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Reynolds v. Reynolds

Court of Special Appeals of Maryland

February 26, 2014

John Beauchamp REYNOLDS, III
v.
Valerie Lambiase REYNOLDS.

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John Quinn (Aindrea Conroy and Etheridge, Quinn, Kemp, McAuliffe, Rowan & Hartinger, on the brief) Rockville, MD, for appellant/cross-appellee.

Glenn M. Cooper (Howard Soypher and Paley, Rothman, Goldstein, Rosenberg, Eig & Cooper, Chtd., on the brief) Bethesda, MD, for appellee/cross-appellant.

Panel: MATRICCIANI, HOTTEN, JAMES R. EYLER (Retired, Specially Assigned), JJ.

MATRICCIANI, J.

[216 Md.App. 211] Appellee, Valerie Lambiase Reynolds (" Wife" ), sued appellant, John Beauchamp Reynolds, III (" Husband" ), for absolute divorce on September 16, 2010, in the Circuit Court for Montgomery County, Maryland. Husband counter-sued for the same on November 12, 2010. Wife voluntarily dismissed her original suit on June 8, 2011, and then brought a new complaint for divorce on November 3, 2011, which sought alimony, child support, monetary award, and other relief.

The trial court entered judgment on June 6, 2012, awarding Husband absolute divorce from Wife and disposing of all related claims. Both parties filed motions to alter or amend, which the trial court heard on August 30, 2012. In a memorandum

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[216 Md.App. 212] opinion entered September 19, 2013, the trial court granted each motion in part and denied each motion in part. Husband and Wife then filed timely appeals and cross-appeals, respectively, from both the original and amended judgments.

QUESTIONS PRESENTED

Husband presents six questions for our review, which we have re-ordered to comport with our discussion:

I. Did the Circuit Court err in finding what Ms. Reynolds'[s] actual income was?
II. Did the Circuit Court err in finding that Mr. Reynolds'[s] payment of expenses for the parties'[s] adult children was not a reasonable expense?
III. Did the Circuit Court err in finding what Ms. Reynolds'[s] reasonable expenses are?
IV. Did the Circuit Court err in its refusal to impute any employment income to Ms. Reynolds?
V. Did the Circuit Court abuse its discretion in granting Ms. Reynolds'[s] Motion to Alter or Amend with respect to amending its findings to state that no portion of Warren Place [[1]] was marital?
VI. Did the Circuit Court abuse its discretion in granting Ms. Reynolds'[s] Motion to Alter or Amend with respect to rounding up Ms. Reynolds'[s] expenses to account for her purported state tax liability?

In her cross-appeal, Wife presents four questions for our review, which we also quote, but re-order:

[VII]. Whether the [Circuit] Court's Consideration of Mr. Reynolds'[s] Post-Hearing Expenses, While Refusing to Consider Similar Expenses Paid by Ms. Reynolds, was an Abuse of the Court's Discretion.
[VIII]. Whether the [Circuit] Court's Failure to Include As Marital Property Sums that Mr. Reynolds is Entitled to Receive as Refunds for Overpayment of Income Taxes Was Error.
[216 Md.App. 213] [IX]. Whether the [Circuit] Court Abused its Discretion in Failing to Admit Evidence as to the U.S. Treasury Rate of Return and Award a Reasonable Rate of Return on Ms. Reynolds'[s] Pre-Marital Individual Retirement Account.
[X]. Whether the [Circuit] Court's Failure to Accept Ms. Reynolds'[s] Evidence as to Certain Claimed Expenses in the Absence of Any Contrary Evidence Was Clearly Erroneous.

For the reasons that follow, we answer no to all questions presented both in Husband's appeal and in Wife's cross-appeal, and we affirm the judgment of the Circuit Court for Montgomery County.

FACTUAL AND PROCEDURAL HISTORY

Husband and Wife graduated from Yale Law School in the early 1980's and took jobs with prestigious law firms in the Washington, D.C., area.[2] The parties were married in 1989, and the next year Wife became pregnant with twin boys and

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stopped working due to her medical complications. The twins' health problems continued after their premature birth,[3] so the parties decided that Wife would not return to practice and would instead raise their two children, who were joined by their younger brother in 1994. When Wife stopped working, she had been making approximately $120,000 per year.

Husband continued to work in private practice and by 2010 was earning over $800,000 per year.[4] Not surprisingly, this [216 Md.App. 214] afforded the parties an affluent lifestyle, which included a residence worth approximately $2 million at the time of trial,[5] household help, dinners out, private school for the children, two international vacations each year,[6] new model foreign cars, charitable donations to their alma maters, and substantial retirement savings.

The price of Husband's salary was as much as 2,700 hours of billable work per year,[7] and it apparently put a strain on the parties' relationship that slowly drove them to minor violence against each other and, in time, completely apart. By 2009, the parties were sleeping in separate parts of the house, and after attempts at counseling failed, the parties abruptly separated on July 29, 2010.[8]

During their separation, Husband rented a four-bedroom home at the cost of $5,000 per month. Meanwhile, Wife purchased a $1.52 million home, known as " Warren Place," jointly with her father, who also gave her over $100,000 between June of 2010 and April of 2011. In addition to these gifts, Wife received miscellaneous interest and dividend income, including monthly $8,000 checks from a minority interest in her family's commercial real estate company. [9]

Wife sued for absolute divorce on September 16, 2010, and Husband counter-sued for the same on November 12, 2010. The parties reached a custody agreement in April of 2011, giving them joint legal and shared residential custody of their [216 Md.App. 215] youngest son, who was the only minor child at time (and who has since been emancipated by majority). Wife voluntarily dismissed her original suit on June 8, 2011, but she then brought a new complaint on November 3, 2011, demanding alimony, child support, monetary award, and other relief.

The court held five days of trial in March of 2012. There, Wife testified that she has rheumatic heart disease and will likely need valve replacement surgery as well as two leg surgeries, that she has difficulty sleeping, and that she requires psychiatric therapy. Wife also testified

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that she continues to employ a housekeeper, and that she spends an average of $908 per month on vacations and contributes $500 per month to a retirement savings account. Wife admitted that she had not looked for work during the parties' separation because of these divorce proceedings and due to her continued responsibility for the parties' youngest son.

Husband and Wife stipulated that the Warren Place property was worth $1.52 million, and the uncontested evidence showed that the net equity in the home was $478,559, the remaining amount financed by a mortgage with payments of $5,470 per month. Wife claimed that she had applied $190,478.61 of non-marital funds towards the $480,000 down-payment that she made on the Warren Place property. But the trial court found that Wife was unable to trace that $190,478.61 to the savings bonds that she claimed had been titled to her and her children, and liquidated to use for this purchase. The court therefore found that the non-marital portion of Wife's down-payment was 55.7%, with the remaining 44.3% owing to marital funds. The court then used that figure to determine the marital portion of Wife's one-half interest in the property's net equity, arriving at an ultimate marital property value of $106,000.82.

Turning to alimony, the trial court noted that the only evidence it had of Wife's earning capacity was her salary from over two decades ago, and that Husband had failed to introduce any evidence supporting his claim that Wife could earn between $30,000 and $40,000 per year. The court took the [216 Md.App. 216] amount of Wife's net unearned income from her 2011 federal tax return, finding that it was $69,758 per year, or $5,813.16 per month.[10]

The trial court then examined Wife's expenses and found that a portion of her housekeeping, vacation, mortgage, and retirement expenses were reasonable. The trial court further found that although Wife failed to introduce evidence of her physical and mental health needs, Husband had stated that $200 per month for therapy and $193 per month in extraordinary medical expenses were " realistic" figures, which the court took as his admission that those amounts were reasonable.[11] The court concluded that Wife's total reasonable expenses were $15,812 per month, leaving her with a financial deficit of $9,998.84 per month.

Turning to Husband's finances, the trial court conservatively estimated his monthly net income to be $46,421.83, a figure that neither party contests. The court found that Husband's reasonably necessary expenses for himself and for the parties' minor child totaled ...


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