Herget v. Herget

• Decision Date: 25 May 1990
• Docket Number: No. 138,138
• Citation: 573 A.2d 798,319 Md. 466
• Parties: , 58 USLW 2747 Charles E. HERGET, Jr. v. Mary Elizabeth HERGET. Sept. Term 1988.
• Court: Maryland Court of Appeals

Page 466

319 Md. 466

573 A.2d 798, 58 USLW 2747

Charles E. HERGET, Jr. v. Mary Elizabeth HERGET.

No. 138 Sept. Term 1988.

Court of Appeals of Maryland.

May 25, 1990.

Motion for Reconsideration Denied

June 29, 1990.

Francis B. Burch, Jr. (Glen K. Allen, Piper & Marbury, Baltimore, James G. Beach, Jr., Beach, Cadigan & Martin, Towson) all on brief, for petitioner.

Bruce A. Kaufman (Rosenthal and Kaufman, P.A., on brief), Baltimore, for respondent.

Argued before MURPHY, C.J., and ELDRIDGE, COLE, RODOWSKY, McAULIFFE, ADKINS and BLACKWELL, ^* JJ.

McAULIFFE, Judge.

The major area of controversy in this divorce action concerns an antenuptial agreement that was executed in 1973. In an action filed in the Circuit Court for Baltimore County, the wife claimed that the agreement was invalid, reasoning that the husband did not make a full disclosure of his income and assets at the time the agreement was signed; that the agreement was not the wife's voluntary act; and, that the wife did not enter into the agreement with a full understanding of its meaning. Alternatively, she argued that if the agreement were valid, it did not have the effect of barring her claim to a monetary award--a right that arose by virtue of legislation enacted after the antenuptial agreement had been signed.

Judge J. William Hinkel carefully considered each of the wife's contentions concerning the alleged invalidity of the agreement, following the guidelines established by this Court in Frey v. Frey, 298 Md. 552, 563-64, 471 A.2d 705 (1984) and Hartz v. Hartz, 248 Md. 47, 234 A.2d 865 (1967). Judge Hinkel concluded that the agreement was valid. He also concluded that the plain language of the agreement evidenced the intent of both parties to exclude and protect the property of each from any and all claims of the other that might arise out of their relationship as husband and wife, and that their mutual release was sufficiently broad to protect either party from a claim for a monetary award.

The Court of Special Appeals upheld the trial judge's holding that the antenuptial agreement was valid, but held that the wife's claim for a monetary award was not barred by the terms of the agreement. Herget v. Herget, 77 Md.App. 268, 550 A.2d 382 (1988). We granted the husband's petition for certiorari to consider the effect of the antenuptial agreement on the wife's claim for a monetary award. We denied the wife's cross-petition, by which she sought further review of the determination that the agreement was valid.

At the time of execution of the antenuptial agreement, petitioner was a bachelor. Respondent, on the other hand, had been previously married, and had custody of her two daughters, who were seven and five years of age. Petitioner's assets at that time were valued at $1,604,000. Respondent's assets, consisting mainly of an investment portfolio, were valued at $690,000. Petitioner enjoyed an income of $50,039 and respondent received $28,650 in annual unearned income. Petitioner is a college graduate, who owned his own business. Respondent has a high school education and no particular training for employment, but the trial judge described her as "intelligent," and said that he was impressed with her "sophistication, comprehension, and ability to communicate." The agreement, executed two days before the marriage, was prepared by petitioner's attorney.

The agreement, recites the intent of the parties to:

waive, relinquish and bar ... all ... rights and interests which she and he, respectively, as wife [or] husband ... may become entitled to, except as in this Agreement provided, with respect to any property, real or personal, now owned or hereafter acquired by the other party.

Further, it provided, in paragraph two, that:

Mary Elizabeth Schaefer releases and surrenders any and all claims she may have, now, or at the time of any termination of the proposed marriage between the parties, by divorce, death or otherwise, in any estate or property of Charles Edward Herget, Jr., now owned or hereafter acquired by him, including all rights to support, dower, thirds and halves, and all other rights and interests of every kind therein that shall arise out of the relation of the parties as husband and wife, and whether such rights and interests shall accrue during the lifetime of either of the parties, or at the time of or after her or his death, other than as specifically provided for herein or by will, trust agreement or other instrument.

Paragraph three contained a reciprocal agreement on the part of the husband. Paragraph four then provided:

Except as above provided, each of the parties hereby waives and releases unto the other party, her or his heirs, next of kin, personal representatives and assigns, all of her and his respective rights, interests and claims in and to said property of the other, to the end that neither of the parties shall obtain any right or interest to or in any property of the other by virtue of their marriage, but each, during her or his lifetime shall own or dispose of her or his property in the same manner as if the parties had never been married; and upon the death of either of the parties, the property of the deceased party shall be distributed and title thereto shall devolve in the same manner as if the parties had never been married.

As we have noted, the trial judge found this agreement to be valid, and that issue is not before us. The sole issue with which we are concerned is whether the agreement bars the wife's claim for a monetary award.

An antenuptial agreement is a contract, subject to the general rules of contract interpretation. In Re Marriage of Garrity/Bishton, 181 Cal.App.3d 675, 226 Cal.Rptr. 485, 488 (1986); 3 Lindey on Separation Agreements and Antenuptial Contracts, § 90.14 (1989); S. Green and J. Long, Marriage and Family Law Agreements, § 2.07 at 118 (1984). It is well settled that Maryland follows the objective law of contracts. General Motors Acceptance v. Daniels, 303 Md. 254, 261, 492 A.2d 1306 (1985). We explained, in Aetna Cas. & Sur. v. Ins. Comm'r, 293 Md. 409, 420, 445 A.2d 14 (1982), the procedure to be followed in interpreting a contract:

In Maryland, under the objective law of contracts, a court, in construing an agreement, must first determine from the language of the agreement itself, what a reasonable person in the position of the parties would have meant at the time it was effectuated. Where the language of the contract is unambiguous, its plain meaning will be given effect. There is no need for further construction. (Citations omitted).

In the particular context of the case before us, our task is perhaps most aptly stated by the language of Judge Boyd in Joffe v. Niagara Fire Ins. Co., 116 Md. 155, 160, 81 A. 281 (1911):

Courts have no right to make new contracts for the parties, or ignore those already made by them simply to avoid seeming hardships.

The monetary award that the wife seeks is authorized by Maryland Code (1984, 1989 Cum.Supp.) Family Law Article, § 8-201 et seq. The concept of a monetary award is relatively new in Maryland, having been first adopted in 1978. Chapter 794, Laws of Maryland 1978. Its function is to provide a means for the adjustment of inequities that may result from distribution of certain property in accordance with the dictates of title. With one exception, ¹ a divorce court in Maryland is not empowered to alter title to real or personal property held by the parties, or to directly divide or distribute that property in a way that is inconsistent with title. The court may, however, after giving consideration to factors enumerated by the legislature, enter a monetary award against one party and in favor of the other when that action is appropriate to adjust an inequity that would otherwise result from distribution, strictly in accordance with title, of property qualifying as "marital property." To the extent a monetary award is immediately due and owing, the court may enter a judgment reflecting it, thereby subjecting the property of the indebted party to lien and execution. Family Law Article, § 8-205(b).

In rejecting the husband's contention that the antenuptial agreement in this case was sufficiently broad to encompass a release of the future right to a monetary award, the Court of Special Appeals held that "the right to a monetary award ... is not an interest in the estate or property of one's spouse," and therefore is not covered by the language of the agreement. Herget, supra, 77 Md.App. at 279, 550 A.2d 382. In so holding, the court followed its earlier decision in Falise v. Falise, 63 Md.App. 574, 493 A.2d 385 (1985). In Falise, the intermediate appellate court held that a separation agreement entered into before 1978 (and before a reconciliation of the parties and the acquisition of additional marital property), by which each party agreed to relinquish all right, title, and interest in and to the property of the other then owned or thereafter acquired, did not effect a release of the right to a monetary award, for two reasons. First, the court said, "[w]e 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." Id. [573 A.2d 801] at 580, 493 A.2d 385. Second, the court reasoned that the wife could not be regarded as having released a right that she did not have and could not have fairly anticipated at the time the agreement was signed. Id. at 580-81, 493 A.2d 385.

This second line of reasoning, that one cannot release a right that is unknown to that person at the time of the execution of the agreement, was at least mentioned, and may have been relied upon, by the Court of Special Appeals in this case.

This lack of contemplation of such a concept, however, is the very reason why appellant did not surrender her right to seek a monetary award which did not exist at the time she entered the antenuptial agreement. Falise v. Falise, supra, 63...