Schneider v. Schneider

ALPERT, Judge. This is yet another case which has its genesis in the disintegration of the respective parties’ marital relationship. Janet Marie Schneider (“Janet”), appellant, appeals from a judgment of the Circuit Court for Frederick County (G. Edward Dwyer, Jr., J., presiding) in favor of her ex-husband, Mark Reynolds Schneider (“Mark”), appellee. Specifically, the circuit court dismissed Janet’s Complaint for Specific Performance; Janet now appeals asking us to address a single question: Did the court below err in dismissing [without a trial on the merits] appellant’s complaint under the doctrine of unclean hands?

We answer this question in the negative, and therefore affirm. I. In 1966, Janet and Mark married. Two children were born of the marriage, a daughter in 1967 and a son in 1972. Then, on July 15, 1990, Mark moved out of the marital home and the couple’s marriage, for all intents and purposes, was over; divorce was soon to follow. ²⁹⁹ Four days after he moved out, ie., on July 19, 1990, Mark returned briefly to the marital home and left for Janet a four-page, handwritten letter.

In the letter, Mark discussed the couple’s financial situation. As part of that discussion, Mark requested Janet to “[d]o what you have to to sell the [marital] house,” and that if the house would sell for more than a certain specified amount, “I [Mark] could send you [Janet] $400.00 or $500.00 every two week[s or] 24 times a year or $10,000.00+ per year.” Moreover, during this approximate time period (ie., late July, 1990), Mark also allegedly promised that he would continue to keep Janet as the primary beneficiary on his life insurance policies. Janet alleged that she relied on Mark’s two financial representations (being, (1) the twice-monthly payments, and (2) remaining his life insurance beneficiary) and, in so relying, she abstained from seeking alimony or other monetary relief from Mark. On August 7, 1990, Janet filed in the Circuit Court for Frederick County a “Complaint for Absolute Divorce” on the grounds of Mark’s alleged adultery.

Janet described the facts supporting Mark’s adultery thusly: On July 15, 1990, [Janet] went by herself to church as she ordinarily does every Sunday. She left at the normal time, 8:00 AM, but returned home somewhat early because there was a visiting priest. At approximately 9:45 AM, she entered the bedroom she shared with [Mark]. She had in mind changing into her McDonald’s uniform as she was scheduled to begin work at McDonald’s that morning at 11:00 AM.

She found [Mark] in bed with a blonde-haired woman. [Janet] was flabbergasted, managed to say something like, “Get out of the house”, and went downstairs. [Mark] came down stairs and stated that he would be moving out. [Mark] left that day and never slept under the roof of the marital home again. (Emphasis added.) In his Answer to Janet’s Complaint, Mark confirmed the validity of the facts surrounding his adultery and, accordingly, on August 31, 1990, a Judgment of Absolute Divorce was entered in favor of Janet. Consistent with her allegations, Janet sought neither alimony nor other monetary ³⁰⁰ relief; instead, (she contends) she simply relied on Mark’s two aforementioned financial “promises.” Apparently consistent with his alleged promises, Mark did, in fact, make several $400 payments to Janet. But (according to Janet) the payments soon stopped, Mark “prompt[ly] removed” Janet as his life insurance beneficiary, and, eventually, Janet looked to the legal system to enforce Mark’s alleged contractual promises.

On or about August 27, 1991, in attempting to enforce Mark’s promises, Janet filed legal papers in two separate but concurrent cases. On the one hand, as part of her divorce case, she filed a “Motion to Revise Judgment,” wherein she requested the circuit court to reopen the Judgment of Absolute Divorce “to receive additional evidence and then enter a new judgment that awards Plaintiff [Janet] alimony.” On the other hand, Janet also initiated (in the same court) a completely separate civil action which she captioned as a “Complaint for Specific Performance,” wherein she sought specific performance of Mark’s two financial promises. Janet stated the relationship between her two concurrent cases as follows: As stated in [the] Motion [to Revise Judgment], [Janet’s] first choice of remedy is specific performance. However, if for any reason this Court declines to order specific performance, [Janet’s] only recourse would then be a reopening of the divorce case.

Moreover, pursuant to delineated paragraph six of her Complaint for Specific Performance, Janet noted: For a description of the surrounding circumstances and the conduct of the parties, Plaintiff [Janet] hereby adopts by reference and requests to have incorporated herein the contents of her “Motion to Revise Judgment”, which Motion is being filed in [the divorce case] at the same time as this Complaint is being filed. The Motion to Revise Judgment, of course, had in turn made express reference to the previous divorce proceedings includ ³⁰¹ ing, not surprisingly, Mark’s adultery upon which the divorce had been granted. On or about February 25, 1992, Mark filed a Motion to Dismiss (which Motion was interpreted as applying to both of Janet’s concurrent cases). The heart of the Motion — indeed, the heart of this case — lies in its delineated paragraph 9: That the Complaint [for Specific Performance] seeks equitable relief, for which the Plaintiff [Janet] has unclean hands as paragraph six [of the Complaint] incorporates the contents of her original Motion to Revise Judgment, which said Motion was based upon perjured testimony.

(Emphasis added.) Perjured testimony? As Janet subsequently explained in her “Amended Motion to Revise Judgment by Interlineation,” the events which precipitated the parties’ divorce had occurred in a slightly different fashion than (1) she had originally alleged in her Complaint for Absolute Divorce, and (2) she had reiterated in her aforementioned Motion to Revise (and incorporated by reference into her Complaint for Specific Performance): On July 15, 1990, [Janet] went by herself to church as she ordinarily does every Sunday. She left at the normal time, 8:00 AM, but returned home somewhat early because there was a visiting priest. At approximately 9:45 AM, she entered the bedroom she shared with [Mark], She did not at that time, as stated in Paragraph #2 of the original Motion to Revise Judgment, find [Mark] in bed with another woman. [Instead, Mark] at that time told [Janet] to use the truck for transportation to work at McDonald’s in Thurmont.

When [Janet] asked why, [Mark] replied that he was using the car to go find another place to live in Frederick. At approximately noon of the same day, [Mark] appeared at the McDonald’s where [Janet] was working and told her that he had found a place to move into. (Emphasis added.) A hearing on Mark’s Motion to Dismiss (vis-a-vis both of Janet’s concurrent cases) was held on May 14, 1992 before ³⁰² Judge Dwyer. With respect to Janet’s “Motion to Revise Judgment,” the court held Quite frankly, I think the motion to dismiss properly lies in that case.

I think if there is any fraud that it’s intrinsic fraud and in addition to the intrinsic fraud, quite frankly, unclean hands is so applicable in that case, I mean that’s the basis for her getting that divorce was her perjured testimony, which she admits. I am going to grant, for both reasons, the fact that it’s intrinsic as opposed to extrinsic and because the unclean hands is so applicable in the divorce action that the motion to dismiss in that case is granted. With respect to Mark’s Motion to Dismiss Janet’s “Complaint for Specific Performance,” the court heard arguments from both parties, but reserved judgment until it had reread the case of Manown v. Adams, 89 Md.App. 503 , 598 A.2d 821 (1991), rev’d on other grounds as Adams v. Manown, 328 Md. 463 , 615 A.2d 611 (1992), a significant and recent case concerning the “unclean hands” doctrine. After rereading Manoum, the court, on June 12, 1992, issued a written Order which granted Mark’s motion (and thereby dismissed Janet’s Complaint).

In dismissing the Complaint, the court held as follows: Janet Marie Schneider has admitted, both in these proceedings and in [the divorce case], that in the divorce proceeding .... in which she was the Plaintiff, that the divorce was granted to her on the grounds of adultery as a result of perjured testimony by her. The oral agreement which she seeks to enforce in this matter encompasses matters which could have been heard in the divorce case[.] Under Manown v. Adams, 89 Md.App. 503 [ 598 A.2d 821 ] (1991), it appears to be discretionary with the Court as to whether or not the Court should dismiss a matter under the doctrine of unclean hands. * * * * In this case, the matters which the Plaintiff [Janet] attempts to litigate in this matter could and should have been disposed of in the divorce action. Where the Plaintiff ³⁰³ obtained her divorce on admittedly perjured testimony, this Court refuses to recognize her action in this case under the doctrine of unclean hands. It is from this written Order (vis-a-vis her Complaint for Specific Performance) that Janet appeals. 1 II.

Recently, both we and the Court of Appeals have had occasion to examine the law concerning the doctrine of unclean hands. Both examinations arose from a single case, Manown, supra. Manown concerned the relationship between one J. Stephen Adams (“Adams”) and one Patricia J. Manown (“Manown”). After separating from his wife, but before his divorce was final, Adams commenced both a personal and business relationship with Manown.

Consequently, Adams “invested” significant financial assets into their ventures. Because Adams anticipated the divorce action, and, accordingly, because he wanted to secrete these assets from the divorce proceedings, Adams’ transferred assets were titled in Manown’s name only. These secreted assets included, inter alia, $43,000 in cash (which Adams had accumulated over some unspecified time, and which he had kept in a safe deposit box) which was used toward the purchase of a home in Manown’s name only; the couple was to use this home as both their dwelling and their place of business. Not long after his divorce was final, Adams filed a voluntary petition in bankruptcy.

In his schedules filed in bankruptcy, and despite his business dealings with Manoum, Adams swore that he had no interest in property held by another and ³⁰⁴ that he had no interest in any partnerships. Shortly thereafter Adams was discharged from his debts, and his bankruptcy case was closed. Meanwhile, Adams’ and Manown’s relationship soured. Approximately four months after his discharge in bankruptcy, Adams filed suit against Manown.

The gist of the Complaint was that Adams was seeking recovery from Manown for the very funds in which he had denied any interest in his two previous proceedings the divorce and the bankruptcy). Manown defended on the grounds that Adams was coming into court with “unclean hands” and that his action should therefore be barred. The Circuit Court for Washington County declined to apply the unclean hands doctrine, and a subsequent jury verdict came down in favor of Adams and against Manown in the amount of $43,000. Manown appealed to. us, and we reversed; in essence, we held that the circuit court should have applied the unclean hands doctrine.

Manown, 89 Md.App. at 516 , 598 A.2d 821 . Adams then appealed our decision to the Court of Appeals which, though it reversed the case on wholly unrelated grounds, provided the Court with its opportunity to address the state of the law regarding -unclean hands. See Adams v. Manown, 328 Md. 463, 474-76 , 615 A.2d 611 (1992). With respect to the unclean hands doctrine, our introductory discussion in Manoum applies equally to the case at bar: The unclean hands doctrine refuses recognition and relief from the courts to those guilty of unlawful or inequitable conduct pertaining to the matter in which relief is sought.

The doctrine is not for the protection of the parties to a lawsuit, but rather, for the protection of the courts — the idea being that judicial integrity is endangered when judicial powers are interposed to aid persons whose very presence before a court is the result of some fraud or inequity. The doctrine also serves another purpose which was stated long ago by the Court of Appeals in a case with facts parallel to this one: The suppression of such illegal and fraudulent transactions is far more likely, in general, to be accomplished by ³⁰⁵ leaving the parties without remedy against each other, and thus introducing a preventative check, than by enforcing them at the instance of one of the parties to the iraud[J Roman v. Mali, 42 Md. 513, 533-34 (1875). Thus where there is evidence of willful wrongdoing in relation to the controversy before it, the doctrine allows a court to literally wash its hands of the affair, leaving the guilty party or parties to the consequences of their actions. Manown, 89 Md.App. at 511 , 598 A.2d 821 (other citations omitted).

In the context of that introduction, we also noted that the question of whether the principle is to be invoked in a particular case rests in the sound discretion of the trial court. Id. (citing Space Aero Products Co. v. Darling, 238 Md. 93, 120 , 208 A.2d 74 , 699 cert. denied, 382 U.S. 843 , 86 S.Ct. 77 , 15 L.Ed.2d 83 (1965)). We concluded, While the unclean hands doctrine may involve factual questions, its purpose is to protect institutional interests.

It is therefore the judge, who is capable of identifying such interests and weighing them against other considerations, who must determine when the doctrine should be invoked to bar a claim. Id. 89 Md.App. at 513 , 598 A.2d 821 (citing Niner v. Hanson, 217 Md. 298, 309 , 142 A.2d 798 (1957)). In reversing Manown on other grounds 2 , the Court of Appeals reiterated much of the law set forth in Manown, as well as added the following: “It has been also said that the maxim [ie., that the doctrine is applied for the court’s own protection] has nothing to do with disapproval of the character or past behavior of the applicant but only with the effect of his present application.” Niner, 217 Md. at 309 [ 142 A.2d 798 ]. “Equity does not ³⁰⁶ demand that its suitors shall have led blameless lives.” Id. (quoting Loughran v. Loughran, 292 U.S. 216, 229 [ 54 S.Ct. 684, 689 , 78 L.Ed. 1219 ] (1934)).

Thus, an important element of the [un]clean hands doctrine is that the alleged misconduct must be connected