McClellan v. McClellan

Garrity, J., delivered the opinion of the Court. The appellant, A. Estelle McClellan, appeals from a decree of the Circuit Court for Anne Arundel County which granted a divorce a vinculo matrimonii to the appellee, Russell Dale McClellan on the grounds of voluntary separation. This decree also awarded custody of two minor children to the appellant, provided for their support, and ordered that an agreement of the parties, dated September 17, 1977 be incorporated into and made a part of the decree. The appellant presents five questions for our review: I. Did the court err when it found no undue influence, duress, or dominance by Mr. McClellan in the execution of the agreement?

II

Did the court err when it found no issue of fraud?

III

Was there adequate consideration to support the enforcement of the agreement?

IV

Do the circumstances surrounding the execution of the agreement, and the agreement itself, make it inequitable to enforce and against public policy? ⁵²⁷ V. Was the court clearly erroneous in granting the appellee a divorce on the grounds of voluntary separation? For the reasons set forth in this opinion, we answer each of the appellant’s questions negatively, and we affirm the judgment of the Circuit Court. THE FACTS A. Estelle McClellan and Russell Dale McClellan were married in Florida on December 24, 1960. Both parties worked for American Can Company in Tampa until Mr. McClellan received a promotion and transfer.

Thereafter Mrs. McClellan did not work outside of the family home. The parties and their two sons moved to Maryland in 1975 where Mr. McClellan became a plant manager for American Can Company. 1 Marital difficulties, which had periodically plagued the couple prior to their move to Maryland, arose again and resulted in the closure of their joint checking accounts in late 1976, and their discussion of possible separation. In July of 1977, Mr. McClellan provided his wife with $2,500.00 as a deposit for the purchase of an ice cream business. The appellee also consulted with counsel concerning a possible separation, and prepared an outline of a separation and marital property settlement agreement.

Mrs. McClellan did not retain her own counsel, but she participated with her husband in preparing a draft agreement. The parties signed the document, and Mr. McClellan presented it to his attorney as the basis for a formal agreement. Appellee’s counsel prepared a formal agreement and sent it to his client. Mrs. McClellan first saw a copy of this agreement when Mr. McClellan delivered the copy to her with instructions that she was to find a notary while he was ⁵²⁸ on a business trip.

She retained this copy during the week of her husband’s absence, and following his return, she agreed to sign the agreement. The couple then went to a notary and formalized the agreement on September 17, 1977. Mr. McClellan left the marital home on or about December 6, 1977. Pursuant to the separation agreement, Mrs. McClellan retained custody of the children and received child support payments.

She also exercised her right under the agreement to possess the marital home until the eighteenth birthday of the youngest child. She was provided with a car, mortgage and insurance payments, furniture, and $2,500 from the sale of jointly-titled stock, in addition to the amount previously provided for her business. Mr. McClellan received a waiver of marital obligations, the remaining savings, stocks, bonds and possessions titled in his name, and ultimate title and possession of the house. He was also obligated to provide each of the children with $25,000.00 upon their graduation from high school, and to leave each child a one-fourth share of his estate as valued from the time of the separation.

After then retaining the services of an attorney for the first time, Mrs. McClellan filed a bill of complaint for divorce a mensa et thoro, on October 2, 1980 alleging desertion by Mr. McClellan. He denied the allegation on the basis of the separation agreement and filed a cross-bill of complaint for divorce a vinculo matrimonii. On November 25, 1980, Mrs. McClellan filed an amended bill of complaint for divorce a vinculo matrimonii alleging desertion and adultery, and seeking alimony, child custody and support, use and possession of the marital home, and distribution of marital property. She denied the validity of the separation agreement.

Trial was held on September 16, 1981, and subsequently on September 28, 1981, the Circuit Court for Anne Arundel County decreed, inter alia, that Mr. McClellan was divorced a vinculo matrimonii from Mrs. McClellan, and that the agreement of the parties dated September 17, 1977 be incorporated into and made a part of the decree. ⁵²⁹ I. The Agreement In his oral opinion announced at the end of the trial on September 16, 1981, the chancellor stated that: The issue as presented by the parties in this case ... is whether or not this agreement is valid. There is no question that the parties to a marriage have a right upon having a dispute within that marriage, and desire to dissolve it, have a right to enter into an agreement that would dispose of the property rights as accrued to each. The chancellor then announced his findings 1) that negotiations for the agreement were conducted between the parties in their own home, 2) that Mrs. McClellan was intelligent and understood that she signed a separation agreement, 3) that she understood that the agreement divided property rights, 4) that she handled family finances, prepared tax returns and knew her husband’s financial status, 5) and that she was not subjected to undue duress when she helped prepare and then signed the agreement. Based on these factual determinations, the chancellor ruled that the agreement was valid and binding on the parties.

In the decree of September 28, 1981, the chancellor specifically found as a matter of fact that Said agreement was freely and voluntarily entered into by both parties, and is valid and binding; that there was legally adequate consideration for said agreement; and that said agreement was not the product of fraud, coercion or undue influence. On appeal, Mrs. McClellan contends that the Circuit Court was "clearly erroneous in its finding that Mrs. McClellan was not dominated by her husband and erred in ignoring the issue of the confidential nature of the relationship”. The appellant asserts that the chancellor should have made the factual finding that "her husband was clearly the dominant party during the marriage,” and then ⁵³⁰ placed the burden of proving the validity of the separation agreement on Mr. McClellan. In our analysis of the appellant’s contention, this Court cannot substitute its judgment for that of the chancellor on the findings of fact.

We may only determine whether those findings were clearly erroneous in light of the total evidence. Colburn v. Colburn, 15 Md. App. 503, 513 , 292 A.2d 121 (1972). To rule that a chancellor’s findings were clearly erroneous, we must first assume the truth of all the evidence and of all the favorable inferences fairly deducible therefrom tending to support the factual conclusion reached by the chancellor. Jacober v. High Hill Realty, Inc., 22 Md. App. 115, 121 , 321 A.2d 838 , cert. denied, 272 Md. 743 (1974); accord State v. Rusk, 289 Md. 230, 245 , 424 A.2d 720 (1981).

The chancellor determined that the separation agreement was not the product of duress or undue influence by Mr. McClellan to the detriment of his wife. We hold that as adequate evidence was presented by the parties at trial upon which the chancellor could have based his conclusion, the chancellor’s findings were not clearly erroneous. Testimony presented at the trial reveals some disparity between the education and experience of the two parties. Mr. McClellan is a high school graduate; his wife did not attend high school.

He worked as a plant manager earning over $39,000.00 per year; she temporarily operated an ice cream business and received minimal income. These facts do not contradict the chancellor’s conclusion that Mrs. McClellan is an intelligent person. Likewise, the testimony that the appellee once threatened to have his wife committed does not justify reversing the chancellor’s conclusion that Mrs. McClellan was not forced to sign the agreement, especially in light of the appellant’s admission that she responded to her husband by telling him, "What I should do is just blow your brains out”. This Court will invalidate a separation agreement on the basis of duress in its formation, but only when "the conclusion that the execution of the agreement was obtained by duress is inescapable”.

Eckstein v. Eckstein, 38 Md. App. ⁵³¹ 506, 518, 379 A.2d 757 (1978). In Eckstein , we determined that an agreement which provided a mentally-ill wife with $1,100.00, her clothes and a van, in exchange for $30,000.00 to $40,000.00 worth of property rights, had to be invalidated because the wife signed the agreement under an acknowledged threat by her husband that she would never see her children again and receive nothing if she did not sign. From these facts in the record, we held that the appellant in Eckstein met her burden of establishing that the agreement was not a product of her free will. Id. at 516.

In a case based on less egregious facts, we affirmed a chancellor’s determination that a separation agreement was not the product of duress. In Bell v. Bell, 38 Md. App. 10 , 379 A.2d 419 (1977), cert. denied, 282 Md. 729 (1978), we held that the chancellor’s ruling was not clearly erroneous when supported by evidence that a wife negotiated an agreement giving her $45,000.00 in cash and property and providing her husband with property worth $163,000.00. We further held that the husband’s threats to sue his wife for adultery may have provided a basis for a finding of duress, but we would not say that the chancellor erred in ruling that the wife signed the agreement of her own free will. Bell, supra at 17-18 .

Also in Bell, supra at 13-14 , we discussed the concept of a confidential relationship between spouses, the existence of which would shift the burden to the husband to show that the agreement was fair in all respects. In order to establish a confidential relationship, the wife must prove that she justifiably assumed that her husband would only act in a manner consistent with the wife’s welfare. Maryland law, especially since the passage of Article 46 of the Maryland Declaration of Rights, also known as the Equal Rights Amendment, does not permit a presumption of such a confidential relationship between spouses. Absent proof of the relationship, a separation agreement is presumed to be valid.

Cronin v. Hebditch, 195 Md. 607 , 74 A.2d 50 (1950). In the present case, the chancellor did not expressly find the absence of a confidential relationship, but by stating on ⁵³² the record his finding that Mrs. McClellan fully understood her own actions, that she had participated in negotiating the agreement, and was not subservient to her husband, the chancellor found a fortiori, that a confidential relationship did not exist. The appellant concedes that no Maryland authority requires that both signatories to a separation agreement have separate legal counsel. Mrs. McClellan, however, contends that "without counsel to resist her husband’s threats ... [she] was unable to challenge her husband’s will and did not freely and voluntarily execute the agreement”.

The appellant’s conclusion — that she did not act voluntarily — does not necessarily follow from the fact that she lacked independent counsel. Lack of legal representation is not dispositive of the issue of an agreement’s validity, but is only one of many factors, including the extent of parties’ negotiations and their awareness of each other’s assets, which a chancellor considers. Eaton v. Eaton, 34 Md. App. 157 , 366 A.2d 121 (1976). In the present case, sufficient evidence was presented to the chancellor concerning the capacity of the parties and the legality of the séparation agreement to support the chancellor’s ruling that the agreement was freely entered into.

Id. supra at 163.

II

Issue of Fraud After the presentation of testimony, the chancellor considered the issue of fraud or duress in the agreement, by announcing in his oral opinion: And I think she fully understood what she was doing, did sign it. It’s not unconscionable. It’s not obtained by duress, and there’s certainly no issue of fraud. And it’s not under any undue influence that she was required to sign it.

(emphasis added) The highlighted comment of the chancellor was not included in the court’s written decree, rather the decree stated "that said agreement was not the product of fraud”. ⁵³³ On appeal, Mrs. McClellan declines to quote from the chancellor’s decree, but quotes the single phrase in her brief, "... no issue of fraud . . .,” for the proposition that the chancellor failed "to recognize the fraud practiced upon her”. The appellant then asserts that the chancellor was clearly erroneous in