The issue before us concerns the propriety of a marital property monetary award granted in a divorce proceeding. The General Assembly has enacted a statutory scheme relating to property matters upon divorce, Maryland Code (1984, 1991 Repl.Vol.), §§ 8-201 to 8-205 of the Family Law Article. Pursuant to these provisions, the mechanism by which the spouses' property interests in "marital property" are to be adjusted is the "monetary award."
We shall conclude in this case that the trial court erred when it awarded to the wife half of the value of a specific piece of marital property.
The relevant facts are as follows. Viola and Herman Alston were married in June 1964, and they separated in 1985. In late 1987, Mrs. Alston filed in the Circuit Court for Baltimore City a complaint for divorce, based on the couple's voluntary separation for over one year. She did not seek alimony or a marital property award. Mr. Alston was served and notified that if he did not file a response within thirty days a divorce could be granted against him, but he did not file any response. After the thirty days expired, he assumed that the divorce had been granted.
At the time the above-mentioned divorce action was filed, Mrs. Alston was employed as a clerk with the Federal Government, earning a salary of about $19,000 per year. Through this employment, she had accrued pension rights worth approximately $22,000. She owned a car worth about $1,000, and some furniture worth about $2,000. She had savings accounts worth $1,000. Mrs. Alston's net worth was, therefore, approximately $26,000.
When the Baltimore City divorce action was filed, Mr. Alston was employed as a prison guard by the Department of Corrections in Washington, D.C., earning a salary of $29,500 per year. His government pension, accrued through his years of military service and employment with the Department of Corrections, was worth approximately $17,000. He owned a car, and about $8,000 worth of furniture. His net worth was approximately $25,000, plus the value of his car.
Several days before the expiration of the thirty day period for filing an answer to Mrs. Alston's divorce complaint, Mr. Alston won the District of Columbia "Lotto," which had an annuity value of over one million dollars.
Mr. Alston filed a motion to dismiss and an answer to Mrs. Alston's complaint. He also filed a "Counter Complaint for Absolute Divorce," seeking a divorce from Mrs. Alston on the grounds of adultery, desertion, and cruelty. The circuit court denied Mr. Alston's motion to dismiss.
During the trial, both parties agreed that the annuity was technically marital property because it was acquired before the expiration of the marriage. Although the parties disputed the present value of the annuity, the parties' arguments centered on the appropriateness of a monetary award. Mrs. Alston argued that, considering all the statutory factors, she was entitled to a monetary award of half or some other substantial portion of the annuity. Specifically, she contended that she had made substantially greater contributions to the well-being of the family, and that, therefore, the first statutory factor set forth in § 8-205(b) of the Family Law Article weighed against Mr. Alston. She also argued, among other things, that Mr. Alston's ongoing adultery caused the estrangement of the parties, so the fourth factor weighed in her favor.
Mr. Alston argued that Mrs. Alston was not entitled to any monetary award. Mr. Alston asserted that Mrs. Alston had not made significant contributions, economic or non-economic, to the well-being of the family. He contended that he was in dire economic straits at the time of trial, and, consequently, the third statutory factor in § 8-205(b) militated against a monetary award.
On November 15, 1989, the circuit court entered a judgment of absolute divorce in favor of Mrs. Alston on the ground of Mr. Alston's adultery. The court denied alimony to either party. The court then valued all of the Alstons' marital property, including the lottery annuity. The court found that Mr. Alston had title to marital assets with a present value of $479,695.85, and that Mrs. Alston held title to assets worth $26,889.09. The court discussed the ten factors set forth in § 8-205(b) of the Family Law Article, treating each of them as entitled to equal weight. Noting the disparity of $452,806.76 in marital assets, the court made a monetary award to Mrs. Alston of fifty percent of the yearly net distribution on the annuity.
Mr. Alston, aggrieved by the circuit court's grant of an absolute divorce to Mrs. Alston on the ground of adultery, and by the court's decision to award half of his lottery winnings to Mrs. Alston, took an appeal to the Court of Special Appeals. The intermediate appellate court affirmed the circuit court's judgment, Alston v. Alston, 85 Md.App. 176, 582 A.2d 574 (1990). With regard to the circuit court's determination of a marital property monetary award, the Court of Special Appeals reviewed all of the statutory factors in sequence, as had the trial judge. As to the eighth factor set forth in § 8-205, namely "how and when specific marital property ... was acquired, including the effort expended by each party in accumulating the marital property," the Court of Special Appeals stated (85 Md. App. at 188-189, 582 A.2d at 580):
Thereafter, we granted Mr. Alston's petition for a writ of certiorari which was limited to the marital property issue, 322 Md. 333, 587 A.2d 510 (1991).
The decision whether to grant a monetary award is generally within the sound discretion of the trial court. See § 8-205(a) ("the court may ... grant a monetary award") (emphasis added). See also Niroo v. Niroo, supra, 313 Md. at 230-231, 545 A.2d at 37; Deering v. Deering, supra, 292 Md. at 131, 437 A.2d at 891; Ward v. Ward, 52 Md.App. 336, 339 n. 3, 449 A.2d 443, 446 n. 3 (1982). Nevertheless, even with respect to a discretionary matter, a trial court must exercise its discretion in accordance with correct legal standards. See, e.g., Bohnert v. State, 312 Md. 266, 275, 539 A.2d 657, 661 (1988); Colter v. State, 297 Md. 423, 426-430, 466 A.2d 1286, 1288-1290 (1983); Kemp v. Kemp, 287 Md. 165, 170, 411 A.2d 1028, 1031-1032 (1980); Radman v. Harold, 279 Md. 167, 173, 367 A.2d 472, 476 (1977).
Mr. Alston's Lotto annuity has correctly been classified as marital property.
To address this and other family law problems, the Governor in 1976 appointed a commission which, after study, recommended, inter alia, an entirely new system of "equitable distribution." In discussing why it believed that the title system ought to be modified, the Commission stated (Report of the Governor's Commission on Domestic Relations Law, at 3 (Jan. 1978) (often referred to as the Groner Commission Report, after its presiding officer)):
Consequently, the Commission was particularly concerned with giving recognition to the non-monetary contribution of one spouse with regard to the acquisition of property by either or both spouses during the marriage.
The General Assembly followed the Commission's proposal and enacted the equitable distribution statute. Ch. 794 of the Acts of 1978. In doing so, the Legislature, in the title to Ch. 794, set forth the State's policy that "when a marriage is dissolved the property interests of the spouses should be adjusted fairly and equitably, with careful consideration being given to both monetary and nonmonetary contributions made by the respective spouses to the well-being of the family." At the same time, the General Assembly expressed its concern that the courts make equitable, as opposed to presumptively equal, property divisions. See Laws of Maryland 1978, Ch. 794, at 2308 (deleting the language "A monetary award shall be presumptively such as is necessary to divide the value of the marital property equally between the parties. The court may adjust the division of the value of the marital property on a basis other than equal after considering" several factors).
It is important that courts not lose sight of this history and purpose when making decisions about marital property. The "function [of the monetary award] is to provide a means for the adjustment of inequities that may result from distribution of certain property in accordance with the dictates of title." Herget v. Herget, supra, 319 Md. at 471, 573 A.2d at 800. The history of the statute indicates that the General Assembly was primarily concerned with achieving equity by reflecting nonmonetary contributions to the acquisition of marital assets, and this principle should be a major consideration in a trial judge's analysis.
The statutory factors listed in § 8-205(b) are not prioritized in any way, nor has the General Assembly mandated any particular weighing or balancing of the factors. The application and weighing of the factors is left to the discretion of the trial court. Nevertheless, in light of the history and purpose of the statute, the eighth factor, relating to "how and when specific marital property" was acquired and the contribution that each party made toward its acquisition, should be given considerable weight. The circuit court and the Court of Special Appeals indicated that the eighth factor should not be given any more weight than any other factor in this case. Under the particular circumstances here, however, such approach was not consistent with the statute.
While no hard and fast rule can be laid down, and while each case must depend upon its own circumstances to insure that equity be accomplished, generally in a case such as this the eighth factor should be given greater weight than the others. Where one party, wholly through his or her own efforts, and without any direct or indirect contribution by the other, acquires a specific item of marital property after the parties have separated and after the marital family has, as a practical matter, ceased to exist, a monetary award representing an equal division of that particular property would not ordinarily be consonant with the history and purpose of the statute.
The trial judge found that the annuity was acquired because Mr. Alston "took the time and effort and money, whatever it cost, to purchase the lottery ticket." While the amount of effort itself may not have been great, the annuity was acquired entirely through Mr. Alston's efforts. This is not a case in which one party has facilitated the other's acquisition of property, directly or indirectly.
In this case, as in many other cases, once property was determined to be "marital," the circuit court may have succumbed to the temptation to divide the property equally. As previously discussed, our statute requires "equitable" division of marital property, not "equal" division. The Maryland Legislature specifically rejected the notion that marital property should presumptively be divided equally.
In making a marital property monetary award, a trial judge must weigh the relevant factors in light of the legislative purpose, and then use his or her sound discretion to arrive at an award that is equitable and in accordance with the statute. Of course, equal distribution may often be proper, and where that result is equitable and consistent with the legislative purpose, a court should not hesitate to make such an award. Each divorce situation is different, and must be evaluated individually. In light of the peculiar circumstances of this case, however, the trial judge erred in awarding half of the Lotto annuity to Mrs. Alston. Moreover, the record before us contains no evidence which would justify awarding any portion of the annuity to Mrs. Alston.
Consequently, the portion of the trial court's judgment relating to the marital property monetary award must be reversed. Because of the relationship between a marital property monetary award and alimony, however, we shall remand the case so that the trial court may redetermine the matter of alimony. See McAlear v. McAlear, 298 Md. 320, 469 A.2d 1256 (1984).
JUDGMENT OF THE COURT OF SPECIAL APPEALS AFFIRMED IN PART AND REVERSED IN PART, AND CASE REMANDED TO THAT COURT WITH DIRECTIONS TO AFFIRM IN PART AND REVERSE IN PART THE JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE COUNTY AND TO REMAND THE CASE TO THE CIRCUIT COURT FOR BALTIMORE COUNTY FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION. COSTS IN THIS COURT AND IN THE COURT OF SPECIAL APPEALS TO BE EQUALLY DIVIDED.
Dissenting Opinion by ROBERT M. BELL, J.
ROBERT M. BELL, dissenting.
The majority holds that,
Op. at 507. The majority seeks to achieve a result that it believes is just and fair. Unable, under the existing ruling, to avoid what it considers a harsh result in this very difficult case — it has been observed that hard cases make bad law, Fed. Communication Comm'n v. WOKO, Inc., 329 U.S. 223, 229, 67 S.Ct. 213, 216, 91 L.Ed. 204, 209 (1946); Northern Sec. Co. v. United States, 193 U.S. 197, 400-401, 24 S.Ct. 436, 468, 48 L.Ed. 679, 712 (1904) (Holmes, J. dissenting); Citaramanis v. Hallowell, 328 Md. 142, 177, 613 A.2d 964, 981 (1992) (Bell, J. dissenting) — the majority simply changes the rules of the game. It puts a gloss on marital property, which, in turn, impacts how marital property is distributed, as well as judicial review of monetary awards. Heretofore, once property, whether acquired before or after separation, was determined to be marital property, the decision to make a monetary award, either as a percentage of the property or in a lump sum amount, was entrusted to the sound discretion of the chancellor, exercised after considering the factors enumerated in Maryland Code (1984, 1991 Repl.Vol.) § 8-205(b) of the Family Law Article,
We have held that "when a monetary award is at issue, the court is permitted to effectuate a realignment of assets via a three-step process." Zandford v. Wiens, 314 Md. 102, 106, 549 A.2d 13, 15 (1988); Niroo v. Niroo, 313 Md. 226, 231, 545 A.2d 35, 37-38 (1988). The first step requires the court to determine which of the parties' property is marital property. § 8-203(a). Under the second, the court has to value that property. § 8-204. Finally, the court must decide whether to make a monetary award as an adjustment of the parties' equities and rights. § 8-205(a); Zandford, 314 Md. at 106, 549 A.2d at 15. The chancellor is not obliged to make a monetary award and, if one is made, he or she need not equally divide the property. Deering v. Deering, 292 Md. 115, 203, 437 A.2d 883, 892 (1981); Ohm v. Ohm, 49 Md.App. 392, 405, 431 A.2d 1371, 1378 (1981). If an award is deemed appropriate, before the court may make it, it must consider each of the ten factors enumerated in section 8-205. Id. 314 Md. at 106-07 n. 5, 549 A.2d at 15 n. 5; Harper v. Harper, 294 Md. 54, 79, 448 A.2d 916, 929 (1982).
The trial court found that the lotto winnings were marital property, i.e., "property ... acquired by 1 or both parties during the marriage." § 8-201(e)(1). See also Pope v. Pope, 322 Md. 277, 279, 587 A.2d 481, 482 (1991); Niroo, 313 Md. at 228, 545 A.2d at 36; Queen v. Queen, 308 Md. 574, 575, 521 A.2d 320, 321 (1987); Archer v. Archer, 303 Md. 347, 349, 493 A.2d 1074, 1075 (1985).
After today, the chancellor's discretion to make monetary awards is significantly curtailed when the marital property is acquired after the parties have separated.
Op. at 507. It proffers that the history and purpose of the equitable distribution statute dictate that result. Acknowledging that the Legislature was concerned that "careful consideration [be] given to both monetary and nonmonetary contributions made by the respective spouses to the well-being of the family," see Ch. 794, Acts of 1978, the majority asserts that
Op. at 506-507. In the majority's view, this translates into according "the eighth factor, relating to `how and when specific marital property' was acquired and the contribution that each party made toward its acquisition ... considerable weight." Id. The majority initially focused on what it perceived to be the chancellor's knee jerk inclination equally to divide the lotto winnings. It then purports to acknowledge that it is the chancellor's role to weigh the relevant factors and exercise discretion to make an appropriate monetary award, which under some circumstances, may be an equal division of the property. A remand for that purpose ordinarily would have been required. Rather than remanding the case for that purpose, however, the Court makes clear its real holding when it determined that "the record before us contains no evidence which would justify awarding any portion of the annuity to Mrs. Alston." Op. at 509. Whenever a lotto ticket is purchased after separation by one of the parties, the record will contain the same evidence; hence, as a matter of law, in no such case would the non-purchasing spouse be entitled to a monetary award of any portion of the winnings.
Before today's decision, the determination whether to make a monetary award was entrusted to the trial judge's discretion, not to a reviewing court to determine as a matter of law. Before today, after determining which property is marital property, the chancellor was not then required further to categorize the marital property as property acquired before separation and property acquired after separation. That was not required because, by reference to the factors the Legislature defined to inform the decision whether to make a monetary award, the health of the marital family when the asset was acquired was readily and unmistakenly apparent. It was not required for another reason — nothing in the statute, or case law, for that matter, permitted the chancellor to treat marital property acquired after separation differently from marital property acquired before separation. Simply put, as a "[r]ose is a rose is a rose is a rose"
The effect of today's decision is further to define "marital property," to engraft onto the definition, a refinement based on when the property was acquired, and to require the chancellor to assess whether such property may be a predicate for a monetary award on the basis of one of the ten factors required to be considered when the property is acquired before separation. Being aware of the definition we have given it, had the Legislature desired to do so, it certainly could have either redefined "marital property" and excluded from that definition any property acquired after the separation, but prior to the divorce or, within the existing definition, accorded a different treatment for pre-separation marital property and post-separation marital property.
By its opinion, the majority mandates two categories of marital property and two standards for reviewing decisions relating to monetary awards. Property acquired before separation is one category; if a monetary award is made from that property, the reviewing court must look to determine if all ten factors in section 8-205 have been considered. Moreover, none of them is to be accorded greater weight than another as a matter of law. Thus, had the petitioner acquired the lotto ticket, pre-separation, even if by only an hour, the chancellor's decision to weigh all of the relevant factors would not be a problem for the majority. If, however, the property were acquired after separation, even if by only an hour, a different result would obtain; factor eight would have to be weighted more heavily and even to the exclusion of the other factors. In fact, that fact, on review, would be decisive.
In no case has a court of this State held or even suggested that one of the factors in section 8-205(b) should, as a matter of law, weigh more heavily than another. See Prahinski v. Prahinski, 321 Md. 227, 229-30, 582 A.2d 784, 785 (1990); Herget v. Herget, 319 Md. 466, 471, 573 A.2d 798, 800 (1990); Manns v. Manns, 308 Md. 347, 351, 519 A.2d 740, 742 (1987); Archer, 303 Md. at 350, 493 A.2d at 1076; Lookingbill v. Lookingbill, 301 Md. 283, 293, 483 A.2d 1, 6 (1984); Hoffman v. Hoffman, 93 Md.App. 704, 712, 713, 614 A.2d 988, 992 (1992); John O. v. Jane O., 90 Md.App. 406, 425, 601 A.2d 149, 160 (1992); Melrod v. Melrod, 83 Md.App. 180, 185, 574 A.2d 1, 3, cert. denied, 321 Md. 67, 580 A.2d 1077 (1990); Hughes v. Hughes, 80 Md.App. 216, 229, 560 A.2d 1145, 1149 (1989); Watson v. Watson, 77 Md.App. 622, 627, 551 A.2d 505, 507 (1989). The statute suggests only that each of the factors is to be given some weight: the statute states, in pertinent part, "The court shall determine the amount and the method of payment of a monetary award ... after considering each of the following factors...." § 8-205(b) (emphasis added). Moreover, the required factors are listed in the conjunctive. This, too, indicates that all of them must be considered. We have held that "the word `and' should be interpreted according to its plain and ordinary meaning and that it is not interchangeable with the word `or.'" Comptroller v. Fairchild Industries, 303 Md. 280, 285-86, 493 A.2d 341, 343-44 (1985). There is nothing in the statute or case law to suggest that the Legislature intended that the factors in section 8-205(b) be interpreted other than in the conjunctive; thus, requiring the chancellor to weigh each of the factors. "Where the interpretation of a statute is such as to place it in the conjunctive, an applicant for a variance must show both practical difficulty and hardship in order to have a court interpret the statute in the disjunctive." 1A Norman J. Singer, Sutherland Statutory Construction, § 21.14, at 128 (4th ed. 1985). Thus,
Wilen, 61 Md. App. at 355, 486 A.2d at 784 (emphasis added).
To be sure, a chancellor must and, in fact, would be remiss if he or she did not consider how, and when, marital property was acquired. This, however, does not require or, for that matter, permit the chancellor only to consider those matters. But, once it is determined that the property was acquired after separation and by the efforts of one spouse alone, that is the effect of the majority opinion. Because in that situation, the record will never "contain ... evidence which would justify awarding any portion of the annuity" to the other party, the effect of the majority opinion is to preclude, as a matter of law, such post-separation property from being the source of a marital award, whatever the result that consideration of the other factors would dictate. I agree with the intermediate appellate court, once the chancellor concludes that the property acquired during the parties' separation was marital property, "the method of acquisition ... bec[omes] merely one factor among ten statutory factors, with its weight to be determined by the court as trier of fact." Alston v. Alston, 85 Md.App. 176, 188, 582 A.2d 574, 510 (1990), cert. granted, 322 Md. 333, 587 A.2d 510 (1991) (emphasis supplied). I would hold that it is the chancellor's duty, not ours, to consider all of the factors and determine the weight to be given to each factor.
Making the determination whether particular property may be the basis of a monetary award to depend primarily on the timing of its acquisition not only flies in the face of the legislative scheme and the interpretation we have given marital property, but it has the effect, as I have shown, of treating the same kind of property differently based only on that factor. Moreover, as I have also shown, an unnecessary layer of review, requiring consideration of different factors depending on the timing of acquisition, is imposed.
Prior to today, a trial court's decision to make a monetary award, the identification of the property from which it is to be made and the award itself could be reversed only where it was "clear from the record that the [court] gave no more than lip service to the [ten] factors", Alston, 85 Md. App. at 188, 582 A.2d at 579, quoting Ward v. Ward, 52 Md.App. 336, 343-44, 449 A.2d 443, 448 (1982), or "where the court misinterpreted or dismissed as unimportant one of the factors." Id. at 188, 582 A.2d at 579-80, citing Mount v. Mount, 59 Md.App. 538, 476 A.2d 1175, 1183 (1984). Now, when property is acquired after separation, the trial court's monetary award decision as to that property may be reversed if factor eight is not accorded considerable weight.
If the Legislature had intended the result the majority reaches, it could, and probably would, have drawn a distinction between pre-separation and post-separation acquired property or, at least, prioritized the required factors according to importance, perhaps listing factor eight as most important. Currently, "how and when the marital property was acquired" is the eighth of the ten factors, indicating, if anything at all, that it is not to be accorded overriding importance. See Giedinghagen v. Giedinghagen, 712 S.W.2d 711 (Mo. App. 1986), in which the court held
Id. at 714 (emphasis omitted and supplied).
The determination of whether a spouse is entitled to a monetary award in respect of the acquisition of marital property and, if so, in what amount has been entrusted by the Legislature to the sound discretion of the chancellor, the latter decision required to be made by the chancellor upon the consideration of the factors enumerated in section 8-205(b). That decision was not, and should not be, made to depend upon when the property was acquired or whether the reviewing court believes the result the chancellor reaches to be harsh.
Mrs. Alston also alleged that she and Mr. Alston had cohabited briefly during March 1988, thereby abandoning any claim for a no-fault divorce on the ground of voluntary separation for over one year.
Some states which have adopted equitable distribution schemes have created a statutory presumption in favor of equal distribution. See, e.g., Ark. Code Ann. (1987, 1991 Repl.Vol.) § 9-12-315(a)(1) ("All marital property shall be distributed one-half to each party unless the court finds such a division to be inequitable. In that event the court shall make some other division that the court deems equitable"); N.C. Gen. Stat. (1992) § 50-20(c); Oregon Revised Stat. (1991) § 107.105(1)(f); W. Va.Code Ann. (1966, 1992 Repl.Vol.) § 48-2-32(a); Wis. Stat. Ann. (1981) § 767.255. See also Salisbury v. Salisbury, 657 S.W.2d 761, 770 (Tenn. Ct. App. 1983) (adopting a presumption of equal division as a matter of statutory interpretation). Other states have adopted equal division as a less formal "starting point" for equitable distribution. See LaBuda v. LaBuda, 349 Pa.Super. 524, 503 A.2d 971 (1986); Wanberg v. Wanberg, 664 P.2d 568, 575 (Alaska 1983); Cherry v. Cherry, 66 Ohio St.2d 348, 355, 421 N.E.2d 1293, 1298-1299 (1981).
(b) Factors in determining amount and method of payment or terms of transfer. — The court shall determine the amount and the method of payment of a monetary award, or the terms of the transfer of the interest in the pension, retirement, profit sharing, or deferred compensation plan, or both, after considering each of the following factors: