Falise v. Falise

• Decision Date: 01 September 1984
• Docket Number: No. 1368,1368
• Citation: 493 A.2d 385,63 Md.App. 574
• Parties: Joanne R. FALISE v. Frank J. FALISE. ,
• Court: Court of Special Appeals of Maryland

Page 574

63 Md.App. 574

493 A.2d 385

Joanne R. FALISE v. Frank J. FALISE.

No. 1368, Sept. Term, 1984.

Court of Special Appeals of Maryland.

June 10, 1985.

Richard William Winelander, Baltimore, for appellant.

Richard Andrew Sargent, Baltimore (Bruce Ezrine, Baltimore, on the brief), for appellee.

Argued before MOYLAN, ALPERT and ROBERT M. BELL, JJ.

ALPERT, Judge.

The instant appeal arises from yet another "marital property" dispute compounded by separation, a separation agreement, reconciliation, and post separation (pre-reconciliation) property acquisition. The parties, appellant Joanne R. Falise and appellee Frank J. Falise, were married in September of 1967. The couple had one child, Samuel, born November 8, 1968. Some time thereafter, marital difficulties arose and the couple separated in July of 1975. This separation was memorialized by a Separation Agreement dated September 12, 1975, which cited "unreconcilable differences" as the reason for the separation. Mrs. Falise was granted custody of the couple's minor son and she and Samuel moved to the state of Vermont. The Separation Agreement contained various terms adjusting property and monetary matters between the parties.

During the tenure of the couple's first separation, Mr. Falise purchased a tract of land in Howard County for $18,000.00, $5,000.00 of which was paid in cash; the balance of $13,000.00 was secured by a mortgage. The $5,000.00 downpayment consisted partially of money received by Mr. Falise pursuant to the Separation Agreement and partially from his earnings. Title was placed in his name alone.

During December of 1977, the parties began discussing a possible reconciliation and some time thereafter Mrs. Falise returned to Maryland with their son. At first, the Falises resided with his mother, at which time they began to plan the construction of a home on the Howard County property. The parties jointly selected plans and a builder. When the parties received permanent financing for the house, a new deed was issued in which the property was titled in both names as tenants by the entirety. The deed and mortgage were dated December 11, 1978.

The Falises moved into their new home in October of 1979 and resided there as a family unit until Mrs. Falise moved out on February 20, 1981.

Mr. Falise subsequently filed divorce proceedings in the Circuit Court for Howard County alleging both desertion and adultery; Mrs. Falise filed a cross bill of complaint, alleging constructive desertion, voluntary separation, adultery and a two-year separation. The trial judge granted a Divorce A Vinculo Matrimonii on behalf of the husband, finding that Mr. Falise had adequately proven desertion and adultery by Mrs. Falise. Custody of the parties' son was awarded to Mr. Falise.

The court found that Mrs. Falise removed her personal property when she left the Howard County home. The parties were in disagreement as to whether the house itself was marital property and what effect the Separation Agreement ¹ had on this determination. Mrs. Falise essentially argued that the home was presumed to be a gift to her premised upon its titling as tenants by the entirety and that the Separation Agreement was inoperative because it was abrogated by virtue of their reconciliation. The trial judge disagreed with both contentions and found that the home was marital in part and nonmarital in part, but that "both monetary and non-monetary contributions of [Mrs. Falise were] nominal." After valuing the property, the judge made a monetary award in favor of Mrs. Falise:

Not only was [Mrs. Falise's] contribution small, but it was also short in duration. The mortgage was dated December 4, 1978; assuming that the first payment was January 1, 1979, the contribution, what there was of it, lasted only until February 20, 1981 (some twenty-six (26) months).

The Court is of the opinion that the short period of time the parties were together along with the small monetary and non-monetary contributions made by [Mrs. Falise] toward the real property, requires a monetary award of $2,500.00 as her interest in the real estate.

The parties also disputed the value of a life insurance policy and investment plans. As to these items, the court held that in light of "the small monetary and non-monetary contribution of [Mrs. Falise], together with the short time the parties were reconciled requires an award of $500."

Mrs. Falise appeals from this Order and raises three issues:

I. Whether the trial court erred in determining that the 1975 Separation Agreement was operable and relevant to the categorization of property as marital versus nonmarital?

II. Whether the trial court erred in making a $2500 monetary award as "her interest in the real estate"?

III. Whether the trial court erred in making a $500 monetary award to the wife representing her interest in a life insurance policy and investment accounts?

Because we answer in the affirmative, we must reverse and remand the case for further proceedings.

I.

The first issue raised is whether the parties' 1978 reconciliation served to abrogate the 1975 Separation Agreement executed by the Falises. The only real significance of the Agreement is in the relationship of Paragraph 13 (reprinted in footnote 1 supra ) to the tract of land in Howard County upon which the Falises constructed the home at issue, i.e., whether the tract itself constitutes marital or nonmarital property. That significance dissipates like a puff of smoke because even if the separation agreement was not abrogated, the unimproved lot of ground acquired by appellant during the separation must be classified as "marital" and not as "nonmarital" property.

It is clear that by paragraph 13 of the agreement the parties intended to relinquish any and all right, title and interest in and to the other's property, then owned or thereafter acquired. We doubt that the subject agreement could affect the status of something which is neither an interest in real or personal property, i.e., marital property. Marital property is merely a term created by the legislature to describe the status of property acquired during the marriage, however titled (as defined in Md.Family Law Code Ann. § 8-201(e) (1984)), title to which may have given rise to a potential inequity, upon dissolution of the marriage. That inequity, conceptually, may be corrected via a different legislative creature called the "monetary award." Thus, the only function of "marital property" is to form a base for a "monetary award." The legislature never intended that either spouse could have a legal interest in the "marital property" of the other since it merely intended to cure the title created inequity through the issuance of a "monetary award."

The Supreme Court of New Jersey in Smith v. Smith, 72 N.J. 350, 371 A.2d 1, 5-6 (1977), in determining whether equitable distribution was foreclosed by prior agreement, opined:

The husband further argues that Paragraph Tenth of the agreement, by which each spouse released all rights in the property of the other, operates as a binding relinquishment of any right to equitable distribution. It is settled law that the scope of a release is determined by the intent of the parties, and that in general, claims arising after the date of delivery of the instrument are not covered by it unless explicitly mentioned, since they would not appear to have been within the contemplation of the parties. Bilotti v. Accurate Forming Corp., 39 N.J. 184, 203-05, 188 A.2d 24 (1963). At the time Mr. and Mrs. Smith signed their agreement, courts had no power to make an equitable distribution of marital assets and neither party had any rights, inchoate or otherwise, in the individually owned property of the other, aside from dower, curtesy and right of quarantine. Calame v. Calame, [25 N.J.Eq. 548, 549 (E. & A. 1874) ]. We agree with Mrs. Smith that she cannot be regarded as having released a right which she did not have and could not fairly have anticipated.

See also Head v. Head, 759 F.2d 1172 (4th Cir.1985) (reprinted in Daily Record, May 13, 1984), wherein the United States Court of Appeals for the Fourth Circuit, in analyzing the Marital Property Act, recognized that "the less pecunious spouse in Maryland did not have a property interest in property to which the wealthier spouse held title. At most the less pecunious spouse had but an intangible expectancy in a share of the marital property's total cash value." Id. slip op. at 1174 (Daily Record, May 13, 1985 at 5).

In order to exclude property "by valid agreement" from the reach of a monetary award, we believe that the parties must specifically provide that the subject property must be considered "non marital" or in some other terms specifically exclude the property from the scope of the Marital Property Act.

II.

Although the trial judge was clearly empowered to grant a monetary award ² pursuant to Md.Cts. & Jud.Proc.Code Ann. § 3-6A-05 (1984 Repl.Vol.) (repealed), the procedure he followed and the result he reached were not altogether correct. A three-step procedure must be followed when the trial judge makes an equitable distribution of marital 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." Sharp v. Sharp, 58 Md.App. 386, 394, 473 A.2d 499 (1984) (citing Harper v. Harper, 294 Md. 54, 79, 448 A.2d 916 (1982)). ³

Mrs. Falise contends that the trial judge was not authorized to grant a monetary award because none was specifically requested by Mr. Falise. We note, however, that in his Amended Bill of Complaint, Mr. Falise prayed "that the Plaintiff be awarded such other and further relief as the nature of his case may require." This prayer was sufficient to permit the trial judge to render any...