107(b) of the Family Law Article states that, “[s]ubject to § 8-103 of this article and on the petition of either party, the court may modify the amount of alimony awarded as circumstances and justice require.” Section 8-103(c) limits such modifications as follows: The court may modify any provision of a deed, agreement, or settlement with respect to alimony or spousal support executed on or after April 13, 1976, regardless of how the provision is stated, unless there is: (1) an express waiver of alimony or spousal support; or (2) a provision that specifically states that the provisions with respect to alimony or spousal support are not subject to any court modification. Md.Code (1984, 1999 Repl.Vol.), § 8-103(c) of the Family Law Article (emphasis added). Section 8-103 provides an additional restriction upon the general rule that allows a court to modify “any provision of a deed, agreement, or settlement” which has been “incorporated, whether or not merged, into a ⁵⁰⁴ divorce decree.... ” Md.Code (1984, 1999 RepLVol.), § 8-105 of the Family Law Article.

The legislative roots of Sections ll-107(b) and 8-103(c) run deep within Maryland’s statutory history. See 1980 Md. Laws ch. 575, § 5; 1931 Md. Laws ch. 220 § 1. Throughout this history of legislation concerning alimony awards, the General Assembly never delineated explicitly a provision governing retroactive modification of alimony awards. The legislature, however, repeatedly has vested the courts with broad discretionary power when dealing with alimony awards.

For example, Article 16, Section 14 of the Maryland Code (1888) stated: The courts of equity of this State, shall and may hear and determine all causes for alimony, in as full and ample manner as such causes could be heard and determined by the laws of England in the ecclesiastical courts there. Md.Code, Art. 16, § 14 (1888)(citing Keerl v. Keerl, 34 Md. 21 (1871); J.G. v. H.G., 33 Md. 401 (1870); Schindel v. Schindel, 12 Md. 294 (1858); Feigley v. Feigley, 7 Md. 537 (1855); Jamison v. Jamison, 4 Md. Ch. 289 (1847); Wiles v. Wiles, 3 Md. 1 (1852); Wright v. Wright’s Lessee, 2 Md. 429 (1852); Dunnock v. Dunnock, 3 Md. Ch. 140 (1852); Tayman v. Tayman, 2 Md. Ch. 393 (1851); Coles v. Coles, 2 Md. Ch. 341 (1851); Daiger v. Daiger, 2 Md. Ch. 335 (1850); Ricketts v. Ricketts, 4 Gill 105 (1846); Helms v. Franciscus, 2 Bland 544 (1830); Hewitt v. Hewitt, 1 Bland 101 (1826); Crane v. Meginnis, 1 G. & J. 463 (1829); Wallingsford v. Wallingsford, 6 H. & J. 485 (1825); Galwith v. Galwith, 4 H. & McH. 477 (1689)); see Thomas v. Thomas, 294 Md. 605, 618-19 , 451 A.2d 1215, 1222 (1982). 2. The Separation Agreement Between the Parties The point of departure for this analysis of alimony is the parties’ Separation Agreement, because “the court is bound by that agreement as the agreement relates to alimony.” Md. Code (1984, 1999 Repl.Vol.), § ll-101(c) of the Family Law Article. If the Langstons’ Separation Agreement “specifically” precludes “any court modification,” then the court is bound ⁵⁰⁵ by those terms.

McLCode (1984,1999 Repl.Vol.), § 8-103(c) of the Family Law Article. The Langstons’ Separation Agreement explicitly states that, “[t]he 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.... ” Section V(c) of the Separation Agreement (italicized emphasis added; other emphasis in original). The Separation Agreement establishing the amount and schedule of respondent’s alimony payments to petitioner was incorporated, but not merged, into the trial court’s order granting the parties an absolute divorce. The terms of a separation agreement which has been incorporated, but not merged, into a divorce decree are enforceable either through contempt proceedings or as an independent contract.

See Md.Code, § 8-105(a) of the Family Law Article. 6 Because respondent urges us to consider the Separation Agreement as an independent contract, he argues that its terms should be strictly construed as not prohibiting retroactive modification of his alimony obligation to petitioner. 7 As such, we will apply ⁵⁰⁶ the basic rules and principles of contract interpretation to the Langstons’ Separation Agreement. See Goldberg v. Goldberg, 290 Md. 204, 212 , 428 A.2d 469, 474 (1981). The in banc panel and the Court of Special Appeals disagreed with respondent and found that “the language of the Agreement does not provide for modification of alimony retroactive to the date when [Dr. Langston] first sustained a decrease in income.” Langston, 136 Md.App. at 227 , 764 A.2d at 391 . In reaching this conclusion, the Court of Special Appeals noted that the Settlement Agreement was in fact silent on the issue of retroactive modification, rather than prohibitive in its language.

See id. The interpretation by the lower courts of the Settlement Agreement is a question of law, which is subject to de novo review. See Auction & Estate Representatives, Inc. v. Ashton, 354 Md. 333, 341 , 731 A.2d 441, 445 (1999); JBG/Twinbrook Metro Ltd. v. Wheeler, 346 Md. 601, 625 , 697 A.2d 898, 911 (1997). Contract interpretation, like statutory interpretation, begins with the principle of the plain meaning of the contractual terms.

See Fister v. Allstate Life Ins. Co., 366 Md. 201, 209 , 783 A.2d 194, 199 (2001). The terms of a contract must be given their ordinary and usual meaning as utilized within the context of the contract. See Cheney v. Bell Nat’l Life Ins.

Co., 315 Md. 761, 766 , 556 A.2d 1135, 1138 (1989); Fasten Construction Co. v. Rod Enters., Inc., 268 Md. 318, 329 , 301 A.2d 12,18 (1973). Maryland follows the objective law of contract interpretation. See Taylor v. NationsBank, N.A., 365 Md. 166, 178 , 776 A.2d 645, 653 (2001). The objective law of contract interpretation holds that a written contract will be considered ambiguous when it is susceptible to more than one interpretation when examined by a reasonably prudent person, see ⁵⁰⁷ Calomiris v. Woods, 353 Md. 425, 436 , 727 A.2d 358, 363 (1999); however, “[i]f a written contract is susceptible of a clear, unambiguous and definite understanding ... its construction is for the court to determine.” Wells v. Chevy Chase Bank, F.S.B., 363 Md. 232, 251 , 768 A.2d 620, 630 (2001)(quoting Rothman v. Silver, 245 Md. 292, 296 , 226 A.2d 308, 310 (1967))(internal quotations omitted).

Under the objective law of contract interpretation, the court will give force and effect to the words of the contract without regard to what the parties to the contract thought it meant or what they intended for it to mean. See Auction & Estate Reps., Inc. v. Ashton, 354 Md. at 340-41 , 731 A.2d at 445 (quoting Calomiris, 353 Md. at 436 , 727 A.2d at 363 ). It is evident from the plain meaning of the words of Section V(c) of the Separation Agreement that the parties anticipated that there may come a point in time where the alimony might be increased or decreased based upon changes in respondent’s income. The Agreement specifically states that “[t]he alimony provisions of this paragraph are subject to the further order of the court, and may be modified AS TO AMOUNT ONLY....” Section V(c) of the Separation Agreement (emphasis in original).

With regard to retroactivity of any modification, the Agreement does not expressly permit retroactive modification, nor does it expressly prohibit either party from seeking retroactive modification through the statutory provisions of Section ll-107(b). The terms of the Settlement Agreement are not dispositive of the issue of whether a trial court has discretion retroactively to modify alimony payments. Lang-ston, 136 Md.App. at 228 , 764 A.2d at 391 . We now turn to the statutory provisions. 3.

Application of the Statutory Framework Whether retroactive modification is permissible within the statutory framework is determined by interpretation of Sections 8-103(c) and ll-107(b) of