McGeehan v. McGeehan , 455 Md. 268 ( 2017 )

Ann McGeehan v. Michael McGeehan, No. 93, Sept. Term, 2016. Opinion by Battaglia,
J.
MARRIAGE AND COHABITATION – AGREEMENTS CONCERNING
MARRIAGE – POSTNUPTIAL AGREEMENTS – PROPERTY DISPOSITION IN
DIVORCE – MD. CODE ANN., FAM. LAW § 8-201(e)(3)(iii)
Under Section 8-201(e)(3)(iii) of the Family Law Article of the Maryland Code, which
permits a valid agreement to exclude property acquired during the marriage from marital
property, a valid postnuptial agreement does not require language that reclassifies
property as nonmarital in order to exclude that property from marital property in divorce.
Circuit Court for Howard County
Case No: 13-C-14-101752
Argued: June 2, 2017
IN THE COURT OF APPEALS
OF MARYLAND
No. 93
September Term, 2016
______________________________________
ANN MCGEEHAN
v.
MICHAEL MCGEEHAN
______________________________________
Barbera, C.J.,
Greene,
Adkins,
McDonald,
Watts,
Getty,
Battaglia, Lynne A. (Senior Judge,
Specially Assigned),
JJ.
______________________________________
Opinion by Battaglia, J.
Getty, J., concurs.
______________________________________
Filed: August 10, 2017
We are asked to consider whether an agreement entered into during the course of a
marriage made manifest by three deeds by which title was transferred to the wife, Ann
McGeehan, Petitioner, by her husband, Michael McGeehan, Respondent, was sufficient
to exclude those properties from consideration as marital property under Section 8-201(e)
of the Family Law Article of the Maryland Code (1984, 2012 Repl. Vol.). 1 We granted
certiorari to address the following question:
Did the Court of Special Appeals err in affirming the trial court’s determination
that the parties’ oral agreement, with consideration, that property deemed Wife’s
sole and separate property did not constitute a “valid agreement” under the
requirements of [the Family Law Article] § 8-201(e)?
McGeehan v. McGeehan, 451 Md. 580 (2017).
In October of 2014, Ann and Michael McGeehan separated after an eighteen year
marriage, during which they had eight children. Two months later, Mr. McGeehan filed
for divorce in the Circuit Court for Howard County, and an acrimonious debate ensued,
which culminated in a divorce in December of 2015. The one year battle consumed
1
All references to the Family Law Article are to Maryland Code (1984, 2012 Repl. Vol.),
unless otherwise noted. Section 8-201(e) of the Family Law Article provides:
(e) Marital property. — (1) “Marital property” means the property,
however titled, acquired by 1 or both parties during the marriage.
(2) “Marital property” includes any interest in real property held by
the parties as tenants by the entirety unless the real property is excluded by valid
agreement.
(3) Except as provided in paragraph (2) of this subsection, “marital
property” does not include property:
(i) acquired before the marriage;
(ii) acquired by inheritance or gift from a third party;
(iii) excluded by valid agreement; or
(iv) directly traceable to any of these sources.
volumes of the record, but our analysis will be focused on only that which engenders the
discussion of three pieces of real property: property located on Embassy Park Road in
Washington, DC (“Embassy Park”), purchased in December of 1998 and titled initially in
both names as tenants by the entirety; another property located in Mason Neck, Virginia
(“Mason Neck”), purchased in 2000 and titled initially in the husband’s name; and
property located on Farside Road in Ellicott City, Maryland (“Farside”), purchased in
2002 and titled as tenants by the entirety.
A fourth property located at Log Jump Trail in Ellicott City, Maryland (“Log
Jump”), purchased in September of 2013 by the McGeehans and titled as tenants by the
entirety is relevant, because proceeds of sales of the Farside and Embassy Park properties
apparently were rolled into the Log Jump purchase. Only the Log Jump and Mason Neck
properties were owned by the parties at the time of their divorce. 2
The present dispute between the parties before us was queued up in April of 2005
when a series of events occurred that were encapsulated by the Circuit Court Judge in her
findings:
[I]n the year 2000, wife learned the husband had taken $50,000 out of her sole
bank account without her knowledge or permission to purchase a piece of property
in [Mason Neck], Virginia. Husband told her afterward he had taken the money to
purchase the property but wife now says she doesn’t know if that’s why he took
the money.
2
There is a reference to furniture at a “Whale Boat” property being marital property in
the findings entered by the Circuit Court Judge. “Whale Boat” referred to Mr.
McGeehan’s leased residence.
2
The judge then discussed Mr. McGeehan’s stock trading, which ultimately lead to the
April 2005 real property transactions:
Husband testified he accessed many of wife’s accounts and that she was
aware that he did so since it was he who handled the family finances. In addition,
he had changed the document that wife had signed to allow him to take $5,000 out
of her premarital security account and he changed it to read $15,000. Throughout
the parties’ marriage, from time to time -- from the time husband worked for
Merrill Lynch, husband would invest in the stock market. He made a lot of money
early on but lost as much as he had earned when the dot com bubble burst.
Husband discontinued stocking trading for a period of time when the family lived
in Europe but resumed in about 2008 and continued to trade for several years. His
last trade was about six months ago. It appears from the evidence that husband has
lost significantly more in the stock market than he has profited.
The judge then described the circumstances of the transfer in April of 2005 that
lead to this embroilment:
In 2005, wife discovered that husband had been trading her premarital stock
account and she discovered that when she got a tax bill from the State of Virginia
for over $592,000. This was a time of crisis for the couple and at that time it led
them both to contemplate the future of their marriage. Wife made a new will
leaving everything to her children and had her family’s estate attorney write up a
waiver of the statutory share for her husband to sign. Wife lost trust in husband,
demanded that he transfer the parties’ Embassy Park Drive home, Farside home in
Ellicott City and the property in Virginia into her sole name. Husband alleges that
this was done for estate planning purposes due to his risky employment but it’s
more credible that it was done to appease wife who was distraught over losing her
inherited stock portfolio. The parties continued in the marriage after this. Husband
continued to be in charge of the parties’ finances.
The judge also found that, “All of the premarital funds had been co-mingled at that
point.”
The gravamen of the question raised by Ms. McGeehan, however, arises as a result
of the judge’s determination that the Mason Neck property retitled in 2005 to Ms.
McGeehan’s name was marital property:
3
The [Mason Neck], Virginia property was disputed property. It was initially
titled in husband’s name. It was transferred to wife’s name in 2005 at a time when
wife had recently learned her premarital estate had been traded away in the stock
market. It would seem that it was the parties’ mutual agreement that the property
would be wife’s property. Under the law of Maryland, even though property is
titled in the name of one party or another party, it remains marital property and can
be excluded by agreement of the parties. But the law is clear that to do that, and I
just learned this, the agreement has to be specific not just that it’s my sole and
separate property but it is my sole and separate property and will be excluded from
marital property in the future. It has to be explicitly stated. It was not explicitly
stated. I’ve seen no evidence that it was. So, under the cases of Golden versus
Golden and Falise versus Falise, the property is now marital. However, it’s titled
in wife’s name. Wife is the only person as the titled owner who can give an
opinion as to its value and since the property was not appraised, I have to find that
the value of that property is $600,000.00.
The Judge also determined that the Log Jump property, titled as tenants by the entirety
upon purchase, was marital property, without any discussion of whether any portion of it
was excluded by valid agreement or any consideration of its financial underpinnings or
source of funds 3:
3
Under the source of funds theory, property that is acquired by an expenditure of both
nonmarital and marital funds is characterized as part nonmarital and attributed to the
contributing spouse, and part marital, subject to equitable distribution. Harper v. Harper,
294 Md. 54, 80 (1982). Log Jump, as jointly titled property, may have been properly
determined to be marital property under Section 8-201(e)(2) of the Family Law Article,
in the absence of a valid agreement to exclude it as nonmarital property. If Farside and
Embassy Park were nonmarital properties, however, any contribution of their proceeds to
Log Jump’s purchase should also have been considered in the trial judge’s determination
of the monetary award under Section 8-205(b)(8)–(9) of the Family Law Article. Section
8-205(b)(8)–(9) of the Family Law Article provides:
(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 . . . after considering each of the following factors . . .
(8) how and when specific marital property or interest in property described
in subsection (a)(2) of this section, was acquired, including the effort expended by
(continued . . . )
4
There is a house on Log Jump Trail, 11640 Log Jump Trail. It is titled
tenants by the entireties. It is marital property. Its value is $1,568,200.00. There is
a debt against that property of $445,000. So the value of that property is . . .
$1,123,200.
The “gift deed” executed and recorded in 2005 between the McGeehans with
respect to the Mason Neck property conveyed the property to Ms. McGeehan as her “sole
separate and equitable estate”:
THIS DEED, made and entered into this 11th day of April, 2005, by and
between Michael S. McGEEHAN, a married man, GRANTOR, and Ann O.
McGEEHAN, a married woman, as and for her sole separate and equitable estate,
GRANTEE:
WHEREAS, Michael S. McGeehan acquired an interest in the property
described herein by deed dated May 5, 2000 and recorded May 8, 2000, in Deed
Book 11343 at Page 1378, among the land records of Fairfax County, Virginia;
and
WHEREAS, Michael S. McGeehan, Grantor, desires to convey all his
rights, title and interests in said property described herein to his wife, Ann O.
McGeehan, the Grantee, in fee simple.
The “gift deed” conveying the couple’s Embassy Park property to Ms. McGeehan
similarly provided that the property would be “her sole separate and equitable estate”:
THIS DEED, made and entered into this 11th day of April, 2005, by and
between Michael S. McGEEHAN, a married man, GRANTOR, and Ann O.
McGEEHAN , a married woman, as and for her sole separate and equitable estate,
GRANTEE:
WHEREAS, Michael S. McGeehan acquired an interest in the property
described herein along with his wife An [sic] O. McGeehan, as tenants by the
entirety with full common law right of survivorship, by deed dated November 18,
( . . . continued)
each party in accumulating the marital property or the interest in property
described in subsection (a)(2) of this section, or both;
(9) the contribution by either party of property described in § 8-201(e)(3) of
this subtitle to the acquisition of real property held by the parties as tenants by the
entirety . . . .
5
1998 and recorded December 2, 1998, as Instrument Number 9800092930, among
the land records of the District of Columbia; and
WHEREAS, Michael S. McGeehan, Grantor, desires to convey all his
rights, title and interests in said property described herein to his wife, Ann O.
McGeehan, the Grantee, in fee simple.
With respect to the Farside property, the deed transferring the property from “Husband
and Wife to Wife” 4 provided:
This Deed, made this 11th day of April, 2005, by and between MICHAEL
S. MCGEEHAN and ANN O. MCGEEHAN, parties of the first part, Grantors;
and ANN O. MCGEEHAN, party of the second part, Grantee.
– Witnesseth –
THIS IS A TRANSFER FROM HUSBAND AND WIFE TO WIFE AND IS
EXEMPT UNDER 12-1098(d) OF TAX PROPERTY ARTICLE OF THE
ANNOTATED CODE OF MARYLAND.
THAT for an in consideration of the sum of NO AND 00/100 DOLLARS ($.00),
which includes the amount of any outstanding Mortgage or Deed of Trust, if any,
the receipt whereof is hereby acknowledged, the said Grantors do grant and
convey to the said ANN O. MCGEEHAN, as sole owner, in fee simple, all that lot
of ground situate in Howard County, Maryland . . . .
At trial, Ms. McGeehan testified that the Embassy Park property was sold in
“2012 or 2013,” and the proceeds from that sale yielded “a little bit more than
$400,000.00”:
Q. Now, concerning the property on Embassy, there came a time when you sold
that, right?
A. Yes.
Q. The D.C. property. And to the best of your recollection, approximately when
was that home sold?
4
The Deed iterated that the transfer was “EXEMPT UNDER 12-1098(d) OF TAX
PROPERTY ARTICLE OF THE ANNOTATED CODE OF MARYLAND.” This
statement apparently referred to Section 12-108(d) of the Tax Property Article of the
Maryland Code (1985, 2001 Repl. Vol.), which provided, “An instrument of writing that
transfers property between spouses or former spouses is not subject to recordation tax.”
6
A. To the best of my recollection, around it was the summertime, it was either
2012 or 2013. And then it went into escrow, the proceeds, while I looked for an
investment property.
Q. Now and do you remember what the approximate amount was from the
proceeds of the sale of that property?
A. Approximately $440,000.00. Around $400,000.00, a little bit more than
$400,000.00. We had purchased it for $200,000.00 something it was . . . sold for
about $650,000.00 and there was – and uh, yeah.
Ms. McGeehan further testified that Farside was sold in 2014, and the proceeds of
Embassy Park and Farside were used to purchase Log Jump:
Q. And with regard to the purchase of your current property [Log Jump], were
there uh, was any portion of the – well the property was sold, correct? The
[Farside] property was sold?
A. Yes it was.
Q. And do you remember the approximate amount it was sold for?
A. It was approximately sold, approximately $800,000.00.
Q. And when it was sold do you know how the proceeds were applied, if at all, to
the purchase of the Log Jump property?
A. My husband told me that we were rolling all of the proceeds into the Log Jump
property because the Log Jump property was about – it’s $400,000.00 more
expensive and that was the same amount of the $439,500.00 proceeds. So we were
combining in the two ultimately to move them –
Q. When you say combining the two, what two are you referring to?
A. In other words, the [Embassy Park] property, the properties are listed on my –
the [Embassy Park] property, the properties are listed on my – the [Embassy Park]
and the 11777 [Farside] Road. Both of those properties were sold. And both my
understanding and what my husband definitively told me is that the full sum of
those two properties which were in my name, would be transferred into the
property to have a bigger house for the kids, you know, for us to live in.
The issue raised by Ms. McGeehan before us is, thus, queued up. Did the 2005
Mason Neck gift deed from Mr. McGeehan act not only to transfer title to Ms. McGeehan
but also to remove Mason Neck from consideration as marital property? Likewise, did the
2005 deeds from husband to wife relating to Embassy Park and Farside make them
nonmarital property, such that their subsequent sales and contribution of their proceeds to
7
the purchase of Log Jump render any portion of the value of Log Jump nonmarital?
Although both parties present the decisions by the Court of Special Appeals in Golden v.
Golden, 116 Md. App. 190 (1997), and Falise v. Falise, 63 Md. App. 574 (1985), as
dispositive to our analysis, we, as will be seen, disagree.
Before the Court of Special Appeals, Ms. McGeehan raised a number of issues,
among which she argued that Circuit Court Judge had erred in classifying Mason Neck
and, implicitly, Farside as marital property because there was a “valid agreement” under
Section 8-201(e) of the Family Law Article excluding the two pieces of real property
from marital property. 5 Mr. McGeehan, conversely, contended that there had never been
an agreement that Mason Neck and Farside, as well as Embassy Park, were nonmarital
property, and, thus, Log Jump was appropriately designated as marital property. He
argued that there was no evidence of an explicit agreement to designate Mason Neck as
“nonmarital” and that, not only did the trial judge expressly find that Log Jump had been
purchased with co-mingled funds, but, even if Farside and Embassy Park were wife’s
5
The five questions presented before the Court of Special Appeals by Ms. McGeehan
were:
I. Did the lower court err or abuse its discretion in allowing federal government to
participate as a party in trial proceedings?
II. Did the lower court err or abuse its discretion in determining child support,
imputing income, and finding that Appellant voluntarily impoverished?
III. Did the lower court err or abuse its discretion in failing to award use and
possession of the marital home to wife?
IV. Did the lower court err or abuse its discretion in its determination of marital and
non-marital property and in its determination of a monetary award?
V. Did the lower court err or abuse its discretion erred [sic] in failing to rule on
motion to void deeds of trust recorded before merits trial by Appellee’s counsel on
the marital home titled as tenants by the entireties?
8
nonmarital property, the trial court had the discretion to ignore that fact in the
determination of the monetary award.
The Court of Special Appeals agreed with Mr. McGeehan and relied on the trial
court’s rationale for its observation that:
Although, as the trial court noted, the deed for the property and the oral
agreement between the parties evidenced an intent to transfer the property into
[Ms. McGeehan’s] name alone, they did not express an intent to remove the
Mason Neck property from marital property status or to exempt it from application
of the Marital Property Act. The trial court, citing Golden v. Golden, carefully
noted that that an agreement must explicitly state that the property is to be
excluded from marital property and that the agreement between [Ms. McGeehan]
and Mr. McGeehan had no such statement. The trial court concluded that the
testimony and the documents did not support a finding that the parties were
contemplating the future division of property and wanted to remove the Mason
Neck property from the scope of the Marital Property Act. Similarly, the trial court
did not believe that Ms. [McGeehan’s] use of gift funds to pay off the mortgage
converted Mason Neck into nonmarital property. We see no error in the trial
court’s analysis.
McGeehan v. McGeehan, September Term, 2015, No. 2445, at 13–14 (October 26, 2016).
Before us, Ms. McGeehan argues that the trial court misapplied Golden and Falise
to require that the deeds needed to specify that the properties would be nonmarital and
that the words “sole” and “separate” as well as “sole owner” contained in the deeds were
not sufficient to exclude the properties from marital property. Mr. McGeehan, on the
other hand, maintains that the transfers of the three properties to Ms. McGeehan did not
constitute a valid agreement to exclude any portion of the value of the properties or
proceeds from the sale of the properties from the marital cauldron, because the deeds and
oral agreements were not specific enough to exempt them from marital property.
9
The gravamen of the Maryland property division scheme upon divorce is an
attempt to ensure that the value of both real and personal property is distributed in a fair
and equitable manner. Cynthia Callahan & Thomas C. Ries, Fader’s Maryland Family
Law § 13-2 (6th ed. 2016). 6 The initial determination by a trial judge centers on whether
the property is marital, such that its value is attributable to both spouses, or nonmarital
and attributable to one spouse. Section 8-203(a) of the Family Law Article. 7 Once the
values of the marital and nonmarital properties have been identified, 8 a monetary award
is tabulated as an adjustment of the equities and rights of the parties concerning marital
property:
(a) Grant of award. — (1) Subject to the provisions of subsection (b) of this
section, after the court determines which property is marital property, and the
value of the marital property, the court may . . . grant a monetary award . . . as an
adjustment of the equities and rights of the parties concerning marital property . . .
.
* * *
(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 . . . after considering each of the following factors:
(1) the contributions, monetary and nonmonetary, of each party to the well-
being of the family;
(2) the value of all property interests of each party;
6
All references to Cynthia Callahan & Thomas C. Ries’ Fader’s Maryland Family Law
will be to the 2016 edition, unless otherwise noted.
7
Section 8-203(a) of the Family Law Article provides, in pertinent part:
(a) Time of court action. — In a proceeding for an annulment or an absolute
divorce, if there is a dispute as to whether certain property is marital property, the
court shall determine which property is marital property . . . .
8
Section 8-204(a) of the Family Law Article provides:
(a) Determination by court. — Except as provided in subsection (b) of this section,
the court shall determine the value of all marital property.
10
(3) the economic circumstances of each party at the time the award is to be
made;
(4) the circumstances that contributed to the estrangement of the parties;
(5) the duration of the marriage;
(6) the age of each party;
(7) the physical and mental condition of each party;
(8) how and when specific marital property or interest in property described
in subsection (a)(2) of this section, was acquired, including the effort expended by
each party in accumulating the marital property or the interest in property
described in subsection (a)(2) of this section, or both;
(9) the contribution by either party of property described in § 8-201(e)(3) of
this subtitle to the acquisition of real property held by the parties as tenants by the
entirety;
(10) any award of alimony and any award or other provision that the court
has made with respect to family use personal property or the family home; and
(11) any other factor that the court considers necessary or appropriate to
consider in order to arrive at a fair and equitable monetary award or transfer of an
interest in property described in subsection (a)(2) of this section, or both.
(c) Award reduced to judgment. — The court may reduce to a judgment any
monetary award made under this section, to the extent that any part of the award is
due and owing.
Section 8-205 of the Family Law Article.
Section 8-201(e) of the Family Law Article defines “marital property,” provides
that real property titled as tenants by the entirety is marital property, unless excluded by
valid agreement, and also allows all other property “excluded by valid agreement” to be
excluded from marital property:
(e) Marital property. — (1) “Marital property” means the property,
however titled, acquired by 1 or both parties during the marriage.
(2) “Marital property” includes any interest in real property held by
the parties as tenants by the entirety unless the real property is excluded by valid
agreement.
(3) Except as provided in paragraph (2) of this subsection, “marital
property” does not include property:
(i) acquired before the marriage;
(ii) acquired by inheritance or gift from a third party;
(iii) excluded by valid agreement; or
(iv) directly traceable to any of these sources.
11
The statute, however, does not define what constitutes a “valid agreement.”
What is now the language of Section 8-201(e)(3)(iii) of the Family Law Article,
providing that property “excluded by valid agreement” is nonmarital, was enacted as part
of the Maryland Property Disposition in Divorce and Annulment Act (the “Marital
Property Act”) by the General Assembly in 1978, which established our current statutory
regime providing for the disposition of property in a divorce. 1978 Maryland Laws,
Chapter 794. The language had been recommended by the Governor’s Commission on
Domestic Relations Laws (also known as the “Groner Commission,” named after its
chairperson Beverly Groner), appointed in 1976, in part, to propose changes to the
Maryland laws governing the disposition of property in divorce. Report of the Governor’s
Commission on Domestic Relations Law, at 2 (1978).
With respect to the definition of “marital property,” the Groner Commission
recommended only one exclusion from the definition of marital property, that being
property “excluded by valid agreement.” Id. at 7. The Report of the Groner Commission,
however, did not include any reference to where the language of valid agreement was
derived, nor define what a “valid agreement” was. Id.
The General Assembly in Chapter 794 of the Maryland Laws of 1978 did follow
the lead of the Groner Commission and provided that “property excluded by valid
agreement” was not marital property, which was codified at Section 3–6A–01(e) of the
Courts and Judicial Proceedings Article of the Maryland Code (1974, 1979 Supp.), with
the addition of other exclusions:
12
“Marital property” is all property, however titled, acquired by either or both
spouses during their marriage. It does not include property acquired prior to the
marriage, property acquired by inheritance or gift from a third party, or property
excluded by valid agreement or property directly traceable to any of these sources.
1978 Maryland Laws, Chapter 794.
One commentator at the time noted the significance of “permit[ting] the exclusion
of property from the provisions of the statute if governed by a valid agreement,” which
elevated the role that antenuptial contracts would have in resolving property disputes
upon divorce. Paula Peters, Property Disposition Upon Divorce in Maryland, 8 U. Balt.
L. Rev. 377, 409 n.201 (1979) (noting that “practitioners should consider increased
counseling and education in the field of antenuptial agreements” as a result of the
enactment of the statute). This Court also recognized that as a result of the enactment of
the “valid agreement” language, parties could “control the distribution of property upon
divorce” through antenuptial agreements:
Furthermore, the General Assembly has expressed the public policy of
Maryland such that antenuptial agreements contemplating divorce are recognized,
and hence not contrary to public policy. In 1978, the General Assembly enacted
what is known as the Marital Property Act which concerns property distribution
upon divorce. 1978 Md. Laws 794. Under the statute, the parties may agree what
property is not to be considered marital property or family use personal property.
Maryland Code (1974, 1980 Repl. Vol.), Cts. & Jud. Proc. Article, § 3–6A–01(c),
(e). Through such agreements, the parties can control the distribution of property
upon divorce.
Frey v. Frey, 298 Md. 552, 562 (1984).
13
In 1994, the General Assembly, in response to our decision in Grant v. Zich, 300
Md. 256 (1984), added a provision to the statute that real property held by spouses as
tenants by the entirety is marital property, unless “excluded by valid agreement” 9:
(e)(1) “Marital property” means the property, however titled, acquired by 1 or both
parties during the marriage.
(2) “Marital property” includes any interest in real property held by the
parties as tenants by the entirety unless the real property is excluded by valid
agreement.
(3) Except as provided in paragraph (2) of this subsection, “marital
property” does not include property:
(i) acquired before the marriage;
(ii) acquired by inheritance or gift from a third party;
(iii) excluded by valid agreement; or
(iv) directly traceable to any of these sources.
1994 Maryland Laws, Chapter 462. In so doing, the General Assembly intended to
overrule Grant v. Zich, according to its bill analysis:
This bill is directed toward the first step of the court’s analysis of marital
property. It overrules the holding in Grant v. Zich, in which the Court of Appeals
ruled that in determining whether property held by the parties as tenants by the
entirety should be characterized as marital property, a court must apply a source of
9
By Chapter 296 of the Maryland Laws of 1984, the General Assembly repealed former
Section 3–6A–01(e) of the Courts and Judicial Proceedings Article of the Maryland Code
(1974, 1980 Repl. Vol.), and recodified the provision, with stylistic changes, as Section
8-201(e) of the Family Law Article of the Maryland Code (1984):
(e) Marital property.
(1) “Marital property” means the property, however titled, acquired by 1 or
both parties during the marriage.
(2) “Marital property” does not include property:
(i) acquired before the marriage;
(ii) acquired by inheritance or gift from a third party;
(iii) excluded by valid agreement; or
(iv) directly traceable to any of these sources.
1984 Maryland Laws, Chapter 296.
14
the funds analysis, and that the portion of the property that is directly traceable to
funds or other property acquired before marriage is nonmarital property.
Senate Judicial Proceedings Committee, Bill Analysis of Senate Bill 41 (1994).
In abrogating Grant v. Zich, the General Assembly adopted the presumption that a
tenancy by the entirety property was marital and could only be excluded as nonmarital by
the execution of a valid agreement. Its value relative to the monetary award would
continue to be subject to the rubric of Section 8-205(b) of the Family Law Article of the
Maryland Code (1991 Repl. Vol., 1995 Supp.), to which was added a new factor in the
same legislation. 10
In so doing, the General Assembly recognized the importance of the legal analysis
of a valid agreement to determine exclusion, rather than an initial analysis of the source
of funds. Since the introduction of what is now Section 8-201(e)(2) of the Family Law
Article, the Court of Special Appeals has decided in Brown v. Brown, 195 Md. App. 72,
107 n.18 (2010), in the only reported opinion addressing the validity of an agreement
10
The General Assembly in 1994 also amended Section 8-205(b) of the Family Law
Article of the Maryland Code (1984, 1991 Repl. Vol.), requiring the trial court to
consider the nonmarital contributions of a spouse to property held as tenants by the
entirety, among the other statutory factors, when determining the propriety and amount of
a monetary award:
(b) The court shall determine the amount and the method of payment of a
monetary award . . . after considering each of the following factors:
(9) the contribution by either party of property described in § 8-201(e)(3) of
this subtitle to the acquisition of real property held by the parties as tenants by the
entirety.
1994 Maryland Laws, Chapter 462.
15
under that section, that a jointly filed statement under Maryland Rule 9-207 11 designating
a tenancy by the entirety property as nonmarital could constitute a valid agreement to
exclude that property from marital property.
Each party before us, however, asserts that two cases, Falise and Golden need to
be considered to determine what the General Assembly intended in adopting the language
of valid agreement in Section 8-201(e)(3)(iii) of the Family Law Article. In Falise, the
Court of Special Appeals considered whether a clause in a separation agreement that
excluded real property acquired after separation, but before the divorce, was valid, in the
context of a husband having purchased property in his own name during that period,
reconciling with his wife, and retitling the property as tenants by the entirety. The
separation agreement in issue had provided that both spouses agreed to waive “all rights,
11
Maryland Rule 9-207 provides, in relevant part:
(a) When required. When a monetary award or other relief pursuant to Code,
Family Law Article, § 8-205 is an issue, the parties shall file a joint statement
listing all property owned by one or both of them.
(b) Form of Property Statement. The joint statement shall be in substantially the
following form:
JOINT STATEMENT OF PARTIES CONCERNING MARITAL AND
NON-MARITAL PROPERTY
1. The parties agree that the following property is “marital property” as
defined by Maryland Annotated Code, Family Law Article, § 8-201 . . .
* * *
2. The parties agree that the following property is not marital property
because the property (a) was acquired by one party before marriage, (b) was
acquired by one party by inheritance or gift from a third person, (c) has been
excluded by valid agreement, or (d) is directly traceable to any of those sources . .
.
* * *
3. The parties are not in agreement as to whether the following property is
marital or non-marital . . .
16
title, interest and claims which said parties might now have or may hereafter have as the
husband, wife . . . or otherwise, in and to any property, real or personal, that either of said
parties may own or hereafter acquire. . . .” Falise, 63 Md. App. at 578 n.1. The agreement
had been executed prior to the enactment of the Marital Property Act.
Attempting to address whether the separation agreement clause in issue constituted
a valid agreement to exclude the property from consideration as marital property, the
Court of Special Appeals observed that, “the parties intended to relinquish any and all
right, title and interest in and to the other’s property, then owned or thereafter acquired.”
Id. at 580. Regardless of the parties’ intentions, however, our intermediate appellate court
emphasized that the clause in the separation agreement could not anticipate the passage
of the Marital Property Act. As a result, then, the Marital Property Act was in play, and
the absence of reclassification language of the property as nonmarital was determinative
that a valid agreement to exclude did not exist:
The only real significance of the Agreement is in the relationship of [the clause] to
the tract of land in Howard County upon which the Falises constructed the home at
issue, i.e., whether the tract itself constitutes marital or nonmarital property. That
significance dissipates like a puff of smoke because even if the separation
agreement was not abrogated, the unimproved lot of ground acquired by appellant
during the separation must be classified as “marital” and not as “nonmarital”
property.
It is clear that by [the clause] of the agreement the parties intended to
relinquish any and all right, title and interest in and to the other's property, then
owned or thereafter acquired. We doubt that the subject agreement could affect the
status of something which is neither an interest in real or personal property, i.e.,
marital property. Marital property is merely a term created by the legislature to
describe the status of property acquired during the marriage, however titled (as
defined in Md. Family Law Code Ann. § 8–201(e) (1984)), title to which may
have given rise to a potential inequity, upon dissolution of the marriage. That
inequity, conceptually, may be corrected via a different legislative creature called
17
the “monetary award.” Thus, the only function of “marital property” is to form a
base for a “monetary award.” The legislature never intended that either spouse
could have a legal interest in the “marital property” of the other since it merely
intended to cure the title created inequity through the issuance of a “monetary
award.”
Id.
The holding in Falise then followed: “In order to exclude property ‘by valid
agreement’ from the reach of a monetary award, we believe that the parties must
specifically provide that the subject property must be considered ‘non marital’ or in some
other terms specifically exclude the property from the scope of the Marital Property Act.”
Id. at 581. In so doing, the Court of Special Appeals enmeshed the notion of
reclassification of the property as nonmarital into its interpretation of the language of
valid agreement, 12 which has led to disparate results in interpreting separation
agreements.
12
We take a moment to note that there is a distinction between a valid agreement, which
has been construed under contract principles, and reclassification. The distinction is
important not only in terms of the holding in the present case, but for an understanding of
the dichotomy observed in Falise. In drawing this distinction, we have reviewed the
provisions and comments to the Uniform Marital Property Act (1983), which identifies
statutory bases for exclusion from marital property including a marital property
agreement or reclassification, among others.
Section 4 of the Uniform Marital Property Act (1983) defined “individual,” or
nonmarital, property as including property acquired “by a decree, marital property
agreement, written consent, or reclassification . . . designating it as the individual
property of the spouse. . . .” The Uniform Act’s provisions and commentary separate the
interpretation of a valid agreement from the concept of reclassification, a term which is
not a part of the Maryland statutory scheme.
In assessing the validity of marital property agreements, Section 10(f)–(h) of the
Uniform Marital Property Act (1983) suggested standards for enforcing marital property
agreements made both during marriage and before marriage, based on various principles:
(continued . . . )
18
One such disparate result was occasioned in Carsey v. Carsey, 67 Md. App. 544,
553 (1986), in which the Court of Special Appeals evaluated whether a trial court’s
determination that a valid agreement existed to exclude property from marital property in
favor of the wife, after the husband had provided a letter to her by which “all properties
assigned jointly or under my name singularly are Nancy S. Carsey’s privilege to dispose
( . . . continued)
(f) A marital property agreement executed during marriage is not enforceable if
the spouse against whom enforcement is sought proves that:
(1) the agreement was unconscionable when made; or
(2) that spouse did not execute the agreement voluntarily; or
(3) before execution of the agreement, that spouse: (i) was not provided a
fair and reasonable disclosure of the property or financial obligations of the
other spouse; (ii) did not voluntarily sign a written consent expressly
waiving any right to disclosure of the property or financial obligations of
the other spouse beyond the disclosure provided; and (iii) did not have
notice of the property or financial obligations of the other spouse.
(g) A marital property agreement executed before marriage is not enforceable if
the spouse against whom enforcement is sought proves that:
(1) that spouse did not execute the agreement voluntarily; or
(2) the agreement was unconscionable when made and before execution of
the agreement that spouse: (i) was not provided a fair and reasonable
disclosure of the property or financial obligations of the other spouse; (ii)
did not voluntarily sign a written consent expressly waiving any right to
disclosure of the property or financial obligations of the other spouse
beyond the disclosure provided; and (iii) did not have notice of the property
or financial obligations of the other spouse.
(h) An issue of unconscionability of a marital property agreement is for decision
by the court as a matter of law.
Reclassification, on the other hand, “is just what the word implies-it is a change in
classification, generally from marital to individual or vice versa.” Unif. Marital Property
Act § 4 cmt. on classification (1983). Although the Act notes that “title does not function
as a classification index,” id., “the provisions of the Act do not require any particular
form of labeling of title-documented property. . . .” Id. § 11 cmt.
In raising the dichotomy between what is a valid agreement and a reclassification,
we leave for a more appropriate case whether Falise continues to be valid in the context
of a separation agreement.
19
of as she wishes,” provided that wife took on the “responsibility for liabilities related to
that estate.” Our intermediate appellate court agreed that a valid agreement “respecting
the ownership of property which by its terms justified a finding of no marital property,”
id. at 552, existed, contrasting Falise and applying traditional contract principles of offer,
acceptance, consideration, and intent, as well as knowledge of the assets and
voluntariness in its analysis:
Unlike the parties in Falise, who, by a bilateral agreement, relinquished all
right, title and interest in and to each other’s property (known and unknown, then
owned or thereafter acquired), Julian Carsey made a unilateral offer to Nancy
Carsey whereby “all properties assigned jointly or under my name singularly are
Nancy S. Carsey’s privilege to dispose of as she wishes” if she undertook
“responsibility for liabilities related to that estate.” The trial judge found, and we
agree, that Nancy, through her conduct, accepted the unilateral offer; ergo, a valid
agreement. That valid agreement specifically authorized Nancy to dispose of the
property as she pleased, thus manifesting a clear intent, albeit “in some other terms
specifically [to] exclude the property from the scope of the Marital Property Act.”[]
Furthermore, in Falise, unlike here, the property sought to be excluded by the
agreement was property acquired by the husband during the parties’ separation
pursuant to the agreement.
Here, the trial court in effect found as a fact, and justifiably so, that the note
and the tape transcript, when viewed in light of appellant’s actions, evinced
appellant’s clear intent to be rid of the liabilities of marriage as well as the
benefits; in short, appellant intended to completely sever any and all connections,
present and future, he had with his marriage, i.e., to chuck it all for now,
henceforth, and forevermore. Supplementing his words, appellant’s conduct also
reflected that he was offering to give up his marital rights to be free of his marital
obligations, just as he was willing to give up property rights to be free of his debts.
The supportive evidence is ample. The note and the transcript speak with
unmistakable clarity. And appellant’s actions provide the exclamation point: he
was fully aware of the parties’ assets; his leaving was volitional, not coerced; aside
from leaving without a hint of warning, so far as the record reveals, during the
more than two years from departure to the filing of his answer to appellee’s
divorce action and his counter-bill for divorce, he never communicated with
appellee; and, even more to the point, he neither inquired nor evidenced any
concern about the property he now claims to be marital property. Furthermore,
appellant himself testified that before leaving, among other things, he decided his
marriage was over and should be dissolved and, having made that decision, he left.
20
Given these facts, we are unable to say that the trial court’s finding was erroneous,
much less clearly so.
Id. at 553–54. 13
In Thomasian v. Thomasian, 79 Md. App. 188 (1989), however, our intermediate
appellate court considered whether property acquired during the couple’s separation, but
before divorce, and titled in husband’s sole name was marital, although it was unclear
from the trial court’s ruling whether it had considered that property as marital or
nonmarital. The Court of Special Appeals noted, relying on the language of Falise, that,
“In order to be effective, the agreement must be sufficiently specific as to make clear that
the property is to be ‘non marital’ or, in some other terms, specifically exclude the
property from the scope of the Marital Property Act.” Id. at 203. Observing that, the
“record does not reflect any such agreement,” id., the court remanded the issue to the trial
court.
In Harbom v. Harbom, 134 Md. App. 430 (2000), the Court of Special Appeals
considered the validity of a separation agreement, as well as of a postnuptial agreement
and an antenuptial agreement, to exclude property as nonmarital, as discussed more fully
infra. With respect to the separation agreement, our intermediate appellate court
considered whether real property, purchased with funds that wife had received from
husband in exchange for her one-half interest in their jointly owned real property, after
13
We note, further, that in a case where the statute was not applied in Williams v.
Williams, 306 Md. 332 (1986), we assessed the validity of a separation agreement, which
provided for the disposition of certain real property, based on the concept of
unconscionability, a traditional contract defense.
21
their separation but before divorce, was nonmarital, pursuant to a valid agreement to
exclude. In determining that the agreement to exchange was a valid agreement to
exclude, the Court of Special Appeals did not rely on the Falise tenets, but determined:
“The exchange between the parties was a distribution of property intended to be separate
from any judicial determination of a monetary award. Consequently, the court did not err
in classifying these properties as nonmarital.” Id. at 454.
In Flanagan v. Flanagan, 181 Md. App. 492 (2008), our intermediate appellate
court considered whether property not identified in the couple’s joint statement of marital
and nonmarital property, but discussed during trial, was marital, such that it should have
been considered in the calculation of the total value of marital property. The joint
statement had only identified four items of marital property but contained a clause that
stated, “The parties agree that all issues with regard to the remaining property that they
hold have been resolved.” Id. at 499. Observing that the trial court had not erred in
calculating the value of parties’ marital property based on the four items identified in the
joint statement, the Court of Special Appeals interpreted the clause as affecting a valid
exclusion from marital property with respect to any remaining property, even though the
property had not been classified as nonmarital:
An agreement such as the one set forth in the parties’ joint statement, that
“all issues with regard to the remaining property that they hold have been
resolved,” when articulated in a Rule 9-207 statement, meets the criteria
explicated in [Falise]: it “specifically exclude[s] the property from the scope of the
Marital Property Act,” and thus removes the property from the marital property
pool that is subject to division. If it were otherwise, the purposes underlying Rule
9-207 would be thwarted, because the parties’ joint statement would not narrow
the issues before the chancellor.
22
Accordingly, an agreement reflected in a joint statement under Rule 9-207,
to the effect that the parties have resolved the disposition of certain marital
property, serves to render that property non-marital, pursuant to F.L. § 8-
201(e)(3)(iii).
Id. at 531–32 (citation omitted).
It certainly goes without saying that the Court of Special Appeals in the instant
case applied the Falise rationale requiring language of reclassification of the property as
nonmarital to effect an exclusion from marital property, even though we are not dealing
with a separation agreement. It is not a given, however, that Falise should be applied in
the context of a postnuptial agreement, as in the present case, as we shall discuss.
Before discussing antenuptial and postnuptial agreements, however, we turn to
Golden, the second case highlighted by the parties. In Golden, the Court of Special
Appeals only decided that the trial court had erred in finding the existence of an oral
agreement entered into premaritally that essentially iterated “what was hers was hers and
what was mine was mine,” based upon conduct that showed “before and after marriage,
these parties, with the exception of the joint account for household expenses, handled
their money and their investments as though unmarried.” Golden, 116 Md. App. at 193.
Our intermediate appellate court in Golden disagreed and posited, “We perceive
that the finding of an oral property settlement agreement was erroneous. We perceive of
nothing in the testimony or evidence in this case that would constitute an agreement
sufficient to bind the parties to it or to support the trial judge’s finding.” Id. at 201–2.
Judge Dale Cathell, writing for the Court, also observed that it would be unlikely that any
23
oral agreement between a husband and wife that “what is hers is hers and what is mine is
mine” could ever contain the degree of specificity referenced by Falise:
Accordingly, in the case sub judice, the trial court's finding that an
agreement existed “between these parties that their property was sole and
separate” is clearly erroneous. We would doubt, although we do not now
specifically hold, that a “what is hers is hers and what is mine is mine” oral
agreement, no matter how often repeated, could ever contain the degree of
specificity required by Falise, i.e., “the parties must specifically provide that the
subject property must be considered ‘non marital’ or in some other terms
specifically exclude the property from the scope of the Marital Property Act.”
Falise, 63 Md.App. at 581, 493 A.2d 385. Accordingly, we shall vacate the trial
court’s judgment on this issue.
Id. 203 (emphasis added). Although Golden went on in dicta to explore what should
occur on remand, its central holding regarding the lack of a valid agreement, because of
insufficiency of evidence supporting the existence of such, is not apposite in the instant
case, because the trial court judge did find that, “It would seem that it was the parties’
mutual agreement that the property would be wife’s property,” although she immediately
obviated that finding by requiring the Falise classification language.
To return to the main issue, however, there are, generally, three different types of
agreements that can be entered into in order to effect property disposition between
spouses upon divorce, the separation agreement, the antenuptial agreement, and the
postnuptial agreement. 14
14
Beneficiary agreements which involve the rights of spouses may also be a fourth
category affecting the distribution of property of spouses, but that clearly is not before us.
See Painewebber Incorporated v. East, 363 Md. 408 (2001),
24
An antenuptial agreement, also referred to as a premarital or prenuptial agreement,
is entered into by prospective spouses prior to marriage and “settl[es] in advance alimony
or property rights of the parties upon divorce.” Cynthia Callahan & Thomas C. Ries,
Fader’s Maryland Family Law § 14-2. One commentator has noted that prospective
spouses will often enter into antenuptial agreements for the protection of their assets and
property rights:
Perhaps the most frequent motivation for entering into a premarital agreement is
that the upcoming marriage is a partial or joint remarriage. A spouse about to
remarry may want a premarital agreement because he or she has children from a
prior relationship and wants to protect his or her assets for them, free from
conflicting claims by the new spouse. A spouse about to remarry may have gone
through a tumultuous divorce; he or she may desire a premarital agreement to
avoid the emotional and financial costs that accompany divorce litigation over
property and support rights, should another divorce occur. In some cases, a
premarital agreement may be motivated by a prospective spouse's hostility to the
state law concept that marriage is an economic partnership and to the sharing of
income and property, particularly at divorce.
Gail Frommer Brod, Premarital Agreements and Gender Justice, 6 Yale J. L. &
Feminism 229, 238–40 (1994) (footnotes omitted).
An antenuptial agreement is interpreted according to the objective theory of
contracts and subject to traditional contract defenses, such as fraud, duress, coercion,
mistake, undue influence, incompetency, or unconscionability at the time the agreement
was entered into. Cynthia Callahan & Thomas C. Ries, Fader’s Maryland Family Law §§
14-1, 14-2[b]. Unlike other contracts, however, a “confidential relationship exists
between the parties, as a matter of law” in an antenuptial agreement. Id. § 14-2(b). To
establish the validity of an antenuptial agreement, however, its proponent must show that
there was no “overreaching,” requiring an exploration of “whether in the atmosphere and
25
environment of the confidential relationship there was unfairness or inequity in the result
of the agreement or in its procurement.” Id.
The absence of overreaching may be established by showing that there was a
“frank, full and truthful disclosure of [each party’s] respective worth in real and personal
property so that ‘he or she who waives can know what it is he or she is waiving.’” Id.
Even when no disclosure has been made, the party seeking to enforce the antenuptial
agreement may prove that overreaching did not occur by showing that the challenging
party had “adequate knowledge of the existence of the assets subject to the waiver and
knowledge of what those assets are worth in sum so that the attacking party knows what
he or she is waiving.” Id. § 14-2(e). Alternatively, the validity of an antenuptial
agreement may be proved if the challenging party was not prejudiced by the lack of
disclosure or knowledge, which is proven by showing that the “benefit to the waiving
party was commensurate with what he or she relinquished such that the agreement was
fair and equitable and/or . . . the party attacking the agreement entered into the agreement
freely and understandingly.” Id. § 14-2(b). 15
15
In Cannon v. Cannon, 384 Md. 537, 550 n.6 (2005), Judge Glenn Harrell, writing for
this Court, observed that the circuit court, in evaluating the antenuptial agreement at issue
there, relied on an earlier version of Fader’s Maryland Family Law for an articulation of
five “considerations” in determining the validity of an antenuptial agreement:
[1] fair and equitable in procurement and result[; 2] parties must make frank, full
and truthful disclosure of all their assets[; 3] the agreement must be entered
voluntarily, freely and with full knowledge of its meaning and effect[; 4] the
importance of independent legal advice in evaluating whether the agreement was
voluntarily and understandingly made is emphasized[; 5] there is a confidential
relationship between the parties which, if a contest to validity occurs, shifts the
(continued . . . )
26
In Herget v. Herget, 319 Md. 466 (1990), we considered the effect of an
antenuptial agreement, which was entered into prior to the effective date of the Marital
Property Act, on the wife’s allegation that she was entitled to a monetary award under the
statute. The language of the antenuptial agreement at issue provided that the wife had
release[d] and surrender[ed] any and all claims she may have, now, or at the time
of any termination of the proposed marriage between the parties, by divorce, death
or otherwise, in any estate or property of [the other], now owned or hereafter
acquired by him, including all rights to support . . . and all other rights and interest
of every kind therein that shall arise out of the relation of the parties as husband
and wife. . . .
Id. at 469. We accepted the trial court’s finding that the antenuptial agreement was valid
and that “the plain language of the agreement evidenced the intent of both parties to
exclude and protect the property of each from any and all claims of the other that might
arise out of their relationship as husband and wife.” Id. at 468.
We parted ways with Falise, however, in determining that the wife’s release did
encompass any claims to an award under the Marital Property Act, a result contrary to
that which was decided in Falise, when we said:
We reject the notion that the parties in the case before us were incapable of
releasing a right that did not then exist. We also reject the argument that general
knowledge cannot effect a full release of a specific right, even a right that is
unknown at the time the agreement is drawn.
We return then, to the first and more difficult question presented by this
case—was the general language employed by the parties in this case sufficient to
effect a mutual release of the then unknown right to a monetary award? We hold
that it was.
* * *
( . . . continued)
burden of proof to the one attempting to uphold the agreement to prove that it is
fair and equitable.
27
We think it clear that in referring to mutual releases of all claims of rights or
interests that each party might have or might thereafter acquire in and to any
property of the other, these parties were using the term “property” in its broad
sense. They manifested an unequivocal mutual intent to free all of their estate and
property from any claims by the other that might arise by virtue of their marriage.
If a monetary award is now allowed, that intent will be frustrated, because the
award will have to be paid from the property, whether cash, personalty, or realty,
of the party against whom the award is made.
Id. at 473–76. In so doing, we questioned the efficacy of Falise and validated the
antenuptial agreement by using contract principles to interpret its language and the
parties’ intent.
The Court of Special Appeals in Harbom, 134 Md. App. at 438, also considered
the validity of an antenuptial agreement in the context of a divorce in which each party
had waived “any right or claim . . . in the property of [the other party, including] all
future growth, interest, . . . or changes in assets, traceable to [the other party’s] current
ownership of the property.” In considering whether the antenuptial agreement was
invalid, based on the husband’s failure to disclose the value of his assets to the wife prior
to its execution, the court applied the traditional test, heretofore articulated, for
antenuptial agreements:
First, if the parties wish to insulate the agreement from subsequent challenge on
the basis of overreaching, full, frank, and truthful disclosure serves to make the
validity of the agreement “impregnable.” The alternative to full disclosure is proof
that the disgruntled party had a “general idea” of the spouse's property and
resources. When there is neither full disclosure or actual knowledge and the
allowance to the party who waives is unfairly disproportionate to the worth of the
property involved, the party seeking to uphold the agreement simply must
shoulder the burden to prove that it was entered into voluntarily, freely, and with
full knowledge of its meaning and effect.
28
Id. at 444. In consideration of these principles, the intermediate appellate court affirmed
the trial court in its determination that the antenuptial agreement was valid, because,
though the value of the assets had not been disclosed, the wife “had reasonably good
understanding of what she was giving up.” Id. at 449.
In each of the cases that we have found which involved an antenuptial agreement
affecting the disposition of property in divorce, issued after the advent of the Marital
Property Act, the traditional notions governing the evaluation of such agreements have
been applied to govern the division of property and its value, without any reference to the
reclassification language of Falise.
“[S]imilar to an antenuptial agreement” is a postnuptial agreement that is “a
contract—in this instance between a married couple—that sets forth the rights, duties and
responsibilities of the parties during and upon termination of the marriage through death
or divorce.” Cynthia Callahan & Thomas C. Ries, Fader’s Maryland Family Law § 14-
15. As such:
Postnuptial agreements often look a lot like prenuptial agreements. In both
contexts, couples are trying to assure that their financial situation is certain and
predictable. . . . Alternatively, many postnuptial agreements attempt to use
financial rewards and penalties to create incentives during a marriage that
constrain the behavior of both spouses.
Sean Williams, Postnuptial Agreements, 2007 Wis. L. Rev. 827, 835 (2007). Williston
has observed that “property settlements or other postnuptial agreements, whether in
contemplation of divorce or otherwise, are generally held to be binding when they are
shown to be fair and regular and not unconscionable or the product of fraud, duress,
29
mistake or undue influence; and certainly when they have been fully executed they will
be given effect.” 7 Williston on Contracts § 11:7 (4th ed. 2017).
The validity of an agreement affecting property and its division upon divorce was
considered in Harbom, 134 Md. App. at 451, in which the creation of an individual
retirement account (“IRA”) under the wife’s name with the husband’s funds during their
marriage was held to constitute a valid agreement under Section 8-201(e)(3)(iii) of the
Family Law Article (1984, 1999 Repl. Vol.) to exclude that property as nonmarital. The
Court of Special Appeals iterated that in order to establish that the IRA was not marital
property, proof of “donative intent, delivery or relinquishment of dominion, and
acceptance (which is presumed in the absence of evidence to the contrary)” was required;
the requisite donative intent would be the “intention to give or relinquish the contingent
equitable claim that arises from the marital/nonmarital status of the property.” Id. at 452.
Applying, thus, only a gift analysis, the intermediate appellate court, without any mention
of Falise and its reclassification requirement, excluded the lRA from marital property and
“classified” the IRA as nonmarital:
In the case sub judice, the court reasoned that the IRA was nonmarital
because “[f]rom the testimony . . . I think it was a gift” from appellant to appellee.
We interpret the court's statement as a finding that appellant made a gift of his
legal and equitable interest in the IRA funds; thus, the court did not err in this
determination. Appellant was meticulous in his financial record-keeping and he
took care that all of his significant investment and real estate holdings—even the
family cars—were titled solely in his name. The properties that were not so titled
were: the Billow Row property, which was titled as tenants by the entireties,
pursuant to the antenuptial agreement; the Crows Nest property, which appellant
had titled as tenants by the entireties to make appellee comfortable in the
marriage and to get her excited about the house; and the IRA, which appellant
created primarily with his nonmarital funds, also to make appellee comfortable in
the marriage.
30
Appellant testified that “the Prenuptial Agreement was a big concern for
[appellee]. She constantly talked about it . . . [S]he wanted to own everything that
I owned. She wanted the Prenuptial Agreement torn up.” It is reasonable to believe
from this testimony that appellant created the IRA to alleviate appellee's concern
that she had nothing in the marriage. When contrasted with appellant’s usual
practice of titling everything solely in his name to ensure his equitable interest
therein, his creation of the IRA in appellee’s name may be interpreted as
evidencing an intent to relinquish his equitable interest in those funds. The trial
court did not err in classifying the IRA as nonmarital.
Id. at 452–53.
In Newborn v. Newborn, 133 Md. App. 64 (2000), the Court of Special Appeals
considered the trial court’s finding that a postnuptial agreement did not exist between
husband and wife, where proceeds from the husband’s personal injury settlement, which
had included a claim for loss of consortium, were distributed 95% to the husband and 5%
to the wife into separately titled accounts during their marriage. Agreeing with the trial
court that no agreement existed, our intermediate appellate court explained that there was
no proof of an agreement to exclude those funds as nonmarital property:
The trial judge did not err in the manner appellant alleges. First of all, Mr.
Newborn’s testimony that the parties agreed as to how the accounts should be
titled was rebutted by the testimony of Ms. Newborn. According to her testimony,
Mr. Newborn acted alone when he decided to title the Legg Mason accounts
ninety-five percent to five percent in his favor. Second, even if the parties did
agree as to how the accounts were to be titled, that agreement would not be
determinative as to whether the property was marital. What would be
determinative under FA section 201(e) would be an agreement to exclude as
marital property certain (or all) of the proceeds from the personal injury
settlement. Here, there was no evidence of such an agreement.
Id. at 82. The court went on to consider whether the funds from the personal injury
settlement constituted marital property and remanded the issue to the circuit court to
permit proof by the wife of whether any part of the proceeds was marital.
31
Although the stable of postnuptial agreements in our jurisprudence in which a
property disposition upon divorce is considered is relatively sparse, it is clear that none of
the cases has applied the Falise reclassification requirement to determine the validity of
the postnuptial agreement.
In the present case, the trial judge found that the 2005 agreement between Mr. and
Ms. McGeehan made manifest by the transfer by deed of Embassy Park, Farside, and
Mason Neck to Ms. McGeehan was made during the course of their marriage to appease
her for the loss of her inherited stock portfolio:
In 2005, wife discovered that husband had been trading her premarital stock
account and she discovered that when she got a tax bill from the State of Virginia
for over $592,000. This was a time of crisis for the couple and at that time it led
them both to contemplate the future of their marriage. Wife made a new will
leaving everything to her children and had her family’s estate attorney write up a
waiver of the statutory share of her husband to sign. Wife lost trust in husband,
demanded that he transfer the parties’ Embassy Park Drive home, Farside home in
Ellicott City and the [Mason Neck] property in Virginia into her sole name.
Husband alleges that this was done for estate planning purposes due to his risky
employment but it’s more credible that it was done to appease wife who was
distraught over losing her inherited stock portfolio. The parties continued in the
marriage after this.
With respect to the Mason Neck property, having already classified Log Jump as marital,
the trial judge found that the parties intended that the property would be wife’s. The
judge then neutralized that agreement by requiring the Falise reclassification language.
In so doing, the trial judge obviated her central finding by requiring that the parties
insert the reclassification language of nonmarital as mandated in Falise. In this, she erred;
the Falise dictates are inapplicable to negate the McGeehans’ postnuptial agreement to
transfer Mason Neck and its value to the wife.
32
The bases for the trial judge’s finding that it was the parties’ “mutual agreement
that the property would be wife’s property” were the deeds that conveyed the property to
the wife as her sole and separate property; the wife’s discovery of her alienated
inheritance; the simultaneous execution during the marriage of the deeds for Mason
Neck, Farside, and Embassy Park; and the execution of a new will by Ms. McGeehan
excluding Mr. McGeehan and Mr. McGeehan’s waiver of his statutory share. The judge’s
finding of validity of the agreement is supported in the record and in our jurisprudence
addressing validity of postnuptial agreements. 16 The same conclusion can be drawn
regarding the Farside and Embassy Park deeds executed contemporaneously with Mason
Neck.
As a result, there was a valid postnuptial agreement to exclude Mason Neck as the
nonmarital property of Ms. McGeehan. With respect to Log Jump, the trial judge, on
remand, must initially consider whether there was a valid agreement to exclude Log Jump
as nonmarital under Section 8-201(e)(2) of the Family Law Article. Absent such an
agreement, the judge must then consider whether the source of funds for the purchase of
Log Jump, based upon the testimony elicited that the proceeds of the sale of Farside and
Embassy Park, which were transferred in 2005 to the wife, was traceable thereby to her
contribution under Section 8-205(b)(8)–(9) of the Family Law Article.
16
Mr. McGeehan has not asserted by way of a cross petition any challenge to the judge’s
finding that the agreement between the parties was valid, absent the application of the
Falise tenets.
33
JUDGMENT OF ABSOLUTE DIVORCE
AFFIRMED; JUDGMENT GRANTING
MONETARY AWARD VACATED. CASE
REMANDED TO THE CIRCUIT COURT
FOR HOWARD COUNTY FOR FURTHER
PROCEEDINGS CONSISTENT WITH
THE VIEWS EXPRESSED IN THIS
OPINION. COSTS TO BE PAID BY
RESPONDENT.
34
Circuit Court for Howard County
Case No: 13-C-14-101752
Argued: June 2, 2017
IN THE COURT OF APPEALS
OF MARYLAND
No. 93
September Term, 2016
______________________________________
ANN MCGEEHAN
v.
MICHAEL MCGEEHAN
______________________________________
Barbera, C.J.,
Greene,
Adkins,
McDonald,
Watts,
Getty,
Battaglia, Lynne A. (Senior Judge,
Specially Assigned),
JJ.
______________________________________
Concurring Opinion by Getty, J.
______________________________________
Filed: August 10, 2017
While I agree with the result reached today by the Majority, I would reach it on
somewhat different grounds. Specifically, I would explicitly overturn the Court of Special
Appeals’ holding in Falise v. Falise, 63 Md. App. 574, 581 (1985), that “[i]n order to
exclude property ‘by valid agreement’ from the reach of a monetary award, [ ] parties must
specifically provide that the subject property must be considered ‘non marital’ or in some
other terms specifically exclude the property from the scope of the Marital Property Act.”
Therefore, I respectfully concur.
Maryland Code, Family Law Article (1984, 2012 Repl. Vol.) (“FL”) 8-201(e)
provides that property that is acquired by one or both parties during a marriage, however
titled, is generally considered “marital property.” However the statute also sets forth
several exceptions under which property acquired during a marriage by one or both parties
is not considered “marital property.” One of those exceptions is for property “excluded by
valid agreement.” FL 8-201(e)(2)-(3). One consequence of such an agreement to exclude
real property that is held by one party to a marriage from being considered “marital
property” is that, in the event of a subsequent divorce between the married parties, the
excluded property would not be subject to a monetary award pursuant to FL § 8-205. 1
1
When a party in a divorce proceeding petitions the trial court for a monetary award,
the trial court follows a three step procedure,
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. . . .
In this divorce action, the trial judge found that there was a “mutual agreement”
between the parties, entered into during the course of their marriage, that Mr. McGeehan
would “convey all his rights, title and interests” in the Mason Neck, Farside, and Embassy
Park properties to Ms. McGeehan, so that those properties “would be wife’s property.”
Maj. Slip Op. at 4-6. However, the trial judge ruled that the agreement was insufficiently
specific to exclude the Mason Neck property from being “marital property,” because the
parties did not expressly state that the properties would be excluded from being considered
as marital property in the future. 2
The practical effect of the trial judge’s ruling that there was no valid agreement to
exclude any of the properties from being “marital property” was that the properties at issue
could be the subject of a “monetary award [ ] as an adjustment of the equities and rights of
the parties concerning marital property.” FL § 8-205. And, although not mentioned by the
Reichert v. Hornbeck, 210 Md. App. 282, 361 (2013) (quoting Innerbichler v. Innerbichler,
132 Md. App. 207, 228 (2000)) (additional internal citations omitted). In making a
determination as to whether it would be equitable to grant a marital award, and if so for
what amount, a trial court must consider parties’ marital and non-marital property. See FL
§ 8-205(b) (listing factors a trial court must consider in making a determination as to a
marital award, including “the value of all property interests of each party”). However, a
monetary award may only be awarded “as an adjustment of the equities and rights of the
parties concerning marital property.” FL 8-205(a) (emphasis added). Thus, while a trial
court must consider both marital and non-marital property, the focus of the marital award
is to reach an equitable division of marital property.
2
By the time of the divorce proceedings, the Farside and Embassy Park properties
had been sold. But, the record indicates that the proceeds of that sale may have been rolled
into the purchase of a fourth property, the Log Jump property. Maj. Slip Op. at 2. The
trial judge did not make findings as to that issue and “also determined that the Log Jump
property . . . was marital property, without any discussion of whether any portion of it was
excluded by valid agreement or any consideration of its financial underpinnings or source
of funds.” Id. at 4.
2
Majority, the trial judge did in fact grant a $230,000 monetary award to Mr. McGeehan.
McGeehan v. McGeehan, No. 2445 Sept. Term 2015, 2016 WL 6299681, at *2 (Md. Ct.
Spec. App. Oct. 26, 2016).
In reaching her ruling that there was no agreement to exclude the properties at issue
from being marital property, the trial judge explicitly relied upon the Court of Special
Appeals’ opinions in Falise v. Falise, 63 Md. App. 574 (1985) and Golden v. Golden, 116
Md. App. 190 (1997), explaining,
It would seem that it was the parties’ mutual agreement that the [Mason
Neck] property would be wife’s property. Under the law of Maryland, even
though property is titled in the name of one party or another party, it remains
marital property and can be excluded by agreement of the parties. But the
law is clear that to do that, and I just learned this, the agreement has to be
specific not just that it’s my sole and separate property but it is my sole and
separate property and will be excluded from marital property in the future.
It has to be explicitly stated. It was not explicitly stated. I’ve seen no
evidence that it was. So, under the cases of Golden versus Golden and Falise
versus Falise, the property is now marital. However, it’s titled in wife’s
name.
Maj. Slip Op. at 4.
Falise
In Falise, the Court of Special Appeals addressed the significance of a separation
agreement entered into by a married couple, the Falises. 63 Md. App. at 577. Several
years into their marriage, the Falises separated and entered into a separation agreement
which provided, in pertinent part, that the Falises would each “mutually release, waive,
surrender and assign unto the other, his or her heirs, personal representatives and assigns,
all rights, title, interest and claims which said parties might now have or may hereafter have
as the husband, wife, widower, widow, next of kin, successor or otherwise, in and to any
3
property, real or personal, that either of said parties may own or hereafter acquire[.]” Id.
at 578 n.1. During the parties’ separation, Mr. Falise acquired property titled in his name
in Howard County. Id. at 577. The parties subsequently entered into a short-lived
reconciliation, during which a house was built on that property titled in both parties’ names
as tenants by the entirety. Id. at 577-78. Ultimately, after the reconciliation broke down,
Mr. Falise filed for divorce, which was granted by the trial court. Id. at 578. The trial
judge found that the home held by the parties “was marital in part and nonmarital in part,”
but that “both monetary and non-monetary contributions of [Mrs. Falise were] nominal,”
and consequently granted a minimal monetary award of $2500 to Mrs. Falise. Id. at 579.
The Court of Special Appeals held that the separation agreement entered into by the
Falises did not exclude the property subsequently acquired by Mr. Falise from being
marital property. The intermediate appellate court offered two reasons for its holding.
First, it suggested that “marital property” was not covered by the agreement because it was
not an interest in real or personal property, explaining,
We doubt that the subject agreement could affect the status of something
which is neither an interest in real or personal property, i.e., marital property.
Marital property is merely a term created by the legislature to describe the
status of property acquired during the marriage, however titled (as defined in
[FL § 8-201(e)]), title to which may have given rise to a potential inequity,
upon dissolution of the marriage. That inequity, conceptually, may be
corrected via a different legislative creature called the “monetary award.”
Thus, the only function of “marital property” is to form a base for a
“monetary award.” The legislature never intended that either spouse could
have a legal interest in the “marital property” of the other since it merely
intended to cure the title[-]created inequity through the issuance of a
“monetary award.”
Id. at 580.
4
The Court of Special Appeals in Falise also reasoned that because the Marital
Property Act did not exist at the time of the parties’ agreement, Ms. Falise could not be
deemed to have released a right that she did not have and could not have fairly anticipated.
Id. at 580-81. The intermediate appellate court cited in support to the case of Smith v.
Smith, in which the Supreme Court of New Jersey considered whether a similar mutual
release in a separation agreement would prevent a trial court from making an equitable
distribution during a divorce. 371 A.2d 1 (1977). That court noted that generally, under
New Jersey law, “claims arising after the date of delivery of the instrument are not covered
by it unless explicitly mentioned, since they would not appear to have been within the
contemplation of the parties.” Id. at 6. Because, at the time the couple entered into the
separation agreement, New Jersey courts “had no power to make an equitable distribution
of marital assets” the court held that the agreement “cannot be regarded as having released
a right which [a party] did not have and could not fairly have anticipated.” Id.Consequently, the intermediate appellate court held that “[i]n order to exclude
property ‘by valid agreement’ from the reach of a monetary award, we believe that the
parties must specifically provide that the subject property must be considered ‘non marital’
or in some other terms specifically exclude the property from the scope of the Marital
Property Act.” Id. at 581.
Herget
Five years later, this Court in Herget v. Herget, 319 Md. 466 (1990) strongly
disapproved of the Court of Special Appeals’ reasoning behind the specificity requirement
stated in Falise. In Herget, a couple had entered into an antenuptial agreement two days
5
prior to their marriage, which stated that each party “waives and surrenders any and all
claims she may have, now, or at the time of any termination of the proposed marriage
between the parties,” in the property of the other “now owned or hereafter acquired.” 319
Md. at 469. A separate provision in the agreement stated that “each of the parties hereby
waives and releases unto the other party, her or his heirs, next of kin, personal
representatives and assigns, all of her and his respective rights, interests and claims in and
to said property of the other[.]” Id. The parties subsequently divorced, and the wife
contended that the agreement was invalid and, if valid, did not have the effect of barring
her from receiving a monetary award. Id. at 467-68. The trial court found the agreement
to be valid, but the Court of Special Appeals agreed with the wife that “the wife’s claim
for a monetary award was not barred by the terms of the agreement.” Id. at 468. On appeal
to this Court, “[t]he sole issue with which we [were] concerned [was] whether the
agreement bars the wife’s claim for a monetary award.” Id. at 470.
We noted that the Court of Special Appeals had followed Falise, and held that “‘the
right to a monetary award . . . is not an interest in the estate or property of one’s spouse,’
and therefore is not covered by the language of the agreement.” Id. at 471 (quoting Herget
v. Herget, 77 Md. App. 268, 279 (1988)). We summarized the holding of Falise that “the
separation agreement in that case, by which each party agreed to relinquish all right, title,
and interest in and to the property of the other then owned or thereafter acquired, did not
effect a release of the right to a monetary award.” Id. We also noted the two reasons the
Court of Special Appeals had offered to support the Falise holding: that the intermediate
appellate court doubted such an agreement “‘could affect the status of something which is
6
neither an interest in real or personal property, i.e., marital property[,]’” and that “the wife
could not be regarded as having released a right that she did not have and could not have
fairly anticipated at the time the agreement was signed.” Id. at 471-72 (quoting Falise, 63
Md. App. at 580).
Beginning our analysis with the second reason stated in Falise, we observed that the
Court of Special Appeals had relied on New Jersey law stated in Smith v. Smith, 371 A.2d
1, 6 (1977), but held that law was “contrary to established Maryland law.” Herget, 319
Md. at 473. We noted that in Bernstein v. Kapneck, 290 Md. 452 (1981), “this Court held
that a broad general release of claims for injuries ‘known and unknown, and which have
resulted or may in the future develop’ sufficiently reflected the intent of the parties to
release the defendant from any responsibility for a serious brain injury about which the
parties neither knew or could reasonably have known at the time the release was executed.”
Herget, 319 Md. at 473 (quoting Bernstein, 290 Md. at 456). We therefore stated that we
“reject the notion that the parties in the case before us were incapable of releasing a right
that did not then exist.” Id. We also stated a broader rule of law, namely, that “[w]e also
reject the argument that general language cannot effect a full release of a specific right,
even a right that is unknown at the time the agreement is drawn.” Id.We then considered the Court of Special Appeals’ first reason in Falise, that a
monetary award is not a “legal interest” in real property. We agreed that “the right to a
monetary award does not carry with it a ‘legal interest’ in the other party’s property . . . in
the sense of title.” Id. at 475. However we regarded the conception of property rights and
interest taken by the Court of Special Appeals as “overly narrow.” Id. We stated that,
7
under the Maryland Marital Property Act, “this Court has approved a broad definition of
the term ‘property,’” explaining,
The term property, “when considered in a broad sense, is a term of wide and
rather comprehensive signification. . . . It has been stated that the term
embraces everything which has exchangeable value or goes to make up a
man’s wealth—every interest or estate which the law regards of sufficient
value for judicial recognition.”
Id. (quoting Deering v. Deering, 292 Md. 115, 125 (1981)). We therefore determined that,
as to the language of the agreement at issue, “in referring to mutual releases of all claims
of rights or interests that each party might have or might thereafter acquire in and to any
property of the other, these parties were using the term ‘property’ in its broad sense.” Id.
at 475-76. And, we noted that as a general matter, a claim for a monetary award is simply
“a claim against the property of the person from whom the award is sought.” Id. at 476.
For those reasons, we concluded “that the intent of the parties manifested by their
antenuptial agreement was to prevent the very type of claim [for a monetary award] that is
now being made.” Id. at 477.
While some older opinions may become stale or surpassed by the gradual
development of the law, others, grounded on firmer reasoning, remain compelling
statements of the law even many years later. I believe that Herget is an example of a case
whose reasoning remains sound, and should be applied to the instant appeal. The statutory
language at issue in Herget, now contained in FL § 8-201(e), has not been substantially
changed, and was in existence prior to the agreement entered into between the McGeehans.
This Court still generally gives full effect to the language of a general release. See Brethren
8
Mut. Ins. Co. v. Buckley, 437 Md. 332, 343 (2014). 3 Courts also continue to recognize that
“rights” or “interests” as to real property are wide and comprehensive concepts, including
not only title but a much broader “bundle of sticks.” See USA Cartage Leasing, LLC v.
Baer, 202 Md. App. 138, 172 (2011), aff’d, 429 Md. 199 (2012); United States v. Craft,
535 U.S. 274, 278 (2002). 4
Therefore, pursuant to Herget and the broader concept of property rights and
interests described in that case, I would hold that the general release entered into by the
McGeehans, under which Mr. McGeehan agreed to convey “all his rights, title, and
interests” in the properties at issue to Ms. McGeehan, should be given full effect. And, I
would hold that the release shows a clear intent to convey the property to Ms. McGeehan
free of all claims from Mr. McGeehan, including any future claims by Mr. McGeehan that
the property is marital property and subject to a monetary award.
3
In Brethren we discussed Bernstein v. Kapneck, 290 Md. 452 (1981), and agreed
with its holding that general releases are generally given the full effect that the language of
the release would allow, unless there were constitutional, statutory or policy barriers to
effectuating that language. 437 Md. at 343. Although in Brethren we found that a there
was a statutory barrier to effectuating the full language of the general release at issue before
us in that appeal, see id. at 344-45, that is not true here. As to agreements between married
parties to exclude property from being considered marital property, not only is there not a
statutory barrier, but the relevant statute expressly permits a party to exclude property by
valid agreement. FL § 8-201(e).
4
Moreover, a spouse’s potential future interest in receiving a marital award for
marital property, which is contingent upon a divorce and the decisions of a trial court, is
akin to the expectancy interest of a potential beneficiary in a will, which is contingent upon
whether the testator decides to include that individual in his will and under what terms.
Maryland law has long recognized that the contractual conveyance of such future
expectancy interests may be valid and enforceable. See Keys v. Keys, 148 Md. 397 (1925).
See also Douglas v. Lyles, 841 A.2d 1, 5 (D.C. 2004).
9
Golden
Golden v. Golden, 116 Md. App. 190 (1997) is the second case on which the trial
judge in the instant case relied. However, Golden is inapposite to the facts of this case.
The Majority describes the holding in Golden,
In Golden, the Court of Special Appeals only decided whether the trial court
had erred in finding the existence of an oral agreement entered into
premaritally that essentially iterated “what was hers was hers and what was
mine was mine[.]” . . . Our intermediate appellate court in Golden disagreed
and posited, “We perceive that the finding of an oral property settlement
agreement was erroneous. We perceive of nothing in the testimony or
evidence in this case that would constitute an agreement sufficient to bind
the parties to it or to support the trial judge’s finding.”
Maj. Slip Op. at 23 (quoting Golden, 116 Md. at 201-202). 5 In contrast, the trial court in
this case ruled that a valid agreement existed whereby Mr. McGeehan would “convey all
his rights, title and interests” in the Mason Neck, Farside, and Embassy Park properties to
Ms. McGeehan. Therefore, Golden does not control the outcome here.
Conclusion
As the trial court’s ruling is not supported by Golden, the resolution of this appeal
turns on whether the trial judge was correct to rely on Falise to find that the parties’
agreement did not apply to exclude Mason Neck, Farside, and Embassy Park from being
considered “marital property” and the subject of a monetary award because the agreement
5
The Court of Special Appeals also stated in Golden, in dicta, that “[w]e would
doubt, although we do not now specifically hold, that a ‘what is hers is hers and what is
mine is mine’ oral agreement, no matter how often repeated, could ever contain the degree
of specificity required by Falise, i.e., ‘the parties must specifically provide that the subject
property must be considered ‘non marital’ or in some other terms specifically exclude the
property from the scope of the Marital Property Act.’” Golden, 116 Md. App. at 203
(quoting Falise, 63 Md. App. at 581).
10
did not specify that those properties would be considered non-marital or outside the scope
of the Marital Property Act. The Majority holds that the trial court erred in so ruling
because Maryland courts have not applied the holding in Falise, which involved a marital
separation agreement, to the type of postnuptial agreement entered into by Mr. and Ms.
McGeehan (or to antenuptial agreements). Maj. Slip Op. at 32.
Although I have no dispute with the Majority’s conclusion that Falise has been
narrowly applied, I believe that in light of our prior decision in Herget, a more
straightforward way to resolve this appeal would be to simply overturn the holding in
Falise that “in order to exclude property ‘by valid agreement’ from the reach of a monetary
award . . . parties must specifically provide that the subject property must be considered
‘non marital’ or in some other terms specifically exclude the property from the scope of
the Marital Property Act.” 63 Md. App. at 581. And, having first overturned Falise, I
would thereafter hold that, pursuant to Herget, the agreement entered into by the parties—
that Mr. McGeehan would “convey all his rights, title and interests” to Ms. McGeehan—
is a valid agreement to exclude that property as marital property under FL § 8-201(e). 6 For
that reason, I respectfully concur.
6
As a more general statement of the law, I would also hold that any valid contractual
agreement by a party to a marriage to waive, transfer, convey, or otherwise grant all or any
rights, title, and interest in certain real property to his or her spouse, or a similar mutual
agreement entered into by both spouses, is a valid agreement to exclude that property as
marital property under FL § 8-201(e).
11