28 A.3d 1093 (Del.Fam.Ct. 2010), CS07-03151, Sutherland v. Sutherland

Docket Nº:CS07-03151.
Citation:28 A.3d 1093
Opinion Judge:HENRIKSEN, J.
Party Name:In re the Matter of Karly B. SUTHERLAND, Petitioner, v. Fred SUTHERLAND, Respondent.
Attorney:Ashley Oland, Esquire, Law Office of Edward C. Gill, P.A., Georgetown, DE, Attorney for Karly B. Sutherland. Seth Thompson, Esquire, Law Office of Hudson, Jones, Jaywork, and Fisher, Georgetown, DE, Attorney for Fred Sutherland.
Case Date:January 28, 2010
Court:Family Court of Delaware
 
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Page 1093

28 A.3d 1093 (Del.Fam.Ct. 2010)

In re the Matter of Karly B. SUTHERLAND, Petitioner,

v.

Fred SUTHERLAND, Respondent.

No. CS07-03151.

Family Court of Delaware, Sussex County.

January 28, 2010

Submitted: Sept. 10, 2009.

Page 1094

Ashley Oland, Esquire, Law Office of Edward C. Gill, P.A., Georgetown, DE, Attorney for Karly B. Sutherland.

Seth Thompson, Esquire, Law Office of Hudson, Jones, Jaywork, and Fisher, Georgetown, DE, Attorney for Fred Sutherland.

OPINION

HENRIKSEN, J.

After two lengthy days of trial, as well as the attorneys submitting follow-up memorandums, this is the Court's Decision and Order regarding property division, child support modification, and Wife's request for alimony. 1

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The Court must first address the agreement of the parties stated in their Rule 52(d) pre-trial filings wherein they stipulated to a 50/50 division of marital property. Unfortunately, it appears to the Court that there was not a clear meeting of the minds on this stipulation. Wife was willing to stipulate to a 50/50 division of marital property based upon her underlying belief that Husband had forfeited his marital interest in the parties' marital " dream home" when he executed a quit claim deed conveying whatever interest he might have in the property to Wife. Wife avers that Husband's execution of the quit claim deed of the marital " dream home" constituted a valid agreement of the parties to exclude the " dream home" from marital property pursuant to 13 Delaware Code, Section 1513(b)(3)2. At the same time, Wife avers that Husband continues to remain 50% liable on the sizeable outstanding indebtedness against the " dream home." Husband, on the other hand, takes the position that his execution of the quit claim deed did not constitute a valid agreement intending to exclude the " dream home" from marital property, and that the value of the " dream home," as well as the associated debt, should both be considered in the Court's division of the marital estate.

Given the Court's opinion that the quit claim deed did not result in Husband validly agreeing to exclude the value of the " dream home" from the marital property, it would be unfair for the Court to hold Wife to a 50/50 division of marital property based upon this misunderstanding of the parties.

The Court will therefore address the main issue in this case, that being whether the execution of the quit claim by both parties to Wife alone of their jointly owned real estate should be construed as a valid agreement of the parties, thereby excluding the real estate from the marital estate to be considered by the Court under the exceptions set forth in 13 Delaware Code, Section 1513(b)(3)3. In order to address this issue, it is important for the Court to first go through the history of events leading to the moment when the parties executed the quit claim deed.

The parties were married July 06, 1996. For almost the first year of their marriage, they resided in Wife's father's beach home until they were ready to move into their first family home, which the Court will call the " Townsend Court" property. The parties resided in the Townsend Court property for the next 10 years of their almost 12 year marriage. Four children were born of the marriage, all of whom are still minors. Although the parties official date of separation was October 30, 2007, testimony indicated that their marriage was going through troubled times well before the final separation date.

While the marriage was still in relatively stable condition, or at least during a time

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when the parties had not yet contemplated divorce, Husband and Wife proceeded with a plan to purchase a new property and build their " dream home." The " dream home" property will hereafter be referred to as " Holly Mist" . Their plan included purchasing unimproved real estate and financing the construction of the home on the Holly Mist property while at the same time accomplishing the sale of their Townsend Court property. Once the Townsend Court property was sold, the parties intended to apply the proceeds of that sale against the construction loan on the Holly Mist property.

" The Plan," as described in the testimony of both Wife and her father, began formally on February 18, 2006, with a written agreement involving Husband, Wife, and Wife's father. It was in this same month of February 2006, that Husband and Wife purchased in their joint names the Holly Mist unimproved real estate.

Through the course of their marriage, Husband had been rising in the ranks from a concrete worker to a supervisor of concrete workers. He had also obtained a two year degree in architectural design. Wife was a 2nd grade school teacher for the past 10 years. Wife's father, who participated considerably in " The Plan," has been a project director for a major engineering company that specializes in the industrial design and construction of major facilities all over the world.

Around the time " The Plan" was entered into, Wife's father was nearing retirement. Having a certain amount of expertise about borrowing power at the time, Wife's father realized that Husband and Wife would not be able to meet the necessary bank requirements to obtain a construction loan to build the " dream home" the couple wanted to build. In order to assist his daughter and her husband, Wife's father agreed to be the lender of construction funds by obtaining funds from his own equity line, making all payments due on his equity line during the period of construction, and being repaid by Husband and Wife at the time Husband and Wife obtained a permanent mortgage on their new home, and after sale of the existing Townsend Court home. Wife's father believed " The Plan" had a high chance of success because, at the time, the real estate market was strong, and Husband was qualified to act as the general contractor which would result in considerable savings. Wife's father prepared a cost projection in which he envisioned a 13 month construction period. Wife's father, in addition to factoring in the savings related to Husband being the general contractor, also considered Husband's employment with a construction company from which Husband could obtain materials and machinery at a reduced cost.

The Court believes one of the major flaws in " The Plan" was the manner in which checks were processed and paid to subcontractors. Under " The Plan", Wife's father signed checks in blank and gave them to Wife. Wife then filled out the checks at such times as payments needed to be made to subcontractors as identified and requested by Husband. The first draw was made in mid-March of 2006. According to Wife's father, everything was going according to " The Plan" until about November 28, 2006.

Another problem with " The Plan" was the lack of the sale of the Townsend Court property. All parties seemed to agree that the Townsend Court property had initially been overpriced by the realtor. In addition, the real estate market had begun to fall. In Wife's father's opinion, even dropping the listing price on the Townsend Court property by $100,000.00 would not defeat the success of " The Plan" to build Husband and Wife's " dream home."

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But on November 26, 2006, Husband suddenly left the home and dropped out of sight. Wife did not know where Husband was living. Construction work stopped on the Holly Mist home. Work did not resume again on the home until more than two months later, when Husband returned around February 01, 2007.

During the gap of time between November 26, 2006, and February 01, 2007, Husband terminated or was terminated from his stable construction manager's job. Husband began his own concrete business with an old friend. Although Husband had dropped out of sight during this time, he and Wife still had occasional contact. It was on these occasions Wife provided Husband with checks he requested to be paid ostensibly to certain subcontractors. Apparently, love really is blind. The fallacy of Wife's and her father's trust in handing these sizeable payments of money over to Husband when he left and construction stopped is clearly recognized by any person distant from the transaction. Wife and her father now maintain that nearly $200,000.00 in checks were written during this " gap time" that were misapplied by Husband. Wife and her father believe these misapplied funds were spent on projects unrelated to the building of the " dream home," possibly being used to pay contractors on other jobs with Husband's new concrete company, or simply to fund Husband's own personal extravagances. Unfortunately, because these checks were written on Wife's father's own account, only Wife's father could have obtained copies of the checks written during this time period. However, Wife's father did not produce any of these checks which might have assisted in proving Wife and Wife's father's claim that Husband had been spending these funds on projects unrelated to the building of the " dream home" at Holly Mist. The Court is therefore unable to accept the theory of Husband misapplying the funds.

Both Husband and his partner in the new concrete business, an old friend from high school, acknowledged that Husband and his old friend foolishly spent money earned from their new business. The friend bought a Corvette through the business, which was eventually repossessed. Husband used funds from his new business to foolishly buy a big double tire truck which he did not need, a Tahoe for the family costing $43,980.00, and a used Silverado for himself costing $34,987.00. Husband's friend eventually pulled out of the business around July 2007. Husband attempted to run the business on his own. In doing so, he was trying to bid on jobs, oversee five to seven employees, and...

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