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Meese v. Meese

Court of Special Appeals of Maryland

June 26, 2013


Kehoe, Watts, Davis, Arrie W. (Retired, Specially Assigned), JJ.


Davis, J.

Megan S. Meese, appellant, and Timothy Meese, appellee, have a long and sad history of litigation that began with the break-up of their marriage and subsequent divorce in 2007. They are before us for the fourth time on appeal from a decision of the Circuit Court for Montgomery County granting summary judgment in favor of Timothy and against both Megan and Charles Anthony Armstrong Miller, Trustee of the 3316 Weller Road Trust (the Trustee), also an appellant herein, in an action to vacate the May 5, 2005 transfer of real property by Megan to the 3316 Weller Road Irrevocable Trust (the Trust).[1]

On April 11, 2008, Timothy filed a complaint against both Megan and the Trustee seeking to vacate Megan's transfer of property to the Trust on the ground that it was a fraudulent conveyance. The action was stayed pending the outcome of a dispute in the parties' divorce action over marital property and a monetary award. On March 17, 2011, the trial court rendered a final ruling in the divorce action and lifted the stay in the action seeking to vacate the conveyance. Thereafter, Timothy filed a motion for summary judgment with respect to his complaint to vacate the transfer of property, which both Megan and the Trustee opposed. After a hearing on May 10, 2011, the circuit court granted Timothy's motion for summary judgment and this timely appeal followed.


Megan and the Trustee present the following two issues for our consideration:

I. Whether the trial court erred in finding that there were no genuine issues of material fact in granting summary judgment in a fraudulent conveyance action where the underlying transaction involved the return of a family home from a daughter to her father, where the original transfer of the home from the father was not at arm's length, was for less than fair market value, where the father had been given a right to reside in the home for life, where the father had been threatened with eviction by his son-in-law, and where the daughter's position in the fraudulent conveyance action was that the return of the home to her father was not gratuitous, but was in resolution of her father's claim that he was entitled to the return of the home because his original transfer was void and/or voidable under the circumstances; and,
II. Whether a finding of "dissipation" of a marital asset in a divorce case requires a finding of "fraudulent conveyance" against the recipient transferee of that marital asset in a subsequent lawsuit by the non-transferring spouse against the transferee who was not a party to the divorce.

For the reasons set forth below, we shall affirm.


The factual and procedural background of this case was set forth fully in our most recent unreported opinion, Meese v. Meese, No. 499, Sept. Term 2011 (filed June 18, 2012), but for ease of reference, we shall include a brief review of the facts here. Timothy and Megan Meese were married on August 1, 1998 and, shortly thereafter, moved into a home owned by Megan's father, Charles H. Miller, and located on Weller Road in Silver Spring. Miller had owned the home since the 1970s and Megan had lived there as a child. Timothy and Megan lived with Charles in his home rent-free.

When Charles retired, he entered into an agreement with Megan and Timothy pursuant to which they would purchase the home from him. Megan and Timothy assumed the remaining mortgage on the home and signed a balloon note for $30, 000, in favor of Charles, which was to come due upon the first to occur of (1) the sale of the home; (2) sixty days after Charles' death; or (3) November 29, 2015. The balloon note did not bear interest and was guaranteed by Megan and Timothy with the home as collateral. The balloon note and assumed mortgage were valued at approximately $150, 000, which was about $30, 000 less than the appraised value of the home at the time of the transfer. Because Charles' mortgage contained a due-on-sale clause, the transfer of the home was made solely in Megan's name.[2] In exchange, Charles would live in the home, rent-free, for the rest of his life and, if the home was sold prior to his death, the couple agreed to provide substitute rent-free housing for him until his death.[3]

Megan and Timothy's relationship deteriorated and eventually Megan told Timothy she wanted a divorce. Timothy told Charles that he needed to look for a new place to live and Charles then realized that the home sale transaction did not provide him with a life estate in the home. In an attempt to ensure that Charles would be able to live in the home until his death, Megan transferred title of the home to the Trust without consideration. Charles was the beneficiary of the Trust and, upon his death, the Trust would cease to exist and the property would revert to Megan in fee simple.

Subsequently, Timothy filed in the Circuit Court for Montgomery County a complaint for absolute divorce. The parties agreed to joint custody of their children and to split all marital property evenly, with the exception of the home. Megan took the position that the home was not marital property because it was a gift from her father to her. Timothy took the position that the home was ...

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