Richards v. Richards

SHARER, J. The parties to this appeal were divorced by judgment of the Circuit Court for Montgomery County, granted on the counter complaint of appellee, Donna Richards, filed in response to the complaint of appellant, John Richards. Aggrieved at the financial aspects of the judgment, John Richards has noted this appeal. Appellant has presented for our review three assignments of error, which, as recast, are: I. Whether the circuit court erred in its determination of the monetary award.

II

Whether the circuit court erred in reserving alimony.

III

Whether the circuit court erred in its award of counsel fees to appellee. Finding neither error nor abuse of discretion, we shall affirm the judgment of the circuit court. FACTUAL BACKGROUND The Parties Appellant and appellee were married on September 21, 1986. The judgment of divorce was entered on April 14, 2004.

No children were born of the marriage. During the marriage, John Richards was employed by the federal government, earning, at the time of this litigation, approximately $100,000 per year. His health is unremarkable. Donna Richards, 60 years of age at the time of trial, also worked for the federal government during the marriage.

Her health, in contrast to appellant’s, is fragile. In April 1990, she suffered an on-the-job injury and has been rated as disabled. In addition to her physical disability, she has a history of ²⁶⁸ emotional instability. Unable to work since the injury, she receives benefits from Social Security, private disability insurance, 1 and worker’s compensation.

She is eligible to receive Federal Employees’ Retirement System (FERS) benefits. The current benefits provide her with a total monthly income of approximately $3,000. The Property Mrs. Goldberg This litigation brings into play certain property and assets of appellee’s mother, Celia Goldberg. In 1994, Mrs. Goldberg established a revocable trust into which she placed most of her assets.

Donna Richards is a co-trustee. Mrs. Goldberg also established two bank accounts: an interest-bearing checking account at the Bank of America in Florida, and a savings account at the Torrington Savings Bank in Connecticut. In creating the accounts, Mrs. Goldberg named both John and Donna Richards as joint tenants with rights of survivorship. 2 In 1998, Mrs. Goldberg entered an assisted living home. As her health deteriorated, appellant and appellee assumed a larger role in managing her financial affairs.

In 1998, they consolidated her various banking and brokerage accounts, held in the trust, into one Schwab One Account. Appellee, as co-trustee, had check signing authority over this account. During Mrs. Goldberg’s lifetime, checks were made payable to appellant on various occasions from the account. 3 Many checks ²⁶⁹ from that account, payable to John Richards, were deposited into the parties’ joint checking account. Mrs. Goldberg died in 2000.

In accord with her will, Donna Richards qualified as the executor. By way of disposition, the will created a testamentary trust, of which Donna Richards and her brother, Mrs. Goldberg’s only other heir, were named as co-trustees. The will was silent as to John Richards. Her United States Estate Tax return designated as “joint” the two bank accounts as to which appellant and appellee were the survivors.

The Parties Appellant states in his brief that, during the marriage, he and appellee “co-mingled and merged all of their financial assets so that most of the assets were joint.” Appellee concedes the point and further claims that appellant “wielded total control” over the parties’ finances. Shortly after the death of Mrs. Goldberg, the parties opened a joint Schwab One Account with the rights of survivorship. The initial deposit of $110,000 was made with funds from Mrs. Goldberg’s Bank of America and Torrington accounts (respectively, $85,000 and $25,000). On the same day, appellee opened an individual Schwab One Account.

Her initial deposit of $34,838.63 came from inherited funds. Appellee designated appellant as her attorney in fact with authority to draw from the account. On numerous occasions, checks payable to appellant were drawn on the account. In 2001, the parties purchased real estate in Reno, Nevada, the source of funds being the joint Schwab One Account.

Appellant testified that those funds came through Mrs. Goldberg’s estate. Appellant also claims that he contributed $40,232.40 from his premarital Schwab Account into the joint account. The circuit court determined the Nevada property to be marital. ²⁷⁰ In 2002, appellant removed about $100,000 from the joint Schwab One Account — one-half of the account balance at the time. At the time of trial, appellant had approximately $30,000 of that amount remaining in his individual Schwab One Account.

The circuit court found those funds to be appellee’s non-marital property. We shall address additional facts as necessary for context. PROCEDURAL HISTORY Suit was filed by appellant on February 6, 2003. Appellee filed a counter-complaint for absolute divorce, seeking alimony, a monetary award, and other relief, including counsel fees.

Soon thereafter, the parties filed a joint statement concerning marital property, pursuant to Md. Rule 9-207. Trial was held on March 29 and 30, 2004, and judgment was entered on April 14, 2004. Relevant to the issues in this appeal, the court ordered: ORDERED that [appellee’s] request for an award of alimony is hereby reserved, and it is further, ORDERED that the real property located in Reno, Nevada is determined to be marital property, and said property shall be sold and the net proceeds of sale divided equally between the parties, and it is further, * * * ORDERED that [appellant] shall pay to [appellee] the sum of $105,000 as an adjustment of the equities of the parties in the Reno, Nevada real property, and it is further, ORDERED that the Schwab One account titled in [appellant’s] name is determined to be [appellee’s] non-marital property, with a value of $30,000, and it is further, ORDERED that a monetary award is hereby granted in favor of [appellee], and against [appellant] in the amount of $207,290 as an adjustment of the equities of the parties in ²⁷¹ and to the marital property listed on Schedule A, the Reno, Nevada real property, and the Schwab One account, and it is further, ORDERED that a judgment is hereby entered in favor of [appellee] and against [appellant] in the amount of $207,290, and it is further, ORDERED that [appellant] shall pay to [appellee] as a contribution toward her attorney’s fees incurred in connection with this proceeding the sum of $17,000, and it is further, ORDERED that a judgment is hereby entered in favor of [the law firm representing appellee] in the amount of $17,000[.] Appellant filed his timely Notice of Appeal on May 7, 2004. DISCUSSION I. Whether the circuit court erred in its determination of the monetary award.

We hold, for three reasons, that the circuit court appropriately granted appellee a monetary award in the amount of $207,290. First, the court correctly found that the $30,000 contained in appellant’s individual Schwab One Account was appellee’s non-marital property. Second, the court exercised proper discretion when it adjusted the parties’ equities in the Nevada property and other marital property. Finally, the court articulated its consideration of the requisite statutory factors in granting a monetary award.

Standard of Review In our review of the monetary award, we shall apply two standards of review. First, we utilize the “clearly erroneous” standard to the court’s determination of what is, and what is not, marital property because “[o]rdinarily, it is a question of fact as to whether all or a portion of an asset is marital or non-marital property.” Innerbichler v. Innerbi- ²⁷² chler, 132 Md.App. 207, 229 , 752 A.2d 291 (2000); see also Md. Rule 8-131(c). Factual findings that are supported by substantial evidence are not clearly erroneous. Collins v. Collins, 144 Md.App. 395, 409 , 798 A.2d 1155 (2002).

Second, as to the court’s decision to grant a monetary award, and the amount thereof, we apply an abuse of discretion standard of review. Gallagher v. Gallagher, 118 Md.App. 567, 576 , 703 A.2d 850 (1997). Within that context, “we may not substitute our judgment for that of the fact finder, even if we might have reached a different result.” Innerbichler, supra, 132 Md.App. at 230 , 752 A.2d 291 . The court granted appellee a monetary award in the amount of $207,290.

That amount is composed of: (1) $30,000 (the monies in appellant’s individual Schwab One Account, which the court determined to be non-marital property of appellee); (2) $105,000 (the “adjustment of the equities” of the parties in the Nevada Property); and (3) a marital property adjustment in the amount of $72,290. Appellant challenges two aspects of the monetary award: the $30,000 Schwab One Account and the adjustment of equities in the Nevada real estate. We discuss the pertinent law and proceed to appellant’s contentions. Monetary Award When a party seeks a monetary award, the court must follow a three step procedure: First, for each disputed item of property, the court must determine whether it is marital or non-marital.

Second, the court must determine the value of all marital property. Third, the court must determine if the division of marital property according to title will be unfair; if so, the court may make an award to rectify the inequity. Collins, supra, 144 Md.App. at 409 , 798 A.2d 1155 (internal citations omitted) (citing Doser v. Doser, 106 Md.App. 329, 349-50 , 664 A.2d 453 (1995)); see also Md. Rule §§ 8-203, 8-204, 8-205. Appellant’s challenges on appeal require us only to examine the first and third step of this procedure. ²⁷³ As to the first step, classification of the property as marital or non-marital, we observe that section 8 — 201(e)(1) of the Family Law Article of the Maryland Annotated Code defines “marital property” as “property, however titled, acquired by 1 or both parties during the marriage.” This includes “any interest in real property held by the parties as tenants by the entirety unless the real property is excluded by valid agreement.” § 8 — 201(e)(2).

Pursuant to section 8 — 201(e)(3), however, marital property does not include property: (i) acquired before the marriage; (ii) acquired by inheritance or gift from a third party; (iii) excluded by valid agreement; or (iv) directly traceable to any of these sources. After a court has determined the nature of property and the value thereof, it must proceed to the third step of the procedure: rectifying the inequities, if any. In addressing step three, the court shall consider section 8-205 of the Family Law Article of the Maryland Annotated Code. (a) Grant of Award. — Subject to the provisions of subsection (b) of this section, after the court determines which property is marital property, and the value of the marital property, the court may ... grant a monetary award ... as an adjustment of the equities and rights of the parties concerning marital property, whether or not alimony is awarded.

(b) Factors in determining amount and method of payment or terms of transfer. — The court shall determine the amount and the method of payment of a monetary award ... after considering each of the following factors: (1) the contributions, monetary and nonmonetary, of each party to the well-being of the family; (2) the value of all property interests of each party; (3) the economic circumstances of each party at the time the award is to be made; (4) the circumstances that contributed to the estrangement of the parties; ²⁷⁴ (5) the duration of the marriage; (6) the age of each party; (7) the physical and mental condition of each party; (8) how and when specific marital property or interest in the pension, retirement, profit sharing, or deferred compensation plan, was acquired, including the effort expended by each party in accumulating the marital property or the interest in the pension, retirement, profit sharing, or deferred compensation plan, or both; (9) the contribution by either party of property described in § 8 — 201(e)(3) of this subtitle to the acquisition of real property held by the parties as tenants by the entirety; (10) any award of alimony and any award or other provision that the court has made with respect to family use personal property or the family home; and (11) any other factor that the court considers necessary or appropriate to consider in order to arrive at a fair and equitable monetary award or transfer of an interest in the pension, retirement, profit sharing, or deferred compensation plan, or both. Md.Code Ann., Fam. Law § 8-205(a)-(b) (Repl.Vol.1999 & Supp.2004) (alterations added). The court shall articulate that it has considered all the factors when granting (or denying) a monetary award request.

See Imagnu v. Wodajo, 85 Md.App. 208 , 582 A.2d 590 (1990). As we have noted, the monetary award to appellee was an effort to achieve an “adjustment of the equities,” relating to appellant’s individual Schwab One Account and the Nevada real estate. We address each item in turn. Appellant’s Individual Schwab One Account The evolution of appellant’s individual Schwab One Account is as follows.

Mrs. Goldberg established two bank accounts (Bank of America and Torrington). As her health deteriorated, Mrs. Goldberg sought the assistance of the parties in managing her financial affairs. In what the circuit court found to be an accommodation to facilitate their care of her, ²⁷⁵ Mrs. Goldberg added the names of appellant and appellee as joint tenants of the two accounts, with the right of survivor-ship. 4 Following the death of Mrs. Goldberg, creating their entitlement to the proceeds of the accounts, the parties consolidated the accounts into a joint Schwab One Account. The parties were joint owners of the consolidated account.

Later, for some reason not fully clear from the record, the parties placed the funds remaining in the consolidated account into a second joint Schwab One Account. Appellant acknowledges that these funds originated from Mrs. Goldberg’s consolidated account. In addition, appellant made one deposit to that account of non-marital funds in the amount of about $40,000. In October 2002, the funds in the joint Schwab One Account approximated $200,000.

Appellant, prior to the divorce, withdrew one-half of that balance and placed it into an individual Schwab One Account titled in his name only. At the time of trial, $30,000 remained in appellant’s sole account. The court determined the $30,000 to be appellee’s non-marital property, even though it was in an account titled only to appellant. Implicit in the court’s conclusion, and supported by the record, is the finding that the $30,000 was the residue of Mrs. Goldberg’s funds, from the accommodation bank accounts.

The evidence supports that finding because (1) Mrs. Goldberg did not make a gift to appellant; and (2) appellant did not inherit from Mrs. Goldberg. Appellant contends that “[a]ny remaining assets of Appellant after splitting the remainder of the Joint Schwab One account cannot be traced to any non-marital source.” In support of this contention, appellant asserts that “direct tracing of Appellee’s inheritance and gifts from her mother was not possible due to the commingling of assets in the joint Schwab One account. In addition, Appellee did not meet her burden of proof regarding the jointly titled bank accounts ²⁷⁶ being gifts solely to her and not to her and appellant, either individually or jointly.” Appellant’s contention lacks merit. The trial court was able to trace the evolution of the $30,000 balance, which arose substantially from Mrs. Goldberg’s accounts.

The fact of appellant’s one-time contribution to the account, although substantial, does not defeat the court’s ability to trace. 5 Indeed, in Noffsinger v. Noffsinger, 95 Md.App. 265 , 620 A.2d 415 (1993), this Court has said that: the mere fact that non-marital funds rested in the same account as marital funds does not compel the conclusion that the funds commingled. See e.g. Melrod [v. Melrod ], 83 Md.App. [180], at 188, 574 A.2d 1 [ (1990) ] (only when the spouse chooses to commingle marital and nonmarital funds to the point that direct tracing is impossible does his or her property lose its nonmarital status). 95 Md.App., at 284 , 620 A.2d 415 . In Noffsinger , Judge Bloom also pointed out that “[T]he party seeking to demonstrate that particular property acquired during the marriage is nonmarital must trace the property to a nonmarital source.” Id. at 283 , 620 A.2d 415 .

In the matter before us, the trial court was satisfied, as are we, that appellant did not meet his tracing burden. Because we do not find the trial court’s factual findings on the tracing issue to have been clearly erroneous, we will not disturb the findings. Appellant also suggests that the court’s marital property determination is undermined by the fact that Mrs. Goldberg made gifts to him of the funds at issue. The evidence does not support his assertion.

He produced no evidence to show gifts from his mother-in-law. 6 In Maryland, ²⁷⁷ one who asserts the status of donee bears the burden to demonstrate “(1) donative intent [on the part of the donor]; (2)