Maryland Cases September 17, 2020: Polis v. Polis

Case Description

Circuit Court for Charles County
Case No. C-08-FM-18-001271

UNREPORTED

Arthur, Gould, Sharer, J. Frederick (Senior Judge, Specially Assigned), JJ.

Opinion by Arthur, 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.

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On June 20, 2019, the Circuit Court for Charles County entered an order granting appellant Robert Polis ("Husband") an absolute divorce from appellee Karen Elaine Polis ("Wife"). The order distributed marital property and required Husband to pay rehabilitative alimony to Wife.

On appeal, Husband asserts that the court made erroneous findings of fact regarding whether certain property was marital or non-marital, the length of time that it would take for Wife to become self-supporting, and the circumstances that contributed to the estrangement of the parties. Husband also asserts that the court failed to consider the tax consequences of the distribution of property and exceeded its authority in setting terms for the transfer of his ownership interest in the marital home to Wife.

Although we shall not disturb any of the factual findings that are challenged on appeal, we shall vacate the order distributing property and remand for the court to make additional findings about whether certain assets were marital or non-marital. In light of those additional findings, the court may, if necessary, reevaluate the order. In addition, although we find no error in the findings supporting the award of alimony, we shall also vacate the alimony award. See St . Cyr v . St . Cyr , 228 Md. App. 163, 198 (2016) (the factors to be considered in granting a monetary award and alimony are so interrelated that '"when this Court vacates one such award, we often vacate the remaining awards for revaluation'") (quoting Turner v . Turner , 147 Md. App. 350, 400-01 (2002)).

In August 2018, Husband filed a complaint for absolute divorce based on a voluntary separation of two years. Wife filed a counterclaim for divorce on the same

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grounds and included a request for an award of alimony. Both parties requested that the court determine the value of marital property, order a division of the property, and grant a monetary award in their favor.

The parties submitted a joint statement of marital property, which included the marital home in Charles County, a home in Florida, several vehicles, and various retirement accounts. The parties disagreed about whether other items were marital property, including a bank account in Wife's name and a car that was purchased with funds from that account.

A trial began on May 14, 2019. We limit the presentation of facts to those necessary to resolve the issues on appeal.

A. History of the Marriage

The parties were married in 1991. They had two children, both of whom had reached adulthood by the time of trial. At the time of the trial in May 2019, Husband and Wife were both 51 years of age.

Wife entered the marriage with an associate degree in elementary education. Before giving birth to the children, she had worked full-time, first at a school and then in a doctor's office. Wife had intended eventually to earn her bachelor's degree and become a classroom teacher. Husband was employed as a car salesman.

Wife stopped working outside the home in 1996, when the parties' first child was born. For the next ten years, she served as the children's primary caregiver. She returned to work in the educational field in 2006, when a downturn in the car market had a negative impact on Husband's commission-based income. Husband encouraged Wife to

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go back to school and get her bachelor's degree, but according to Husband, Wife "refused" to do so.

At first, Wife worked "almost daily" as a substitute teacher for the Charles County public schools. She also held other part-time positions within the school system. In 2015, Wife was hired as a full-time instructional assistant. She continued to hold that position at the time of trial.

In 2009, Husband began taking college courses so that he could get out of the car business. In 2012, Husband earned a bachelor's degree in applied computer science with a minor in business administration and became employed as a software engineer.

At the end of March 2016, after 25 years of marriage, Husband told Wife that he was no longer in love with her and that he wanted a divorce. Wife proposed marriage counseling, but Husband refused, saying that nothing would change his mind. Husband moved out of the marital home and into a travel trailer located on the same property. Shortly thereafter, Husband purchased a home in Florida and traveled back and forth between Maryland and Florida. He moved to Florida in July 2016.

B . Estrangement of the Parties

According to Husband, the "major factor" that contributed to the estrangement of the parties was that Wife did not help to support the family financially. He was "not happy" when Wife quit her job to become a stay-at-home parent, because they needed the

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money from her employment. Husband did not want the "strain" and "anxiety" of being the sole source of the family's income. Husband and Wife had "periodic conversations that could turn into arguments" about Wife completing her degree and going back to work. When Wife returned to work, Husband believed that her income was insufficient, and he was frustrated that Wife "refused" to earn her bachelor's degree.

Wife acknowledged that the "number one" issue in the marriage was finances and that Husband wanted her to get her bachelor's degree as soon as possible. Wife did not feel that it was "practical" for her to go back to school early in the marriage, because they did not have a lot of money. After the children were born, Wife did not feel that she could succeed in school while taking care of the children and the house. Because Husband's earning potential was greater than hers, Wife suggested that he get his bachelor's degree first and that she would get her degree afterward. According to Wife, after she returned to full-time work, Husband "occasionally" mentioned that he wished that she could make more money and help with the bills, but Wife did not view it as a problem because they were making a "decent" amount of money and they "weren't wanting for anything."

Wife said that she was "shocked" when Husband told her that he wanted a divorce, because she "didn't have any idea that there was a problem." Wife believed that Husband had a girlfriend. She introduced a photograph of Husband that was posted on Facebook on August 15, 2016, less than a month after Husband moved to Florida, showing Husband holding hands with a woman to whom we shall refer as "L." Other

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photographs, posted on Facebook, showed Husband and L. together, with his arm around her. The parties' daughter received a Christmas card that was signed by Husband and L.

Husband stated that L. was a friend whom he had known for over 30 years, but he denied that L. was his girlfriend at the time he moved to Florida or that he moved to Florida to be closer to her. He explained that he wanted to live in Florida because all of his family members live there.

C . Wife's BB&T Account

During the marriage, Wife was the sole owner of a BB&T money market account. At the time of trial, that account had a balance of approximately $15,000. The parties asked the court to determine whether the account was marital or non-marital property.

It was undisputed that the BB&T account had been used to hold both marital and non-marital funds. Husband testified that he gave Wife $800 a month during the marriage, for a minimum of ten years, "for savings." Wife disputed that testimony, stating that Husband gave her $400 a month for only a "portion of those 10 years." There was no evidence of whether or how any of that money was spent, except that Wife agreed that the money was not used to pay bills.

At some point during the marriage, Wife's grandmother gave her $22,000, and Wife deposited half of that money into her BB&T account. An unspecified amount of the

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remainder of the $22,000 gift was deposited into a separate, jointly-owned, "investor's deposit account."

According to Wife, the $15,000 balance in the BB&T account was partially comprised of $11,000 of her grandmother's money. The remainder of the account balance, she said, was attributable to gifts and loans that Wife's parents gave her after the parties separated. On cross-examination, Wife agreed that statements from the BB&T account for the 12-month period before trial did not show any deposits of money from Wife's parents.

D. Wife's Car

During the marriage, a 2012 Hyundai Santa Fe was purchased, for Wife's use, for approximately $17,000. The car was titled in Wife's name. It had a value of approximately $7,600 at the time of trial.

According to Husband, the car was purchased, in full, with marital funds from Wife's BB&T account. Wife stated that only part of the purchase price came out of her BB&T account and that the primary source of the funds was the separate "investor's deposit" account that held another portion of the gift from Wife's grandmother. See supra n.2.

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E . Income and Earning Potential

At the time of trial, Husband was employed as a software engineer and was earning a salary of $102,000 a year. He explained that his current project would end in November 2019. According to Husband, there was a strong possibility that he would have to leave his current employment if he was not hired for another project.

Wife earned $22,198 a year as a full-time instructional assistant. She had started working toward her bachelor's degree in elementary education and had one more class to complete. In September 2019, she would begin a four-month unpaid student-teaching position. During that time, she would not be able to work as an instructional assistant. She would be qualified to be hired as a classroom teacher in January 2020, but because teaching positions were often unavailable in the middle of the school year, she predicted that she was more likely to begin teaching in the fall of 2020. The starting salary for full-time teachers holding a bachelor's degree was between $45,000 and $48,000 a year.

Wife explained that Charles County requires classroom teachers to earn a master's degree within seven years of the date of hire or to face termination. The starting salary for teachers holding a master's degree was $56,000. Wife expected that it would take six to seven years to earn her master's degree and that it would cost approximately $20,000.

F . Marital Home

Husband requested that the marital home be sold and that the proceeds be split evenly. Wife stated that she wanted to remain in the marital home.

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The marital home was subject to two liens: a $190,000 mortgage and a home equity line of credit with a balance of $44,000. Wife stated that she had spoken to a lending company and learned that she "barely" qualified for a $200,000 mortgage on her current salary. Wife said that she "should be able to refinance" the marital home if she were awarded alimony.

G. Court's Opinion and Order

On June 20, 2019, the court issued an opinion and order granting Husband an absolute divorce on the uncontested ground of a one-year separation. The court ordered Husband to pay alimony for a period of ten years: $1,500 a month for the first five years, and $1,000 a month for the remaining five years. In awarding alimony, the court considered the requirement that Wife earn a master's degree to maintain employment as a classroom teacher. In addition, the court found that the estrangement of the parties was attributable to Husband's desire "to conduct a new romantic relationship."

The court transferred the marital home to Wife, provided that if she was unable to refinance the loans (including the home equity line of credit) in her own name by

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December 2020, approximately 17 months after the issuance of the opinion, the home was to be immediately listed for sale. In case of a sale, Wife would retain all of the proceeds. Husband retained his interest in the home in Florida.

The court determined the value of undisputed marital property, including vehicles, appliances, and tools, and distributed those assets. The court ordered that Wife's car and the BB&T money market account would remain Wife's sole property. After considering the division of the marital property, the court declined to redistribute the funds in the parties' respective retirement accounts. The court then determined that, in light of the alimony award and the division of property, the payment of a monetary award was not warranted.

We shall include additional facts in the discussion as they become relevant.

Husband presents six questions for review, which we have consolidated and rephrased:

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1. Was the court clearly erroneous in finding that Wife's bank account and Wife's car were non-marital property?

2. Was the court clearly erroneous in finding that the estrangement of the parties was due to Husband's move to Florida to conduct a new romantic relationship?

3. Did the court err in failing to consider the tax consequences of the distribution of marital property?

4. Did the court lack the authority to give Wife 17 months to refinance the mortgage and home equity line of credit in her name?

5. Was the court clearly erroneous in finding that Wife would be required to earn a master's degree in education to maintain her employment?

"When an action has been tried without a jury, the appellate court will review the case on both the law and the evidence[,] . . . and will give due regard to the opportunity of the trial court to judge the credibility of the witnesses." Md. Rule 8-131(c). On

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questions involving marital property and alimony, we do not set aside the trial court's factual findings unless they are clearly erroneous. Solomon v . Solomon , 383 Md. 176, 196 (2004); Huntley v . Huntley , 229 Md. App. 484, 489 (2016). Factual findings are not clearly erroneous if they are supported by substantial evidence. Huntley , 229 Md. App. at 489.

We review the ultimate decision to grant a monetary award or to award alimony for abuse of discretion. Reynolds v . Reynolds , 216 Md. App. 205, 222 (2014). "Under that lenient standard, the ruling 'will not be reversed simply because the appellate court would not have made the same ruling.'" McAllister v . McAllister , 218 Md. App. 386, 400 (2014) (quoting North v . North , 102 Md. App. 1, 14 (1994)). "Instead, '[t]he decision under consideration has to be well removed from any center mark imagined by the reviewing court and beyond the fringe of what that court deems minimally acceptable.'" Id . (quoting North , 102 Md. App. at 14).

I. BB&T Account and Wife's Car

Husband contends that, because there was no dispute that marital funds were deposited into Wife's BB&T account, and because Wife failed to produce evidence showing that the balance of that account at the time of the divorce proceedings was

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directly traceable to a non-marital source, the court erred in finding that the BB&T account was non-marital property. Husband further contends that at least part of the purchase price of Wife's car came from the BB&T account that held commingled marital funds and therefore that the court erred in determining that Wife's car was non-marital property.

Our review of the record reveals that the circuit court did not clearly express a finding as to whether the BB&T account or Wife's car were marital or non-marital property. Consequently, we must vacate the court's order and remand to the circuit court for further findings.

Where a party in a divorce proceeding petitions for a monetary award, the court must engage in a three-step procedure. Reichert v . Hornbeck , 210 Md. App. 282, 361 (2013).

First, for each disputed item of property, the court must determine whether it is marital or non[-]marital. Second, the court must determine the value of all marital property. Third, the court must decide if the division of marital property according to title will be unfair; if so, the court may make a monetary award to rectify any inequity[.]

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Id . (quoting Innerbichler v . Innerbichler , 132 Md. App. 207, 228 (2000)) (statutory citations omitted).

"Failure to comply with the three-step process requires that any monetary award be vacated." Quinn v . Quinn , 83 Md. App. 460, 464 (1990).

In its written opinion, the court noted that the source of the $15,000 balance in the BB&T account was disputed and commented that "[t]here was very little evidence to determine where this money came from." Similarly, the court noted that Wife's car "may have been purchased with [Wife's] commingled inheritance money," but that it was "not clear by testimony or the evidence what the source of those funds were."

Although the court ultimately ordered that both the BB&T account and Wife's car would remain her sole property, it is not clear whether the court based its ruling on a finding that those assets were non-marital (as opposed to a finding that the assets were marital, but that they should be divided according to title). Accordingly, we shall remand the case to the circuit court to make those findings. See , e . g ., Grant v . Zich , 53 Md. App. 610, 616-17 (1983) (circuit court's failure to determine fully what was marital property requires remand). We cannot accurately evaluate the circuit court's ultimate decision unless we understand the precise factual predicate for the decision.

II. Circumstances Contributing to the Estrangement of the Parties

In considering a request for a monetary award or an award of alimony, a court must consider "the circumstances that contributed to the estrangement of the parties." See Md. Code (1984, 2019 Repl. Vol.), §§ 8-205(b)(4) and 11-106(b)(6) of the Family Law Article ("FL"). With respect to that factor, the court found that the Husband "left

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the marriage to conduct a new romantic relationship when he left to move to Florida in 2016." Husband contends that the court's finding was not supported by the evidence. We disagree.

"'If is any competent evidence to support the factual findings [of the trial court], those findings cannot be held to be clearly erroneous.'" Solomon v . Solomon , 383 Md. at 202 (quoting Fuge v . Fuge , 146 Md. App. 142, 180 (2002)). "'Competent evidence' is simply evidence that is reliable and admissible." Juliano v . State , 166 Md. App. 531, 540 (2006).

Wife testified that Husband wanted a divorce because he was not in love with her anymore. Wife was "shocked" because she had no idea that there was a problem in the marriage. Husband refused to participate in marital counseling. Within a few months after asking for a divorce, Husband bought a home in Florida and moved there. Less than a month after Husband moved to Florida, a photograph was posted on Facebook that showed Husband holding hands with L., a woman whom he knew before he married Wife. That photograph, as well as another taken later that depicted Husband with his arm around L., coupled with evidence that Husband and L. jointly signed a card to the parties' daughter, tended to establish that, within a relatively short time after the parties separated, Husband had become romantically involved with an old acquaintance. Accordingly, we conclude that the court was not clearly erroneous in finding that the parties became estranged because Husband wanted to become involved in a new romantic relationship.

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III. Tax Consequences

Husband contends that the court's distribution of marital assets was an abuse of discretion because most of the assets awarded to Wife were "tax free equity" while most of the assets awarded to him "would be highly taxed[.]" Wife contends that the issue was not preserved for appellate review because the court was not asked to make a tax analysis. We agree with Wife.

A court is not specifically required to consider tax consequences when making a monetary award or transferring property pursuant to FL § 8-205(b). Nonetheless, a court may consider "tax liabilities" as "'other factors' for purposes of distributing a marital property award," pursuant to FL § 8-205(b)(11), provided that "'they are immediate and specific or not speculative.'" Solomon v . Solomon , 383 Md. at 191 (citing Rosenberg v . Rosenberg , 64 Md. App. 487 (1985)). Husband presented no evidence and made no argument regarding immediate and specific tax consequences of the division of assets. Consequently, we shall not address it. See Md. Rule 8-131(a).

IV. Terms of the Transfer of Marital Home

Husband claims that the court exceeded its statutory authority in giving Wife until December 2020 to refinance the loans secured by the marital home. He observes that he

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will remain personally obligated on the loans until Wife refinances them (and perhaps longer, if she is unable to refinance them). We find it unnecessary to address the issue in depth, as we are vacating the judgment, including the terms of the transfer of ownership in property, and the issue may become moot upon remand.

We note, however, that, although FL § 8-205(a)(2)(iii)(1) allows a court to transfer one spouse's interest in a jointly-owned marital home to the other spouse "if the party to whom the real property is transferred obtains the release of the other party from any lien against the real property," the statute does not establish or limit the time for the release of liens. As a practical matter, to achieve Husband's release from any liens on the property, Wife would require a reasonable amount of time to obtain approval for financing in her own name, but it is not clear why the court determined that 17 months was reasonable in this case. Upon remand, assuming the issue is not then moot, the court may reconsider the terms of the transfer of Husband's ownership interest of the marital home.

V. Alimony

Husband asserts that the court ordered him to pay alimony for 10 years because of an erroneous finding that the Charles County public schools require classroom teachers to earn a master's degree within seven years of their date of hire to maintain their employment. Although Husband did not dispute Wife's testimony regarding the master's degree requirement at trial, he contends on appeal that the court's finding is

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"contradictory" to the job posting for an Early Childhood Teacher in the Charles County school system, which he admitted into evidence to show the availability of teaching positions. Specifically, Husband argues that the job posting does not mention that teachers hired with a bachelor's degree must obtain a master's degree within seven years of employment. Although we shall vacate the alimony award, we shall address the issue, as it may arise on remand.

The unrefuted testimony of Wife, who had worked for the Charles County public schools for 12 years, was competent evidence to support the finding that classroom teachers hired with a bachelor's degree are required to earn a master's degree within seven years after they are hired to maintain their employment. In addressing Wife's claim for alimony, the court expressly accepted Wife's testimony, and we defer to the trial court's credibility determinations. Md. Rule 8-131(c).

Furthermore, we are unpersuaded that Wife's testimony is contradicted by the job posting relied on by Husband. As an initial matter, it is not clear that the job posting was germane, as it specifies the educational qualifications for a candidate for an "Early Childhood Teacher." Wife was working toward a degree in elementary education, not early childhood education, and she stated that she would be teaching first through fifth

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grade students. In any event, we are not convinced that because the eligibility requirements for a job applicant do not also include the professional development requirements for an applicant who is hired, the only conclusion to be drawn is that there are no such requirements.

We perceive no error in the court's findings (1) that the estrangement of the parties was due to Husband's desire to conduct a new romantic relationship or (2) that Wife would be required to earn a master's degree to become self-supporting. We shall vacate the judgment and remand the case to the circuit court to determine whether Wife's BB&T account and Wife's car were marital or non-marital property, and, in light of those findings, to reassess the division of property, as needed. Upon remand, the court may reconsider the terms of the transfer of the marital home. Although we see no error in the finding that Wife required a master's degree to become self-supporting, we shall vacate the alimony award so that the court may reevaluate it in light of any adjustment in the division of property and any other change in circumstances. Pending the resolution of the issues on remand, the existing order for alimony will remain in effect as a pendente lite award.

JUDGMENT OF THE CIRCUIT COURT FOR CHARLES COUNTY AFFIRMED IN PART AND VACATED IN PART.

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ALIMONY PROVISIONS TO REMAIN IN FORCE AND EFFECT AS A PENDENTE LITE ORDER PENDING FURTHER ORDERS OF THE CIRCUIT COURT; JUDGMENT OTHERWISE AFFIRMED. CASE REMANDED FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION. COSTS TO BE EVENLY DIVIDED BETWEEN THE PARTIES.