Maryland Wife Wins Appeal Allowing Her to Pursue Claim that Husband Did Not Satisfy the Couple’s Marital Settlement Agreement

checkbookIn a case arising from a somewhat unusual marital settlement agreement, the Court of Special Appeals recently threw out a summary judgment order in favor of a husband who had persuaded the trial court that he had substantially complied with his financial obligations spelled out in that agreement. However, since the wife had presented enough evidence to raise a potentially triable case regarding whether a check she received from her husband was a payment under the agreement or a gift, the trial court should not have granted a summary judgment in favor of the husband.

The husband and the wife in this case divorced in 2008. At their final hearing in March of that year, they reached a marital settlement agreement that called for the husband, as a replacement for paying alimony, to put the wife on the payroll of his business as an employee for either seven years or eight years, depending on the level of success of the husband’s business.

Six and a half years later, the paychecks stopped coming to the wife. She filed an action in the trial court, asking the judge to hold the husband in contempt. The husband, in return, asked for the court to issue a summary judgment in his favor. According to the husband, he already paid the wife an extra $66,000 in salary advances, so he’d already fulfilled his obligation under the agreement. The wife contended that the $66,000 was actually a pair of gifts the husband had already promised her, rather than advances. The first allegedly related to tax liabilities that the wife had racked up as a result of the husband’s failure to file their income taxes from 2003-08. The second was a sum to pay off her student loan debts, which he’d promised to cover.

Without holding a hearing, the trial court granted the husband’s request and issued a summary judgment in his favor. On appeal, the wife was able to achieve a degree of success. As is the case in many legal disputes involving money, the couple’s case came down to documentation.

The law says that, to be entitled to a summary judgment, a party must show that there are no factual disputes that are material to the outcome of the case. Unfortunately for the husband, such a factual dispute did exist in his case. He had paid the wife two different payments — one for $38,000 and one for $28,000 — that he argued were advances. To back up this claim, the husband produced each of the two checks that combined to make up the first advance. Both of them said “advance” on them. The check paying the second alleged advance did not have the word “advance” on it, and the husband acknowledged that it was less clear that this payment was a salary advance.

If the business’ growth was such that the husband only owed the wife seven years of salary, he owed her $655,000. If, however, he owed her eight years of payments, the sum total was $748,000. Taking away the second $28,000 payment, the grand total of employment income the wife received was $744,380, or roughly $3,620 less than the $748,000. What all this math meant was that there was a viable dispute of material fact. If the nature of the second payment was a gift rather than an advance (which was validly in dispute), and the wife was owed eight years of salary instead of seven, there was a potential basis for finding that the husband had not completely fulfilled his obligation under the settlement agreement. This meant that he was not entitled to a summary judgment.

Maryland alimony attorney Anthony A. Fatemi has extensive experience helping individuals dealing with divorce or divorce-related issues, whether those issues relate to alimony, the enforcement of marital settlement agreements, contempt, or other matters. To put this office’s skills and resources to work for you, contact us at 301-519-2801 or via our online form.

More blog posts:

Civil Contempt Punishments and Your Maryland Custody and Visitation Case, Maryland Divorce Lawyer Blog, Sept. 14, 2016

Maryland Court Upholds Marital Agreement Dividing Pension Benefits, Maryland Divorce Lawyer Blog, July 15, 2015

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