One type of asset that can often be the center of a marital-versus-non-marital classification dispute is real property. That was the case with one Anne Arundel County couple and a million-dollar Annapolis residence that the husband inherited.
During the marriage, the couple jointly purchased investment properties in Bowie. To secure the funding needed for the purchase, the husband put up as collateral the inherited property. The couple eventually sold the Bowie properties and repaid the loans in full. To repay those loans, the couple used both proceeds from selling one of the Bowie properties and marital funds.
In the divorce litigation, the wife argued that the inherited property was partially marital in nature.
Assets Can Change Status
Normally, an asset that one spouse inherits is considered non-marital. However, an asset can convert from non-marital to marital depending on how the spouses handled that asset. For example, non-marital funds commingled with marital funds in a marital account can change from non-marital to marital as a result of commingling.
In this case, the wife asserted that, when the husband used the property to obtain funds for purchasing jointly-owned properties, that transaction changed the property’s status. Both the trial court and the appellate court rejected that argument. The trial court decided that simply placing an inherited property (that the husband owned without a mortgage) up as collateral did not give the wife a legal interest in the property, regardless of what the couple used the loan proceeds for. The property was the husband’s and simply using it as collateral did nothing to change its status.
The appeals court agreed with that outcome. The law (Family Law Section 8-201(e)(1) says that marital property is “property, however titled, acquired by 1 or both parties during the marriage.” The Maryland Supreme Court has laid out a standard for assessing an asset’s status that says that the “characterization of property as non-marital or marital depends upon the source of each contribution as payments are made.”
Here, the husband owned the property “free and clear.” During the marriage, he used the property as collateral to obtain funds to buy other properties. He never used any loan proceeds to acquire or improve the property. (Had he done either, the wife would have acquired some degree of marital interest.) Instead, the husband used the loan proceeds to buy other properties. Those properties were ones where the wife had an interest, not the collateral property.
Arriving at a fair distribution of assets in a divorce can be a complicated endeavor. When it comes to protecting your rights and interests during the divorce process, count on the knowledgeable Maryland family law attorneys at Anthony A. Fatemi, LLC. Our detail-oriented team is singularly focused on providing you with the thorough and effective representation you deserve. Contact us today at 301-519-2801 or via our online form to set up your consultation.
]]>A divorce case from Annapolis is a strong cautionary tale in this regard. The husband’s complaint alleged that both spouses mutually agreed not to seek alimony and that the spouses had “no marital property or debts that need to be decided by the court.”
At a virtual hearing in 2021, the magistrate judge asked if the spouses had resolved all their issues and distributed all their property. The spouses — neither of whom had attorneys — said yes. The magistrate explained that the spouses’ answers constituted a waiver, meaning “you cannot come back to the [c]ourt at a later date and ask the [c]ourt to grant your relief.” The magistrate asked if the spouses understood, and again both spouses said yes.
A year and a half later, the wife hired legal counsel. With the help of her lawyer, she filed a motion to reopen the case.
The law only allows spouses to reopen their finalized divorces in exceptional circumstances, including mistakes, duress/coercion, or certain types of fraud. The wife argued that she and the husband signed a written marital settlement agreement in December 2020 that covered property and other issues, and that the husband’s failure to file that agreement with the court constituted extrinsic fraud.
The trial court sided with the wife, but the appeals court reversed that ruling. The appeals court’s opinion explained that even if the spouses signed a written settlement agreement (as the wife alleged and the husband denied,) and even if the husband failed to file that document with the court or notify the court of its existence (as the wife alleged,) the conduct would not amount to extrinsic fraud under Maryland law.
Two Types of Fraud
As background, it’s important to understand that the law recognizes two types of fraud — intrinsic and extrinsic. Proof of extrinsic fraud can reopen your finalized divorce; intrinsic fraud cannot.
Extrinsic fraud happens when a party makes affirmative misrepresentations (openly lies) or conceals evidence, and that misconduct prevents a fair trial from occurring. Intrinsic fraud involves no affirmative misrepresentation or concealment. As previous rulings have explained, if “a party could have discovered the fraud, but” her failure to discover the fraud was at least partially the result of her “own neglect… in the preparation of the case”, then the fraud will be deemed intrinsic.
The fraud alleged in this couple’s case was intrinsic. One of the factors that weighed heavily against the wife was the set of representations she made during the hearing. There, the wife confirmed that she and the husband had distributed all of their property and that she was not seeking alimony, a monetary award, or retirement benefits. She also confirmed her understanding that she “could not come back to the [c]ourt at a later time and make a claim” related to those issues. At no point did the wife mention the agreement to the magistrate judge.
That meant that the trial court’s failure to “approve the settlement agreement resulted at least in part from [the wife’s] own neglect and failure to exercise… care in the preparation of the case,” meaning that the alleged fraud was intrinsic and that the wife’s divorce was not eligible for reopening.
Clearly, having representation from a competent lawyer would’ve helped, both before the trial (in terms of getting the agreement filed with the court,) and at trial (in terms of notifying the judge of the agreement’s existence and requesting its merger or incorporation into the divorce judgment.)
Your divorce case could have very high stakes in terms of financial matters, family matters, and more. There’s simply too much at stake to risk making the sort of errors that an unrepresented person might reasonably make but that a skilled and diligent attorney almost certainly would not. Look to the experienced Maryland family law attorneys at Anthony A. Fatemi, LLC to provide you with the thorough and effective advocacy you and your case deserve. Contact us today at 301-519-2801 or via our online form to schedule your consultation.
]]>A recent divorce dispute from Anne Arundel County is a stark reminder of this notion. The husband filed for divorce in late 2019. In early January 2020, the trial judge issued an “Injunction to Prevent Dissipation of Assets.” That injunction barred the husband from “disposing of… any of the property alleged to be marital property or property acquired during the separation.”
In late 2021, the husband emptied the entire $72,800 balance of his Thrift Savings Plan and put the net proceeds (after penalties and taxes) of $56,800 into his credit union account. The husband eventually spent all of those proceeds to support his father in Nigeria, who had stage IV cancer. The couple also had a Lexus vehicle that the husband sold during the divorce for $18,600, of which the wife received $0.
The trial court concluded that these transactions constituted dissipation of assets and awarded the wife 60% of the $91,400 total, or a monetary award of roughly $55,000.
3 Key Things to Know About Dissipation Cases
There are a few crucial things you need to know about cases like this. One is the importance of being fully equipped when you appear before the trial court. The law says that an appeals court “will not set aside a trial court’s determination regarding dissipation of marital assets unless the determination made is clearly erroneous.” That phrase — clearly erroneous — means that there is no competent evidence in the case that could possibly support the outcome the trial court awarded.
That makes appeals in these cases particularly challenging to win, so giving the trial court everything possible to support your position at your hearing is critical.
Another is the way that the trial court will go about deciding an allegation of dissipation. The law places the initial burden of proof on the spouse who alleges dissipation. If that spouse meets his/her initial burden of making out a “prima facie” case of dissipation, then the burden shifts to the other spouse, who must prove that he/she spent the funds on “marital or family purposes.”
Finally, understand what the law does and does not consider “family purposes.” This phrase limits your expenditures to things “for the benefit of the immediate family unit.” Even something as selfless as paying for a parent’s urgent medical care needed as a result of catastrophic illness is still an expenditure that is not related to the marriage or the family unit (spouse and minor children,) and is therefore vulnerable to a dissipation claim.
Divorce is often a very painful process. It can also be a very costly event if you are not properly prepared. To avoid making your divorce more costly than it needs to be, you need the right legal advice and advocacy. Rely on the knowledgeable Maryland family law attorneys at Anthony A. Fatemi, LLC to be that effective voice and trusted advisor for you. Contact us today at 301-519-2801 or via our online form to set up your consultation.
]]>Last August, we covered a change to D.C. law in which that jurisdiction declared that judges may consider the “best interests of a pet” in determining who gets an animal in a divorce. The amended law also gave judges in D.C. the option to award joint custody of a pet in a divorce judgment.
Here in Maryland, the law is substantially different. As noted above, Maryland law says that pets are personal property. That distinction means that, if you desire to get possession of your pet (or pets) in a Maryland divorce, you have to litigate the case very differently than you might in D.C. Those distinctions were on clear display in a recent divorce case from Frederick County.
The spouses owned two dogs when the case went to trial in the spring of 2022. Whereas a spouse in D.C. might present testimony about who spent the most time bonding with the animals, the wife in the Frederick County case sought to demonstrate that the dogs were purchased using the non-marital funds that she individually received as an inheritance, making the animals her non-marital property… in much the same way one might seek to prove separate ownership of a home or car in a divorce hearing. The husband countered by asserting that the dogs were “family use” personal property items subject to division in the divorce.
The court ultimately gave one dog to each spouse, and the wife appealed.
Pets as ‘Family Use’ Property
Maryland law has a specific statute that deals with “family use personal property.” Section 8-201(d) of the Family Law says that “family use personal property” includes:
and specifically excludes property “acquired by inheritance or gift from a third party.”
If an item qualifies as family use personal property, Section 8-205 gives the court the power to transfer ownership of family use property from one spouse to another.
The court looked at the facts and the proof the spouses presented and decided that the dog in dispute was family use property. The “whole family testified to contributing to” the dog’s welfare, including the wife who trained the animals and the husband who served as their primary caretakers. Additionally, the wife lacked clear evidence indicating that the money used to buy the dogs came from her inherited funds. In the absence of that proof, the trial court was within its proper discretion to award one of the two dogs to the husband.
While it might be distasteful to hear your beloved beagle Bernie lumped in with the recliner, the refrigerator, and the Range Rover, that is the state of the law as things stand now. To protect your interests (and the best interests of your four-legged family members,) you need an effective legal team advocating for you. Rely on the experienced Maryland family law attorneys at Anthony A. Fatemi, LLC to be that voice for you. Whether your divorce hinges upon homes, vehicles, or pets, we can help you navigate the system effectively. Contact us today at 301-519-2801 or via our online form to set up your consultation.
]]>Skilled counsel can help you persuade the court to look at more than just your spouse’s W2 income when it comes to setting an alimony amount. Take, for example, this recent divorce case from Montgomery County.
The wife filed for divorce in 2021. At trial, the wife asked the court to award her alimony, so the court made findings regarding the spouses’ earning capacity and income.
When determining the husband’s income, the trial judge stated that “a large majority of [Husband’s] personal expenses such as dining out, golf, groceries, gas, health insurance ($600/ month)… and a myriad of other expenses [were] run through the business.” For that reason, the court included in the husband’s overall income “50% of the meal expenses listed on his tax returns in addition to his officer compensation and the ordinary business income.”
After doing that analysis, the court arrived at an income figure of $111,000. Using that number, the court awarded the wife 24 months of rehabilitative alimony at $2,500 per month in addition to 18 months of retroactive alimony at $2,500 per month.
The Importance of ‘Equitably Sound’ Outcomes
The husband’s appeal contested the inclusion of the meal expenses from his tax return, but the appeals court upheld what the trial judge ordered. The husband’s unsuccessful argument contended that “income” for the purposes of alimony calculation only includes “wages or salary from regular, full-time employment, i.e., money earned during the normal work week as is appropriate to a given occupation.”
The court disagreed, stating that Maryland Family Law requires that trial courts factor in all income and assets when determining alimony. In this case, because the husband was the sole owner of a roofing business and “readily mingled the finances of this business… with his personal expenses,” the trial judge could not “look simply at wage statements.” The husband incurred substantial personal expenses while dining out and ran those expenses through his roofing company. Given that the goal of Family Law Section 11-106 was “to create a statutory mechanism leading to equitably sound alimony determinations by judges,” including this income was only fair, as a failure to consider it would give this husband “a huge advantage over [spouses] who earn the same amount but receive the money as part of their base salary.”
Alimony cases are intensely fact-driven matters in which the trial court has broad discretion. For these reasons, you want to be certain that the trial judge deciding your case has everything he/she needs to make an appropriate alimony award. The knowledgeable Maryland family law attorneys at Anthony A. Fatemi, LLC are here to help our clients do exactly that in their cases. Contact us today at 301-519-2801 or via our online form to schedule your consultation.
]]>As noted above, a division is not always 50-50. As an example, there’s this divorce-related case from Brookeville.
The spouses worked out a marital settlement agreement in early 2015 that said that the wife would receive the exclusive “use and possession” of the marital home for three years. After that 36-month period elapsed (or if the wife remarried earlier,) the agreement dictated that the home would be listed for sale.
In 2018, the three-year window expired, but the wife refused to sell. Eventually, the husband went back to court and got a judicial order for the sale of the home. The court also appointed a trustee to handle the transaction and ordered the wife to pay all of the trustee’s fees.
The home sold in October 2021, netting $36,000 in proceeds — $18,000 to each spouse. Shortly thereafter, the trustee requested payment of fees totaling $22,000. That meant the wife’s $18,000 went to the trustee and the court ordered her to pay the trustee $4,000 to cover the full $22,000 fee.
The wife appealed that judgment, arguing that Maryland law doesn’t give trial courts the authority to do what the judge did in her case. She contended that, if the court chose to order a sale, the judge could only divide the proceeds between the spouses “according to the parties’ respective rights.”
According to the appeals court, the court did divide the proceeds according to the spouses’ respective rights. It gave the husband $18,000 and the wife $18,000. It simply tacked on an order obliging the wife to pay 100% of the $22,000 sum owed to the trustee, which wiped out her $18,000 and left her owing an additional $4,000. The law permitted the court to do that as part of creating an equitable result.
Judges Have Broad Discretion in Equity Matters
As the appeals court explained, proceedings seeking a judicial sale of a property under Real Property Section 14-107 are “equitable in nature.” Additionally, any proceeding adjudicating “issues related to divorce” is an equitable one, too.
What’s the significance of that? It means that the trial court has “broad discretionary authority.” The law gives judges substantial leeway in fashioning judgments that ensure justice and fairness to all parties. The law also gives trial court judges wide latitude in the factors they choose to consider in deciding what would constitute an equitable outcome.
In this couple’s case, the agreement required the wife to give up the home for sale in early 2018 but she steadfastly refused for almost three years. For several months, the husband paid half of the monthly mortgage payment, even though that payment was the wife’s obligation under the terms of the agreement. The wife continued resisting selling until the husband got a court order. Even then, the wife “continued to frustrate efforts to sell the home.” These were all things that the trial judge was entitled to consider as factors in determining what an equitable outcome should be.
What you can take away from this wife’s unsuccessful appeal is the knowledge that any court proceeding related to your divorce is an equitable one and the law gives courts deciding equity matters very broad discretion in deciding outcomes. These discretionary decisions are often difficult to overturn on appeal, which means that it is crucial to ensure you’ve put your strongest case forward when you’ve before the trial court. Part of that is retaining experienced legal counsel. The knowledgeable Maryland family law attorneys at Anthony A. Fatemi, LLC are here to be that experienced, effective legal counsel for you, working to ensure that the outcome you receive is a genuinely fair one. Contact us today at 301-519-2801 or via our online form to schedule your consultation.
]]>As another example, there’s D.R. and L.R., a late middle-aged couple who signed their prenuptial agreement in the fall of 1992. The husband’s lawyer drafted the document. The wife’s attorney counseled against signing the agreement, but the wife signed anyway.
The agreement’s terms called for neither spouse to receive alimony and that the couple would not split income or assets. It also said that “the parties expect to reside together in a location, style, and manner mutually suitable to them,” and that ownership “of any homes, residences, or other real property acquired by [husband and wife] shall be held by the parties as Tenants in Common with no rights of survivorship.”
In 2019, the couple divorced, and the husband sought to enforce the agreement. Both the trial court and the appeals court ruled in favor of the wife. Although the document was fair and reasonable (and therefore valid) when the spouses signed it, it was unconscionable at the time of enforcement.
The problem was not the facial terms of the contract, but its practical impact. The spouses lived in two homes — one in Florida and one in Massachusetts — purchased during the marriage. Unbeknownst to the wife, the Florida property was in the husband’s name alone, and the Massachusetts home was titled in a trust the beneficiaries of which were the husband’s adult children from a previous marriage.
Enforcing the agreement as written, the court reasoned, would be unconscionable, as it would have “essentially stripped [the wife] of substantially all her marital interests.” As a result, the court found the agreement unenforceable.
How Maryland Does Unconscionability Analysis
This divorce — and legal case — arose in the Commonwealth of Massachusetts. That’s important to know because a difference between Massachusetts law and Maryland law was central to the wife’s success. Massachusetts says that, for prenuptial agreements to be enforceable, they must be “both (1) fair and reasonable at the time of execution (the “first look”), and (2) conscionable at the time of enforcement (the “second look”).
Maryland does something distinctly different. Maryland law says that, for a prenuptial agreement to be unenforceable, it must have been the result of fraud, duress, coercion, mistake, undue influence, or incompetency. Alternately, it can be unenforceable if it is unconscionable, but Maryland only analyzes a prenuptial agreement’s unconscionability at the time the agreement was entered. In Maryland, there is no “second look” at unconscionability.
What that means is that, if this case had proceeded in the courts of Maryland, the wife would have needed a different litigation approach or the husband would have had a much better chance of securing the enforcement of the agreement as written.
This also should tell you something about the profound importance of getting meaningful and knowledgeable legal counsel before you sign any prenuptial agreement. The experienced Maryland family law attorneys at Anthony A. Fatemi, LLC offer our clients thoughtful, careful, knowledgeable advice regarding prenuptial agreements and all other family law matters to ensure that your interests are protected to the maximum extent possible. Contact us today at 301-519-2801 or via our online form to set up your consultation.
]]>Although the central issue driving a recent divorce case from Prince George’s County was child custody, the lessons it teaches are universal across many family law disputes.
A.W. and B.W.’s was a short-term marriage. They wed in 2014, had a child in 2018, and the wife filed for divorce in 2020. In early April 2021, the court convened a remote settlement conference over Zoom.
During the video conference, the wife testified that she and the husband had agreed on terms of child support, custody, visitation, and alimony. As the conference proceeded, a disagreement arose regarding custody, but the spouses continued with the conference.
The court ordered the spouses’ lawyers to prepare a consent order (reflecting the terms of the spouses’ agreement,) which the judge would sign. However, issues persisted between the two sides, and no consent order was ever entered. (Specifically, although the husband agreed to a 4:3 custody schedule, he objected to the wife being labeled as the “primary physical” parent, instead insisting that the arrangement be labeled as “joint physical” custody.)
Ultimately, the case proceeded to trial on all the issues. At the end of the trial, the court entered a divorce judgment. Some of the terms in the judgment were more favorable to the wife than the terms of the purported agreement the spouses reached during the Zoom conference.
Any Agreement Was ‘Null and Void’
The husband appealed but he was unsuccessful. The appeals court pointed out that the trial judge clearly informed the husband that, “whatever happened when you were in front of [the settlement hearing judge], that you and your wife did not execute an agreement, therefore, you have no agreement.” The husband indicated his understanding that any agreement from the conference “was null and void.”
In other words, the husband had repeatedly stated before the trial judge that there was no agreement but later argued on appeal that the trial court should not have adjudicated certain issues because the spouses had a binding settlement agreement. The court rejected that contention, declaring the husband “acquiesced” to the trial and “specifically stated that there was no agreement.” As a result, “he cannot now argue that the parties had an enforceable agreement.”
Whether you’re in a pretrial settlement conference or merits hearing, a knowledgeable lawyer can aid you in protecting and advancing your positions and interests. The diligent Maryland family law attorneys at Anthony A. Fatemi, LLC offer our clients effective advocacy, thoughtful solutions, and personalized service. Contact us today at 301-519-2801 or via our online form to set up your consultation
]]>Not all divorces are traumatic. An out-of-state lawyer, who began his career clerking for a small-town family court judge, once described an older couple’s appearance in court to finalize their divorce. As the judge inquired whether the couple met the statutory qualifications, one question inadvertently inspired the husband to disclose that the couple had most recently engaged in intimate relations less than one week before the hearing.
The judge explained that she could not grant the divorce because the couple didn’t meet the state’s requirement for being separated, and the couple exited, smiling and joking with one another.
Those cases are, of course, the exception. Many divorces are agonizing for one or both spouses. They may engender feelings of loss, hopelessness, and desperation. The same out-of-state lawyer recounted a different couple who appeared for a mandatory pretrial mediation session. When the husband’s counsel raised the possibility of the husband seeking sole custody of the children, the wife glared and declared, “If you take my babies from me, I will kill you.”
While the stressed-out wife likely just blurted the first thing that came to mind, her attorney still decided (wisely) that a 5-10 minute break for counsel to consult with their clients separately was a good idea.
Sadly, the Washington County case shows that, sometimes, litigants don’t just make idle threats but instead resort to actual violence.
On the first day of the trial, the husband appeared without counsel. On day two, neither the husband nor an attorney appeared. The husband called the courthouse and said he had “a headache.”
On that second day, the man’s adult daughter (from a previous relationship) testified in court that the man confined her to her bedroom for years, installed cameras to watch “her every move” and beat her with a belt and other objects. That testimony came in addition to the wife’s testimony about how the husband isolated her and the children, controlled “every aspect” of their lives, and abused them.
After receiving all of that proof, Judge Wilkinson determined that the man should not have custody of any of the couple’s four children, ages 12, 11, 5, and 3. He also determined that the husband should not have visitation and should not contact the wife or the children. The judge wrote that the manner in which the husband had “isolated these children and mom over the past two years, I think that has gone on throughout the marriage, and it’s shocking. I think he is abusive in multiple ways.”
Later that day, the husband killed the judge.
Divorce Counsel and the Emotionally Fraught Client
It is entirely possible that there was nothing anyone — not even the best divorce lawyer — could have done to alter or mitigate this man’s path of death and destruction. Still, the loss of a marriage (combined with a divorce action) can make even entirely mentally stable people feel overwhelmed and desperate, and sometimes having good legal counsel can help immeasurably.
This is a very important (but less frequently considered) benefit of legal representation in your divorce. People may recognize a lawyer’s keen knowledge of the law and ability to advocate powerfully, but a good divorce lawyer can also act as a buffer and a sounding board for their divorce client. This may include clearly managing client expectations to prevent a spouse from developing unreasonable hopes and managing client emotions, helping to “rein them in” when the stress of the situation might otherwise lead them to do something damaging to their case, to themselves, or to others.
If you find yourself going through a divorce, the thoughtful and diligent Maryland family law attorneys at Anthony A. Fatemi, LLC are here to help. Contact us today at 301-519-2801 or via our online form to schedule your consultation.
]]>A divorce case from Prince George’s County shows exactly how damaging procedural errors can be.
The spouses in the case married in 2013 and separated in 2019. The wife worked for the federal government, but she also had her own business that, in 2016, transitioned to focus primarily on nutritional supplements. That transition was a success and the wife’s business experienced substantial growth during the spouses’ marriage.
The wife, according to the court, failed to respond to all of the husband’s document requests. Additionally, she failed to timely name an expert witness who would testify about the value of her business. The court had established a deadline of June 14, 2021, for the disclosure of expert witnesses. The husband designated an Accredited Senior Appraiser (ASA) from Baltimore as his business valuation expert on June 14. The wife made no expert disclosure on or before the June 14 deadline.
That failure led the trial court to sanction the wife. Those sanctions included banning the wife from providing direct testimony — and expert testimony — about the business’s value.
As a result, the husband’s business valuation expert was the only expert who testified, and the trial judge eventually adopted the dollar figures that the husband’s expert submitted to the court, which placed the value of the wife’s business at more than $34.5 million.
The wife appealed the divorce judgment, contesting the judge’s disallowance of her direct testimony rebutting the testimony provided by the husband’s expert. At the trial, the wife sought unsuccessfully to testify that the husband’s expert’s figures were faulty (and overstated the value of the business) because they were based on sales projections that “never materialized.”
Normally, a business owner would be entitled to give testimony about her business’s value, even if she was not an expert in accounting or appraisal. The Maryland rules allow lay witnesses to opine if their testimony comes from first-hand knowledge. That rule does not, however, give that party an absolute right to provide that testimony, and the ability to provide that testimony can be lost, including as a result of a discovery sanction.
That’s exactly what happened in this case. The appeals court upheld the trial judge’s decision, explaining that the lower court did not exclude the wife’s testimony due to concerns about her “qualifications to speak to the value of her business.” Rather, the judge had barred such testimony from the wife as a punishment for her multiple discovery violations, and “permitting her testimony would undermine” those sanctions.
Whether your divorce involves assets worth tens of millions of dollars or a more modest amount of wealth, you need skillful counsel to ensure you get a fair outcome. The knowledgeable Maryland family law attorneys at Anthony A. Fatemi, LLC are here to help you navigate the divorce litigation process and work towards a positive result. Contact us today at 301-519-2801 or via our online form to set up your consultation.
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