Property division in a divorce is not always as simple as splitting a bank account in two. Oftentimes a couple will jointly own real property for personal or business use. It may not be practical to immediately sell such property, especially if it will remain in active use following the divorce. As a result, it is important for the parties to carefully draft settlement agreements that provide a clear road map for how to address questions of ownership or potential sales going forward.

Court of Special Appeals Calls Out Former Husband’s Efforts to Frustrate Former Wife’s Contractual Rights

Even with such agreements in place, there can still be disputes. Take this recent case from the Maryland Court of Special Appeals, Wells v. Wells. This case involved a now-divorced husband and wife who owned a farm in Freeland, Maryland. The farm was both the marital home and the base for the former wife’s business.

The parties negotiated a property settlement as part of their divorce. The former wife could continue to occupy the farm until, as relevant here, three months after the couple’s youngest living child graduated high school. At that point the farm would be sold in one of four ways. First, the former wife had the option to buy out the former husband. If she did not exercise this option, then the former husband could elect to buy out the former wife. If neither party bought out the other, then an agent would sell the property. If that did not occur, then either party could ask the court to order a judicial sale.

So, what happened? The former husband ended up going back to court, demanding a judicial sale. The former wife counter-sued, asking that she be allowed to exercise her buyout option. The trial judge dismissed both complaints.

The Court of Special Appeals, however, saw merit in the former wife’s countersuit. The issue here was that the former wife did exercise her option within three months of the youngest child’s graduation. But the appellate court said the former husband failed to take “the steps that he was contractually obligated to take” to complete the process. The former husband then turned around and complained that the former wife failed to exercise her option in a timely manner. But the Court of Appeals said, “A party cannot enter into an agreement, fail to do what the agreement requires, and then reap the benefits of its own failures.”

As such, the Court said the appropriate remedy was to restore the former wife’s option to buy out the former husband’s share of the property. Only if that option fails–presuming the former husband does not again breach the agreement–would a sale by agent or judicial sale be an appropriate option for disposing of the property.

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This article has been provided by the Law Office of Robert Castro. For more information or questions contact our office to speak to an experienced lawyer at (301) 870-1200.

Source:

https://www.courts.state.md.us/sites/default/files/unreported-opinions/1860s19.pdf