PAUL W. NUSBAUM, JR.
MARSHA R. NUSBAUM, ET AL.
Circuit Court for Carroll County Case No. 06-C 03-039838
Nazarian, Wells, Adkins, Sally D. (Senior Judge, Specially
Paul Nusbaum, asked the Circuit Court for Carroll County to
order the Carroll County Office of the Maryland Child Support
Administration to reallocate the money he had previously paid
for child support and alimony solely to his child support
account. After a hearing on the issue, the circuit court
ruled that Mr. Nusbaum was judicially estopped from the
requested reallocation because Mr. Nusbaum had previously
claimed part of the money as "alimony paid" and
taken an income tax deduction. Consequently, the court ruled
that he could not re-characterize those payments exclusively
as child support.
Nusbaum took a timely appeal and presents two questions for
1. Did the circuit court err in declaring that Mr. Nusbaum
was judicially estopped from claiming that the amounts he
claimed as alimony on his tax returns should be reallocated
toward his child support arrears with the [Carroll County
Office of Child Support Enforcement (OCSE)]?
2. Did the Circuit Court err in not reaching a decision as to
whether the allocation of support funds paid to a former
spouse should be first paid to current child support and
child support arrears, prior to any payment of funds toward
that although the circuit court erred in its application of
judicial estoppel to prevent the reallocation, the circuit
court could not have legally ordered the reallocation in any
event. We, therefore, affirm the circuit court.
FACTUAL AND PROCEDURAL BACKGROUND
they divorced in 2005, the Circuit Court for Carroll County
ordered Paul Nusbaum to pay his former wife, Marsha Nusbaum,
$3, 250.00 per month in non-modifiable alimony. Mr. Nusbaum
was also ordered to pay Ms. Nusbaum $1, 422.00 per month in
child support for the benefit of their four children. At Ms.
Nusbaum's request, Mr. Nusbaum was required to pay both
sums via an Earnings Withholding Order through the Carroll
County Office of Child Support Enforcement
("OCSE"), the local branch of the Maryland Child
Support Administration ("MCSA"), the state agency
charged with collecting child and spousal support.
2008, Mr. Nusbaum moved to Georgia. The OCSE duly registered
the Earnings Withholding Order in Georgia, obligating Georgia
to collect Mr. Nusbaum's alimony and child support
payments and forward them to Maryland.
important to note that during this time, although Mr.
Nusbaum's wages were garnished, he did not pay the full
monthly amount of either child support or alimony because
what he earned could not fully satisfy either obligation.
Consequently, by 2010, when Mr. Nusbaum asked the court to
modify his monthly child support payment, he owed $36, 264.60
in unpaid child support and $117, 127.22 in unpaid alimony.
Nevertheless, because of the emancipation of two of the
Nusbaums' children, the court reduced his child support
payment to $941.00 per month from January 2010 through August
2010, at $835.00 per month for September 2010, and
established the child support payment at $929.00 per month
starting in October 2010.
in early 2016, Mr. Nusbaum noticed that Georgia allocated his
monthly payments differently from Maryland. Whereas Maryland
declared his child support arrears were $80, 905.25, Georgia
said his child support arrears were approximately $30,
000.00. Mr. Nusbaum discovered that this was because Georgia
allocated a higher percentage of his monthly payment to child
support, rather than alimony. Maryland did almost the
opposite, allocating 70% of his payments to alimony and 30%
to child support. Armed with this information, Mr. Nusbaum
returned to Maryland.
April 16, 2016, Mr. Nusbaum filed a motion asking the circuit
court to order OCSE to do an audit and establish his arrears
for both alimony and child support. Mr. Nusbaum also
requested the court to modify his on-going child support
payment because another of the Nusbaums' children had
emancipated. At a hearing before a Magistrate, Mr.
Nusbaum argued that the circuit court should order OCSE to
perform an audit to determine exactly how much he had paid
for both obligations. After the audit, he wanted OCSE to
credit all the money he paid be put toward his child support
obligation until that obligation was satisfied. Only then, so
Mr. Nusbaum argued, should any excess amount be credited
against his alimony obligation. Ms. Nusbaum opposed the
Magistrate, in a written set of findings, reduced Mr.
Nusbaum's on-going monthly child support obligation to
$481.00 per month, plus $120.25 toward his arrears, due to
the emancipation of one of the children. More importantly,
the Magistrate determined that the circuit court did not have
the authority to: (1) order OCSE to perform an audit, nor,
(2) order OCSE to reallocate Mr. Nusbaum's prior total
payments to exhaust his child support obligation before
satisfying his alimony obligation. "Your Magistrate
reviewed the statutes cited by the parties, testimony
presented, Plaintiff's Exhibit 3, and [case cited], and
finds that there is no authority given to this Court to alter
the Audit in the manner requested by [Mr. Nusbaum]."
Surprisingly however, the Magistrate recommended "that
upon entry of this Order, that child support current and
arrearage payments should be given priority over the alimony
obligation, as it is in the best interests of the
parties' minor child." OCSE filed Exceptions to the
Exceptions hearing, the attorneys for OCSE and Mr. Nusbaum
set forth their positions. Mr. Nusbaum wanted all past
payments to Ms. Nusbaum reallocated to satisfy his child
support obligation first, rather than be apportioned between
alimony and child support, as OCSE had done. Additionally, he
wanted any future payments apportioned to first satisfy child
support, then child support arrears, and alimony last. In Mr.
Nusbaum's view, it was in the children's best
interests to prioritize the allocation of payments in this
Nusbaum and OCSE disagreed. The attorney for OCSE noted that
Mr. Nusbaum desired the reallocation because Georgia was
"coming after" him for not making full payments to
either child support or alimony. More importantly, OCSE's
counsel explained that under current procedures, child
support and spousal support are given equal priority, as the
payments are for the benefit of the children and the former
counsel for OCSE explained that it would be too onerous for
them to have to manually adjust each monthly payment and
apportion it solely to child support.
days after the hearing, in an oral ruling, the judge
"grudgingly" found that the Magistrate erred. The
judge, essentially, agreed with Mr. Nusbaum and ordered OCSE
to perform an audit and "allocate and prioritize all
payments first and foremost to the child support obligation
as well as any child support arrears." "Any other
remaining payments… shall then be credited towards
[Mr. Nusbaum's] alimony obligation and any outstanding
Nusbaum immediately filed a motion to alter or amend the
court's order. Simultaneously, OCSE filed a motion to
reconsider. Ms. Nusbaum argued that there was no evidence
presented at the hearing to suggest that the ordered
reallocation was in the children's best interests, as Mr.
Nusbaum claimed. Additionally, both Ms. Nusbaum and OCSE
argued that the circuit court should reverse itself because
the reallocation was contrary to "Maryland [l]aw and
federal and state regulations regarding child support."
OCSE specifically argued that the court's order placed
OCSE in direct violation of federal law, since they were
obligated pursuant to federal statutes and the state's
"distribution matrix" to collect spousal and child
support without prioritizing one over the other. Mr. Nusbaum
opposed altering the court's order in any way.
court held a hearing on Ms. Nusbaum's motion to alter or
amend judgment and OCSE's motion to reconsider, after
which the court took the matter under advisement. Later, the
court issued an "Opinion and Order" which was a
legal analysis of the arguments advanced at the motions
hearing. For reasons not entirely clear, the court
re-evaluated Ms. Nusbaum's request for counsel. The
record is ambiguous as to whether the court denied her
request or found it to be moot. In any event, the record is
clear that Ms. Nusbaum was represented by counsel at the
motions hearing. The court also revisited its in-court ruling
denying Ms. Nusbaum's request to allow expert testimony
at the hearing. The court determined that it properly
excluded expert testimony.
analysis of what the court termed "Motion 2," the
reallocation issue, the judge admitted that at the end of the
Exceptions hearing he was "uncomfortable" ordering
OCSE to perform an audit and reallocate Mr. Nusbaum's
payments giving priority to satisfying his child support
obligation. The judge recalled that he found OCSE's
allocation method, giving equal priority to spousal and child
support, to be "inconsistent with the best interests of
the child standard." Based on his reasoning at that
time, the judge concluded that Mr. Nusbaum could not be
"estopped" from getting what he wanted. Now, the
judge noted that at prior hearings on Mr. Nusbaum's
requests to modify child support, Mr. Nusbaum provided his
income tax returns. The judge found that on those tax
returns, Mr. Nusbaum "claimed a deduction from taxable
income, the amount of alimony deemed 'paid' by
In other words, he benefited from an income deduction based
upon the very method of alimony payment allocation he now
seeks to challenge. Indeed, he secured prior reductions of
child support based upon his stated income at the time -
which had been adjusted based upon a deduction for alimony
paid. If he truly felt that all payments should have been
applied to child support first as he now contends, then it is
wholly inconsistent to take a corresponding deduction for
alimony paid in prior tax returns. In short, it appears to
the Court that Mr. Nusbaum is trying to "have his cake
and eat it too."
reviewing the holdings of several cases, the judge concluded
that Mr. Nusbaum was judicially estopped from seeking to
reallocate past and future child support payments and have
them take priority over his alimony obligation.
the judge did not answer the question of whether the court
had the authority to order OCSE to reallocate payments in the
manner that Mr. Nusbaum requested. Rather, the judge
concluded that as Mr. Nusbaum was estopped from making the
request, this threshold question would "have to await
review the circuit court's decision using an abuse of
discretion standard. "In general, the denial of a motion
to alter or amend a judgment is reviewed by appellate courts
for abuse of discretion." RRC Northeast, LLC v. BAA
Maryland, Inc., 413 Md. 638, 673 (2010) (citing
Wilson-X v. Dep't of Human Res., 403 Md. 667,
674-75 (2008)). "The relevance of an asserted legal
error, of substantive law, procedural requirements, or
fact-finding unsupported by substantial evidence, lies in
whether there has been such an abuse."
Wilson-X, 403 Md. at 676.
a "court's discretion is always tempered by the
requirement that the court correctly apply the law applicable
to the case." Arrington v. State, 411 Md. 524,
552 (2009); see In re Adoption/Guardianship No.
T97036005, 358 Md. 1, 24-25 (2000) (abuse of discretion
where trial judge's decision with respect to
discretionary matter "was based on an error of
law"); Guidash v. Tome, 211 Md.App. 725, 735
(2013) (abuse of discretion occurs when court "makes a
decision based on an incorrect legal premise");
Brockington v. Grimstead, 176 Md.App. 327,
359 (2007) ("an exercise of discretion based upon an
error of law is an abuse of discretion").
Nusbaum first asks us to consider whether the circuit court
properly determined that he was judicially estopped from
requesting OCSE to reallocate his child support and alimony
payments. He argues that judicial estoppel is inapplicable,
as none of the elements of judicial estoppel apply in his
circumstances. OCSE seemingly admits that judicial estoppel
is inapplicable and argues that the allied doctrine of
equitable estoppel should deny Mr. Nusbaum relief.
circuit court expressly based its ruling on the doctrine of
judicial estoppel, and it is there that we begin our
analysis. Judicial estoppel is derived from the doctrine of
estoppel by admission in English jurisprudence. In Eagan
v. Calhoun, 347 Md. 72 (1997), the Court of Appeals
noted that, "Maryland has long recognized the doctrine
of estoppel by admission, derived from the rule laid down by
the English Court of Exchequer . . . that '[a] man shall
not be allowed to blow hot and cold, to claim at one time and
deny at another.'" Id. at 88 (citation
omitted). Indeed, this Court explained in Gordon v.
Posner, 142 Md.App. 399, 424, cert. denied, 369
Md. 180 (2002), that "[j]udicial estoppel, also known as
the 'doctrine against inconsistent positions,' and
'estoppel by admission,' prevents 'a party who
successfully pursued a position in a prior legal proceeding
from asserting a contrary position in a later
proceeding.'" Roane v. Washington Co.
Hosp., 137 Md.App. 582, 592, cert. denied, 364
Md. 463 (2001). Judicial estoppel, therefore, "precludes
a party from taking a position in a subsequent action
inconsistent with a position taken by him or her in a
previous action." Dashiell v. Meeks, 396 Md.
149, 170 (2006).
circumstances must exist before judicial estoppel will be
used to foreclose a party's claim:
(1) one of the parties takes a position that is inconsistent
with a position it took in previous litigation, (2) the
previous inconsistent position was accepted by a court, and
(3) the party who is maintaining the inconsistent positions
must have intentionally misled the court in order to gain an
Bank of New York Mellon v. Georg, 456 Md. 616, 625
(2017) (quoting Dashiell, 396 Md. at 170 (citation
omitted)); Blentlinger, LLC v. Cleanwater Linganore,
Inc., 456 Md. 272, 297 (2017).
noted that judicial estoppel performs two important
functions. First, the doctrine "rests upon the principle
that a litigant should not be permitted to lead a court to
find a fact one way and then contend in another judicial
proceeding that the same fact should be found
otherwise." Gordon, 142 Md.App. at 425
(internal quotations and citations omitted). Judicial
estoppel ensures "the 'integrity of the judicial
process by 'prohibiting parties from deliberately
changing positions according to the exigencies of the moment
[.]'" New Hampshire v. Maine, 532 U.S. 742,
(2001) (citation omitted); see also Dashiell, 396
Md. at 171 (explaining the doctrine is used "to protect
the integrity of the judicial system from one party who is
attempting to gain an unfair advantage over another party by
manipulating the court system."). The Court of Appeals
has explained that
[i]f parties in court were permitted to assume inconsistent
positions in the trial of their causes, the usefulness of
courts of justice would in most cases be paralyzed; the
coercive process of the law, available only between those who
consented to its exercise, could be set at naught by all....
It may accordingly be laid down as a broad proposition that
one who, without mistake induced by the opposite party, has
taken a particular position deliberately in the course of
litigation, must act consistently with it; one cannot play
fast and loose.
WinMark Ltd. P'ship v. Miles and Stockbridge,
345 Md. 614, 620 (1997) (internal quotations and citations
omitted). The Supreme Court cautioned, however, that it was
"not establish[ing] inflexible prerequisites or an
exhaustive formula for determining the applicability of
judicial estoppel." New Hampshire, 532 U.S. at
751. To the contrary, it observed that "[a]dditional
considerations may inform the doctrine's application in
specific factual contexts." Id. Therefore, the
chief goal of judicial estoppel is to preserve the integrity
of the judicial process by precluding a litigant from taking
one position in a legal proceeding and taking a contrary
position in another legal proceeding. See Civil Procedure
Intent and the Application of Judicial Estoppel: Equitable
Shield or Judicial Heartbreak?, Dodd, Brian A., 22 AMJTA
481, Fall, 1998.
subsidiary function that judicial estoppel performs is to
protect the party seeking the estoppel. The Court of Appeals
has recognized that in addition to protecting the judicial
system, judicial estoppel seeks to preserve "'the
relationship between the parties to the prior
litigation.'" WinMark Ltd. P'ship, 345
Md. at 623 (citation omitted).
estoppel, on the other hand, has been defined as the
effect of the voluntary conduct of a party whereby he is
absolutely precluded both at law and in equity, from
asserting rights which might perhaps have otherwise existed,
either of property, of contract, or of remedy, as against
another person, who has in good faith relied upon such
conduct, and has been led thereby to change his position for
the worse and who on his part acquires some corresponding
right, either of property, of contract, or of remedy.
3 J. Pomeroy, Equity Jurisprudence, § 804 (5th ed.
1941), quoted in Leonard v. Sav-A-Stop Services, 289
Md. 204, 211 (1981). In Knill v. Knill, 306 Md. 527
(1986), the Court of Appeals noted that the doctrine "is
comprised of three basic elements, 'voluntary
conduct' or representation, reliance, and
detriment." Id. at 535.
Creveling v. Government Employees Insurance Co., 376
Md. 72 (2003), the Court of Appeals held that a putative
class's equitable estoppel claim was not satisfied. The
appellant alleged that an insurance company's
representations "likely" led putative class members
to not retain documentation required for reimbursement.
Id. at 101. The Court found that because appellants
did not provide any evidence, "any prejudice or
detrimental reliance suffered by the putative class is purely
speculative." Id. at 103. Further, it said
"any prejudice is dubious because even if claimants lost