Court Opinion

ID: 4494400
Source: CourtListenerOpinion
Date Created: 2020-01-23 16:05:34.614289+00
Date Added: 2024-06-11T14:54:11.532409
License: Public Domain

MAINE SUPREME JUDICIAL COURT                                          Reporter of Decisions
Decision: 2020 ME 10
Docket:   Wal-19-341
Argued:   January 8, 2020
Decided:  January 23, 2020

Panel:       SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, and HUMPHREY, JJ.

                                    CURTIS S. DOW

                                            v.

                               ROBYN (DOW) BILLING

ALEXANDER, J.

         [¶1] Curtis S. Dow appeals from a judgment of divorce from Robyn (Dow)

Billing entered by the District Court (Belfast, Davis, J.). Dow contends that the

court erred by interpreting the parties’ premarital agreement as not applicable

to a 401(k) plan he created during the marriage and by failing to consider his

testimony that the 401(k) plan was funded, at least partially, with nonmarital

property. He also argues that the court abused its discretion by making

contradictory findings regarding its consideration of his nonmarital real estate

and the debt associated with that property.             We find no merit in Dow’s

arguments concerning the premarital agreement and the 401(k) plan, and we

determine that any error in the court’s consideration of the value of Dow’s
2

nonmarital property in its property distribution was harmless. Accordingly, we

affirm the judgment.

                                 I. CASE HISTORY

      [¶2] The parties were married in 2010. Prior to the marriage, the parties

signed a premarital agreement that was requested and drafted by Dow.

      [¶3] Dow filed a complaint for divorce against Billing in July 2017 after

seven years of marriage. After a settlement conference, the parties were unable

to resolve the case because of disagreements concerning the validity, scope, and

interpretation of the premarital agreement.          The parties then agreed to

bifurcate trial of the issues to allow the court to first decide the issues regarding

the premarital agreement and then proceed to the divorce trial, because the

“length and scope of the trial” would depend significantly on the court’s

interpretation of the premarital agreement.

      [¶4] Hearing on the premarital agreement was set for July 2018. In the

parties’ prehearing briefs, the focus was whether Dow’s 401(k) plan—which

the parties agreed he had created during their marriage—was nonmarital

property pursuant to the terms of the premarital agreement.

      [¶5] At the evidentiary hearing on the premarital agreement, both sides

presented arguments and Billing testified about her understanding of the
                                                                               3

premarital agreement and its execution. Apart from brief testimony regarding

the validity of the premarital agreement, Dow did not present any evidence

regarding the origin of the funds for the 401(k) plan. He relied instead on his

argument that the premarital agreement dictated that separately-owned

property, whenever acquired, was to be considered nonmarital.

      [¶6] After taking the matter under advisement, the court found that the

premarital agreement was valid and enforceable, and that it “very explicitly

applie[d] only to the property (and liabilities) that the parties owned when they

executed the agreement.” Accordingly, the court concluded that Dow’s 401(k)

plan was “marital property subject to equitable distribution.”

      [¶7] Dow filed a motion to reopen the evidence pursuant to M.R. Civ. P.

43(j), seeking to offer additional evidence on the nature of the 401(k) plan and

“extrinsic evidence necessary for the court’s interpretation of the premarital

agreement.” The court denied the motion, noting that it would be unfair, after

the issue had been decided, to allow Dow to reopen the record and offer

evidence that he could have presented at the earlier hearing.

      [¶8] A contested divorce hearing was held in January 2019. Thereafter,

the court entered a judgment of divorce with extensive findings of fact and a

child support order that is not challenged here. Relevant to the issues on
4

appeal, the court found that the factors enumerated in 19-A M.R.S. § 953(1)

(2018) favored distribution of a larger share of the 401(k) plan funds to Billing.

Specifically, the court found that (1) the “account was funded through [Dow’s]

employment, but was made possible by [Billing’s] substantial contribution as

the homemaker and care provider for the parties’ two children,” (2) Dow was

leaving the marriage with substantially more property than Billing, and (3)

Dow would be able to refund the 401(k) account “easily” because his economic

circumstances were “far better” than Billing’s economic circumstances. As

such, the court awarded Billing $126,000 of the 401(k) plan’s $179,877 value.1

        [¶9]    Following the court’s judgment, Dow filed a single motion

requesting further findings of fact and conclusions of law, see M.R. Civ. P. 52(b),

and that the court amend its judgment, see M.R. Civ. P. 59(e). The court

generally denied Dow’s motion, noting that the “vast majority of the issues

raised in [the] motion have already been addressed.” The court did, however,

clarify a few points regarding its consideration and valuation of Dow’s

nonmarital real estate.

    The court determined that it would be equitable for Billing to reimburse Dow $11,000 for marital
    1

debts and expenses, and her share of the 401(k) plan was ultimately reduced to $115,000.
                                                                                                5

         [¶10] Dow timely appealed. See 19-A M.R.S. § 104 (2018); M.R. App. P.

2B(c)(2).

                                    II. LEGAL ANALYSIS

A.       Interpretation of the Premarital Agreement

         [¶11] Dow first challenges the court’s interpretation of the parties’

premarital agreement. The language at issue is as follows:

         4.    Rights and Obligations of the Parties

         Each of the parties shall retain the title, management, and control
         of the estates now owned by each of them whether real, personal,
         or mixed;[2] and all increases or additions thereto, entirely free and
         unmolested by the other party and may encumber, sell, dispose,
         give, or provide by will for the disposition of any or all of such
         estates so separately owned and possessed.

         At the death of either, no claim by inheritance, descent, surviving
         spouse award, homestead, dower or maintenance shall be made by
         either of the parties against the other or against the estate of the
         other.

         Each of the parties separately waives any and all rights by dower,
         homestead, surviving spouse award, inheritance, descent or any
         other marital right arising by virtue of statute or otherwise in and
         to any parcel of the estate now owned and possessed by the other,
         and does agree and consent that each shall have full power and
         control in all respects to exercise free and undisputed ownership,
         management and disposition of each of such estates and increases

     The court and Dow both identify the punctuation following “mixed” as a semicolon. However, it
     2

appears from the copies of the agreement in both the appendix and the court file that the mark may
actually be a comma with a copier artifact near it. Fortunately, as explained in this opinion, the
interpretation of the contract does not turn on whether the mark is a semicolon or a comma.
6

      thereto now owned and possessed by the parties, and each of the
      parties does waive and renounce any legal and statutory rights that
      might, under any law, be set up against any part of the estate of the
      other and does consent that the estate of each shall descend or be
      disposed of by will to the heirs or legatees or devisees of each of the
      parties, free and clear of any claim by inheritance, dower, surviving
      spouse award or homestead or maintenance or any claim
      otherwise given by law to a husband and wife.

      [¶12] Dow contends that the court’s interpretation of the premarital

agreement as covering only property owned at the time of its execution—“the

estates now owned by each of them”—is erroneous. He argues that “the

operative language of the premarital agreement” is the portion that states,

“Each of the parties shall retain the title, management, and control of the estates

now owned by each of them whether real, personal, or mixed; and all increases

or additions thereto . . . .” (Emphasis added.) He maintains that the agreement

applies to property owned at the time of its execution as well as to

after-acquired property—i.e., additions to the parties’ respective estates.

Alternatively, although he elected not to offer evidence on the issue at the

premarital agreement hearing, Dow now argues that the premarital agreement

is ambiguous and that we should remand for the taking of extrinsic evidence of

the parties’ intent.

      [¶13]    “Premarital agreements are contracts” that we evaluate “in

accordance with standard rules of contract construction.” Estate of Barrows,
                                                                              7

2008 ME 62, ¶ 3, 945 A.2d 1217. “[T]he interpretation of a contract, including

whether or not its terms are ambiguous, is a question of law that we review de

novo.” Scott v. Fall Line Condo. Ass’n, 2019 ME 50, ¶ 6, 206 A.3d 307.

      [¶14] We construe contracts “in accordance with the intention of the

parties, which is to be ascertained from an examination of the whole

instrument. All parts and clauses must be considered together that it may be

seen if and how one clause is explained, modified, limited or controlled by the

others.” Am. Prot. Ins. Co. v. Acadia Ins. Co., 2003 ME 6, ¶ 11, 814 A.2d 989.

Ultimately, we seek to give effect to the plain meaning of the words used in the

contract and avoid rendering any part meaningless. See Scott, 2019 ME 50, ¶ 7,

206 A.3d 307. However, if we determine that a contract contains an ambiguity

that cannot be resolved from the four corners of the document, the

interpretation of the ambiguous language becomes a question for the

fact-finder to resolve by taking extrinsic evidence. See Estate of Barrows,

2006 ME 143, ¶ 18, 913 A.2d 608.

      [¶15] We determine that the court’s ultimate conclusion that the

premarital agreement did not apply to property acquired or created during the

marriage was correct and that the premarital agreement is not ambiguous. The

first paragraph of the above-quoted language—which Dow describes as
8

operative—says nothing about rights arising from marriage. It states that “the

parties shall retain title, management, and control of the estates now owned by

each of them . . . and all increases or additions thereto, entirely free and

unmolested by the other party and may encumber, sell, dispose, give, or provide

by will for the disposition of any or all of such estates so separately owned and

possessed.”

      [¶16] Focusing on the “all increases or additions thereto” language, and

downplaying the importance of the “now owned” language, Dow suggests that

through this paragraph the parties waived their marital rights to property

acquired or created during the marriage. However, inferences that downplay

or disregard important language in a contract are insufficient to demonstrate a

waiver of important statutory rights, such as those stated in the statute

governing marital property division, 19-A M.R.S. § 953 (2018).

      [¶17]   Courts normally “will not infer from a general contractual

provision that the parties intended to waive a statutorily protected right unless

the undertaking is explicitly stated. More succinctly, the waiver must be clear

and unmistakable.” Metro. Edison Co. v. Nat’l Labor Relations Bd., 460 U.S. 693,

708 (1983) (emphasis added); see Estate of Barrows, 2008 ME 62, ¶ 6,

945 A.2d 1217 (quoting Metro. Edison for this proposition).
                                                                                  9

      [¶18] Far from being “clear and unmistakable,” the first paragraph uses

no terms of art—such as marital property, nonmarital property, or property

division—that suggest it applies to property acquired or created after the

marriage in the event of the parties’ divorce. The statement that the parties

shall “retain title, management, and control” of their estates has little bearing

on the rights protected by Maine’s marital property statute. See 19-A M.R.S.

§ 953(3) (property acquired during marriage is presumptively marital

regardless of whether title is held individually by one spouse).

      [¶19] Similarly, the fact that the agreement permits the parties to devise

their separately owned property by will does not, by itself, indicate that the

parties intended to waive their marital rights in the event of divorce. Cf. Estate

of Berzinis, 505 A.2d 86, 86 (Me. 1986) (holding that a premarital agreement

that spoke only in terms of divorce did not operate as a waiver of the wife’s

right to an elective share of her decedent husband’s estate).

      [¶20] The second paragraph deals exclusively with property rights at

death. The third paragraph of the agreement does address marital rights,

stating that each party “separately waives any . . . marital right arising by virtue

of statute or otherwise in and to any parcel of the estate now owned and

possessed by the other.” (Emphasis added.) It then states that the parties agree
10

that they shall maintain ownership and control over “each of such estates and

increases thereto now owned and possessed by the parties.” (Emphasis added.)

The third paragraph also states that each party waives “any legal and statutory

rights that might, under any law, be set up against any part of the estate of the

other.”3

         [¶21] Well-established principles of contract interpretation support

reading the third paragraph to waive marital rights only in the estates “now

owned and possessed” by the parties at the time of the premarital agreement’s

execution. “[S]pecific terms and exact terms are given greater weight than

general language.” Restatement (Second) of Contracts § 203(c) (Am. Law. Inst.

1981). This is because

         [p]eople commonly use general language without a clear
         consciousness of its full scope and without awareness that an
         exception should be made. Attention and understanding are likely
         to be in better focus when language is specific or exact, and in case
         of conflict the specific or exact term is more likely to express the
         meaning of the parties with respect to the situation than the
         general language.

     The last part of the third paragraph also references claims “given by law to a husband and wife,”
     3

but specifically in the context of property rights at the death of either spouse.
                                                                                                    11

Id. § 203 cmt. e. Pursuant to this principle, the parties’ specific waiver of marital

rights only in “the estate now owned and possessed by the other” is presumably

more reflective of their meaning than the general waiver.

       [¶22] This interpretation avoids rendering any part of the contract

meaningless.4 See Scott, 2019 ME 50, ¶ 7, 206 A.3d 307. The first paragraph,

as discussed above, permits a party to maintain ownership and control of his or

her individual property during the marriage but says nothing about what

should happen in the event of a divorce; accordingly, it is unaffected by the trial

court’s interpretation. If the first paragraph operates as broadly as Dow

suggests, the second and third paragraphs would be superfluous and the “now

owned” language would be rendered meaningless.                       A contract “is ambiguous

when it is reasonably susceptible to different interpretations.”                          Estate of

Barrows, 2006 ME 143, ¶ 12, 913 A.2d 608 (emphasis added).                                         An

interpretation that renders portions of a contract redundant or superfluous—

as Dow’s suggested interpretation would—is not reasonable.

   4 We note that the court relied in part on the parties’ disclosure of their then-owned assets at the
beginning of the premarital agreement when determining the scope of the premarital agreement.
The disclosure of specific assets, however, carries little weight concerning the determination of
whether the parties intended the agreement to cover only property owned at the time of execution,
because Maine law requires the disclosure of assets and liabilities for a premarital agreement to be
enforceable. See 19-A M.R.S. § 608(1)(B) (2018).
12

B.    Nonmarital Components of the 401(k) Plan

      [¶23] Dow contends that even if we uphold the court’s interpretation of

the premarital agreement, the court erred by failing to consider his testimony,

offered at the divorce hearing, that the 401(k) plan was partially funded with

nonmarital property. In its judgment, the court expressly declined to consider

testimony on that issue because of its previous determination that the 401(k)

plan was marital property subject to equitable distribution.          The court

explained that Dow had failed to present any evidence on the source of the

funds for the 401(k) plan at the earlier premarital agreement hearing and that

it would not reconsider the evidence presented on that issue at the later divorce

hearing.

      [¶24] We review a court’s factual findings regarding an asset’s

classification as marital or nonmarital property for clear error. See Bond v.

Bond, 2011 ME 54, ¶ 10, 17 A.3d 1219. Property acquired during a marriage is

presumptively marital property, and the party seeking to overcome that

presumption must demonstrate that the property falls within a specifically

enumerated exception. See 19-A M.R.S. § 953(2)-(3).

      [¶25] Whether the 401(k) plan was marital property was very much at

issue at the time of the bifurcated hearing. The parties agreed that Dow had
                                                                              13

created the 401(k) plan during their marriage but disagreed whether it was

excluded from the marital estate by their premarital agreement.          See id.

§ 953(2)(D) (marital property does not include property “excluded by valid

agreement of the parties”). Although Dow argued that the 401(k) plan was

funded with property explicitly identified in the premarital agreement as his

separate property, he did not present any evidence that would have allowed

the court to trace the funds for the 401(k) plan to nonmarital assets.

Accordingly, after the court supportably determined that the premarital

agreement did not exclude property acquired or created during the marriage

from the definition of marital property, it did not err in concluding that the

401(k) plan was marital property in the absence of any evidence suggesting

otherwise. Neither did the court err or abuse its discretion when it declined to

let Dow relitigate the issue of the 401(k) plan at the divorce hearing, given the

parties’ agreement to bifurcate the issue from the divorce hearing.

C.    Property Distribution

      [¶26] Dow asserts that the court abused its discretion in its property

distribution by incorrectly describing the value of the nonmarital real property
14

set aside to him pursuant to the terms of the premarital agreement.5 We review

a court’s distribution of marital property for an abuse of discretion. See

Laqualia v. Laqualia, 2011 ME 114, ¶ 10, 30 A.3d 838; Arey v. Arey,

651 A.2d 351, 353 (Me. 1994).

         [¶27] In its original judgment, the court listed the “real estate with a

value of $400,000” set aside to Dow as part of its consideration of the property

distribution factors in 19-A M.R.S. § 953(1). Dow filed a post-judgment motion

challenging that value and pointing out that his equity in the property was only

approximately $100,000. In its order on the motion, the court revised the value

it assigned to the property to $363,911, but noted that there was “a discrepancy

in the parties’ exhibits regarding the exact amount remaining on the mortgage,

but the salient amount is the value of the home not its equity.” The court also

stated that it “did not consider the value of the residence in its equitable

division of the marital property because the residence is subject to the

pre-marital agreement of the parties.”

         [¶28]   Although nonmarital property is not subject to equitable

distribution, see Miliano v. Miliano, 2012 ME 100, ¶ 16, 50 A.3d 534, courts must

    We are unpersuaded by Dow’s other arguments regarding the court’s property distribution and
     5

do not address them further.
                                                                               15

still consider the value of nonmarital property set aside to each spouse if the

parties present evidence on the subject, see 19-A M.R.S. § 953(1)(B); Laqualia,

2011 ME 114, ¶ 12, 30 A.3d 838. The consideration of the value of such

nonmarital property would logically include the amount of equity. See, e.g.,

Durkin v. Durkin, 2019 ME 32, ¶ 12, 203 A.3d 812.

      [¶29] We conclude, however, that any error in the manner of the court’s

consideration of the value of Dow’s nonmarital real property was harmless.

Despite making somewhat contradictory statements, the court evidently

considered the market value of the property and, even though it did not make

specific findings regarding Dow’s equity in the property, it acknowledged that

there was debt associated with the property. Dow’s attestation that he only has

approximately $100,000 of equity in the property does not conflict with the

court’s ultimate finding that Dow left the marriage with substantially more

assets than Billing; thus, it is highly probable that the court’s overall property

distribution was not affected by any error. See M.R. Civ. P. 61; State v. Guyette,

2012 ME 9, ¶ 19, 36 A.3d 916 (a properly preserved error “is harmless if it is

highly probable that the error did not affect the judgment”); see also Greaton v.

Greaton, 2012 ME 17, ¶ 7, 36 A.3d 913 (“In appealing a judgment, it is not
16

enough to challenge procedural errors allegedly made by the trial court without

also showing actual error in the judgment.”).

        The entry is:

                           Judgment affirmed.

Laura P. Shaw, Esq. (orally), Camden Law LLP, Camden, for appellant Curtis S.
Dow

Joseph W. Baiungo, Esq. (orally), Belfast, for appellee Robyn Billing

Belfast District Court docket number FM-2017-136
FOR CLERK REFERENCE ONLY