Rauch v. McCall

PAUL E. ALPERT (Ret., specially assigned), Judge. The marriage has ended, but the litigation lingers on. In this domestic relations case between Barbara J. McCall, appel-lee, and James F. Rauch, appellant, in the Circuit Court for ⁶²⁷ Montgomery County, appellant now presents the following questions for our review: I. Where a contract provides that the party in breach shall be responsible for all attorney’s fees and costs incurred by the party that is successful in enforcing the contract, and the amount spent in attempting to remedy the breach is documented to the trial court, is the court compelled to award that figure against the breaching party?

II

Did the trial court err in dismissing appellant’s counts for conversion and detinue under his third amended complaint?

III

Did the trial court have authority to prohibit appellant from filing any pleading or document pro se?

IV

Did the trial judge have authority to require that all information concerning Ms. McCall’s deferred employee compensation plan be released only to appellant’s counsel and not to appellant contrary to the parties’ agreement? For the reasons that follow, we shall vacate the judgment of the circuit court and remand on question I., and affirm on question II. In light of our decisions on questions I. and II., we need not address questions III. and IV. Background The parties were married on May 6, 1967.

Two children were born to the marriage, both of whom are above the age of majority. The marriage began to disintegrate in early 1990. Appellee filed for divorce on June 13, 1990, but returned home and dismissed the divorce action soon thereafter. The parties separated permanently in December of 1990.

A Separation Agreement was signed by both parties on October 16, 1991, as a prelude to the divorce, which was granted by the circuit court on February 16, 1993. Although litigation between the parties has been almost continuous since 1990, this case arises out of the terms of the Separation Agreement, namely: (1) money owed to appellant ⁶²⁸ from the Qualified Domestic Relations Order (“QDRO”) and (2) appellee’s possession of appellant’s personal property. On July 29, 1991, the parties reached an oral agreement on the record that (1) their personal possessions would be divided in half, and (2) appellee would move out of the marital home by October 15, 1991, taking her personal property and leaving appellant’s personal property. Appellee left the home by October 15th; an examination of the property revealed, however, that some of appellant’s personal property was taken by appellee. 1 Prior to signing the October 16 th Settlement Agreement, appellant provided appellee with a list of the missing items to be returned by October 17th.

Over the next few months, only a few of the items were recovered. The parties also disputed the lack of a QDRO concerning appellant’s rights to appellee’s pension and profit sharing plans with Bell Atlantic, her employer, as called for in the Separation Agreement. Appellee had failed to disclose, or authorize Bell Atlantic to turn over, the contents of these plans. There was also evidence that appellee took a Hardship Withdrawal from her 401 (k) in the amount of $44,800.00 sometime in early 1991 without disclosure to appellant, which was allegedly in direct violation of the Separation Agreement.

Appellant did not learn of the withdrawal until March 30,1993. Appellee also continually refused to sign the QDRO submitted by appellant. The procedural history of these disputes is extensive; thus, to put the facts into context, we provide a brief historical overview. ⁶²⁹ Voluntary Separation Agreement On October 16, 1991, the parties signed a separation agreement (“Agreement”), to be incorporated but not merged into the divorce decree. With regard to the personal property and furnishings of the parties, the Agreement provided: The parties have already divided between them, to their mutual satisfaction, all personal effects, household furniture and furnishings, and all other articles of personal property which heretofore have been held by them in common.

Neither party shall make a claim to any such items which are now in the possession or under the control of the other party. Henceforth, each of the parties shall own, have and enjoy, independent of any right or claim of the other, all items of property of any kind, nature and description, and wheresoever situated, which are now owned or held by him or her with the full power to him or her to dispose of the same as fully and effectually in all respects and for all purposes as if he or she were unmarried. (See attached [computerized] 2 inventory list). The Agreement provided for counsel fees and the right to counsel.

Both parties agreed to be “responsible for their own legal fees incurred in the negotiation, preparation and execution of this Agreement.” [emphasis added]. Furthermore, “in the event of a breach of the Agreement by either party, the party at fault shall be responsible for payment of all attorney s’ fees and costs including expert witness fees ____” [emphasis added]. Section IX of the Agreement dealt with pensions of appel-lee, who was a “participant in deferred employee compensation plan(s) sponsored or offered by her employer.” The Agreement related that appellant was to be the alternate payee of the plans “according to the percentages provided in this paragraph (50/50),” and that any future court judgment or order “shall be in the form of or shall contain a ... (QDRO) ⁶³⁰ which shall meet the requirements of a QDRO as defined by ...

ERISA ... as from time to time amended.” This section further provided, in pertinent part: Husband’s equitable interest in each of Wife’s plans is hereby declared to be fifty percent (50%) of the total benefits due to the Wife at any time ... Husband shall receive 50% of the Wife’s interests in any plan(s), including any joint and survivor annuity or death benefits, if, as, and when such payments are made.... The Wife has not taken any action since May 17, 1991 and shall take no further action to decrease any account balance in any plan(s) or diminish the employee or employer rate or percentage of contribution (e.g. currently 10% of wife’s gross salary, in regard to the Wife’s 401 plan) without the prior written consent of Husband. Wife shall not cause any change in any provision of any plan either by action or inaction without advance notice and the written consent of Husband.

Wife agrees to authorize all plan administrators to respond to Husband’s request for plan status, plan financial reports or account statements within ten (10) days of a request. Wife expressly agrees to cooperate and to execute such other documents as may be necessary to give effect to this provision of this Agreement____ The parties further agree that until a Court Order of assignment is accepted and approved by the Wife’s employer, the Court of appropriate jurisdiction shall retain jurisdiction to modify its order. (Emphasis added). Hearing on February 17, 1995 On February 17th, a hearing on appellant’s first amended complaint transpired to resolve the issues of the QDRO and the personal property.

Based on the enormous amount of pleadings that appellant had filed in the case, the circuit court held that the division of all the personal property belongs, and everything [in the] separation agreement, precludes him from now proceeding either in this domestic case or in any type ⁶³¹ of replevin action, any claim to any further division of property. Appellant had filed a replevin action in the district court, which was removed to the circuit court, where there was no jurisdiction. The court noted that the claim arose from the Agreement and was not appropriately phrased as a replevin action. The court went into a lengthy discussion with counsel over appellee’s pension plans and the QDRO provided for in the Agreement, however, deferred ruling because not all of the evidence was before the court to render a decision.

Court of Special Appeals In July of 1997, an appeal was noted to this Court from the circuit court’s denial of a Motion for Appropriate Relief, requesting the judge to sign a QDRO pursuant to the Agreement. In Rauch v. McCall, No. 1764, Sept. Term 1996, 116 Md.App. 745 (filed July 24, 1997), this Court held that the circuit court’s order of June 20, 1996 was not a final judgment, and accordingly dismissed the appeal. This Court noted, however, that appellee “has already bargained away a 50 percent interest in the QDROs in this case. It would appear that the actual purpose of any restrictions or limitations ... is to protect the payor of the pension (Bell Atlantic) as opposed to the participant spouse.” We held that: Under the circumstances of this matter, prior to signing the QDRO in question, the chancellor may wish to determine whether Ms. McCall’s failure to cooperate and her attorney’s refusal to act was done so in good faith.

Id. (slip op. at 4). Appellant had included an issue in the appeal regarding the replevin action; namely the circuit court’s failure to afford him a hearing prior to its dismissal. This Court held that because the appeal filed was strictly related to the denial of the motion regarding only the QDRO, the court’s failure to award a hearing on the replevin action was beyond its scope of review. ⁶³² Hearing on October 9, 1998 Yet another hearing transpired on October 9 th to resolve the QDRO disputes, specifically appellant’s request that appellee sign the order.

The court heard the evidence regarding the Agreement and dealings between the parties since its inception. The court concluded, however, that the only time period that was relevant in determining whether appellee withdrew from the funds in violation of the Agreement was after May 17,1991. 3 With regard to appellee’s failure to disclose to appellant any information concerning the amounts in the accounts and any withdrawals after May 17, 1991, the court held that appellant was entitled to this information because the Agreement provided for a 50% share to each party. Thus, appellee was required to submit to appellant on these issues and authorize Bell Atlantic to disclose the contents of her plans. The court ordered that both parties prepare a QDRO that they could agree upon within 10 days, and if the parties could not agree, that the court would appoint an independent third party to prepare a QDRO at the parties’ expense and submit it.

The court also refused to impose sanctions on either party because both parties “have through their actions perpetuated this and made this last longer than it needed to.” Thus, the parties were required to each “bear the expense and cost of this continued litigation.” The issue regarding appellee’s alleged failure to return appellant’s personal property under the terms of the separation Agreement was raised again to the court. The court specifically stated that: based on the testimony I have taken today, I am satisfied that Ms. McCall has none of the property in her possession. That does not mean that she didn’t breach the contract. She may have.

That is another proceeding. But, as a' ⁶³³ replevin action, if she doesn’t have it, I couldn’t — unless she has it, I don’t know how I could help ... I cannot order her to give back what she testified she doesn’t have. The court noted that appellant was entitled to “his day in court,” to have a hearing on whether appellee breached the Agreement.

In order to do so, the court needed appellant to produce all relevant information and evidence in order that the court could finally dispose of the matter. Hearing on April 6, 1999 The parties convened again in the circuit court on April 6th on appellee’s failure to answer interrogatories and motion to compel. The court refused to impose sanctions or hold either party in contempt of court. Rather, the court denied the motion and ordered (1) appellant to provide appellee with a list of the items belonging to him that he is claiming she had, and (2) gave appellee 15 days to answer these claims after receipt of the list.

The court also noted for the record that this was not a tort case, involving conversion or trespass, but rather a cause of action arising from an alleged breach of contract. Hearing on July 8, 1999 On July 8, 1999, a hearing regarding the personal property took place. By this time, several of the items, if not all, had been returned to appellant. 4 The circuit court took testimony from both parties, and received exhibits, including an extensive list of items divided up by the parties in the separation. The court went down the list, item by item, in rendering its decision.

I accept some of the evidence offered by Mr. Rauch, some of the evidence offered by Ms. McCall.... These are items that were to be distributed to him or held by him in accordance with the parties’ separation agreement ⁶³⁴ and the attached list of personal property to be divided on October the 16th, 1991. It is clear from the record that Mr. Rauch over the years has requested the return of that property or requested that property.... The items that were of particular concern today are those items that were either returned damaged to him or not returned at all.

I have also considered the contends of Plaintiffs Exhibit No. 2, which is a letter Mr. Rauch wrote to ... Ms. McCall’s attorney, on August 29, 1992, demanding property that he believed was due him then and still was an issue at today’s trial. And I have tried to compare all of the exhibits and the evidence. I find that Ms. Mc.Call did in fact breach the parties’ separation agreement by removing certain property that was to be property of Mr. Rauch’s.

And the issue then is what damage or relief Mr. Rauch should get for the property either returned damaged or not returned at all.... (Emphasis added). The court went on to say that the list was included as part of the Agreement and that appellee, despite its supposed unfairness, agreed to and signed it. “Ms. McCall’s testimony was that she doesn’t know if she read it or if she didn’t, but it was adopted and became part of the agreement she did sign, and she is bound by it.” Thus, the court said: She has not to this point filed any petition to set the agreement aside or clarify it. So, she is bound by what she did sign.

Ms. McCall’s testimony was that she took this property when she left and moved into her town house in Silver Spring sometime in October of 1991, but after the signing of the agreement. Her testimony was that she did that for reasons involving the harassment that she believed was being put on her by Mr. Rauch at that time and the record — the public record ⁶³⁵ then of court orders — some court orders ordering Mr. Rauch to stay away from her, the pressure she felt, and other reasons that she put on the record. Nonetheless, she had agreed that they would be Mr. Rauch’s property. So, to that extent, I find that she is in breach of the agreement.

(Emphasis added). The court then went into an extensive discussion regarding each item on the list, taking into consideration (1) valuation, (2) age, (3) depreciation, and (4) wear and tear of the property. The court found that the value of these items totaled $1,863.00 and entered judgment to appellant in that amount.