Lloyd v. Niceta

• Decision Date: 26 October 2022
• Docket Number: 934, Sept. Term, 2021
• Citation: Lloyd v. Niceta, 255 Md.App. 663, 284 A.3d 808 (Md. App. 2022)
• Parties: Thomas L. LLOYD v. Anna Cristina NICETA
• Court: Maryland Court of Appeals

255 Md.App. 663

284 A.3d 808

Thomas L. LLOYD

v.Anna Cristina NICETA

No. 934, Sept. Term, 2021

Court of Special Appeals of Maryland.

October 26, 2022

Argued by: Abraham E. Sisson (Hope L. Stafford, Delaney, Stafford LLC, on the brief), Chevy Chase, MD, for Appellant

Argued by: Jeff Evan Lowinger (Cheryl M. New, New & Lowinger PC, on the brief), Bethesda, MD, for Appellee

Panel: Graeff, Nazarian, J. Frederick Sharer (Senior Judge, Specially Assigned), JJ.

Sharer, J. On October 23, 2019, Anna Niceta filed a complaint for divorce in the Circuit Court for Montgomery County, from Thomas Lloyd, her husband of 13 years. Mr. Lloyd filed a cross-complaint. The court divided the issues presented into three areas: the validity of the parties’ post-nuptial agreement; custody of their two children; and the divorce. After separate trials, the court ruled that the post-nuptial agreement was valid, in part; the parties consented to a custody order; and the court granted Ms. Niceta a divorce on the grounds of adultery.

The primary issue of this appeal is the validity of the post-nuptial agreement. Mr. Lloyd raises the following questions for our review, which we have slightly rephrased:

I. Did the circuit court err in enforcing the post-nuptial agreement because it: A) lacked consideration; B) was unconscionable; or C) was procured by undue influence and/or unfair because the parties were in a confidential relationship?

II. Did the circuit court err in upholding the "lump sum" section of the post-nuptial agreement because it was: A) a penalty and contrary to public policy; B) exceeded Mr. Lloyd's ability to pay; or C) unconscionable?

In her cross-appeal, Ms. Niceta raises the following questions, which we have slightly rephrased:

I. Did the circuit court err when it failed to determine Mr. Lloyd's income before ruling that Mr. Lloyd owed no additional duty of child support beyond what he was already paying under the terms of the post-nuptial agreement?

II. Did the circuit court err when it determined that a provision of Mr. Lloyd's trust account that barred the trustee from distributing trust assets to discharge legal obligations prevented the court from ordering Mr. Lloyd to pay child support that he could only pay by using the assets of the trust?

For the reasons that follow, we shall affirm the circuit court's judgments as to the issues raised by appellant. As to the issues raised by appellee in her cross-appeal, we shall remand for further proceedings.

BACKGROUND FACTS

In 2006, Mr. Lloyd and Ms. Niceta, college graduates, married at the ages of 29 and 35, respectively. They had two children: a daughter born in 2008 and a son born in 2010. During much of their marriage, Mr. Lloyd, who held a financial planning certificate from Georgetown University, worked as an advisor in wealth management. His annual income varied from a low of $70,000 to a high of $100,000. Ms. Niceta was employed as an account executive for a catering company and earned a commission that ranged between $130,000 to $200,000 per year.

The parties established a standard of living above their earned income because of Mr. Lloyd's inherited money. His grandmother, Rachel "Bunny" Mellon, was a well-known socialite and philanthropist, who in 2010, gave Mr. Lloyd one million dollars to purchase a house for his family in Arlington, Virginia. Mrs. Mellon died in March 2014, and Mr. Lloyd received a substantial inheritance in two installments. The first installment occurred upon her death and totaled about $5.3 million. The second installment was received in May 2016, when Mr. Lloyd turned 40, and totaled about $5.4 million.

On June 2, 2014, a few months after Mr. Lloyd's grandmother died, Ms. Niceta discovered that Mr. Lloyd was having an affair. She was "devastated," and the parties separated. After several months, the parties began the process of reconciling, although Ms. Niceta was still unsure whether she wanted to continue the marriage. In the fall of 2014, Ms. Niceta asked Mr. Lloyd to re-title his existing financial accounts, then titled in his name only, as tenants by the entirety accounts. He complied with her request. After the new year, Ms. Niceta advised Mr. Lloyd that for her to feel secure in a future together, they should enter into a post-nuptial agreement (the "Agreement"). Ms. Niceta retained two attorneys who began drafting the Agreement. Mr. Lloyd likewise retained two attorneys, both members of the Virginia bar, Ms. Deborah Cochran, who specialized in estate planning, and Ms. Julie Day, who specialized in family law. At that time, the parties were residents of Virginia.

During Mr. Lloyd's conversations with Ms. Day, he told her that his highest priority was "[m]aintaining an intact family unit for his children and regaining the trust of his wife after their marital difficulties." He expressed his desire to have the Agreement done as soon as possible and that he was willing to agree to any terms. He told her that Ms. Niceta had said that reconciliation was only possible if they signed an Agreement. He also told her that "he knows all of the finances and [Ms. Niceta] knows little." In sharing his financial situation, Mr. Lloyd gave his attorneys copies of his father's trust documents that provided that he would receive, among other things, a home on Cape Cod upon his father's death.

A draft Agreement circulated by Ms. Niceta's attorneys contained a "lump sum" clause that stated that if Mr. Lloyd engaged in inappropriate sexual behavior he would pay to Ms. Niceta $5 million. Mr. Lloyd advised Ms. Day that he wanted to increase the "lump sum" clause from $5 million to $7 million, as a "showing of his good faith" toward his wife.¹ Ms. Day explained: "He wanted more money put on it because that would make it that much more clear that he really wouldn't engage in those behaviors again[.] ... That's why he wanted the money to be higher."

The parties and their attorneys met together on two occasions to negotiate the terms of the Agreement. Before the first meeting, Ms. Day had an hour-long telephone conversation with Mr. Lloyd in which she shared her edits and concerns regarding the draft the parties were working from, and he provided comments.

The first meeting of the parties and their attorneys occurred on June 16, 2015, and lasted more than four hours, during which they reviewed the first draft of the agreement, line by line. After the meeting, Ms. Day sent Mr. Lloyd a revised draft. In advance of their second meeting, he provided comments to her on the revised draft. The second meeting occurred a month after the first, during which the parties and their attorneys reviewed the revised draft line by line. That meeting lasted more than six hours. Mr. Lloyd provided information at that meeting that, among other things, his father's estate was valued at about $50 million and that he expected to receive, after taxes, about $12 million. At that time, his father was 78, was attended to by an aide, and was in very poor health. At trial, Mr. Lloyd admitted that both of his attorneys advised him against signing the Agreement, and in particular, they opposed the increase in the lump sum payment from $5 million to $7 million.

By August 2015, Ms. Niceta and Mr. Lloyd had bought a new home in Chevy Chase, Maryland and began living together again as a family, had enrolled the children in a new school, were vacationing and spending time together, and were continuing the effort of reconciliation and finalizing the post-nuptial agreement.² To this end, Mr. Lloyd had sold his car that he had used with his paramour; followed through with his earlier plans to get a vasectomy ; and took steps to convert to Catholicism, which was Ms. Niceta's faith. The parties continued meeting with various marriage counselors.

On September 18, 2015, the parties executed a 25-page "Marital Agreement", which resolved certain issues in the event of a separation and divorce. The Agreement began by naming the parties and their two children. The Agreement then states:

WHEREAS, the parties do not contemplate a suit for divorce at this time, but instead remain desirous of continuing the marriage. However, by this Agreement the parties do resolve certain rights regarding equitable distribution as more fully set forth herein;

WHEREAS, Husband committed adultery with [his paramour], which was discovered by Wife on June 2, 2014. The parties acknowledge that Husband's adultery is in complete contravention of their marriage, and that Wife is working on forgiving the Husband for such adultery. As more fully set forth below, Husband affirms that he shall not have any further contact, including but not limited to: in-person meetings, emails, text messages, letters, and telephone calls, with [his paramour] in the future; he shall not initiate or engage in any Inappropriate and/or Immoral Conduct as defined in Paragraph 10(A)(3) herein with [his paramour] or any other party outside of the marriage of the parties similar to the relationship he engaged in with [his paramour]; and he shall not engage in intentional viewing of pornographic or sexually explicit pictures and videos for so long as the parties remain married;

WHEREAS, whether or not the parties reconcile, each party wants to enter into this Agreement. The parties desire to settle by agreement certain of their rights, interests, and obligations between them and to resolve claims or demands each might have against the other now and in the future as to those provisions set forth below, and each party is entering this Agreement voluntarily and by his or her own free will and choice.

WHEREAS, the parties contemplate that this Agreement will be offered in a court of competent jurisdiction in which their rights and obligations may be decided at a later time as a partial property settlement agreement, in the place of any court determined resolution of the matters that are expressly set forth in this Agreement.

(Emphasis added.) The Agreement, which has a severability...