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One of the more interesting topics in the area of Maryland property division is the handling of “mixed property” – that is, property which is partially marital property and partially separate property. Property can have a mixed status for different reasons, but one common reason is when separate property appreciates in value during the marriage. When a piece of property appreciates in value during this marriage, this appreciated value is marital property. When a couple marries, everything which is acquired during the marriage is generally considered marital property; this is true even if the property in question is only a “portion of value,” and even if the other portion of the property in question is classified as separate property.
In the case of Noutchang v. Feutcha (2019), the court ended up dividing appreciated marital property in a manner which was regarded as unfair from the husband’s perspective. Let’s look at this important case in detail.
Facts of the Case
The husband in this case entered the marriage (which began in 2001) as the sole owner of a piece of real estate. When the marriage first started, the separate property real estate had a total value of around $245,000, and the husband’s equity was $74,000. There was no question that the real estate was the husband’s sole and separate property at the inception of the marriage. The marriage lasted 18 years. When the marriage dissolved, one of the key pieces of property to be divided was the appreciation in value of the husband’s real estate. The husband’s separate real estate had appreciated substantially in value during the 18 years of the marriage, and this appreciated portion was classified as marital property under Maryland law. Hence, the real estate was partially separate and partially marital property.
At the trial court, the wife’s share of the appreciated value was determined to be just a bit lower than $105,000. The husband appealed, arguing that the trial court abused its discretion by awarding the wife such a large share of the appreciated value. The trial court divided the appreciated value in a “straightforward” manner, but the husband argued that his 100% separate interest in the real estate (at the outset of the marriage) meant that the court should have divided the appreciated value differently. The husband argued that the appreciation in value largely occurred on its own, as a result of natural market forces, and was almost wholly unaffected by any contribution of martial funds. Thus, the husband argued, the wife should’ve received a much smaller share of the appreciated value.
Ruling & Outcome
The appellate division ruled against the husband, finding that no abuse of discretion occurred, and that the trial court had sufficient evidence to make its determination. Ordinarily, to support an argument for abuse of discretion, there needs to be glaring evidence that the trial court was erroneous in its decision-making; in other words, the abuse should be quite obvious, with almost no substantive basis to support the trial court determination. In this case, the trial court pinned its decision in part on the fact that the real estate had in fact been renovated using marital funds. Plus, the court found it relevant that the wife paid a majority of the couple’s other bills when her salary increased during the marriage. In any case, the appellate division concluded that there was some evidence to support the trial court’s decision, and consequently the claim of abuse of discretion was rejected.
Contact the Murphy Law Firm for More Information
If you would like more information about appreciated property, converted property, or another related property division topic in Maryland law, contact one of the family law attorneys at the Murphy Law Firm today by calling 240-219-5243.
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