Deen v. Phelps

RACHEL L. DEEN v. DAVID E. PHELPS

No. 263

COURT OF SPECIAL APPEALS OF MARYLAND

September Term, 2016

March 23, 2017

UNREPORTED

Eyler, Deborah S., Nazarian, Salmon, James P. (Senior Judge, Specially Assigned), JJ.

Opinion by Eyler, Deborah S., J.

*This is an unreported opinion and therefore may not be cited either as precedent or as persuasive authority in any paper, brief, motion, or other document filed in this Court or any other Maryland court. Md. Rule 1-104.

Rachel L. Deen, the appellant, f/k/a, Rachel L. Phelps, and David E. Phelps, the appellee, were divorced in the Circuit Court for Montgomery County. Deen challenges the grant of Phelps's motion to revise the divorce judgment and several other post-judgment orders entered by the circuit court.

FACTS AND PROCEEDINGS

Deen and Phelps met in September 2008, when she was 41 and he was 48. They both had children from prior relationships. Deen worked as a surgical nurse at Walter Reed Medical Center and Phelps owned and operated a mortgage brokerage company, Aadvantage Plus Financial.

Phelps owned a house at 6419 Camrose Terrace, Bethesda. He and his former wife had purchased the house in 1994 and, when they divorced in 2004, title was transferred to him.

In 2009, Deen and her two children moved into the Camrose Terrace house with Phelps. Deen and Phelps soon began renovating the kitchen. By deed dated January 14, 2010, Phelps conveyed the Camrose Terrace house to himself and Deen as tenants in common.¹

On June 18, 2011, Deen and Phelps were married. Four months later, in November 2011, they refinanced the mortgage on the property and titled the property in both their names as tenants by the entireties (hereinafter "the marital home").²

The parties' marriage deteriorated rapidly in 2013 after Phelps became addicted to narcotics he was prescribed following rotator cuff surgery and also began abusing alcohol. Meanwhile, in September 2013, with Phelps's knowledge and consent, Deen obtained a Home Equity Line of Credit ("HELOC") on the marital home in her name only, with a credit line of $31,000.

In June 2014, the parties separated and Phelps moved out of the marital home. Deen lived in the marital home with her two children until the merits hearing and paid the $3,031 monthly mortgage payment.

On August 8, 2014, Deen filed for divorce.

The divorce hearing was held over five days in August 2015.³ The division of marital property was the focus of the merits hearing and the major item of marital property was the marital home. Deen asked the court to award her title to the marital home and Phelps asked the court to order the marital home sold, with the proceeds to be divided evenly. Deen testified that she had contributed $55,000 towards renovations tothe marital home both before and after the marriage. Phelps claimed that he had invested $74,000 in non-marital funds toward renovations prior to the parties' marriage. The evidence showed that during the parties' separation, Deen made two withdrawals on the HELOC: $20,000 on July 21, 2014, and $3,000 on June 4, 2015. She deposited the $20,000 into her daughter's bank account and the $3,000 into an account she shared with her ex-husband.

The court entered its opinion and order on November 3, 2015 ("the 2015 Divorce Judgment"). As pertinent, it found that Deen dissipated marital property by drawing on the HELOC and depositing the funds into her children's bank accounts. She also "made a series of transfers from the HELOC via cashier's checks, including one transaction in which she transferred Three Thousand Dollars ($3,000.00) into an account she shared with her ex-husband." The court further found that Deen misappropriated insurance reimbursement checks made out to Phelps totaling $3,800, which were intended to cover his medical expenses. Finally, the court found that Deen removed $3,000 in cash from Phelps's briefcase without his authorization and deposited that money into her son's bank account. In light of these findings, the court concluded that Deen was not credible in her testimony that she had depleted non-marital resources to pay the mortgage on the marital home during the parties' separation.

The court ordered the parties to list the marital home for sale within thirty days; to split the proceeds from the sale of the home equally; to split the mortgage expenses evenly until the home was sold; for Deen to pay Phelps $3,400 to reimburse him formonies she misappropriated; and for Deen to pay Phelps "half of the liquid funds in the Home Equity Line of Credit attached to the [marital home]."⁴ Neither party noted an appeal from that judgment.

Thirty days later, on December 3, 2015, Phelps filed a motion to revise pursuant to Rule 2-535(a). He alleged that Deen's counsel had advised that because the HELOC was maxed out, there were no "liquid funds" and Deen would not be reimbursing Phelps for any HELOC funds she had withdrawn. Phelps asked the court to find that Deen's post-separation withdrawals from the HELOC resulted in $17,234 in dissipated assets and to order a set-off from the proceeds of the sale of the marital home in that amount.⁵ He also asked the court to issue a decision on a motion for attorneys' fees that was pending at the time of the divorce hearing.⁶ Finally, Phelps asked the court to make findings about certain items of personal property.

On December 18, 2015, Deen opposed the motion and filed a cross-motion to revise. She alleged that Phelps was not entitled to a set-off against the proceeds of the sale of the marital home because the evidence adduced at the divorce hearing showed thathe had failed to make any contribution to the mortgage payments from June 2014 forward. Moreover, he had been ordered to pay $1,500 per month for six months as emergency family maintenance in a protective order proceeding, but had failed to comply with that court order. Deen alleged that she had paid $42,447.86 in mortgage payments during the parties' separation, more than double the amounts she had drawn on the HELOC, and had made additional mortgage payments in the months following the merits hearing.

While the cross-motions to revise were pending, Phelps filed a motion to reduce the $3,400 award to him to a judgment.

By order dated March 22, 2016, and entered on March 24, 2016, the court granted in part Phelps's motion to revise. It ordered Deen to "repay from her share of the proceeds [from the sale of the marital home] . . . []$15,234[] owed to the HELOC, secured by the [marital home]." It further ordered Deen to pay $1,200.75 as a contribution towards attorneys' fees incurred by Phelps in filing a motion for sanctions prior to the divorce judgment. Finally, it made findings pertaining to the items of personal property, none of which are challenged in the instant appeal.

By order entered the same day, the court denied Deen's motion to revise, ruling that because it was filed more than thirty days after the entry of the divorce judgment, it was untimely. Finally, the court granted the motion for judgment and entered judgment against Deen and in favor of Phelps for $3,400.

Also on March 24, 2016, Phelps filed an emergency motion to appoint a trustee and for other equitable relief. He alleged that on January 31, 2016, he and Deen had entered into a contract to sell the marital home to third parties for $630,000. Closing was scheduled for March 30, 2016, at the offices of Paragon Title in Bethesda. On March 23, 2016, the day after the court issued its order granting his motion to revise, Deen had spoken to Phelps's attorney by telephone and advised that she would not attend closing unless Phelps agreed to "rescind" the court orders granting the motion to revise and the motion for judgment. Phelps's attorney offered to escrow the proceeds of the sale until such time as Deen's challenge to the allocation of those proceeds could be considered by the court, but she refused this offer. Phelps asked the court to appoint a trustee to take possession of the marital home and to complete the sale, and to order Deen to pay the trustee's fees. He suggested that the court appoint David Goldberg, Esq.⁷

Deen, who was now representing herself, opposed the emergency motion that same day. She alleged that she was no longer represented by an attorney as of "Dec 2015" and asked for the opportunity to hire new counsel before the court ruled on the motion. She also filed a pro se opposition to Phelps's motion to revise,⁸ claiming that she had never been served with a copy of that motion and was unaware that it existed until she received the order granting it. Finally, she filed a motion to revise the March24, 2016 order granting Phelps's motion to revise, arguing that in light of her payment of the mortgage during the parties' separation she should not be obligated to pay Phelps any monies out of the proceeds of the sale of the marital home, to pay attorneys' fees, or to reimburse him for the $3,400 in insurance checks.

The court held an emergency hearing the next day. Phelps appeared with counsel and Deen appeared pro se. The court asked Deen if she was refusing to consummate the sale of the marital home and she replied in the affirmative. The court granted the emergency motion, and appointed Mr. Goldberg as trustee. The order directed Mr. Goldberg to "make a public or private sale of [the marital home] in his sole discretion." The court reserved on the request for Deen to pay the trustee's fees, ordering that that matter be referred to the judge who had presided over the parties' divorce hearing.

At the emergency hearing, Phelps filed a request for $3,442.25 in attorneys' fees incurred to file the emergency motion and proceeding.

On March 28, 2016, Deen filed another motion "requesting to seek legal counsel" prior to the closing on the sale of the marital home.

On March 29, 2016, the day before the closing, Phelps filed an emergency motion to vacate the order appointing Mr. Goldberg as trustee and for entry of a new order consistent with...