Prahinski v. Prahinski

• Citation: 75 Md.App. 113,540 A.2d 833
• Decision Date: 01 September 1987
• Docket Number: No. 1187,1187
• Parties: Leo PRAHINSKI v. Margaret E. PRAHINSKI. ,
• Court: Court of Special Appeals of Maryland

Page 113

75 Md.App. 113

540 A.2d 833

Leo PRAHINSKI v. Margaret E. PRAHINSKI.

No. 1187, Sept. Term, 1987.

Court of Special Appeals of Maryland.

May 6, 1988.

Cheryl Lynn Hepfer (Meehan, Kovach and Hepfer, P.A., on the brief), Upper Marlboro, for appellant.

Marvin E. Perlis, Silver Spring, for appellee.

Argued before MOYLAN, BLOOM and POLLITT, JJ.

BLOOM, Judge.

Leo Prahinski appeals from a judgment of the Circuit Court for Prince George's County severing the bonds of matrimony between him and appellee, Margaret Prahinski. Although the divorce aspect of the case was uncontested, appellant is aggrieved by those portions of the judgment that distributed certain marital property between the parties and granted a substantial monetary award in addition to indefinite alimony. Specifically, appellant contends:

1. The trial court erred in its valuation of the appellant's business.

2. The trial court erred in awarding indefinite alimony to appellee and in making that award the trial court failed to consider the required statutory factors.

3. The trial court erred in requiring that alimony payments begin after the payment of a monetary award representing the business value; and

4. The trial court erred in the distribution of marital assets and likewise failed to consider the required statutory factors.

In her brief, appellee presents us with a fifth issue. But since she failed to file a cross-appeal pursuant to Md. Rule 1012g, she may not raise this issue on appeal. See, Joseph H. Munson Co. v. Sec. of State, 294 Md. 160, 168, 448 A.2d 935 (1982), aff'd, 467 U.S. 947, 104 S.Ct. 2839, 81 L.Ed.2d 786 (1984). Consequently, we will address only those issues that were presented by appellant.

Background

The parties met as college students at the University of Maryland. They were married in 1965, at which time appellee who had completed her freshman year, decided to discontinue her education in order to maintain the family home and, eventually, to raise the parties' two children. ¹ Appellant completed his undergraduate studies and continued his education in law school. In 1971, appellant started his own law practice. Appellee worked with appellant in that practice; she was, as appellant acknowledged, legal secretary, office manager, and a "Gal Friday, doing anything and everything necessary. She was very helpful." Initially, appellant's practice was varied in that he handled negligence cases, estate and will work, some collection work, and domestic relations cases. As appellant testified, he "was dying for [the] Lawyer Referral Service to call with cases."

In 1974, appellant handled his first real estate settlement; by 1977 or 1978 real estate settlement work became a major portion of his practice. As that aspect of the practice grew, appellee's involvement in the practice also grew. Appellant testified that at the time of the trial his practice was probably 95 to 97% settlement work with the remaining percentage being wills work and the giving of legal advice to clients on a variety of matters.

In 1983, appellant became involved with another woman. The parties separated in March 1984. Appellee continued to work for appellant at his law office until October 1986, at which time appellant insisted that she leave the office because of the pending divorce litigation. During the separation, appellee remained in the family home while appellant resided in a house in Montgomery County.

Appellee filed for divorce on November 14, 1986. Hearings were held on July 1, 2, and 6, 1987. At the conclusion of the July 6 hearing, the court granted the parties an absolute divorce, holding the property disposition, monetary award, and alimony issues under advisement. By written order dated July 7, 1987, and filed July 10, 1987, the court incorporated its oral order of absolute divorce, provided for the distribution of marital assets, and granted a monetary award and indefinite alimony. It is from that order that this appeal was taken.

Business Evaluation

A major issue in this case is the evaluation of the husband's business. The court found it to be worth $300,000, which consisted entirely of goodwill since the tangible physical assets were worth less than the liens thereon and the business bank accounts were separately valued. The court granted appellee a monetary award of $150,000, specifically designated as one-half of the value of the business, payable, with interest, at the rate of $3,000 per month. Appellant's first, and principal, argument on appeal is that the evaluation and, therefore, the monetary award based thereon are erroneous.

The threshold consideration of the business evaluation issue is what is the nature of appellant's business. Appellant contends that his business is a law practice that specializes in real estate settlements; appellee contends that it is a title business. The trial court, agreeing with appellee, found appellant's business to be a title business and not a law practice, and valued it as such. We believe that finding to be clearly erroneous. Md. Rule 1086. On the basis of the evidence presented, appellant's business is unquestionably a law practice and not a title company.

A law practice specializing in real estate transactions and a title business are essentially similar in the functions they perform and the services they provide. Both examine land records and approve titles to real estate; both prepare deeds, mortgages and other documents deemed necessary or appropriate to effectuate transfers of title to realty and the securing of liens thereon; both conduct settlements and collect and disburse funds in connection with sales and mortgages of real estate; both either issue to, or obtain for, the purchaser or mortgagee title insurance. An attorney may conduct such business in his own name, as an attorney, or he may opt to do so as, and under the name of, a title company. A title company need not be owned by an attorney, but a title company may need to have an attorney on its staff or be associated with one, since, in certain Maryland counties, a deed, mortgage, or deed of trust cannot be recorded "unless it bears a certification that the instrument has been prepared by an attorney admitted to practice before the Court of Appeals, under his supervision, or by or on behalf of one of the parties named in the instrument." See, Md. Real Prop.Code Ann. § 3-104(f) (1988 Repl.Vol.). Whether operated as a law practice or title company, it would appear that the real estate settlement business can produce substantial income. ²

Despite the similarities, the practice of law, even one dedicated almost exclusively to real estate transactions, is not merely the operation of a title company, and a title company is not a law practice. The difference is not so much in the nature of the "finished product"--an insured title or mortgage--delivered to the client, but in the nature of the responsibility assumed by the provider, particularly in the eyes of the client. The client of the title company may expect no more than the finished product; the client of the attorney has every reason to expect and rely upon the attorney's professional expertise, advice and counsel in addition to the product he could obtain from a title company. The difference may be largely in the perception of the client, but it is that perception, and the professional reputation attached thereto, that would cause the client to choose an attorney rather than a title company to provide the service.

In the case sub judice, when appellant began his law practice in 1971, he held himself out to the public, as he continues to do, as "Leo F.X. Prahinski, Attorney at Law." According to his testimony, as his skills in conducting settlements grew realtors began to return to him for settlements. When asked why realtors returned, appellant testified that "they can count on me to help if a problem comes up in getting a case settled, and they bring [cases] to my office because they know [the transactions] will settle." Appellant further testified that he often gave legal advice at settlements and explained each party's obligation under the contracts and the law. Finally, appellant testified that he frequently gave legal advice to people, drafted wills, answered legal questions, occasionally handled a negligence case, and handled legal matters relating to real estate other than settlements. None of this evidence was contradicted; to a large extent it was corroborated.

Appellee relies heavily on the fact that much of the work done at the business was done by appellant's staff ³ rather than by appellant. That is not unusual in law practices, in many of which non-lawyers--student law clerks, paralegals, and secretaries--do much of the research and clerical work, which the attorney reviews and then adds his professional imprimatur to create a legal end product. According to the evidence, that is precisely what occurred in appellant's office. Appellant's staff did clerical work and initial research. Appellant, applying his professional judgment, would then review their work, conduct the settlement, and certify the settlement forms, pursuant to Md. Real Prop.Code Ann., § 3-104(f), thereby taking full professional responsibility for the work done by his staff as well as by himself.

The only evidence to the effect that appellant's business was a title business rather than a law practice came from appellee's expert witness. That witness, a certified public accountant, was accepted by the court as an expert in the field of accounting and appraising service businesses. The witness's expertise did not, however, include the classification of businesses. And since a title business and a law practice are both service businesses, with considerable similarity between them, the expert's testimony that appellant's business was a title and escrow business should be scrutinized carefully. In one sense, the witness was correct; the bulk of appellant's business or...