Ledvinka v. Ledvinka

GREENE, Judge. Edmund F. Ledvinka, Jr. appeals a decision by the Circuit Court for Baltimore County, setting aside the conveyance of 19730 Eagle Mill Road as a fraudulent conveyance pursuant to Md.Code (2000), §§ 15-201 et. seq. of the Commercial Law Article, and an award of $27,000 in attorney’s fees. Appellee is Joann Ledvinka, appellant’s ex-wife. The two were before the court seeking an annulment, determination of child custody, visitation, and attorney’s fees. ⁴²⁴ Issues Appellant presents three questions for our review.

We have rewritten them for clarity: 1. Whether the court erred by setting aside the conveyance of 19730 Eagle Mill Road as a fraudulent conveyance pursuant to Md.Code (2000), §§ 15-206 and 15-207 of the Commercial Law Article when this cause of action was neither pleaded nor was relief requested prior to trial. 2. Whether the court erred by setting aside the conveyance of 19730 Eagle Mill Road as a fraudulent conveyance pursuant to Md.Code (2000), §§ 15-206 and 15-207 of the Commercial Law Article when the grantee and the heirs of the deceased grantor were not named as parties to the proceedings. 3. Whether the court erred -by awarding appellee $27,000.00 in attorney’s fees.

We hold that the trial court erred in setting aside the conveyance. The authority of a trial court to act in a given case is limited by the issues framed by the pleadings. Because we reverse on the first issue, we need not address the second question presented regarding necessary parties to an action to set aside the conveyance. We vacate the award of attorney’s fees on the ground that the trial court neither made findings of fact regarding its basis for awarding the fees nor a determination that the fees were reasonable.

We remand for further consideration of the facts in light of the statutory requirements for an award of attorney’s fees. Lastly, acting pursuant to our authority under Maryland Rule 8-131(a), we hold that, because the marriage was void ab initio, the court erred in granting an absolute divorce rather than an annulment. Facts and Procedure The procedural history of the efforts of the parties to obtain ⁴²⁵ a divorce is extensive. 1 Relevant to our review, however, is a hearing held on December 17 and 18, 2002, on a complaint for annulment filed by appellee. The Amended Complaint for Annulment, Custody, Alimony and other relief contained three counts: an annulment (count one); intentional infliction of emotional distress (count two); and fraud (count three). 2 Ap-pellee sought $250,000 in compensatory damages and $250,000 in punitive damages.

Counts two and three were eventually dismissed by appellee. Before the December hearing, during a conference in chambers, the parties agreed that the only issues before the court were the annulment on behalf of Mrs. Ledvinka, custody of the minor child, visitation, and attorney’s fees. The parties also stipulated that there was no marital property to be valued and distributed. Appellant and appellee were married on September 30, 1995, in a religious ceremony in Harford County, Maryland.

One child was born to the parties, Mark Edward Ledvinka, on November 8, 1996. On or about November 3, 1997, the parties separated. Both parties agreed the marriage was not a conventional one. At the time the parties were married in 1995, appellant was already married to Velma Ledvinka.

Appellant and Velma Ledvinka were married on May 9, 1964. Although they separated in 1986, their divorce did not become final until July 20, 1998. In 1990, the two signed a Separation and Property Settlement Agreement whereby appellant agreed to pay Velma Ledvinka $300 a week, on demand, for a period of ten years, and to transfer 100% of his pension from his employer, including all stock, bonds, savings and 401k plans to her. Additionally, Velma Ledvinka was awarded all of the marital property.

In an unrelated matter, appellant submitted to a ⁴²⁶ judgment against him in Velma Ledvinka’s favor in the amount of $54,700. Appellant also borrowed $10,000 from Velma Ledvinka to help pay his attorney’s fees in this matter. As a result of the child support and judgement in Velma Ledvinka’s favor, appellant takes home approximately $100 of his $1,000 per week gross pay. From 1991 through June of 1998, appellant and his brother, Charles Ledvinka, 3 owned the property located at 19730 Eagle Mill Road.

The record does not reflect how the property was titled except that both men were on the deed. 4 The property was purchased for $165,000. Appellant testified that Charles Ledvinka paid all of the debts associated with the house, including the mortgage, which was paid in full as of the hearing. The parties never resided in the home. Joyce Hohner, appellant’s girlfriend and the mother of two of his children, lived in the house with Charles Ledvinka.

She testified that in lieu of rent she took care of Charles Ledvinka, the house, and the gardens. On June 22, 1998, appellant transferred his interest in the house to Ms. Hohner for no consideration. Appellant testified that the transfer was made at the request of his brother, who did not want the property tied up by the divorce proceedings. Specifically, he did not want appellee to “get at” the property.

In her closing argument at trial, appellee first raised the issue of valuing assets that may have been fraudulently transferred in connection with her request for attorney’s fees. Appellee originally sought an award of $27,000 in attorney’s fees, however, the amount was amended on the record at trial to $26,000. Appellee first argued that the alimony payments to appellant’s first wife were “[t]o try and make sure [appellant] doesn’t have any money basically[.]” Appellee’s second argument was in response to a question by the trial court asking about its authority to “take assets that [appellant] may ⁴²⁷ or may not have dissipated or transferred in anticipation of litigation[.]” In response, appellee stated that she believed “the fraudulent conveyance statute allowed the court to exercise its authority to set aside a transfer with or without litigation in support of [it].” Appellant responded that if Joann Ledvinka was seeking some form of fraudulent conveyance, the issue was neither pleaded nor was it one of the issues the parties stipulated as being in controversy at the beginning of the hearing. The court requested that the parties brief the issue.

On January 28, 2008, the court granted an absolute divorce on the basis that appellant was already married at the time of his marriage to appellee. The court also held that custody of the child would remain with appellee and appellant would receive three weeks of visitation during the summer in addition to every other weekend in accordance with the schedule already in place. Child support obligations remained at the level of $540 a month. The court reserved its ruling on the issue of fraudulent conveyance and attorney’s fees for further consideration.

In a separate written Ruling and Opinion dated January 28, 2003, the trial court found that appellant had engaged in a fraudulent conveyance in the transfer of 19730 Eagle Mill Road, Baltimore County, in violation of Md.Code (2000), §§ 15-206 and 15-207 of the Commercial Law Article. Specifically, the court found that appellant transferred his share of the property to Ms. Hohner for no consideration because of his pending divorce from Joann Ledvinka and with the intent of keeping appellee from “getting at” it. The court set aside the conveyance to the extent necessary to satisfy an award of attorney’s fees to appellee in the amount of $27,000. Additional facts will be included as necessary.

DISCUSSION I. Fraudulent Conveyance Appellant claims the trial court erred in setting aside, as fraudulent, the conveyance of 19730 Eagle Mill Road. He ⁴²⁸ raises two grounds for objection: first, that the cause of action was neither pleaded nor was relief on this ground requested in any pleading before trial; and second, that necessary parties were not joined in the action. We agree with appellant that the court exceeded its authority in setting aside the conveyance when no cause of action sufficient to put appellant on notice that the property was in dispute was pleaded in this case. Because we conclude the court may not apply the fraudulent conveyance statute in this action, we need not address the question of necessary parties.

In her amended complaint for annulment, custody, alimony, and other relief, appellee set forth three causes of action: annulment; intentional infliction of emotional distress; and fraud. By the trial date, only the annulment cause of action remained. Count one, the annulment, contained no facts sufficient to put appellant on notice that the conveyance of the non-marital home was challenged. The only reference to real property in the amended complaint is in paragraph six.

It reads: “The parties acquired real property during the marriage which was used by the parties as their principal residence and is their family home.” At trial it was established that the marital home was located at 3019 Breidenbaugh Road in White Hall, Maryland. There are no other facts in the pleadings regarding real property. Appellant claims that the trial court’s action in setting aside the conveyance was erroneous as a matter of law. Relying on the case of Gatuso v. Gatuso, 16 Md.App. 632 , 299 A.2d 113 (1973), and for the following reasons, we agree.

We begin by recognizing that where a chancellor finds that property was intentionally dissipated in order to avoid inclusion of that property towards consideration of a monetary award, such intentional dissipation is no more than a. fraud on marital rights. Jeffcoat v. Jeffcoat, 102 Md.App. 301, 306 , 649 A.2d 1137 (1994)(quoting Sharp v. Sharp, 58 Md.App. 386, 399 , 473 A.2d 499 (1984) (internal citation omitted)). This is true even when the property dissipated is non-marital property. Sharp, 58 ⁴²⁹ Md.App. at 395, 473 A.2d 499 . 5 Furthermore, it has been held that “a conveyance made by a husband in anticipation of the wife’s proceedings for divorce ... and to prevent her from obtaining alimony, is fraudulent, and may be set aside[.]” Levin v. Levin, 166 Md. 451, 453 , 171 A. 77 (1934) (permitting a suit pursuant to the predecessor to today’s fraudulent conveyance statute).

These cases are distinguishable from the case sub judice in that the causes of action were either pleaded in the divorce proceeding or in a separate action. Despite the fact that Maryland has long since abandoned the necessities of common law pleading, it is clear that the pleading requirements “remain important elements in the process of bringing a case to trial[,]” and “cannot be dispensed with altogether.” Liberty Mut. Ins. Co. v. Ben Lewis Plumbing, Heating & Air Conditioning, Inc., 121 Md.App. 467, 475 , 710 A.2d 338 (1998).

Pleading serves four important purposes: (1) it provides notice to the parties as to the nature of the claim or defense; (2) it states the facts upon which the claim or defense allegedly exists; (3) it defines the boundaries of litigation; and (4) it provides for the speedy resolution of frivolous claims and defenses. Id. (citing Scott v. Jenkins, 345 Md. 21, 27-28 , 690 A.2d 1000 (1997)). The most important of the four is notice.

Id. (citing Scott, 345 Md. at 28 , 690 A.2d 1000 ). In Liberty Mutual, we recognized that an important basis for the Court of Appeals’ holding in Scott was the due process concerns raised by lack of notice in the pleadings. Id.

In Gatuso, 16 Md.App. 632 , 299 A.2d 113 , we addressed the issue of what discretion a trial court has to enter an order on issues outside the relief prayed or the issues framed in the pleadings. We held that a trial court “has no authority, discretionary or otherwise, to rule upon a question not raised as an issue by pleadings, and of which the parties therefore ⁴³⁰ had neither notice nor an opportunity to be heard.” Id. at 633 , 299 A.2d 113 . The plaintiff in Gatuso sought an order to have her husband adjudged in contempt of a 17-year old court order awarding her alimony and child support. 6 The "wife claimed that her husband owed her $26,829 in back payments. The court looked beyond the pleadings and ruled on the facts as they were presented at trial, denied the prayer for a citation of contempt, modified the alimony award, and required the husband to pay the costs associated with the litigation.

The plaintiff appealed, raising the issue of the court’s authority to reach beyond the pleadings to grant relief. With regard to the trial court’s ruling, we 'wrote: “On proper pleadings and a proper record, the same result may well have been reached. But given jurisdiction of the parties and of the subject matter, the authority of the court to act in any case is still limited by the issues framed by the pleadings.” Id. at 636 , 299 A.2d 113 . We think Gatuso is analogous to the case at bar.

We find that the trial court in the case sub judice had jurisdiction over the subject matter because the court was required to determine the parties’ ability to pay attorney’s fees and the determination requires a valuation of assets. See Md.Code (1984, 1999 Rep. Vol.) § 12-103(b)(l) of the Family Law Article. The court’s jurisdiction does not, however, encompass legal action affecting the title of the assets.

We recognize that the rationale behind the court’s action regarding the property was the award of attorney’s fees. Setting