De Koomen v. De Koomen

LISA W. DE KOOMEN v. JOOST J. DE KOOMEN

No. 1792

COURT OF SPECIAL APPEALS OF MARYLAND

September Term, 2019

November 23, 2020

Circuit Court for Baltimore County

Case No. 03-C-05-011410

UNREPORTED

Beachley, Gould, Wilner, Alan M. (Senior Judge, Specially Assigned), JJ.

Opinion by Beachley, J.

*This is an unreported opinion, and it may not be cited in any paper, brief, motion, or other document filed in this Court or any other Maryland Court as either precedent within the rule of stare decisis or as persuasive authority. Md. Rule 1-104.

On July 11, 2018, appellant Lisa de Koomen ("Lisa") filed in the Circuit Court for Baltimore County a petition to vacate an October 30, 2006 divorce judgment, alleging in substance that her former husband, appellee Joost de Koomen ("Joost"), fraudulently concealed marital assets in negotiations leading up to the execution of a property settlement agreement. After Joost moved to dismiss, Lisa filed an amended petition, which is the operative pleading in this appeal. In addition to requesting vacation of the judgment of divorce, Lisa's amended petition sought to set aside the property settlement agreement incorporated, but not merged, into the divorce decree, and to "[r]e-open the parties' divorce case for litigation regarding division of marital assets and spousal support." In the alternative, Lisa requested the court to "void the Agreement as it relates to division of marital assets . . . and alimony," or find that Joost breached the "Full Disclosure" provision of the marital agreement and grant her a monetary award based on assets Joost allegedly failed to disclose. Joost moved to dismiss Lisa's amended petition for failure to state a cause of action. After a hearing, the court issued a written opinion and order granting Joost's motion to dismiss.

Lisa timely appealed and presents the following questions for our review, which we have rephrased:

1. Did the trial court err in granting Joost's Motion to Dismiss based on its determination that Lisa failed to state a claim upon which relief could be granted?

2. Did the trial court improperly convert the motion to dismiss into a motion for summary judgment by considering and relying on material outside of Lisa's amended petition?

3. Were Lisa's due process rights violated when the trial judge refused to recuse himself?

We hold that the circuit court erred in dismissing Lisa's breach of contract claim, but affirm the court's dismissal of Lisa's other claims.

FACTUAL AND PROCEDURAL BACKGROUND

The parties married in 1994, and after separating in 2003, they executed a Separation and Property Settlement Agreement (the "Agreement") on October 17, 2006. The Agreement purported to resolve all issues arising out of their marriage, including alimony and the division of the parties' real and personal property. On October 30, 2006, the circuit court issued a Judgment of Absolute Divorce, into which the Agreement was incorporated without merger.

Nearly twelve years later, Lisa filed a "Petition to Vacate Judgment of Divorce for Purposes of Setting Aside Marital Settlement Agreement and for Modification of Alimony." After Joost moved to dismiss, Lisa filed an amended petition. In her amended petition, Lisa alleged that Joost fraudulently concealed evidence in the divorce proceeding that, had it been disclosed, "would have resulted in a more equitable division of marital assets and . . . a proper amount of alimony." Lisa's amended petition pleaded five separate counts to support her request to vacate the divorce judgment and set aside the Agreement: 1) that Joost's intentional concealment of material financial evidence constituted extrinsic fraud that warranted vacation of the judgment pursuant to Rule 2-535(b); 2) that Lisa's recent discovery of Joost's fraudulent conduct in the divorce action constituted newly-discovered evidence warranting a new trial as provided in Rule 2-535(c); 3) that in light ofJoost's fraudulent conduct, the court should exercise its discretion pursuant to Md. Code (1984, 2019 Repl. Vol.) § 8-103 of the Family Law Article ("FL"), which authorizes a court to "modify any provision of a deed, agreement, or settlement with respect to alimony or spousal support"; 4) that the provisions of the Agreement regarding alimony and distribution of marital assets should be rescinded as a result of Joost's fraudulent concealment of material evidence; and 5) that Joost breached the "Full Disclosure" provision of the Agreement by concealing his assets and income.

Joost moved to dismiss the amended petition, asserting that it failed to state a claim upon which relief could be granted. In addressing Lisa's claims, Joost responded that Lisa's fraud allegation did not constitute extrinsic fraud as contemplated by Rule 2-535(b); that Lisa could not rely on the newly-discovered evidence provision of Rule 2-535(c) because that Rule only authorizes the granting of a new trial if the party files a motion within thirty days of entry of judgment; and that, because the Agreement provided for non-modifiable alimony, FL § 8-103(b)(2) expressly precluded the court from modifying Lisa's alimony award. As to the fraud and breach of contract counts that Lisa added in her amended petition, Joost essentially asserted that Lisa failed to sufficiently allege a factual basis to support those claims.

On September 5, 2019, the court held a hearing on Joost's motion to dismiss. The court thereafter issued a Memorandum Opinion and Order in which it granted Joost's motion and dismissed Lisa's amended petition. Lisa timely noted this appeal.

DISCUSSION

I. Motion to Dismiss

We have explained the appropriate standard of review from the grant of a motion to dismiss as follows:

"The proper standard for reviewing the grant of a motion to dismiss is whether the trial court was legally correct. In reviewing the grant of a motion to dismiss, we must determine whether the complaint, on its face, discloses a legally sufficient cause of action." In reviewing the complaint, we must "presume the truth of all well-pleaded facts in the complaint, along with any reasonable inferences derived therefrom." "Dismissal is proper only if the facts and allegations, so viewed, would nevertheless fail to afford plaintiff relief if proven."

Higginbotham v. Pub. Serv. Comm'n of Md., 171 Md. App. 254, 264 (2006) (quoting Britton v. Meier, 148 Md. App. 419, 425 (2002)). "[A]n appellate court applies the same standard [as the circuit court] and assesses whether that decision was legally correct." Patton v. Wells Fargo Fin. Md., Inc., 437 Md. 83, 95 (2014).

A. Counts I and IV

In Count I of her amended petition, Lisa sought to vacate the divorce judgment based on Rule 2-535(b), which provides: "On motion of any party filed at any time, the court may exercise revisory power and control over the judgment in case of fraud, mistake, or irregularity." She alleged that Joost committed extrinsic fraud which precluded her from "bringing her Counter-Complaint for Divorce before the fact finder." To support this claim, Lisa alleged that, because Joost restricted her access to marital funds, she was unable to hire "effective, aggressive counsel" and thus was compelled to enter into the Agreement rather than litigate her counter-complaint. She also asserted that Joost "manipulated [her]emotions" by convincing her of the possibility of reconciliation if she acceded to his financial demands. Lisa alleged that an individual who formerly worked with Joost, Rogier Buker, notified her in 2013 that Joost "purposely minimized his income and diverted marital cash assets in order to reduce the marital estate." In Lisa's view, because these allegations sufficiently alleged extrinsic fraud as contemplated by Rule 2-535 (b), the court was required to vacate the judgment of divorce.

We disagree and hold that the circuit court properly dismissed Count I pursuant to our decision in Hresko v. Hresko, 83 Md. App. 228 (1990). In Hresko, a husband and wife entered into a voluntary separation agreement which was incorporated but not merged into the parties' divorce decree. Id. at 230. Pursuant to their settlement agreement, wife reserved the right to buy husband's interest in the family home. Id. Following their divorce, wife exercised her option and paid husband $30,000 in cash for his interest in the family home. Id. Surprised that wife had purchased his interest with cash, husband concluded that wife had hidden some of her monetary assets and that she had defrauded him during property settlement negotiations. Id. Husband moved to revise the divorce judgment based on wife's allegedly fraudulent conduct. Id. Wife moved to dismiss and, after a hearing, the court dismissed husband's motion to revise judgment. Id. at 230-31.

On appeal, this Court noted that, "[i]n an action to set aside an enrolled judgment or decree, the moving party must initially produce evidence sufficient to show that the judgment in question was the product of fraud, mistake or irregularity." Id. at 231 (citing Fleisher v. Fleisher, 60 Md. App. 565, 570 (1984)). Regarding fraud, we explained that "the type of fraud which is required to authorize the reopening of an enrolled judgment isextrinsic fraud and not fraud which is intrinsic to the trial itself." Id. (citing Schneider v. Schneider, 35 Md. App. 230, 238 (1977)). We defined intrinsic fraud as fraud related to issues regarding the original action, or issues that were or could have been actually litigated. Id. at 232. In contrast, we described extrinsic fraud as fraud that "actually prevents an adversarial trial[,]" the type of fraud that prevents "the actual dispute from being submitted to the fact finder at all." Id. (citing Fleisher, 60 Md. App. at 571).

We recognized a split of authority regarding whether to treat the concealment of assets as intrinsic or extrinsic fraud, but ultimately concluded that such actions constitute intrinsic fraud. Id. at 233-35. Accordingly, we held that the trial court correctly...