Rogers v. Rogers

BLOOM, Judge. The Circuit Court for Montgomery County granted appellant, Maro A. Rogers, a divorce a vinculo matrimonii from appellee, Walter D. Rogers. It also granted appellant a monetary award of $15,000. By consent, appellee was awarded custody of the minor child of the parties, Farro T. Rogers, who was born 9 June 1976; appellant was not required to contribute financially to the support of the child.

Appealing from that judgment, Mrs. Rogers contends that the court made several errors with respect to ownership and valuations of property, leading to an inequitable monetary ⁵⁷⁸ award. She also contends that the court abused its discretion in denying her requests for alimony and counsel fees. We agree with appellant’s assertion that the circuit court failed to apply the statutory criteria set forth in the Family Law Article of the Maryland Annotated Code pertaining to alimony awards and distribution of marital property. Accordingly, we will reverse the portions of the judgment affected by those errors and remand for further proceedings.

The remand makes it unnecessary for us to address appellant’s assertion that the court erred in denying her request for a brief continuance. I Background Mr. and Mrs. Rogers were married in May 1974. They are now 46 and 37 years of age, respectively. Mr. Rogers was temporarily unemployed at the time testimony was taken before the Domestic Relations Master, but he is presently employed by Merrill Lynch as an investment portfolio manager, with an annual income in excess of $115,000.

In fact, for the past 10 years, he has regularly enjoyed an annual income in excess of $100,000. For a time after the parties were married, Mrs. Rogers did clerical work in an office. She stopped working in 1976 to raise her son and maintain the marital home. In December 1984 she went back to work, at an annual salary of $17,500, but that job lasted only about 14 months.

She then decided to go back to school. Currently, Mrs. Rogers is attending the University of Maryland in order to attain a bachelor’s degree in economics and, possibly, a masters degree in business administration. Mrs. Rogers filed a petition for Chapter 7 bankruptcy and received a discharge in bankruptcy in July, 1988. Other relevant facts will be discussed in connection with the issues to which they pertain.

II The Proceedings On 28 May 1985, following an evidentiary hearing, the domestic relations master recommended and the court issued a pendente lite order compelling appellee to pay ⁵⁷⁹ appellant $300 per month as alimony and $1,400 as child support. On 19 September 1985 there was a second pendente lite order relating to visitation. Alimony was continued at $300 per month; child support was reduced to $1,000 per month. Testimony on the merits of the case was presented to a master on July 20, 21, 22, and 24, 1987.

The master issued his Proposed Recommendations on October 28, 1987; Mrs. Rogers filed a Notice of Intention to Except; and the master eventually issued his Report and Recommendations on April 22, 1988. The master recommended a monetary award of $12,000 to Mrs. Rogers but no award of alimony or counsel fees. Apparently because the parties were discussing settlement, the exceptions were not set for hearing until December 7, 1988. Pointing out that the evidence was stale, 1 appellant requested that the case be sent back to the master or, in the alternative, that the court receive additional evidence.

The court opted to accept additional testimony at the hearing on appellant’s exceptions and set that hearing for December 7, 1988. Appellant’s request that the hearing be postponed until after December 23 was denied. She failed to appear for the December 7 hearing, at which time Mr. Rogers presented fresh evidence as to value of the former marital home, which was then occupied by Mrs. Rogers, and his new home in New Jersey, which he had purchased subsequent to the separation of the parties. Evidence was presented as to Mr. Rogers’s income, and he testified that Mrs. Rogers was then working.

He furnished no details as to the nature of her employment or her salary. ⁵⁸⁰ The court, apparently basing its decision on the master’s findings as modified or supplemented by the evidence it heard, adopted the master’s recommendations except for the monetary award, which it increased from $12,000 to $15,000. Ill Discussion A. Marital Property and the Monetary Award Based on the testimony before him, the master made certain findings of fact concerning the parties’ properties. He found the total value of all marital property to be $269,980, but we cannot tell how he arrived at that figure, since he made specific findings of value only as to certain items of property and never resolved the dispute between the parties as to the ownership of other items. And although the master concluded that Mrs. Rogers made some monetary contributions from funds sent to her by her family in Iran, he made no determination as to whether such contributions resulted in any of the parties’ properties being non-marital in whole or in part.

The master found that the largest single item of marital property was a home in New Jersey purchased by Mr. Rogers in his sole name, having a net value of $174,000. Each party was found to have an IRA, with the husband’s being worth $5,000 more than the wife’s, but no specific value was stated as to either. Each party was found to own an automobile, with the values of the vehicles being about equal. The furniture in the former marital home, then being occupied by the wife, was found to be worth $2,500; the value of the furniture in the husband’s house in New Jersey was found to be $3,230.

According to the master, “[t]he only property interest that seems to be in dispute is as to a piano valued at $5,000 and some rugs valued at $28,000.” The dispute was as to ownership. Mr. Rogers claimed that these items were jointly owned marital property; Mrs. Rogers insisted that they belonged to her parents. That dispute was not resolved, although Mr. Rogers at some point relinquished any claim to the rugs and piano. ⁵⁸¹ As a consequence of the evidentiary hearing before him in December, 1988, the chancellor found that Mrs. Rogers had possession of the piano and rugs, and since Mr. Rogers had relinquished any claim to them he saw no issue to resolve concerning those items. Based on the master’s findings, the chancellor noted that the remaining items of personal property located in the respective homes of the parties are of about equal value.

That left, in his view, only the former marital domicile and the husband’s new home in New Jersey as marital property. In accordance with the testimony he heard, the chancellor found the net value of the former to be $100,000 and the net value of the latter to be $65,000. Based on those values, “and the other factors considered by the master,” the chancellor deemed it appropriate to increase the monetary award from $12,000 to $15,000, which he thought “would equitably adjust the property rights of the parties.” The court’s findings and conclusions as to property and value, based largely upon those of the master, were rife with error. (1) Statutes We begin our discussion with a summary of the applicable statutory law. 2 Md.Fam.Law Code Ann., Title 8, subtitle 2, authorizes a court, upon granting a divorce or annulment, to resolve disputes between the parties with respect to the ownership of property (§ 8-202) and to grant a monetary award as an adjustment of the equities and rights of the parties concerning marital property (§ 8-205).

Marital property is defined in § 8-201(e) as property, however titled, acquired by one or both parties during the marriage, excluding property acquired before the marriage, acquired by inheritance or gift from a third party, excluded by valid agreement, or directly traceable to any of those non-marital sources. If there is any dispute as to whether certain property is marital property, the court shall determine ⁵⁸² which property is marital property. § 8-203(a). The court is also required to determine the value of all marital property. § 8-204. If disposition of the marital property in accordance with ownership or title will be inequitable, the only means of adjusting the equities, is a monetary award; the court may not transfer the ownership of property from one spouse to the other. § 8-202(a)(3).

With those statutory precepts in mind, we turn to appellant’s complaints of judicial errors involving the parties’ properties and the monetary award of $15,000. (2) The Gaithersburg Property The jointly owned marital residence in Gaithersburg, Maryland, was purchased by the parties in 1977 for $74,000. The chancellor found that property to have a present net value (market value less mortgage) of $100,000. The court appears to have found that home to be marital property in its entirety.

But in so doing, it ignored uncontradicted (and uncontroverted) evidence that Mrs. Rogers made a contribution of $10,000 toward the purchase of that property, using money that was part of a larger sum she had received from her mother. Although Mrs. Rogers took rather inconsistent positions regarding these funds in requesting relief, her testimony concerning her receipt of the money from her mother was that it was given to her to hold for her mother’s benefit. She put the money in a separate account but, with her mother’s permission, used $10,000 as a down payment on the house with the understanding that it would be replaced in the separate bank account. Mr. Rogers, on the other hand, asserted that the money was a wedding gift.

This conflicting testimony created a dispute as to whether the Gaithersburg home was entirely marital property or partly marital and partly non-marital property. Was the $10,000 a wedding gift from appellant’s mother, as contended by appellee? If so, was it a gift to both bride and groom or, as would appear to be more consistent with appellant’s uncontradicted evidence as to how the money was sent and how she handled it, a gift to her alone? Or was the money, ⁵⁸³ as appellant contended, given to her in trust, to hold for her mother?

And if given in trust, was it later converted to a loan by appellant’s mother’s authorization to use it as a down payment on the realty? Finally, if the $10,000 became a loan to enable the parties to acquire the marital home, was the loan to Mrs. Rogers or to both parties? The court may infer any one of the above possibilities from the testimony of the parties and the surrounding circumstances; and the resolution of the dispute as to whether the property is entirely marital or partially non-marital will depend upon which inference the court chooses to draw. If the $10,000 used as the down payment on the home was a gift to both husband and wife, the property was entirely marital.

If it was a gift to the wife alone, the money was her non-marital contribution and the property is partly marital and partly non-marital. See Harper v. Harper, 294 Md. 54 , 448 A.2d 916 (1982). The subsequent gift by the wife to the marital unit could not transmute non-marital property to marital. Watson v. Watson, 77 Md. App. 622, 638, 551 A.2d 505 (1989).

On the other hand, if the parties acquired property with money given to Mrs. Rogers in trust by her mother, that property would equitably belong to appellant’s mother. It is one of the fundamental principles of equity that where property is purchased, and the legal title is taken in the name of one person, while the purchase price is paid by another, but not as a loan to the grantee, nor from any natural or moral obligation to provide for the grantee, a resulting trust arises by implication of law in favor of the person paying the purchase price, unless a different intention is shown. Sines v. Shipes, 192 Md. 139, 153 , 63 A.2d 748 (1949). Where, as may be the case here, only a portion of the consideration is so paid a resulting trust may arise in favor of the payor in such proportion as the part paid by him bears to the total purchase price, unless he manifests an intention that no resulting trust should arise or that a resulting ⁵⁸⁴ trust to that extent should not arise.

Fasman v. Pottashnick, supra, [ 188 Md. 105 ] at 109 [ 51 A.2d 664 (1947)]. Levin v. Levin, 43 Md.App. 380, 387 , 405 A.2d 770 (1979). The concept of a loan creates, in turn, a new set of problems. If the $10,000 down payment on the house was a loan, a marital debt in that amount was created, which if still existing would reduce the net value of this property, as marital property, from $100,000, as found by the court, to $90,000. 3 See Zandford v. Wiens, 314 Md. 102, 108 , 549 A.2d 13 (1988); Schweizer v. Schweizer, 301 Md. 626, 637-37 , 484 A.2d 267 (1984); Harper, supra.

We have discussed at some length the testimony concerning Mrs. Rogers’s $10,000 contribution to the purchase price of the Gaithersburg property; the possible inferences that may be drawn from that testimony; and the effects that each inference might have on the question as to identification and valuation of marital property, in order to emphasize that there exists a genuine dispute on matters affecting the identity and valuation of marital property. The failure of the court even to address that dispute, much less resolve it, was error. Because that error affected the monetary award, the award must be vacated. (3) The New Jersey Home The master’s conclusion that the net value of appellee’s new house in New Jersey is $174,000 was obviously erroneous.

Based on “fresh” testimony, the chancellor found the net value of that property to be $65,000, the evidence before him reflecting a market value of $215,000 and a mortgage debt of $150,000. That net value of the property, however, ⁵⁸⁵ is not reflective of the issue to be resolved by the court, which was the value of the marital property. In this case, the value of the marital property exceeds the net value of the property itself because not all of the mortgage debt is marital debt. As explicated by the Court of Appeals in Schweizer v. Schweizer, supra, there is a difference between a “marital” debt and a “non-marital” debt.

The former is a debt that is directly traceable to the acquisition of property; the latter is not traceable to the acquisition of property. “That part of marital property which is represented by an outstanding marital debt has not been ‘acquired’ for purpose of an equitable distribution by way of a monetary award. Therefore, the value of marital property is adjusted downward by the amount of the marital debt.” 301 Md. at 637 , 484 A.2d 267 . Consequently, as the Court pointed out in Niroo v. Niroo, 313 Md. 226, 545 A.2d 35 (1988), the critical question is not whether marital property is encumbered by a secured debt; it is whether the debt is traceable to the acquisition of marital property. With that distinction in mind, we turn to the facts of the case before us.

The only evidence presented to the chancellor as to the value of the New Jersey property came from appellee and an expert witness produced by him. They agreed that the property was worth $215,000. To arrive at the net value of $65,000 the court subtracted from $215,000 the sum of $150,000, which was the approximate balance of the debt secured by the current mortgage on the property. But not all of that debt was marital debt.

The original purchase money mortgage was $113,000. That was a marital debt because it was a debt incurred to acquire the property. Appellant subsequently refinanced the loan, increasing the mortgage indebtedness, and used the additional funds (about $37,000) to pay some of his personal debts. The original mortgage balance at the time of the refinancing was a marital debt; the difference between that amount and the amount of the refinanced mortgage debt was non-marital debt. ⁵⁸⁶ The court was required by statute to determine the value of the marital property.

It found the net value of the New Jersey property to be $65,000. We assume that the court regarded the net value of the real estate to be the same as the value of the marital property. If so, its finding, $65,-000, was clearly erroneous; if not, the failure to make a finding as to the value of this item of marital property was error. (4) Personal Property The court adopted, without change, the master’s findings and recommendation as to personal property.

The recommendation, in effect, was to leave the personalty where it was, i.e., to let each party keep, as his or her own property, that which was then in his or her possession because they were of “about equal value.” That disposition may have been permissible with respect to the furniture in the New Jersey home, valued by the master at $8,280, since that furniture was acquired solely by Mr. Rogers after the separation of the parties. It may also have been allowable with respect to the parties’ automobiles, provided each was titled in the sole name of the spouse in possession. It was contrary to law with respect to the furniture in the Gaithersburg home which, so far as the evidence discloses, was acquired by the parties jointly while they lived together. Property so acquired is presumed to be jointly owned.

See, Bender v. Bender, 282 Md. 525 , 386 A.2d 772 (1978). Allowing Mrs. Rogers to keep the household furnishings in her possession was tantamount to transferring ownership of that property from both parties to one of them. That the court is not authorized to do. § 8-202(a)(3). The household furniture was found to be of relatively little value ($3,280 for the furnishings in New Jersey; $2,500 for those in