Meese v. Meese

• Decision Date: 26 June 2013
• Docket Number: No. 827,Sept. Term, 2011.,827
• Citation: 69 A.3d 53,212 Md.App. 359
• Parties: Megan S. MEESE et al. v. Tim MEESE.
• Court: Court of Special Appeals of Maryland

212 Md.App. 359

69 A.3d 53

Megan S. MEESE et al.

v.Tim MEESE.

No. 827, Sept. Term, 2011.

Court of Special Appeals of Maryland.

June 26, 2013.

Brian M. Barke(James S. Maxwell, Maxwell & Barke, LLC, on the brief), Rockville, MD, for Appellant.

Stewart Andrew Sutton, Germantown, MD, for Appellee.

Panel: KEHOE, WATTS and ARRIE W. DAVIS, (Retired, Specially Assigned), JJ.

DAVIS, J.

Megan S. Meese, appellant, and Timothy Meese, appellee, have a long and sad history of litigation that began with the break-up of their marriage and subsequent divorce in 2007.They are before us for the fourth time on appeal from a decision of the Circuit Court for Montgomery County granting summary judgment in favor of Timothy and against both Megan and Charles Anthony Armstrong Miller, Trustee of the 3316 Weller Road Trust (the Trustee), also an appellant herein, in an action to vacate the May 5, 2005 transfer of real property by Megan to the 3316 Weller Road Irrevocable Trust (the Trust).¹

On April 11, 2008, Timothy filed a complaint against both Megan and the Trustee seeking to vacate Megan's transfer of property to the Trust on the ground that it was a fraudulent conveyance.The action was stayed pending the outcome of a dispute in the parties' divorce action over marital property and a monetary award.On March 17, 2011, the trial court rendered a final ruling in the divorce action and lifted the stay in the action seeking to vacate the conveyance.Thereafter, Timothy filed a motion for summary judgment with respect to his complaint to vacate the transfer of property, which both Megan and the Trustee opposed.After a hearing on May 10, [212 Md.App. 362]2011, the circuit court granted Timothy's motion for summary judgment and this timely appeal followed.

ISSUES PRESENTED

Megan and the Trustee present the following two issues for our consideration:

I.Whether the trial court erred in finding that there were no genuine issues of material fact in granting summary judgment in a fraudulent conveyance action where the underlying transaction involved the return of a family home from a daughter to her father, where the original transfer of the home from the father was not at arm's length, was for less than fair market value, where the father had been given a right to reside in the home for life, where the father had been threatened with eviction by his son-in-law, and where the daughter's position in the fraudulent conveyance action was that the return of the home to her father was not gratuitous, but was in resolution of her father's claim that he was entitled to the return of the home because his original transfer was void and/or voidable under the circumstances; and,

II.Whether a finding of “dissipation” of a marital asset in a divorce case requires a finding of “fraudulent conveyance” against the recipient transferee of that marital asset in a subsequent lawsuit by the non-transferring spouse against the transferee who was not a party to the divorce.

For the reasons set forth below, we shall affirm.

FACTUAL AND PROCEDURAL BACKGROUND

The factual and procedural background of this case was set forth fully in our most recent unreported opinion, Meese v. Meese,No. 499, Sept. Term 2011(filed June 18, 2012), but for ease of reference, we shall include a brief review of the facts here.Timothy and Megan Meese were married on August 1, 1998 and, shortly thereafter, moved into a home owned by Megan's father, Charles H. Miller, and located on Weller Road in Silver Spring.Miller had owned the home since the 1970s and Megan had lived there as a child.Timothy and Megan lived with Charles in his home rent-free.

When Charles retired, he entered into an agreement with Megan and Timothy pursuant to which they would purchase the home from him.Megan and Timothy assumed the remaining mortgage on the home and signed a balloon note for $30,000, in favor of Charles, which was to come due upon the first to occur of (1) the sale of the home; (2) sixty days after Charles' death; or (3)November 29, 2015.The balloon note did not bear interest and was guaranteed by Megan and Timothy with the home as collateral.The balloon note and assumed mortgage were valued at approximately $150,000, which was about $30,000 less than the appraised value of the home at the time of the transfer.Because Charles' mortgage contained a due-on-sale clause, the transfer of the home was made solely in Megan's name.²In exchange, Charles would live in the home, rent-free, for the rest of his life and, if the home was sold prior to his death, the couple agreed to provide substitute rent-free housing for him until his death.³

Megan and Timothy's relationship deteriorated and eventually Megan told Timothy she wanted a divorce.Timothy told Charles that he needed to look for a new place to live and Charles then realized that the home sale transaction did not provide him with a life estate in the home.In an attempt to ensure that Charles would be able to live in the home until his death, Megan transferred title of the home to the Trust without consideration.Charles was the beneficiary of the Trust and, upon his death, the Trust would cease to exist and the property would revert to Megan in fee simple.

Subsequently, Timothy filed in the Circuit Court for Montgomery County a complaint for absolute divorce.The parties agreed to joint custody of their children and to split all marital property evenly, with the exception of the home.Megan took the position that the home was not marital property because it was a gift from her father to her.Timothy took the position that the home was marital property and that the agreement concerning the home showed it was a sale and not a gift to Megan.

After hearing argument, the circuit court delivered an oral ruling in which it declined to determine whether the home was marital property and further declined to make a monetary award or award attorney's fees to either party.Timothy filed an appeal and, in an unreported opinion, Meese v. Meese,No. 177, Sept. Term 2007(filed April 17, 2008), (“Meese I ”), we vacated the circuit court's order denying the monetary award and remanded for further proceedings.After hearings on remand, the circuit court determined that the home was not marital property, but rather a gift from Charles to Megan.Nevertheless, the court awarded Timothy a monetary award of $8,500, an amount which the court determined was equal to the present value of his portion of the balloon note.

Timothy filed a second appeal to this Court in which he argued that the home was marital property and that, by transferring the home to the Trust, Megan had intentionally dissipated the value of the home in order to prevent him from receiving a monetary award.Timothy asserted that he was entitled to a monetary award in line with the 50/50 split that he and Megan had agreed to for all other marital property.In our second unreported opinion, Meese v. Meese,No. 79, Sept. Term 2009(filed July 23, 2010)(“Meese II ”), we reversed, holding that the home was marital property, that the parties' agreement was a contract for the sale of the home that was supported by consideration and that Megan's transfer of the property to the Trust amounted to dissipation as a matter of law.In light of our decision to reverse the circuit court's determination that the property was non-marital, we vacated the monetary award and the denial of attorney's fees.Again, we remanded for further proceedings.

After a hearing on remand, the circuit court granted Timothy a monetary award in the amount of $30,000, but denied his request for attorney's fees.Timothy again appealed to this Court on the ground that the monetary award was inequitable.In an unreported opinion, Meese v. Meese,No. 499, Sept. Term 2011(filed on June 18, 2012)(“Meese III ”), we held that, in making the monetary award, the circuit court properly evaluated the required factors and did not abuse its discretion in granting Timothy a monetary award of $30,000.We also held that the circuit court was legally correct in determining that neither party was entitled to attorney's fees.

On April 11, 2008, while the divorce case was being litigated, Timothy filed a complaint against Megan and the Trustee in which he sought to nullify Megan's fraudulent conveyance of the home to the Trust.Timothy claimed that Megan transferred title to the house to the Trust “with the intent to hinder, delay, or defraud” him, and that the transfer was made without any consideration, at a time when Megan was “legally insolvent or rendered insolvent by the conveyance.”That proceeding was stayed until March 17, 2011.Shortly thereafter, Timothy filed a motion for summary judgment in which he argued that Megan's transfer of the home to the Trust was a fraudulent conveyance because the property was conveyed for no consideration at a time when Megan was insolvent.He pointed out that this Court had determined that the home was marital property, that Megan had dissipated that asset by transferring it to the Trust and that she had done so with the intent of defrauding Timothy as a creditor.Timothy asserted that, based on prior court determinations that Megan had dissipated marital property, she was collaterally estopped from re-litigating the issue that she had fraudulently conveyed the property to prevent him from enforcing his monetary award as a judgment lien against the property.

Megan opposed Timothy's motion for summary judgment, arguing that there was a factual dispute regarding whether she was insolvent at the time of the May 5, 2005 transfer of the property and whether there was fair consideration for the transfer.In addition, she asserted that Timothy had received all that he was entitled to receive in the divorce case, that he never requested that the transfer be set aside and that a finding of dissipation does not require that the transfer be set aside.

After a hearing on the motion, the circuit court...