Rosenberg v. Rosenberg

Brief Fact Summary.

Appellant and appellee divorced in a relationship in which appellant had accumulated significant assets, including ownership in multiple stocks. The appellant challenged the chancellor’s division of property.

Synopsis of Rule of Law.

Marital property generally includes all property not acquired prior to marriage, property acquired by inheritance or gift from a third party, or property excluded by valid agreement. Such property must be distributed based on contribution and need.

Facts.

Eleanor Kantor, appellee and Henry Rosenburg Jr., appellant, married on June 22, 1952. On November 1, 1981, Henry left home with the purpose of ending the marriage. The chancellor for the divorce decree found that appellant had committed adultery many times and appellee had done so once, 2 years after the separation.

Appellee’s family had started American Trading and Production Corporation (ATAPCO), which originally consisted of slightly less than 50% interest in Crown Central Petroleum Corporation (Crown) and 25% in American Oil Company (AOC). A merger of AOC and Standard Oil of Indiana produced large stock holdings of the latter company now owned by ATAPCO, which continued to hold approximately 50% of Crown voting stock. ATAPCO was owned solely by family members.

Crown and ATAPCO prospered throughout the years and appellant’s assets swelled as he became director for most of ATAPCO’s subsidiaries. At the time of divorce, appellant’s net worth was approximately $33 million. The largest of appellant’s assets which experienced the greatest growth was ATAPCO.

Appellee undertook virtually the entire burden of raising the children and maintaining and managing the significant family household at appellant’s request. She also entertained frequently at her husband’s benefit. Appellee’s husband was frequently away from home, and eventually began to pursue other women.

In the 1970’s appellee admitted herself to a hospital for drug treatment. Appellant visited to request a separation agreement. She refused and the experience resulted in further hospitalization.

In 1983 appellee filed a Bill of Complaint for Divorce A Vinculo Matrimonii, alleging adultery, abandonment and desertion as grounds for divorce. Appellant filed and answer and cross-bill relying on a two-year separation of the parties as grounds for the divorce. The chancellor granted a divorce and determined that the husband had given the wife all her jewelry and her interest in the marital residence as gifts. He ordered the parties to sell the home; the husband to pay the wife a monetary award of $1,520,000, plus any difference between $230,000 and the wife’s share of the proceeds from the sale of the house; the husband to pay the wife alimony in the amount of $275,000 per year, to cease upon her remarriage or the death of either party; and husband to pay the wife’s attorney’s fees. He appealed, challenging the monetary award, alimony award, counsel fees, and expenses. Appellee cross-appealed, challenging the failure to classify as marital property the increases in value of
her husband’s ATPCO stock.

Issue.

Did the chancellor correctly value and distribute the marital property of the parties?

Held.

The chancellor correctly distributed the majority of the marital property. It also correctly determined that the ATPCO stock increases were solely the property of appellant.
Regarding the monetary award, the chancellor correctly found that appellant had dissipated the marital property by making a loan and cash advances as part of the determination of marital property. Important factors in the chancellor’s determination included: 1) the contributions, monetary and nonmonetary, of each party to the well-being of the family; 2) the circumstance and facts which contributed to the estrangement of the parties; 3) how and when specific marital property was acquired, including the effort expended by each party in accumulating the marital property. The basic goal of the Marital Property Act is to achieve a fair and equitable distribution. The conclusion that appellee contributed substantially more than appellant to the marital property was not error.

Appellee claims that the chancellor erred in failing to include the increased value of the ATAPCO stock as marital property. All of the trusts were gifts or inheritances, and non-marital property at the inception of the marriage. Marital property does not include property acquired prior to marriage, property acquired by inheritance or gift from a third party, or property excluded by valid agreement. Appellee claims the fact established the stock was a joint venture of the family, but the chancellor’s findings were not clearly erroneous because appellant had only one voice in the various boards.

Appellant also claims the chancellor erred in determining alimony amount and duration. The principle function of alimony is rehabilitation, and can be awarded for an indefinite period when the standards of living of the two parties would be unconscionable disparate even after the receiving party has progressed toward self-support. In this case the chancellor did not err in awarding indefinite alimony. Appellant also claims the alimony award is grossly excessive. This Court cannot determine if the chancellor considered the income that would accrue from the monetary award, therefore this must be reevaluated.

The final challenge of appellant goes to the award of fees and costs. A court may award a reasonable amount for reasonable and necessary expenses after considering the parties’ resources and needs. This award is within the sound discretion of the trial court, and there is no basis for modification in this case.

Discussion.

This case provides an extensive review of the distribution of marital property in a situation where one spouse has considerably more monetary assets than the other. The marital property must be calculated and distributed based upon contribution and need.