MacIntire v. McKay

• Decision Date: 01 September 1987
• Docket Number: No. 971,971
• Citation: 539 A.2d 258,74 Md.App. 577
• Parties: Gould B. MacINTIRE v. Joyce L. McKAY. ,
• Court: Court of Special Appeals of Maryland

Page 577

74 Md.App. 577

539 A.2d 258

Gould B. MacINTIRE v. Joyce L. McKAY.

No. 971, Sept. Term, 1987.

Court of Special Appeals of Maryland.

April 6, 1988.

Susanne K. Henley (Legum & Henley, P.A., on the brief), Annapolis, for appellant.

Irvin J. Brodsky, Towson, for appellee.

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

MOYLAN, Judge.

The appellant, Gould B. MacIntire (Husband), and the appellee, Joyce L. McKay (Wife), were married in December 1976. Two years later, in December, 1978, the parties separated after the Husband discovered his Wife was having an adulterous affair. On July 15, 1985, an absolute divorce was granted to the Husband on the ground of the Wife's adultery. As part of that judgment of divorce, the court granted a monetary award to the Husband in the amount of $9,500. An appeal was filed by the Wife and a cross-appeal was filed by the Husband. In a per curiam opinion, we affirmed the judgment in part but vacated it in part, including the monetary award. McKay v. MacIntire, No. 1558, September Term, 1985, filed August 18, 1986.

On remand, in addition to making certain adjustments which are not in dispute on this appeal, the circuit court again granted the Husband a monetary award in the amount of $9,500. The circuit court arrived at the monetary award figure by placing a value on the marital property of $41,231 and then ruling that each of the parties was entitled to one-half of that figure. Of the total, $30,105 was in possession of the Wife and $11,126 was in possession of the Husband. To effect a fifty-fifty split, it would have been necessary for the court to order an award from the Wife in favor of the Husband of $9,490. The actual award was rounded off in the amount of $9,500.

The Husband has filed this appeal contesting the amount of the award as inadequate. The Husband contends that the trial judge abused his discretion in refusing to make an adjustment in the monetary award so as to reflect the Husband's far greater equitable interest in the marital home, which the parties owned as tenants by the entireties. He argues that this failure to use the monetary award to accomplish an equitable adjustment ignores "the broad remedial purpose of the Act 'to adjust the property interests of spouses fairly and equitably ... and to give careful consideration to both monetary and nonmonetary contributions by the spouses.' " Harper v. Harper, 294 Md. 54, 81, 448 A.2d 916 (1982).

By way of further developing that argument, the Husband argues that the court was clearly erroneous in treating his interest in the marital home (based on his contributions) as non-marital property, which is not available for equitable distribution through a monetary award under Md.Fam.Law Code Ann. § 8-205 (1984 & Supp.1987). Ordinarily, a determination that a significant interest in the marital home was the non-marital property of the husband would appear to be a determination in the husband's favor. In the unusual posture of this case, it worked a directly contrary result. Although the marital home which is the nub of this dispute is now titled to Husband and Wife equally as tenants in common, the Husband had made an overwhelmingly disproportionate equitable contribution to that property. Any determination, therefore, that operated to diminish the size of the marital property "pool" rendered it inadequate as a source from which a monetary award could accomplish the equitable adjustment contemplated by the Maryland law. In our earlier per curiam opinion in this case, we recognized that danger:

"While a monetary award 'is intended to compensate a spouse who either holds no title or holds title to less than an equitable portion of that property' (citations omitted) Nisos v. Nisos, 60 Md.App. 368, 386, 483 A.2d 97 (1984), we recognize that it does not allow a truly equitable distribution in cases such as the one sub judice, where both spouses hold title to property that is overwhelmingly the non-marital property of one of the spouses, because the award is limited to the amount of the marital property."

The Husband argues, alternatively, that if his interest in the marital home is not marital property and not subject to equitable distribution in a monetary award, the court should have determined that he is entitled to an equitable distribution of the proceeds from a sale of the property in the pending action for sale in lieu of partition.

The marital home which is the subject of the dispute as to the marital award was purchased by the Husband from his father in 1976, some six months prior to the parties' marriage. The home, known as 2 Luna Lane, in Severna Park had a fair market value at that time of $65,000. The Husband purchased the property from his father for $50,000. He gave his father a $43,000 first mortgage. In addition, he put a $6,000 downpayment on the home, obtained from the proceeds of a $12,000 second mortgage in favor of the Annapolis Bank and Trust Company. He also paid his father another $1,000.

Less than a year after the parties were married, as the Husband prepared to undergo surgery and treatment for Hodgkin's Disease, he signed a deed which titled the Luna Lane property in himself and his Wife as tenants by the entireties. The parties separated a year later. In the summer of 1981, the Husband's father released the mortgage he held on the Luna Lane property. The value of the mortgage at that time was $36,802.

Since only marital property is subject to equitable distribution through a monetary award, it is necessary that a court distinguish between marital and non-marital property. It is settled, however, that a single piece of property may be partly marital and partly non-marital. The source of the funds and not the way property is titled determines how the property is characterized. Thus, where a spouse contributes non-marital funds and the marital unit contributes marital funds to the purchase of property, a proportionate share of the property will be classified as marital and a proportionate share will be classified as non-marital, depending on each respective contribution. Harper v. Harper, supra.

In the first appeal of this case, we held that the circuit court erred when it determined the Husband's non-marital interest in the Luna Lane property. Including the value of the mortgage when released, which the circuit court found was a gift to the Husband from his father, we calculated the Husband's non-marital interest in the Luna Lane property as follows:

                $15,000.00  -  gift from father by reduction of sale price
                  1,000.00  -  paid prior to settlement as part of downpayment
                    607.63  -  interest acquired by making payments on
                               first mortgage prior to marriage
                    217.18  -  interest acquired by making payments on
                               second mortgage prior to marriage
                 36,802.00  -  gift from father by release of mortgage
                ----------
                $53,626.91
                

We determined that the Wife's non-marital interest in the property is $4,958, representing non-marital funds contributed to improve the property. We concluded, therefore, that the Husband's non-marital interest represented 82.5% of the total value of the property, that the Wife's non-marital interest represented 7.62% of the total value, and that the remainder represented the marital property interest. Accepting the circuit court's finding that the fair market value of the property on the date of divorce was $159,500, we determined that the marital...