Wilen v. Wilen

BLOOM, Judge. These cross-appeals present a variety of issues concerning the propriety of a decree entered by the Circuit Court for Anne Arundel County divorcing the parties a vinculo matrimonii, determining what constituted marital property, valuing that property, and granting the wife, Loveta Wilen, appellant, a monetary award. We shall remand these proceedings because several of the chancellor’s findings were improper and amounted to an abuse of discretion. In late 1971 or early 1972, Loveta Wilen and the appellee, Barry Wilen, began cohabiting in appellee’s apartment in Suitland.

At that time, Mr. Wilen was employed by Hill-crest Electronics, a family-owned business, and appellant was an assistant general manager of a Sheraton Hotel. Appellant left her job several months after she moved in with appellee. She claims she did so because Mr. Wilen ³⁴¹ wanted her to stay at home, entertain guests, and be available for business and social engagements. She had several other hotel-related jobs during the course of her relationship with appellee but inevitably either quit or was fired because of her allegedly heavy social calendar.

In 1973, Mr. Wilen purchased a townhouse in Crofton as a residence for himself and appellant. All of the cash used to purchase that property came from Mr. Wilen’s funds, and the mortgage securing the bulk of the purchase price was in his name only. The parties were married in June 1976. Shortly thereafter, Mr. Wilen sold the townhouse and applied the net proceeds of that sale, $2044, together with an additional $14,700 of his funds, to purchase a three bedroom house in Annapolis, the total cost of which was $129,900.

Mrs. Wilen contributed no funds towards the purchase of the home. Sometime after the parties began cohabiting and before they were married, Hillcrest Electronics was purchased by a wholly owned subsidiary of Peoples Drug Stores, Inc. Mr. Wilen then became an employee of that corporation. Eventually Mr. Wilen sold to his father Hillcrest Electronics stock that had been given to both parties jointly as an engagement gift. The husband’s income increased dramatically from 1971 when he was earning about $25,000 annually to 1981 when he earned about $90,000.

The couple’s lifestyle rose in direct relation to Mr. Wilen’s salary. The two entertained often, maintained a Capital Centre “sky suite” which friends, employees and business acquaintances of appellee’s frequented, and traveled extensively throughout the country and abroad. Mrs. Wilen received gifts of expensive jewelry and furs both from her husband and from her in-laws. Mr. Wilen also became involved in a variety of real estate transactions.

He was a one-third partner in several general partnerships that bought and sold Anne Arundel County real estate, including Bay Country Investments and 1000 ³⁴² West Partnership. He also invested in a real estate tax shelter in Flint, Michigan. He maintained an I.R.A. account and a T. Rowe Price money market fund. Mr. Wilen also owned stock in two companies, Sebar Enterprises, Inc., and Finalco, Inc., which were peripherally related to Hillcrest Electronics and Peoples Drug Stores.

Mrs. Wilen did not contribute any money towards the real estate investments, nor was she involved in any of the companies in any way. The two maintained separate “joint accounts,” with Mr. Wilen putting his money into his account and Mrs. Wilen putting money she earned from her. occasional employment into hers. It does not appear that Mr. Wilen ever withdrew funds from his wife’s account, although he frequently deposited money into it. In 1981, the couple began to have marital problems.

Mrs. Wilen discovered that her husband was having an affair. Several squabbles resulted in physical violence between the two. Ultimately, Mr. Wilen moved out of the Annapolis home. Mrs. Wilen then filed for divorce in May of 1981 on the grounds of adultery.

A proposed consent order was drafted by her counsel, under which Mr. Wilen would provide alimony pendente lite, continue to make mortgage payments, and maintain the marital home. The husband signed this document and began to make payments according to its terms. Mrs. Wilen, however, never signed it. The case was tried in August of 1983.

A memorandum opinion and decree was issued on November 7, 1983, granting the wife a divorce a vinculo matrimonii. The chancellor determined what constituted marital property and the value of each item. The following were found to be marital property: ITEM VALUE (1) Proceeds from stock transfer of Hillcrest Electronics $ 67,000.00 from appellee to appellee’s father ³⁴³ ITEM VALUE (2) Net equity of marital home at 2729 Poplar Lane, $ 18,469.37 Annapolis (3) IRA Retirement Account 53,294.46 (4) Furnishings in marital home 8,000.00 (5) United Bank and Trust Co. stock 1,674.00 (6) Hyatt Hotel tax shelter in Flint, Michigan 42,500.00 (7) T. Rowe Price Account purchases in 1981 before 12,800.00 separation (8) Sales proceeds from property located at 20 Eastern 42,166.66 Avenue Total Value $245,904.49 The following items were found to be non-marital property: (1) Appellee’s Vá interest in 1000 West Partnership (2) Appellee’s interest in Finalco (3) Appellee’s lh interest in Sebar Enterprises, Inc. (4) Appellee’s interest in 18 Eastern Avenue (present residence of appellee) (5) Appellee’s lh interest in Bay Country Investments except for V3 interest in proceeds of 20 Eastern Avenue sale (6) Appellee’s interest in Peoples Drug Stores stock The chancellor granted the wife a monetary award equal to one-half of the marital property, or $122,952.25, but denied her any form of alimony. Petitions to modify were filed by both parties.

After a hearing thereon, the court modified its decree by reducing the total valuation of marital property to $227,435.12, which in turn reduced the wife’s monetary award to $113,717.56. 1 The chancellor refused to amend his decision denying alimony to the wife. ³⁴⁴ A timely appeal and cross-appeal to this court were taken. The wife raises five issues in her appeal; the husband raises six issues in his cross-appeal: I. Did the trial court err in excluding from assets to be considered marital property those assets acquired after the court determined the marriage was “factually dead”?

II

Did the trial court err in not awarding alimony to the Appellant/Cross-Appellee?

III

Did the trial court err in not dividing assets acquired while the parties cohabited prior to their marriage?

IV

Did the trial court err in excluding from assets to be considered marital property those shares of stock that were acquired during the marriage and the increase in value of Sebar, Inc., during the marriage? V. Did the trial court err in not awarding arrearages as per the Consent Order entered into between the parties?

VI

Did the court err in characterizing as marital property the marital home purchased, in part, with non-marital property contributed by cross-appellant?

VII

Did the court err in characterizing as marital property, or in ascertaining the value of, proceeds from the sale of partnership property owned, in part, by cross-appellant, absent evidence that it was purchased subsequent to the marriage of the parties?

VIII

Did the court err in refusing to consider at the hearing on the motions for reconsideration and modification additional evidence proffered by cross-appellant as to the proper valuation of the partnership property?

IX

Did the court err in characterizing as marital property funds held in a T. Rowe Price money ³⁴⁵ market account existing during the course of the marriage, absent any evidence that it existed upon the dissolution of the marriage? X. Did the court err in characterizing as marital property, and in ascertaining the value of, cross-appellant’s interest in a hotel tax shelter, absent evidence that it was purchased subsequent to the marriage of the parties and absent sufficient evidence as to its value?

XI

Did the court err in awarding a monetary award of 50 percent of the ascertained marital property to appellant/cross-appellee, without specific analysis of those factors enumerated in § 3-6A-05(s) of the Courts and Judicial Proceedings Article? I. Property Acquired After Marriage is “Factually Dead” The chancellor determined that the marriage was factually dead as of September 1, 1981. Relying on New Jersey cases such as Painter v. Painter, 65 N.J. 196 , 320 A.2d 484 (1974), and Brandenburg v. Brandenburg, 167 NJ.Super. 256, 400 A.2d 823 (App.Div.1979), he concluded that property acquired after September 1, 1981, should not be considered to be marital property. In light of recent decisions of this court, that conclusion was erroneous.

Cotter v. Cotter, 58 Md.App. 529 , 473 A.2d 970 (1984), Gravenstine v. Gravenstine, 58 Md.App 158, 472 A.2d 1001 (1984), and Dobbyn v. Dobbyn, 57 Md.App. 662 , 471 A.2d 1068 (1984), “make it clear that marital property is to be determined and valued as of the date of divorce, not the date of separation.” Cotter, 58 Md.App. at 537 , 473 A.2d 970 . Thus, the chancellor’s refusal to consider the substantial assets acquired between separation (September 1, 1981) and divorce (November 1983) was improper, 2 and this issue ³⁴⁶ must be remanded for further fact-finding as to acquisition of any property subsequent to the separation but prior to the divorce and valuation of all property as of the date of the divorce.

II

Denial of Alimony Despite noting that appellant’s general financial situation was not very good and that her husband had committed adultery, the chancellor declined to award alimony to Mrs. Wilen. The refusal to grant the wife alimony was based on the fact that she failed to file a “full financial statement pursuant to Maryland Rule S 72(f),” and that “there is no way this Court can determine a proper award without a financial statement, or evidence in its stead.” We believe that the refusal to award alimony on that basis was an abuse of discretion. We note initially that the chancellor did in fact have evidence before him of appellant’s needs. In her testimony, Mrs. Wilen stated the amount of her current earnings, mentioned certain recurring monthly bills, and described her need to borrow money from friends and relatives to meet these bills.

She also testified that she had certain health problems which kept her from going back to work full time. Although her testimony did not mention all of the monthly expenses that should have been listed on a financial statement, it was sufficient to serve as a basis for some award of alimony. With respect to the absence of a financial statement, we observe that Mr. Wilen had made no objection to his wife’s failure to comply with Rule S 72(f). Although that rule provides that if alimony, maintenance or support is sought, a financial statement shall be attached to and considered as part of the formal pleadings, appellee did not demur or file a motion ne recipiatur to the bill of complaint.

Nor did he ³⁴⁷ object to the wife’s testimony at the trial concerning her current financial situation and need for support. Rule S 72(f) provides that a financial statement shall be filed “unless an agreement thereon [concerning alimony, support, etc.] is alleged to exist.” As mentioned above, a consent agreement delineating the monthly support due appellant was signed by Mr. Wilen after the divorce suit was instituted. That document, although not referred to in the pleadings, had been introduced into evidence. Mrs. Wilen was asserting its existence and validity as a basis for her claims for relief, while Mr. Wilen was disputing its validity because it had not been signed by his wife.

There being evidence that both parties at one time conformed their conduct to its terms, that document, insofar as it provided for alimony, support and maintenance, might well be construed to constitute an agreement the alleged existence of which would eliminate the need to file a financial statement under Rule S 72(f). The requirement of a financial statement (in the absence of an agreement for support) would seem to have two functions: (1) to inform the other spouse of the basis for and extent of the claim for support and (2) to furnish the court with information upon which an award of support can be made. Since the husband did not object to the absence of the statement and since the court had received evidence of the wife’s needs, it was an abuse of discretion to deny alimony to a spouse on the sole basis of her failure to file a document that she had some reason to believe did not have to be filed. For that reason, we must remand for reconsideration of the issue of alimony.

III

Assets Acquired During Premarital Cohabitation Appellant also maintains there was error in the chancellor’s refusal to consider assets obtained by appellee during the five year period the couple cohabited prior to their marriage in 1976. Based upon the above quoted language from Cotter , as well as Gravenstine, supra, and Dobbyn, supra, we agree with the chancellor that the property ³⁴⁸ acquired before marriage does not constitute marital property.

IV

Corporate Stock and Increase of Sebar, Inc. Among the assets owned by appellee prior to his marriage to appellant were 1700 shares of Peoples Drug Stores stock. During the marriage the stock apparently split one or more times, increasing the number of appellee’s shares to approximately 2300. Appellant asserts that the 600 or so shares thus acquired by her husband during the marriage should have been considered by the chancellor as marital property. This court’s recent decision in Mount v. Mount, 59 Md. App. 538 , 476 A.2d 1175 (1984), concerns precisely the issue raised by appellant.

In Mount , the husband owned stock in Greenway-Bowl, Inc., prior to his marriage but during the marriage received shares of Greenway Bowl East, a wholly owned subsidiary, as a dividend on the Greenway-Bowl, Inc., stock. We held that the shares received as a dividend were not marital property under Md.Cts. & Jud.Proc.Code Ann., § 3-6A-01(e), because the divided stock was directly traceable to property owned by Mr. Mount prior to the marriage. As in Mount , Mr. Wilen in the case before us received additional stock in Peoples simply because he was already a stockholder in the corporation. Consequently, the stock is property directly traceable to property acquired before the marriage and thus is not marital property under the statute.

In that respect, this case presents a different fact situation