Sharp v. Sharp

ALPERT, Judge. Clarence Sharp, appellant, and Patricia Sharp, appellee, were married on December 4, 1971. Both spouses were employed by the National Institutes of Health in Washington, D.C., appellant as an environmental engineer and appellee as a secretary. A daughter, Frances, was born on November 3, 1972.

Appellee ceased working in September, 1972, two months before the birth of the couple’s child. During appellee’s employment, she gave appellant her paycheck; upon her resignation she gave appellant her retirement fund. The parties resided in a trailer on a farm titled to appellant in Frederick County, Maryland. Sometime in 1976, appellant moved out of the “marital trailer” into a farmhouse located on the property.

In 1978 he moved back into the trailer but slept in a separate bedroom where he shared his bed with the daughter. Appellant remained in the trailer for two-to-three months and then, on June 12, 1978, moved out of the trailer upon advice of counsel. According to appellee, appellant forcibly took Frances away from the trailer. For the following month, appellee had no telephone and appellant refused to give her money, padlocked the gas tank, and turned off the trailer’s air-conditioning.

Appellee ³⁹² stated that appellant would not permit her to see her daughter for seven months. Appellee left the trailer and farm in July 1978. Thereafter, appellant filed a Bill of Complaint for Divorce and Child Custody in the Circuit Court for Frederick County. On December 26, 1979, that court awarded appellant custody of Frances with visitation rights reserved to appellee.

The Circuit Court denied appellant’s prayer for absolute divorce and dismissed his Complaint. On May 20, 1980, in the Circuit Court for Montgomery County, appellee filed for absolute divorce, custody, alimony, attorney’s fees and an adjudication of the parties’ property rights. Appellant filed a Motion Raising Preliminary Objection or in the alternative to transfer venue because of the pending existence of an identical action with identical issues in the Circuit' Court for Frederick County. Appellant’s Motion was granted on the issue of custody, and the remaining issues were set in for trial in Montgomery County.

On April 26,1983, a decree of divorce a vinculo matrimonii was signed, granting appellee an absolute divorce from appellant based upon the grounds of constructive desertion in July, 1978. The husband was ordered to pay rehabilitative alimony of $150.00 per month for five years. Appellee was also granted a monetary award of $25,000.00, and $1,000.00 for partial reimbursement of attorney’s fees. Appellant raises these six issues on appeal: I. The chancellor erred in finding that there was sufficient proof and corroboration of the allegations so as to justify the award of a divorce or alimony in this matter based upon the ground of constructive desertion.

II

The chancellor erred in making a monetary award from the marital property by failing to properly consider the husband’s liabilities as well as his assets in determining the amount of marital property.

III

The chancellor erred in calculating the amount of marital investment made by the wife toward the ³⁹³ marital property and the span of time during which any non-monetary contributions could be considered as part of the marital property.

IV

The court was clearly erroneous in its award of alimony to the wife for an arbitrarily fixed time period when no need for alimony was demonstrated and the wife’s income had significantly increased. V. The chancellor abused his discretion in making an award of counsel fees to the wife when there was, by his own findings, no evidence supporting the wife’s claim for counsel fees.

VI

The court erred in not granting the husband’s Motion Raising Preliminary Objection or, in the alternative, to transfer venue. I. In a two-pronged argument, appellant submits that the chancellor erroneously awarded appellee a divorce based on constructive desertion and that appellee failed to provide the degree of corroboration required to sustain her prayers for divorce and alimony. Our discussion of the former issue shall obviate discussion of the latter. Before constructive desertion may be found, there must be conduct present which “renders impossible a continuation of marital cohabitation with safety, health and self-respect.” Ches v. Ches, 22 Md.App. 475, 482-83 , 323 A.2d 651 (1974) (and cases cited therein).

This behavior must generally amount to a pattern of persistent conduct. See, Coover v. Coover, 258 Md. 643, 654 , 267 A.2d 119 (1970). Where the conduct of one spouse to the other demonstrates “mere marital indifference or a lack of demonstrated love, or rudeness, or expressed desire to end the marital relation, [that indifference] will not legally justify the other spouse’s departure from the marital household however intolerable such conduct might appear to the demeaned spouse.” Bryant v. Bryant, 16 Md.App. 186, 191 , 294 A.2d 467 (1972). ³⁹⁴ Under the standard articulated in Bryant , we might agree with appellant that appellee presented a weak case of constructive desertion as the result of appellant’s actions. We note, however, that appellee’s Bill of Complaint requested a divorce on grounds of desertion by appellant.

Appellant conceded that he voluntarily moved out of the “marital trailer” in June of 1978 and that he and his wife never lived together thereafter. We therefore hold that the evidence adduced at trial adequately supported the granting of divorce to appellee on grounds of actual desertion. Accordingly, we shall affirm the chancellor’s decision but on a different ground. See, Read Drug & Chemical Co. of Baltimore City v. Colwill Constr.

Co., Inc., 250 Md. 406, 423 , 243 A.2d 548 (1968); Schriver v. Schriver, 185 Md. 227, 245 , 44 A.2d 479 (1945).

II

Appellant objects to the chancellor’s method of valuing appellee’s monetary award. Specifically, appellee contends that the chancellor failed to consider appellant’s liabilities when determining appellee’s monetary award. The watershed case on the issue of equitable distribution of marital property is Harper v. Harper, 294 Md. 54 , 448 A.2d 916 (1982). In that case the Court of Appeals explained that Md.Cts. & Jud.Proc.Code Ann. § 3-6A-05 (1980 Repl.Vol., 1983 Cum.Supp.) requires that the chancellor engage in a three-step process when equitably distributing property.

First, the chancellor must categorize all property owned by the parties as marital or nonmarital. Next, the value of the marital property must be determined. Finally, the chancellor may make a monetary award as an adjustment of the parties’ equities and rights concerning marital property. Id. at 79, 448 A.2d 916 .

The chancellor in the case at bar fully complied with the first step by classifying marital and nonmarital property. . Deemed to be marital property were farm equipment and cattle purchased with community funds, that portion of ³⁹⁵ appellant’s retirement funds contributed during the marriage, bank accounts, and appellee’s automobile. Appellant’s farm was labelled nonmarital “except to the extent that any of its present value is attributable to joint efforts or use of community funds during the marriage.” Appellant does not quarrel with the chancellor’s categorizations. His argument focuses on the chancellor’s valuation of this marital property in view of a recent mortgage placed on the farm.

In order to better understand appellant’s complaint, we must examine the financial history of the farm. In 1964, appellant purchased the Frederick County farm for $36,000. Appellant made a downpayment of $12,000 and financed the remaining $24,000 at an interest rate of six per cent per annum. At trial, appellant estimated that the farm’s value had increased to $45,000 by the time the parties married in 1971.

Further, appellant estimated that the farm’s value had increased to $50,000 by the time the parties separated in 1978. Appellant testified that over the years he had refinanced the farm “probably six or seven times,” however, no figures were provided at trial as to the existing liabilities on the farm as of any of the aforementioned dates. Appellant refinanced the farm in July, 1982 with the Federal Land Bank of Baltimore. He estimated that the farm’s value at that time was $80,000.

The mortgage, however, was in the amount of $125,000. When questioned on cross-examination why a $125,000 mortgage would be placed on property worth only $80,000, appellant explained: A Well, I farm with a farm cooperative, it’s special for farmers. And they give you a leeway; it is not like a bank. You buy stock in a farm at $5 per 100 shares and you work that way, and they’re more lenient with farmers, particularly all the financial problems and everything, rather than a regular bank.

Q (BY APPELLEE’S COUNSEL) So then, it’s your testimony that the loan guidelines by which farmers obtain loans from a farm cooperative are different than other types of loans? ³⁹⁶ A Definitely. The only attempt to provide evidence as to the actual value of the farm at the time of trial was made by appellee when she called J. Thomas Gilbert, a certified appraiser employed by the Federal Land Bank of Baltimore. Gilbert, however, had no personal knowledge of the subject farm and therefore was not permitted to testify further. Consequently, the only evidence of the farm’s value was from appellant’s testimony and from a settlement record indicating that the Federal Land Bank of Baltimore had in fact placed a $125,-000 mortgage on appellant’s farm.

The chancellor found that “since [appellant] was able to place a mortgage of $125,000 on the farm in 1982, that would indicate a value of at least that amount at the present time.” We perceive no error in such a finding because the chancellor had sufficient evidence before him to judicially notice that the farm had a value of at least $125,000. “Judicial notice of a fact is an acceptable substitute for formal proof of such fact, when formal proof is clearly unnecessary to enhance the accuracy of the fact-finding process.” Smith v. Hearst Corp., 48 Md.App. 135, 136 , 426 A.2d 1 , cert. denied, 290 Md. 721 (1981). Its use excuses a party having the burden of proving a fact from the necessity of producing formal proof by sworn witnesses and authenticated documents or objective evidence. Judicial notice is particularly appropriate “where the fact in question is known at once with certainty by all the reasonably intelligent people in the community without the need of resorting to any evidential data at all.” Id. (quoting McCormick, Law of Evidence § 323 (1st ed. 1954)).

Appellate review of judicial notice of facts of common knowledge is governed by the clearly erroneous standard of Maryland Rule 1086. Id. 48 Md.App. at 141 , 426 A.2d 1 . Our research on this point has revealed but one other case where judicial notice was taken that a mortgage was based on the property’s value. Gunzer v. Town of New Fairfield, 19 Conn.Super. 231, 111 A.2d 30, 32 (1955).

Manifestly, banking institutions do not ordinarily grant mortgages on ³⁹⁷ property unless that property has a value which equals or exceeds the amount loaned. We recognize that there may be instances where a wealthy borrower may be able to secure a mortgage in an amount in excess of the property’s actual market value. We believe, however, that in those cases, it should be the duty of the opposing party to rebut the inference by introducing proper rebuttal evidence. In the case sub judice, appellee had the burden of proving the value of the farm at the time of trial for purposes of equitable distribution.

Her attempts to introduce Gilbert’s appraisal evidence were thwarted. Still, appellant had already put forth sufficient evidence of a commonly known fact to enable the chancellor to take judicial notice of the farm’s worth. Accordingly, we hold that the chancellor was not clearly erroneous in valuing the farm at $125,000 based on appellant’s ability to obtain a mortgage in that amount. Satisfied that the chancellor correctly valued the farm, we now turn to appellant’s argument that the chancellor erroneously failed to deduct the $125,000 mortgage from the value of the farm.

Had the chancellor credited appellant with the mortgage of $125,000, the farm would have no value for purposes of marital award consideration, i.e., the farm’s value would not be included in the granting of a marital award. For support, appellant draws our attention to Schweizer v. Schweizer, 55 Md.App. 373 , 462 A.2d 562 , cert. granted, 298 Md. 49 (1983), a decision handed down subsequent to the chancellor’s memorandum opinion in this case. In Schweizer , this Court held that where the remaining value of the marital property had not yet been acquired, that amount could not be subject to equitable distribution. Id. 55 Md.App. at 378 , 462 A.2d 562 .

We further stated that to qualify under this rule, “any unpaid marital debt must be directly traceable to the acquisition of marital property.” Id. In other words, in the context of this case, appellant believes he should receive a credit to the extent that the proceeds of the existing mortgage loan are directly traceable to or used for the acquisition of marital property. ³⁹⁸ We find Schweizer distinguishable from the instant case. Our holding there spoke to the acquisition of marital property; here, it is not clear whether the $125,000 mortgage was made to pay off debts, to acquire marital property, some combination of those possibilities, or to intentionally dissipate the marital property to avoid the granting of a monetary award. For whatever reason, because appellant had recently fully refinanced the farm, he possessed nearly zero equity in that property at the time of trial.

The chancellor, however, used the figure $125,000 when computing appellee’s marital portion of the farm. A chancellor is presumed to know the law and is presumed to have performed his duties properly. Lapides v. Lapides, 50 Md.App. 248, 252 , 437 A.2d 251 (1982). Hence, because the chancellor gave appellant no credit for the mortgaged farm, it is implicit that the chancellor found either that (1) appellant failed to establish by a preponderance of the evidence that any unpaid debt was directly traceable to the acquisition of marital property or (2) that the property had been encumbered to avoid equitable distribution.

We cannot say that the chancellor erred in determining under the evidence presented that appellant failed to meet his burden of proving that there were “debts taken on to acquire the marital property.” Schweizer, 55 Md.App. at 378 , 462 A.2d 562 . Although the appellee had the burden of proving the value of the marital property (as she had the affirmative of that issue), appellant had the burden of establishing traceable debt. Likewise, there is support for the alternate conclusion that the property had been encumbered to avoid its inclusion toward a potential monetary award. In his memorandum opinion the chancellor stated the following concerning appellant’s ability to pay alimony: [Appellant’s] financial statement ([Appellant’s] Exhibit No. 6) shows a monthly deficit of $3500.00.

This, despite the fact that he has a retirement income of $1900.00 per month. He claims a monthly farm loss of $1700.00, and living expenses for himself and Frances of $3700.00. Sig ³⁹⁹ nifieantly, despite an annual salary in recent years of approximately $40,000.00, [appellant] has incurred negligible income tax liability due to his claimed farm losses. The Court deems incredulous his ability to survive such financial plight over the years, and finds his ability to pay the alimony ordered secreted among the allowances for depreciation and farm expenses.

(emphasis supplied). The preamble to Maryland’s Marital Property Act states that “it is the policy of this State that when a marriage is dissolved the property interests of the spouses should be adjusted fairly and equitably ...” 1978 Md.Laws ch. 794 (emphasis supplied). Thereupon, it would clearly be against the Legislature’s stated public policy to permit one spouse to squander marital property and render it impossible to make an equitable award of property. Berish v. Berish, 69 Ohio St.2d 318 , 432 N.E.2d 183, 185 (1982).

Therefore, where a chancellor finds that property was intentionally dissipated in