Alston v. Alston

• Decision Date: 01 September 1991
• Docket Number: No. 3,3
• Citation: 629 A.2d 70,331 Md. 496
• Parties: , 62 USLW 2099 Herman ALSTON v. Viola ALSTON. ,
• Court: Maryland Court of Appeals

Page 496

331 Md. 496

629 A.2d 70, 62 USLW 2099

Herman ALSTON v. Viola ALSTON.

No. 3, Sept. Term, 1991.

Court of Appeals of Maryland.

July 23, 1993.

Reconsideration Denied Sept. 13, 1993.

Ann M. Turnbull, Turnbull, Wase & Lyons, P.A., (both on brief), Towson, for petitioner.

William D. Berwick (George W. White, Jr., White, Mindel, Clarke & Foard, all on brief), Towson, for respondent.

Argued before MURPHY, C.J., and ELDRIDGE, RODOWSKY, McAULIFFE, CHASANOW, KARWACKI and ROBERT M. BELL, JJ.

ELDRIDGE, Judge.

The issue before us concerns the propriety of a marital property monetary award granted in a divorce proceeding. The General Assembly has enacted a statutory scheme relating to property matters upon divorce, Maryland Code (1984, 1991 Repl.Vol.), §§ 8-201 to 8-205 of the Family Law Article. Pursuant to these provisions, the mechanism by which the spouses' property interests in "marital property" are to be adjusted is the "monetary award." ¹ Generally, the trial court does not transfer ownership of any particular piece of property, ² but instead undertakes a three-step process which may culminate in a monetary award. First, the trial court must determine which property is "marital property" subject to allocation, §§ 8-203 and 8-205(a). Next, the court must determine the value of the marital property, §§ 8-204 and 8- 205(a). Finally, the court must consider various factors before fashioning any award, §§ 8-205(a) and (b). For more detailed discussions of the Maryland marital property and monetary award scheme, see, e.g., Pope v. Pope, 322 Md. 277, 587 A.2d 481 (1991); Herget v. Herget, 319 Md. 466, 573 A.2d 798 (1990); Zandford v. Wiens, 314 Md. 102, 549 A.2d 13 (1988); Niroo v. Niroo, 313 Md. 226, 545 A.2d 35 (1988); Grant v. Zich, 300 Md. 256, 477 A.2d 1163 (1984); Harper v. Harper, 294 Md. 54, 448 A.2d 916 (1982); Deering v. Deering, 292 Md. 115, 437 A.2d 883 (1981); John F. Fader, II and Richard J. Gilbert, Maryland Family Law, Chapter 17 (1990, 1991 Supp.); Paula Peters, Property Disposition Upon Divorce in Maryland: An Overview of the New Statute, 8 U.Balt.Law Rev. 377 (1979); Lawrence J. Golden,Equitable Distribution of Property, § 8.04 "Monetary Awards" (1983, 1992 Cum.Supp.).

We shall conclude in this case that the trial court erred when it awarded to the wife half of the value of a specific piece of marital property.

I.

The relevant facts are as follows. Viola and Herman Alston were married in June 1964, and they separated in 1985. In late 1987, Mrs. Alston filed in the Circuit Court for Baltimore City a complaint for divorce, based on the couple's voluntary separation for over one year. She did not seek alimony or a marital property award. Mr. Alston was served and notified that if he did not file a response within thirty days a divorce could be granted against him, but he did not file any response. After the thirty days expired, he assumed that the divorce had been granted.

At the time the above-mentioned divorce action was filed, Mrs. Alston was employed as a clerk with the Federal Government, earning a salary of about $19,000 per year. Through this employment, she had accrued pension rights worth approximately $22,000. She owned a car worth about $1,000, and some furniture worth about $2,000. She had savings accounts worth $1,000. Mrs. Alston's net worth was, therefore, approximately $26,000.

When the Baltimore City divorce action was filed, Mr. Alston was employed as a prison guard by the Department of Corrections in Washington, D.C., earning a salary of $29,500 per year. His government pension, accrued through his years of military service and employment with the Department of Corrections, was worth approximately $17,000. He owned a car, and about $8,000 worth of furniture. His net worth was approximately $25,000, plus the value of his car.

Several days before the expiration of the thirty day period for filing an answer to Mrs. Alston's divorce complaint, Mr. Alston won the District of Columbia "Lotto," which had an annuity value of over one million dollars. ³ Mrs. Alston immediately dismissed her divorce petition in the Circuit Court for Baltimore City. Approximately six months later, she filed in the Circuit Court for Baltimore County a complaint for absolute divorce on the ground of adultery, seeking, inter alia, a monetary award representing a substantial interest in Mr. Alston's lottery annuity. ⁴

Mr. Alston filed a motion to dismiss and an answer to Mrs. Alston's complaint. He also filed a "Counter Complaint for Absolute Divorce," seeking a divorce from Mrs. Alston on the grounds of adultery, desertion, and cruelty. The circuit court denied Mr. Alston's motion to dismiss.

During the trial, both parties agreed that the annuity was technically marital property because it was acquired before the expiration of the marriage. Although the parties disputed the present value of the annuity, the parties' arguments centered on the appropriateness of a monetary award. Mrs. Alston argued that, considering all the statutory factors, she was entitled to a monetary award of half or some other substantial portion of the annuity. Specifically, she contended that she had made substantially greater contributions to the well-being of the family, and that, therefore, the first statutory factor set forth in § 8-205(b) of the Family Law Article weighed against Mr. Alston. She also argued, among other things, that Mr. Alston's ongoing adultery caused the estrangement of the parties, so the fourth factor weighed in her favor.

Mr. Alston argued that Mrs. Alston was not entitled to any monetary award. Mr. Alston asserted that Mrs. Alston had not made significant contributions, economic or non-economic, to the well-being of the family. He contended that he was in dire economic straits at the time of trial, and, consequently, the third statutory factor in § 8-205(b) militated against a monetary award. ⁵ He stated that the estrangement of the parties was caused by Mrs. Alston's desertion and thus the fourth statutory factor indicated that no monetary award be made. Mr. Alston relied heavily on the eighth factor delineated in § 8-205(b), which requires the judge to consider how and when specific marital property was acquired. Finally, Mr. Alston pointed to the tenth "catch-all" factor, under which the judge may consider other necessary or appropriate elements. He argued that the situation before the court was unique, in that the asset was not acquired through the parties' joint efforts to provide for their future together.

On November 15, 1989, the circuit court entered a judgment of absolute divorce in favor of Mrs. Alston on the ground of Mr. Alston's adultery. The court denied alimony to either party. The court then valued all of the Alstons' marital property, including the lottery annuity. The court found that Mr. Alston had title to marital assets with a present value of $479,695.85, and that Mrs. Alston held title to assets worth $26,889.09. The court discussed the ten factors set forth in § 8-205(b) of the Family Law Article, treating each of them as entitled to equal weight. Noting the disparity of $452,806.76 in marital assets, the court made a monetary award to Mrs. Alston of fifty percent of the yearly net distribution on the annuity. ⁶

Mr. Alston, aggrieved by the circuit court's grant of an absolute divorce to Mrs. Alston on the ground of adultery, and by the court's decision to award half of his lottery winnings to Mrs. Alston, took an appeal to the Court of Special Appeals. The intermediate appellate court affirmed the circuit court's judgment, Alston v. Alston, 85 Md.App. 176, 582 A.2d 574 (1990). With regard to the circuit court's determination of a marital property monetary award, the Court of Special Appeals reviewed all of the statutory factors in sequence, as had the trial judge. As to the eighth factor set forth in § 8-205, namely "how and when specific marital property ... was acquired, including the effort expended by each party in accumulating the marital property," the Court of Special Appeals stated (85 Md.App. at 188-189, 582 A.2d at 580):

"When the parties correctly conceded that the D.C. Lotto annuity was marital property, the court could not find it to be individual property and thus the method of acquisition, which would have controlled under a § 8-203(a) distribution, became merely one factor among ten statutory factors, with its weight to be determined by the court as the trier of fact."

Thereafter, we granted Mr. Alston's petition for a writ of certiorari which was limited to the marital property issue, 322 Md. 333, 587 A.2d 510 (1991).

II.

The decision whether to grant a monetary award is generally within the sound discretion of the trial court. See § 8-205(a) ("the court may ... grant a monetary award") (emphasis added). See also Niroo v. Niroo, supra, 313 Md. at 230-231, 545 A.2d at 37; Deering v. Deering, supra, 292 Md. at 131, 437 A.2d at 891; Ward v. Ward, 52 Md.App. 336, 339 n. 3, 449 A.2d 443, 446 n. 3 (1982). Nevertheless, even with respect to a discretionary matter, a trial court must exercise its discretion in accordance with correct legal standards. See, e.g., Bohnert v. State, 312 Md. 266, 275, 539 A.2d 657, 661 (1988); Colter v. State, 297 Md. 423, 426-430, 466 A.2d 1286, 1288-1290 (1983); Kemp v. Kemp, 287 Md. 165, 170, 411 A.2d 1028, 1031-1032 (1980); Radman v. Harold, 279 Md. 167, 173, 367 A.2d 472, 476 (1977).

Mr. Alston's Lotto annuity has correctly been classified as marital property. ⁷ Before 1979 in Maryland, disposing, upon divorce, of property acquired during the marriage generally involved a determination of which party was the owner of a particular asset. Once ownership was determined, the court awarded the property to its owner, or, if the property was held jointly, to both parties equally. This system led to substantial inequity in many cases, because a spouse whose efforts assisted the other spouse in the latter's acquisition...