Rayman v. Rayman

• Decision Date: 30 March 2021
• Docket Number: No. 0048,0048
• Citation: Rayman v. Rayman, No. 0048 (Md. App. Mar 30, 2021)
• Parties: JOSEPH G. RAYMAN, III v. WAYNE D. RAYMAN
• Court: Maryland Court of Appeals

JOSEPH G. RAYMAN, III v. WAYNE D. RAYMAN

No. 0048

COURT OF SPECIAL APPEALS OF MARYLAND

September Term, 2019

March 30, 2021

Circuit Court for Harford County

Case No. 12-C-15-002592

UNREPORTED

Beachley, Gould, Zarnoch, Robert A. (Senior Judge, Specially Assigned), JJ.

Opinion by Gould, J.

*This is an unreported opinion, and it may not be cited in any paper, brief, motion, or other document filed in this Court or any other Maryland Court as either precedent within the rule of stare decisis or as persuasive authority. Md. Rule 1-104.

This intrafamily dispute involves the disposition of various assets upon the death of Mary S. Rayman, the matriarch of the Rayman family. According to Mary's¹ son, Wayne, his nephew, Joe III, improperly distributed funds from various bank accounts and death benefit proceeds from a life insurance policy on Mary's life. After a five-day bench trial, the Circuit Court for Harford County found in Wayne's favor on all but one of the issues and entered judgment against Joe III. Joe III appealed, and Wayne cross-appealed.

Finding no reversible error, we affirm the judgment of the circuit court, with one exception. Because it appears that the court double counted certain payments taken by Joe III in fashioning its relief in favor of Wayne, we remand for the limited purpose of correcting the judgment to ensure that no payment is accounted for more than once.

BACKGROUND

To better understand the underlying facts and analyze them in their proper context, we have organized our background discussion around the specific assets at issue in this appeal. The briefs of the parties include much information about events and facts that, given the circuit court's resolution and the standard of review we must apply, are extraneous to the issues at hand. We will concentrate on the facts and issues on which this appeal turns, beginning with the relationships among the various people involved in the underlying transactions and events.

THE RAYMAN FAMILY TREE

Joseph G. Rayman, Sr. ("Joe Sr."), the patriarch of the family, died in 1987. His widow and matriarch of the family, Mary Rayman, died on April 14, 2014.

Mary and Joe Sr. had two sons, Joseph G. Rayman ("Joe Jr.") and appellee Wayne Rayman.

Joe Jr. and his wife, Ilene Nancy ("Nancy") had two sons, appellant Joseph G. Rayman III ("Joe III") and John Rayman.

Joe Jr. died in 2006.

THE FALLSTON BUILDING

Prior to Joe Sr.'s death, Joe Sr., Joe Jr., and Wayne were partners in the Fallston Building Partnership (the "Partnership"). The Partnership was in the business of owning, renting, and maintaining real property in Fallston, Maryland, including a building known as the Fallston Building. Each partner held a one-third interest in the Partnership.

After Joe Sr. died, his interest in the Partnership passed to his widow, Mary. Upon Joe Jr.'s death, his interest passed to his widow, Nancy. Thus, after Joe Jr.'s death in 2006, the three partners were Mary, Nancy, and Wayne.

Mary wanted the Partnership to pass to the next generation, that is, to Joe III and John. To accomplish this, Mary convinced Wayne to sell his interest to John or Joe III. In October 2007, the partners converted the Partnership into a limited liability company called Fallston Building, LLC (the "Fallston LLC"), with each partner acquiring an equal interest in it. Simultaneously with that conversion, Mary, Nancy, and Wayne agreed toassign their membership rights in the Fallston LLC, with the intended result of Joe III and John becoming the sole members.

Specifically, Wayne sold his interest to John for $345,666. Mary purported to sell her interest to Joe III for that same amount. Nancy gifted her interest to Joe III and John.²

As a result of these transactions, Joe III and John each owned 50 percent of the membership interests in the Fallston LLC.

Wayne felt duped by the fact that, the purchase price of $345,666 notwithstanding, Mary gifted her interest to Joe III. Wayne claimed that he only agreed to sell his interest for that price because he understood that Mary's revocable trust—described in detail below and of which Wayne became a beneficiary on Mary's death—would be paid $345,666 by Joe III for Mary's interest. This transaction was the subject of the claim asserted by Wayne that the court rejected, and is the subject of Wayne's cross-appeal.

THE VOYA POLICY

In 1979, a life insurance policy—referred to as the "Voya Policy"—on Mary's life was purchased by Joe Jr. and Wayne, and both Joe Jr. and Wayne were named as equal co-beneficiaries. As noted above, Joe Jr. pre-deceased Mary by approximately eight years, leaving Wayne as the sole beneficiary. Joe Jr.'s estate never asserted any rights to the Voya Policy. After Mary died, Joe III filed a claim for the death benefits. The insurancecompany paid the claim in the amount of $100,217.25, of which Joe III sent 50 percent to Wayne, and kept the other 50 percent for himself and John. The insurance company later took the position that all of the insurance proceeds should have been paid only to Wayne, as the sole beneficiary.

The circuit court ordered Joe III to distribute all of the proceeds to Wayne, the sole surviving beneficiary, and awarded Wayne prejudgment interest as well. On that basis, the court entered judgment against Joe III in Wayne's favor for $50,217.25, with prejudgment interest in the amount of $13,909.49. This ruling is one of the issues raised by Joe III in his appeal.

WELLS FARGO ACCOUNT-TITLED IN THE NAMES

OF JOE III AND WAYNE, AS TENANTS IN COMMON

In 2008, Joe III opened a Wells Fargo bank account in his and Wayne's names, as tenants in common (the "First Wells Fargo Account"). Joe III contended that John was also an owner of this account, which was created to provide a mechanism for Joe III, John, and Wayne to contribute to the cost of Mary's long term health care. Joe III maintained that John was not named on the account as an owner because the bank only permitted two owners to be listed, but that John was considered an owner, nevertheless. Joe III also asserted, and Wayne did not contest, that only the Fallston LLC contributed funds to this account.

The court determined that the balance of the account--$83,056--should be split evenly between its two owners, Joe III and Wayne. This ruling is one of the issues raised by Joe III in his appeal.

WELLS FARGO ACCOUNT-TITLED

IN THE NAME OF THE MARY S. RAYMAN REVOCABLE TRUST

On June 14, 1994, Mary established The Mary S. Rayman Revocable Trust (the "Trust"). She was the initial trustee and beneficiary of the Trust with virtually unfettered discretion over the assets of the Trust, and Wayne and Joe Jr. were the successor trustees and beneficiaries.

Article 4.1.1 of the Trust provided that upon the death of Mary, distributions would be made as follows:

The principal and accumulated income then in the hands of the Trustee shall [be] divided into as many shares as there are then living children of the Settlor plus deceased children of the Settlor whose descendants shall have survived the Settlor, and the Trustee shall distribute one such equal share to each then-living child of the Settlor, free and clear of the trust, and one share to the then living descendants of a deceased child of the Settlor, per stirpes³ and not per capita. The children of the Settler who are now living are JOSEPH G. RAYMAN, JR. and WAYNE RAYMAN.

Mary amended the Trust in May 2006 and then again in February 2014. As a result of the latter change, Joe III was the sole trustee when Mary died.⁴

As a beneficiary of the Trust after Mary's death, Wayne took issue with two payments Joe III made to himself out of a Wells Fargo account belonging to the Trust (the "Second Wells Fargo Account"). The first was a payment described either as a "trustee executor" fee or a "commission" in the amount of $25,557 that Joe III purportedly took as compensation for serving as the trustee. The second was a $30,000 "holdback" that Joe III purportedly set aside in his personal bank account to pay for expenses associated with fixing up and selling a condominium owned by the Trust.⁵ The court agreed with Wayne that both payments were unsubstantiated and ordered Joe III to return those monies to the Trust and then disburse 50 percent of the Second Wells Fargo Account to Wayne. Joe III argues on appeal that the court erred in disallowing these payments.⁶

THE M&T BANK ACCOUNT

The Trust also had an account with M&T Bank (the "M&T Account"). The bank statement admitted into evidence identifies the Trust as the owner of the account. At thetime of the trial, the most recent bank statement in evidence was dated December 19, 2016 and showed a balance of $1,942.05. Based on that statement, the court ordered that Wayne was entitled to $971.02 from this account. Joe III argues on appeal that the court improperly relied on this statement, which was more than two years old, instead of the "real time" balance of $873.25 that he obtained "on his cell phone" during the trial.

THE LITIGATION

Joe III and Wayne were unable to resolve their differences regarding the distribution of the foregoing assets. As a result, in September 2015, Wayne filed suit against Joe III for an accounting and to remove him as trustee of the Trust. Wayne later amended the complaint, and sued Joe III for trover and conversion, misrepresentation, concealment, negligent misrepresentation, breach of fiduciary duty, and unjust enrichment. Wayne alleged that he was entitled to all of the proceeds from the Voya Policy, and that Joe III otherwise misappropriated and/or failed to properly make distributions of bank accounts and funds belonging to the Trust. Wayne also alleged that Joe III failed to pay the Trust for his acquisition of Mary's interest in the Fallston LLC.

In response, Joe III argued that Wayne lacked standing to make his claims, that the circuit court lacked jurisdiction to hear Wayne's claims, and that not only did he not short Wayne of any payments, but Wayne received more than his proper...