Nolan v. Nolan

1

CHRISTINE MARIE NOLAN v. MICHAEL W. NOLAN, JR.

No. 0695-2022

Court of Special Appeals of Maryland

November 29, 2023

Circuit Court for Montgomery County Case No. 112910FL

Kehoe Leahy, Zic, JJ. ^[*]

OPINION^[**]

ZIC J.

This case arises from a 2015 marital settlement agreement between appellant Christine Nolan and appellee Michael Nolan. In March 2020, pursuant to terms of the settlement agreement Mr. Nolan filed a motion for sale of the marital home in the Circuit Court for Montgomery County. The circuit court granted Mr. Nolan's motion, appointed a trustee, and ordered Ms. Nolan to pay for the costs of the trustee.^[1] Ms. Nolan now appeals and challenges the circuit court's authority to order her to pay the full amount of the trustee's costs.

QUESTION PRESENTED

Ms. Nolan presents one question for our review, which we have rephrased and reframed as follows:^[2]

Whether the circuit court erred in ordering Ms. Nolan to pay the entirety of the trustee's costs.

For the reasons that follow, we answer Ms. Nolan's question in the negative and affirm the judgment of the circuit court.

BACKGROUND

In July 2013, Mr. Nolan filed a Complaint for Absolute Divorce in the circuit court. The parties entered into a marital settlement agreement ("Agreement") on January 21, 2015. The circuit court incorporated but did not merge the terms of the Agreement in its March 13, 2015 Judgment of Absolute Divorce. In relevant part, the settlement granted Ms. Nolan exclusive use and possession of the marital home for a period of three years following the formation of the Agreement. The Agreement also required Ms. Nolan to pay all mortgage and maintenance expenses.^[3] After either the expiration of the exclusive use and possession period or Ms. Nolan's remarriage, the marital home was to be listed for sale. Any proceeds or deficiencies of the sale of the home were to be shared equally between the parties.

Ms. Nolan remained in the home after the expiration of the three-year exclusive use and possession period.^[4] Ms. Nolan refused to sell following the expiration of the period because she believed there was "not enough money to sell the property because of the liens." Mr. Nolan began paying half of the marital home's mortgage in July 2019.^[5]On March 13, 2020, Mr. Nolan filed a Motion for Sale of Former Marital Home, and on May 27, 2020, Ms. Nolan filed a timely Answer opposing the Motion for Sale. Following a hearing on October 30, 2020, the circuit court granted the Motion for Sale on November 6. The court appointed a trustee to conduct the sale,^[6] and ordered Ms. Nolan to provide a key and any relevant documents to the trustee to facilitate the sale of the home. Finally, the court ordered Ms. Nolan to pay the trustee's costs "unless [the court determined] at a later hearing that those costs should be allocated in a different manner."

During the October 30, 2020 hearing, the circuit court explained that Ms. Nolan's continued residence in the marital home nearly three years after the exclusive use and possession period ended, along with Ms. Nolan's continued refusal to list the property for sale, was not what the parties agreed to in 2015. In short, "[t]he parties reached an agreement; everyone understood what the agreement was; and that agreement was that the [marital home] would be sold at the termination of the three years." The court explained that § 8-202(b)(2) of the Family Law Article grants the court the authority to order the partition or sale of property.^[7] Section 14-107 of the Real Property Article further allowed the circuit court to decree a partition or sale of real property.^[8] Noting that the circuit court "is a court of equity," the court found that it would be inequitable for Ms. Nolan to remain in the home any longer and granted Mr. Nolan's motion for sale in lieu of partition. Finding that Ms. Nolan benefited by remaining in the marital home for an additional three years, with Mr. Nolan paying one-half of the mortgage for over a year, the court ordered Ms. Nolan to pay the costs of the trustee appointed to sell the home. The court also denied Mr. Nolan's request to order Ms. Nolan to pay attorneys' fees because the court had already "order[ed] [Ms. Nolan] to pay for the trustee."

On January 27, 2021, the trustee filed a Motion for Appropriate Relief after Ms. Nolan failed to provide a key to the home as ordered in the November 6, 2020 order. The motion was granted, and the trustee moved forward with listing and selling the home. Ms. Nolan appealed, challenging the apportionment of the trustee's costs. In his answering brief, Mr. Nolan argued that Ms. Nolan's appeal was impermissible because it appealed a non-final judgment. The Appellate Court of Maryland agreed with Mr. Nolan, and in August 2021, dismissed Ms. Nolan's appeal "as not allowed by law."

On September 24, 2021, the circuit court deferred resolving allocation of the trustee's fee and reimbursement of costs until the trustee filed a motion requesting payment. The home was sold for $550,000, and the sale of the home proceeded to settlement on October 29, 2021. Once all debts on the property were settled, the net proceeds of the October 29, 2021 sale were $35,896.45. This amount was deposited by the trustee into the circuit court's registry on November 1, 2021. The trustee filed an Accounting and Petition for Fees and Reimbursement of Costs on November 10, 2021, requesting payment of $22,875.^[9] On January 12, 2022, the trustee deposited an additional $166.39 into the court's registry, which was the remaining balance of escrowed funds held by the settlement company to be used to pay the home's water bill. This brought the total proceeds from the sale of the home to $36,062.84.

On May 6, 2022, the circuit court held a hearing^[10] on the Trustee's Accounting and Petition for Fees and Reimbursement of Costs, at which time it determined that Mr. and Ms. Nolan were each entitled to one-half of the net proceeds from the sale of the home, or $18,031.42 each. Implementing the circuit court's November 6, 2020 order, the circuit court ordered Ms. Nolan to pay $4,843.58^[11] to the trustee. On May 25, 2022, the Registry of the Court released $18,031.42 each to Mr. Nolan and the trustee and entered judgment against Ms. Nolan in the amount of $4,843.58. Ms. Nolan subsequently appealed, challenging the circuit court's authority to order that her half of the sales proceeds go towards the entirety of the trustee's fees.

STANDARD OF REVIEW

Under Maryland Rule 8-131(c), "[w]hen an action has been tried without a jury, the appellate court will review the case on both the law and the evidence." The appellate court, however, should "not set aside the judgment of the trial court on the evidence unless clearly erroneous." Md. Rule 8-131(c). We review legal questions under the non-deferential de novo standard of review. Floyd v. Balt. City Council, 241 Md.App. 199, 208 (2019). A court's interpretation of the Maryland Rules is one such matter of law to be reviewed de novo. Xu v. Mayor of Balt., 254 Md.App. 205, 211 (2022).

DISCUSSION

I. The Circuit Court Did Not Err in Ordering Ms. Nolan to Pay the Entirety of the Trustee's Costs.

On appeal, Ms. Nolan challenges the circuit court's authority to order one cotenant of real property to pay the entire trustee's costs in a judicial sale. Ms. Nolan argues that Family Law § 8-202 and Real Property § 14-107 limit the circuit court to ordering either the partition or the sale of property according to the parties' respective rights. Ms. Nolan claims the circuit court erroneously reduced her share of the marital home's sale proceeds "below that of her rights in the property by ordering her to pay the entire trustee's commission."

In response, Mr. Nolan argues that Maryland law vests the circuit court with the power to order Ms. Nolan to pay 100 percent of the court-appointed trustee's fees. Mr. Nolan points to several provisions of the Family Law Article and Real Property Article to argue that the circuit court possessed "broad authority to consider any factor deemed necessary or appropriate" in making equitable adjustments in ordering the sale of the marital home, and therefore did not err in considering Ms. Nolan's breach of the marital agreement in ordering Ms. Nolan to pay the entirety of the trustee's costs.

The court's ability to order partition and sale of the Nolans' marital home pursuant to Family Law § 8-202 and Real Property § 14-107 is not in question, only the court's subsequent decision to order Ms. Nolan to pay the entirety of the trustee's fees after splitting the proceeds of the sale equally. We agree that the circuit court possessed the authority to order Ms. Nolan to pay the entirety of the trustee's costs, and therefore affirm.

Real Property § 14-107(a)^12[] granted circuit courts the power to "partition [] any property, either legal or equitable, on the bill or petition of any joint tenant, tenant in common, parcener, or concurrent owner, whether claiming by descent or purchase." If the court determines that the property cannot be partitioned without harm or loss to one or both of the parties, the court may order the property's "sale and divide the money resulting from the sale among the parties according to their respective rights." Real Prop. § 14-107(a).

Maryland appellate courts have long held that a court sitting in equity has broad discretionary authority. See, e.g. Gittings v. Worthington, 67 Md. 139, 149 (1887) ("It is undoubtedly within the power of a court of equity to adapt its methods to the exigencies of justice, being careful, however, not to grasp at forbidden power, for the purpose of relieving the hardship of a particular case."); Meyers v. East End Loan &Sav. Ass'n of...