Murray v. Murray

Citation190 Md. App. 553,989 A.2d 771
Decision Date24 February 2010
Docket NumberNo. 2432 September Term, 2007.,2432 September Term, 2007.
PartiesAnthony MURRAY v. Teresa MURRAY.
CourtCourt of Special Appeals of Maryland

Wm. Ray Ford, Camp Springs, MD, for Appellant.

Josue Pierre, Largo, MD, for Appellee.

Panel: JAMES R. EYLER., ZARNOCH and J. FREDERICK SHARER (Retired, Specially Assigned), JJ.

J. FREDERICK SHARER, Judge (Retired, Specially Assigned).

The parties to this appeal, appellant, Anthony Murray, and appellee, Teresa Murray, were divorced absolutely by judgment of the Circuit Court for Montgomery County, entered on September 19, 2007. Of primary concern in this appeal is the trial court's disposition of marital property, particularly its treatment of funds received by Teresa in settlement of an employment discrimination claim.

In his appeal, Anthony presents four questions for our consideration, which we have distilled and rephrased as:1

1. Whether the trial court erred in ruling that proceeds from Teresa's employment discrimination claim were not marital property.

2. Whether the trial court erred in its unequal division of the proceeds of the sale of the marital home.

For the reasons that follow, we shall vacate the judgment of the circuit court and remand this matter for further appropriate proceedings.

FACTS and PROCEEDINGS2

Anthony Murray and Teresa Murray (the plaintiff below) were married on May 20, 1998. They are the parents of two children, ages ten and four at the time of the trial.3 Both parties were employed: Teresa as an attorney, Anthony as a clerk with the Internal Revenue Service.

The litigation was initiated by Teresa's complaint for absolute or limited divorce on the ground of constructive desertion. Anthony answered and filed a counter-complaint alleging desertion. Ultimately, the parties stipulated, and the trial court found, that they had voluntarily lived separate and apart, without interruption, for 12 months prior to August 16, 2006. The divorce was granted on that ground.

1. The Employment Discrimination Settlement—Marital Property?

During the marriage, Teresa was employed as an attorney by O'Donoghue & O'Donoghue in Washington, D.C. Her employment with that law firm was terminated, by her employer, effective December 31, 2002. Thereafter, Teresa filed an employment discrimination suit against the law firm, and individual partners and employees of the firm, in the Superior Court of the District of Columbia. Her complaint was founded in alleged discriminatory and retaliatory practices by the firm and its employees, in violation of the District of Columbia Family and Medical Leave Act, as well as breach of contract. She sought damages for lost wages and salary, compensatory damages for claims under the District of Columbia Human Rights Act, consequential damages allowable under the Family and Medical Leave Act, and punitive damages.

Teresa's claims were resolved by the execution of a settlement agreement and general release, effective July 21, 2006 ("the settlement agreement"). Significant among the terms of the settlement agreement was the payment to Teresa of $550,000. The net proceeds of the settlement were paid to Teresa, after expenses of suit and counsel fees, in two installments—$425,000 within 14 days of July 21, 2006, and $125,000 on January 2, 2007. The record does not disclose the actual net amount paid to her, but the trial court found that, at the time of the August 15-16, 2007 merits divorce trial, Teresa had retained $274,000 of the settlement in the form of two $50,000 college savings plans and $174,000 in a bank account. Also, in the June 8, 2007 joint statement filed by the parties pursuant to Md. Rule 9-207, (stating that the parties were not in agreement as to whether the settlement proceeds were marital or non-marital property), Teresa asserted that she retained $300,000 from the settlement proceeds.

As to the settlement proceeds, in a written Opinion and Order dated September 19, 2007, the trial court found:

Testimony at trial indicated that, several months after the parties separated, [Teresa] settled a discrimination lawsuit she had filed against her former employer. The lawsuit was filed during the marriage, regarding alleged practices by the employee that occurred during the marriage. [Anthony] contends that the settlement ... is marital property. [Teresa] contends that the settlement does not specify which portion represents back pay, lost wages, pain and suffering, or other elements of damage. Therefore, she claims, it cannot be categorized as marital property.

There is nothing in the Marital Property Act indicating a legislative preference for the classification of property as marital, as opposed to non-marital. The party who asserts a marital interest in property bears the burden of producing evidence as to the identity and value of such property. Melrod v. Melrod, 83 Md.App. 180, 574 A.2d 1 (1990).

In Queen v. Queen, 308 Md. 574, 521 A.2d 320 (1987), appellant received a Workmen's Compensation Act award one year before divorce, for injuries sustained in an employment-related accident that occurred during the marriage. The Court of Appeals held that only the portion of the award representing loss of earning capacity during the marriage was marital property, subject to equitable distribution. In this regard, the [C]ourt said: "Due to the personal nature of the injuries giving rise to a permanent partial disability award, we cannot conclude that the General Assembly intended a noninjured spouse to share in the compensation for the injured spouse's loss of future earning capacity representing a time period beyond the dissolution of the marriage."

The court has examined the First Amended Complaint filed in the discrimination case; [Anthony] is not a party, and there was no claim for loss of consortium. The Settlement Agreement and General Release does not name [Anthony], nor delineate what the $550,000 represents, other than a settlement amount. Because it is [Anthony's] burden to identify and value the property he seeks to classify as marital, there is simply no credible evidence from which the court can conclude that this sum is marital property.

Standard of Review

Our review of a decision of a trial court sitting without a jury is governed by Md. Rule 8-131(c):

(c) Action tried without a jury. When an action has been tried without a jury, the appellate court will review the case on both the law and the evidence. It will not set aside the judgment of the trial court on the evidence unless clearly erroneous, and will give due regard to the opportunity of the trial court to judge the credibility of the witnesses.

"The deference shown to the trial court's factual findings under the clearly erroneous standard does not, of course, apply to legal conclusions." Karsenty v. Schoukroun, 406 Md. 469, 502, 959 A.2d 1147 (2008) (quoting Griffin v. Bierman, 403 Md. 186, 195, 941 A.2d 475 (2008)). "We, instead, review de novo the trial court's legal conclusions." Griffin, 403 Md. at 195, 941 A.2d 475. See also, Alston v. Alston, 331 Md. 496, 504, 629 A.2d 70 (1993) ("a trial court must exercise its discretion in accordance with correct legal standards.").

DISCUSSION

We start with the well-established proposition that only marital property is subject to the equitable distribution provisions of Md.Code (2006 Repl.Vol.), Family Law Article ("FL") §§ 8-201, et seq. Marital property is "all property, however titled, acquired by 1 or both parties during the marriage." FL § 8-201(e)(1).

Before this Court, Anthony renews the arguments he pressed below—that the entire proceeds from the settlement of Teresa's employment discrimination claims are marital property, and that the trial court erred in not including those funds in its identification of marital property subject to equitable distribution via a monetary award.

Three Significant Cases: Queen, Lowery, and Newborn

The question of whether all or part of employment discrimination and/or wrongful discharge settlement proceeds or awards, received by a spouse during the marriage, are marital property has not been addressed by our courts. Before our more extensive discussion of the analysis to be applied to the facts before us, we take time to summarize the three reported Maryland cases that bear upon that analysis: Queen v. Queen, 308 Md. 574, 521 A.2d 320 (1987), Lowery v. Lowery, 113 Md.App. 423, 688 A.2d 65 (1997), and Newborn v. Newborn, 133 Md.App. 64, 754 A.2d 476 (2000). It is those cases upon which appellant relies to support his contention that the settlement proceeds ought to have been found to be marital property. In each of those cases, the courts have taken up the status of workers' compensation and personal injury awards, vis a vis marital property.

David Queen, during his marriage, suffered a work-related injury for which he received, also during the marriage, a lump sum permanent partial disability settlement. The trial court determined the settlement proceeds to be marital property. The Court of Appeals undertook a review of decisions of other jurisdictions dealing with whether, and to what extent, workers' compensation benefits are marital property. After doing so, the Court observed:

In determining whether the permanent partial disability award at issue in this case is marital property "acquired" during the marriage, we consider not only the date of the award, but also the nature of the benefit which it represents.

308 Md. at 585, 521 A.2d 320.

The Court concluded, id. at 586-87, 521 A.2d 320:

[W]e hold that only the portion of the husband's award compensating for loss of earning capacity during the marriage is marital property subject to equitable distribution by the trial judge. Due to the personal nature of the injuries giving rise to a permanent partial disability award, we cannot conclude that the General Assembly intended a noninjured spouse to share in the compensation for the injured spouse's loss of future earning capacity representing a...

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