Opinion ID: 2300977
Heading Depth: 1
Heading Rank: 5

Heading: Maryland Uniform Principal and Income Act

Text: The Court of Special Appeals held that the Maryland Uniform Principal and Income Act, Maryland Code (1974, 2001 Repl.Vol.), § 15-501 et seq. of the Estates and Trusts Article, applies to this estate. Id. at 734-36, 18 A.3d 1018. Green partially contests this holding, arguing that the Legislature did not intend to apply the Act to a spouse's elective share. Nassif maintains that the Act applies. To decide this issue, we must first determine that a justiciable controversy exists. A declaratory judgment shall not issue unless (1) An actual controversy exists between contending parties; (2) Antagonistic claims are present between the parties involved which indicate imminent and inevitable litigation; or (3) A party asserts a legal relation, status, right, or privilege and this is challenged or denied by an adversary party, who also has or asserts a concrete interest in it. Maryland Code (1973, 2006 Repl.Vol.), § 3-409 of the Courts and Judicial Proceedings Article. We described this standard in 120 W. Fayette St., LLLP v. Mayor & City Council of Balt. City, 413 Md. 309, 356, 992 A.2d 459, 488 (2010): A controversy is justiciable when there are interested parties asserting adverse claims upon a state of facts which must have accrued wherein a legal decision is sought or demanded. To be justiciable the issue must present more than a mere difference of opinion, and there must be more than a mere prayer for declaratory relief. (Citations and quotation marks omitted.) Part of showing a justiciable controversy is pointing to specific factual allegations which, under all the circumstances, show that there is a substantial controversy ... of sufficient immediacy and reality to warrant the issuance of a declaratory judgment. Hamilton v. McAuliffe, 277 Md. 336, 340, 353 A.2d 634, 637 (1976) (citations and quotation marks omitted); see also Liss v. Goodman, 224 Md. 173, 177, 167 A.2d 123, 125 (1961) ([D]eclarations should not be made where they would not serve a useful purpose or terminate a controversy.); Staley v. Safe Deposit & Trust Co., 189 Md. 447, 456-57, 56 A.2d 144, 149 (1947) ([C]ourts have some judicial discretion to refuse a declaratory judgment when it does not serve a useful purpose or terminate controversy.). In Hatt v. Anderson, 297 Md. 42, 45-47, 464 A.2d 1076, 1078-79 (1983), we vacated a declaratory judgment because the plaintiff had failed to point to specific facts that would have been affected by the judgment. Although the parties disagreed about how to interpret a county regulation, they did not identify how their proposed interpretations would have any tangible effect on the case at hand. See id. As we explained, It may well be that ... there does exist between Hatt and Klasmeier an actual controversy; antagonistic claims indicating imminent and inevitable litigation; or the assertion and denial of a legal relation, status, right, or privilege. The difficulty confronting us, however, is that if any of these grounds for granting declaratory relief do exist, they are neither disclosed nor apparent from the record before us. The short of it is that nothing appears in the pleadings even remotely suggesting that an actual dispute exists between the parties beyond that which might be implied by the mere facial existence of the regulation; and this alone is plainly insufficient to present a justiciable controversy.... There is no indication that Hatt has been ordered to do, or not do, anything under the regulation.... It is thus evident that the allegations of Hatt's bill of complaint are simply too theoretical, too abstract and too speculative to form the basis for an action for declaratory relief[.] (Citations and quotation marks omitted.) Id.; see also Prince George's County v. Board of Trustees, 269 Md. 9, 12-13, 304 A.2d 228, 229-30 (1973) (same). As in Hatt, the parties have not shown how the issue presented for our decision whether the Maryland Uniform Principal and Income Act applies to elective share assetswill affect the case at hand. The Act provides general rules regarding how fiduciaries should identify and manage income on trusts and estates. See generally Maryland Code (1974, 2011 Repl.Vol.), § 15-501 et seq. of the Estates and Trusts Article. Green complains that it would be unfair to apply the Act, but does not point to any specific facts that would be affected by a decision on this issue. We hold that there is no justiciable controversy at this point regarding the Act's applicability, and shall vacate the opinion of the Court of Special Appeals to the extent that it addresses the Act, with directions to vacate the trial court's declaratory judgment on that issue as well. See Hatt, 297 Md. at 47, 464 A.2d at 1079. JUDGMENT OF THE COURT OF SPECIAL APPEALS AFFIRMED AS TO THE MEANING OF ENFORCEABLE CLAIMS, THE VALUATION AND APPRECIATION OF ESTATE ASSETS, AND THE ELECTIVE SPOUSE'S SHARE OF INCOME; REVERSED AS TO THE TIMELINESS OF THE LEGATEES' DECISION TO PAY CASH; AND VACATED AS TO THE PRINCIPAL AND INCOME ACT. CASE REMANDED TO THAT COURT WITH DIRECTIONS TO VACATE THE JUDGMENT OF THE CIRCUIT COURT FOR PRINCE GEORGE'S COUNTY AND FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION. COSTS TO BE PAID BY PETITIONER. HARRELL, J., concurs and dissents. HARRELL, J., concurring and dissenting. I disagree with but a single holding of the majority opinion: that the value of Nassif's elective share distribution should include a pro rata portion of the income generated by the decedent's estate during its administration. Section 3-203 of the Estates and Trusts Article, the governing statute, was silent at the time of the decedent's death in 1993 as to whether an electing spouse was entitled to interest upon distribution of his or her elective share. The principles of statutory interpretation demonstrate forcibly to me that the surviving spouse's elective share at the time of decedent's death was exclusive of estate income. The majority opinion, however, sidesteps this conclusion, justifying its contrary view with impuissant [1] authority. Although divining legislative intent can be challenging on occasion, the vastly stronger argument in this matter is that Nassif's elective share was exclusive of the decedent's estate income. A plain reading of Senate Bill 312-2003 militates against the majority opinion's conclusion that Nassif's elective share includes income earned on the estate during its administration. The decedent passed on 9 March 1993. At that time (the determinative point of reference for our purposes), the statute was silent as to entitlement to income in this regard. Senate Bill 312 amended § 3-203 in 2003 to include estate income in a surviving spouse's elective share. This amendment was prospective in effect expressly. Senate Bill 312 provided, For purposes of this section, a surviving spouse who has elected to take against a will shall be entitled to the surviving spouse's portion of the income earned on the net estate during the period of administration based on a one-third or one-half share, whichever is applicable.... [T]his act shall be construed to apply only prospectively.... 2003 Md. Laws 234. An elementary principle of statutory construction is to give effect to the plain language of a bill. See, e.g., Md. Ins. Comm'r v. Cent. Acceptance Corp., 424 Md. 1, 36, 33 A.3d 949, 970 (2011) (citing Breslin v. Powell, 421 Md. 266, 286, 26 A.3d 878, 891 (2011)). A statute so adopted should not be construed to have retrospective effect. See, e.g., State v. Stowe, 376 Md. 436, 454, 829 A.2d 1036, 1047 (2003) (quoting State Tax Comm'n v. Potomac Elec. Power Co., 182 Md. 111, 117, 32 A.2d 382, 384 (1943)); Granahan v. Prince George's Cnty., 326 Md. 346, 357, 605 A.2d 91, 96-97 (1992) (citing Wash. Suburban Sanitary Comm'n v. Riverdale Heights Volunteer Fire Co., 308 Md. 556, 560-64, 520 A.2d 1319, 1321-23 (1987)). Senate Bill 312 effected a substantive amendment to § 3-203, which supports further that estate income was not included in the elective share in 1993. A substantive amendment to a statute is one that establishes the rights of persons. 1A Norman J. Singer and J.D. Shambie Singer, Statutes and Statutory Construction, § 41:4, at 4423 (7th ed.2009) [hereinafter Statutory Construction]. Senate Bill 312 was a substantive amendment in this relevant regard because it created for surviving spouses, who elect the statutory share, a right to income generated by the estate during its administration, proportionate to the size of the surviving spouse's elective share. We have observed that a substantive amendment to an existing statute indicates an intent to change the meaning of that statute. In re Criminal Investigation No. 1-162, 307 Md. 674, 689, 516 A.2d 976, 984 (1986) (citations omitted). Further, substantive amendments are presumed to indicate a change in legal rights. Statutory Construction, supra, § 22:30, at 355-56. When the Maryland General Assembly amended § 3-203 in 2003 to include in a surviving spouse's elective share a pro rata share of estate income generated during its administration, the presumption is that it did so because it disagreed with (or changed its mind as to) the law as it existed prior to the amendment, and intended to create a new legal right. If including estate income was a new legal right, logically, such a right could not have existed at the time of the decedent's death, which occurred prior to the effective date of the substantive amendment in Senate Bill 312. The majority opinion circumvents this reasoning by relying on Chesek v. Jones for the proposition that a significant statutory amendment does not evince that the statute was construed differently before the amendment. Chesek, however, is inapposite. It dealt with a clarifying amendment to a statute, whereas Senate Bill 312 was a substantive amendment, for present purposes. As the majority opinion notes, the purpose of the amendment discussed in Chesek was to resolve any disputes over subpoena power and to clarify[] whether that power could be delegated. Chesek v. Jones, 406 Md. 446, 462, 959 A.2d 795, 804 (2008). In contrast, the preamble to Senate Bill 312 stated the purpose of the amendment as  providing that an elective share includes certain income earned on the net estate during the period of administration. 2003 Md. 234 (emphasis added). Further, the floor report for Senate Bill 312 states that one of the most significant changes to § 3-203 was to allow the spouse to be paid a proportionate share of the income earned on the net estate during the period of administration. Chesek is unpersuasive in the present matter and does not support the majority opinion's conclusion. The majority opinion defends further its position that income is included in the elective share in the present case by pointing to two pre-1969 cases. Those cases were superseded, however, in 1969 by Senate Bill 316 of that year. On 24 March 1969, then Governor Marvin Mandel signed into law Senate Bill 316. As the majority opinion notes, the bill repealed, revised, and reorganized the disparate statutes of Maryland estates and trusts law. Shale D. Stiller and Roger D. Redden, Statutory Reform in the Administration of Estates of Maryland Decedents, Minors and Incompetents, 29 Md. L.Rev. 85, 85 (1969). When a legislature revises an entire statutory body of law by repealing former statutes and enacting a new statute, there is a strong implication of legislative intent to repeal former statutory law and also to supersede the common law relating to the same subject. Statutory Construction, supra, § 23:13, at 489-90. Therefore, the 1969 amendment, as a substantive and comprehensive revision of Maryland estates and trusts law, rendered inapplicable the antecedent common law relevant to the topic of § 3-203, which itself was revised (but remained silent as to inclusion of income in an elective share). The majority opinion attempts to avoid this construction by quoting selectively from the Summary of Changes Made in Second Report of Governor's Commission to Review and Revise the Testamentary Laws of Maryland, noting that `with respect to the widow's statutory share ... the Commission has decided to retain the present law. ' op. at 291, 44 A.3d at 340 (2012). This partial quotation shared with us by the majority opinion is inapposite and misapplied because, when reviewing the full quotation in context, one discovers that it refers to § 3-102 of the Estates and Trusts Article, which governs a surviving spouse's intestate share, not an elective share. For these reasons, income generated by the deceased's estate during its administration should be excluded from Nassif's elective share.