Turner v. Turner

• Decision Date: 30 September 2002
• Docket Number: No. 01871,01871
• Citation: 809 A.2d 18,147 Md. App. 350
• Parties: E. Diane TURNER v. Donald P. TURNER, et al.
• Court: Court of Special Appeals of Maryland

809 A.2d 18

147 Md. App. 350

E. Diane TURNER v. Donald P. TURNER, et al.

No. 01871, Sept. Term, 2000.

Court of Special Appeals of Maryland.

September 30, 2002.

Leslie L. Gladstone, Baltimore, for appellant.

T. Bruce Hanley, Towson, for appellee, Donald Turner (T. Allen Mott and Cowie & Mott, P.A., Baltimore, on the brief, for appellee, Stage Lighting, Inc.).

Argued before HOLLANDER, JOHN J. BISHOP and JAMES S. GETTY (Retired, Specially Assigned) JJ. HOLLANDER, Judge.

This appeal arises from two law suits instituted by E. Diane Turner, appellant, in the Circuit Court for Baltimore County. One involves the dissolution of the marriage of appellant and Donald Turner, appellee. The other concerns Mr. Turner and the family business, Baltimore Stage Lighting, Inc. ("BSL" or the "Company"), appellee,¹ a close corporation wholly owned by the Turners.

In a sense, the Turners epitomize the rags to riches American dream. At the outset of their lengthy marriage, the Turners were of modest means. Then, they combined their enterprising spirit with creativity and determination to create BSL, a very profitable business. By 1996, BSL had gross earnings of $3,000,000 and approximately 25 employees. In the litigation at issue here, Ms. Turner, a minority shareholder of BSL, sought equal ownership and control of the Company.

The circuit court conducted two separate trials, one in November 1999 and the other in March 2000, "in a consolidated fashion." By agreement, the evidence adduced at one trial was considered as evidence in the other case.

Throughout the duration of these cases, the circuit court issued numerous written opinions, including three that are of particular importance here. The first, issued just after the divorce trial, is reflected in a seven-page Order docketed December 16, 1999. It addressed the matters of temporary alimony pending final disposition of both cases, as well as attorneys' fees. The second, issued on April 17, 2000, is a Memorandum Opinion addressing the corporate claims (the "Corporate Opinion"). The third is a Memorandum Opinion of June 9, 2000, regarding the divorce case (the "Divorce Opinion"). The court's rulings in the Divorce Opinion are reflected in the Judgment of Absolute Divorce docketed on July 19, 2000, by which appellant was granted a divorce on the ground of adultery, ending her marriage to appellee of more than thirty years.²

Unhappy with the court's resolution of both cases, Ms. Turner noted this appeal, in which she presents us with a dozen issues. Appellees have moved to dismiss the appeal, claiming that Ms. Turner cannot pursue any of her claims because she accepted payment of the monetary award in the divorce case.

We have rephrased slightly and reordered appellant's twelve questions, as follows:

I. Did the trial court err in attributing $35,000 in annual income to appellant in its determination of alimony?

II. Did the trial court err or abuse its discretion in awarding appellant $2,000 per month in indefinite alimony?

III. In awarding alimony, did the trial court err in failing to consider the parties' agreement of August 1997?

IV. Did the trial court err in denying appellant's claim for contribution with respect to the mortgage payments for the marital home?

V. Did the trial court err in finding a dissipation by appellee of only $112,000?

VI. Did the trial court err in its award of counsel fees to appellant and in construing the alimony pendente lite as a partial contribution to counsel fees?

VII. Did the trial court err in denying appellant's request for an accounting as a shareholder of BSL?

VIII. Did the trial court err in denying appellant's claims for corporate relief based on the doctrine of "unclean hands"?

IX. Did the trial court err in failing to grant appellant ownership of fifty percent of BSL?

X. Did the trial court err in refusing to disregard the corporate entity?

XI. Did the trial court err in regard to appellant's claim for wrongful discharge by BSL?

XII. Did the trial court err in limiting appellant's right to inspect and copy BSL documents?

For the reasons that follow, we shall deny appellees' Motion to Dismiss. With respect to appellant's contentions, we shall affirm in part, reverse in part, and remand for further proceedings.³

FACTUAL AND PROCEDURAL SUMMARY

The divorce case was filed on July 15, 1997, initially on the ground of desertion. It was later amended to allege adultery. The corporate suit, filed on the same date, was also amended. The "Second Amended Complaint for Injunction and Other Relief," at issue here, was filed against both BSL and Mr. Turner and contains twelve counts.⁴ Ms. Turner alleged, inter alia, that Mr. Turner misappropriated corporate funds to finance his drug habit, for which she sought various remedies in her capacities as stockholder and employee. She also claimed an equitable ownership of a 50% interest in BSL.

Evidence relating to the divorce case was heard over several days in November 1999, with closing arguments presented in April 2000. Evidence as to the corporate case was presented in March 2000. As we noted, the evidence from one trial was considered as having been admitted at the other trial. After the trials, the court issued a formal Order of Consolidation, dated June 5, 2000, consolidating the cases "for all purposes." In light of the consolidated format, our factual summary is derived from evidence adduced at both trials.

The Turners met in high school and were married on October 28, 1966, when Ms. Turner was eighteen years of age and Mr. Turner was nineteen years old. Their only child, Paul, was born in May 1967. Early in the marriage, Ms. Turner held various jobs with companies like McCrory's, while Mr. Turner was in the armed services and then began working at Burrough's. After thirty-one years of marriage, the couple separated in June 1997. At the time of the trials, they were in their early 50's, and generally in good health. Appellant, however, has had a history of sight problems dating from childhood, and has been a heavy cigarette smoker since she was a teenager, consuming three packs a day.

Appellee's interest in lighting began when he was a youngster, but his hobby did not generate income until 1970, when he created a "light box" that he sold. While working full-time at another job, Mr. Turner devoted his evenings to the development of a lighting business. As the interest in concert lighting generally escalated, the business began to prosper. By 1974, it had grown so much that appellee began to work for it on a full-time basis. The business evolved into BSL, which incorporated on August 6, 1976.

Although Mr. Turner became the president of BSL, it is undisputed that Ms. Turner was actively involved in BSL from its inception, and worked full-time in the business for many years. Indeed, she initially performed many of the same tasks as her husband, such as loading equipment and setting up stage lighting. Over the years, however, she became increasingly involved in management and finance, while appellee pursued technical matters. By 1994, appellant began to handle many of her financial responsibilities from home.

While both parties devoted considerable time and effort to BSL, appellee was paid a significantly higher salary than appellant. Moreover, Mr. Turner owned 65 shares of BSL stock, while only 10 shares were titled to appellant. Ms. Turner testified that she periodically discussed with appellee her desire to hold title to an amount of BSL stock equal to his. She claimed that appellee assured her that they had an "equal" interest in BSL, and "it didn't make any difference" how the stock was titled. Although Mr. Turner did not specifically recall such conversations, he did not dispute that he may have made such remarks.

As BSL prospered, the parties enjoyed a standard of living commensurate with the Company's success. The parties purchased their marital home in Mt. Airy in 1991 for the sum of $349,000. Thereafter, they made substantial improvements to it, at a cost of about $223,650. The fair market value of the home was in dispute at trial, with expert valuations ranging from $380,000 to $475,000.

Appellant claimed that she and her husband devised a financial plan in 1996, by which they intended to pay off the mortgage on their home by January 2000, so that they could reduce their financial burden and spend more time on recreation. To accomplish their objective, they made additional payments of mortgage principal each month.

Ms. Turner recalled that problems in the marriage surfaced in 1995, when she noticed that Mr. Turner was coming home less frequently. By 1996, she suspected that he was involved with drugs and other women. Ms. Turner's concerns were confirmed in January 1997, when she discovered that appellee was using cocaine and had a relationship with another woman. Appellant also learned on June 9, 1997, that appellee had been removing cash from BSL. Soon afterwards, the parties separated.

On August 10, 1997, the Turners executed an Agreement providing for the payment to appellant of a weekly salary from BSL of $2500, and a reduction of Mr. Turner's salary to the same amount, $2500 per week. They also agreed to the payment of equal Company bonuses. Although BSL apparently paid for appellee's car, insurance, gas, and cellular telephone, appellant did not receive comparable benefits. Further, the Agreement contemplated Ms. Turner's continued involvement in BSL, because she was to have access to certain financial records of the Company in order to complete the Company's tax returns for 1994, 1995, and 1996.

Following a pendente lite hearing before the master in December 1998, the terms of the Agreement were, in effect, incorporated into an Order dated December 11, 1998.⁵ Mr. Turner was ordered to pay $2756.61 per week in alimony, effective August 1, 1998, which represented $2500 per week in alimony, comparable to the salary expressed in the August 1997 Agreement, plus...