Elder v. Smith

987 A.2d 36, 412 Md. 288, 2010 Md. LEXIS 5
CourtCourt of Appeals of Maryland
DecidedJanuary 13, 2010
Docket34 September Term, 2009
StatusPublished
Cited by1 cases

This text of 987 A.2d 36 (Elder v. Smith) is published on Counsel Stack Legal Research, covering Court of Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Elder v. Smith, 987 A.2d 36, 412 Md. 288, 2010 Md. LEXIS 5 (Md. 2010).

Opinion

BATTAGLIA, Judge.

We are asked to consider whether a monetary award entered two years prior to the death of a decedent in connection with the division of marital property upon divorce, though not reduced to judgment and recorded as a lien against real estate until after his death, is afforded priority in the statutory scheme of the Estates and Trusts Article.

Emma Elder and Colonel Percy Elder were married in 1976, but after twenty-six years of marriage and the birth of two children, they were divorced in the Baltimore City Circuit Court in 2002. The next year, Emma was awarded a total of $31,500 as a marital award and was to receive one-half of the proceeds of a sale of property located at 928 Beales Trail, Pasadena, Maryland, in Anne Arundel County, although the sale ultimately did not occur. Emma Elder’s $31,500 marital award was not reduced to judgment and remained unsatisfied at the time of Mr. Elder’s death.

Mr. Elder died on November 8, 2005 in Baltimore County, leaving a wife, Theresa, and a child by that marriage. Several months later, on May 1, 2006, Emma attempted to open an estate in Baltimore City, claiming that because she was the estate’s largest creditor as a result of the unpaid $31,500 award, she should be appointed Personal Representative. Cherry Elder Smith, the sister of the decedent, however, having been named as Personal Representative in Mr. Elder’s will, filed a “Small Estate Petition for Administration” in the Orphans’ Court for Baltimore County on May 12, 2006, claiming that the Estate’s only asset was decedent’s one-half interest in Beales Trail. Subsequently, the Orphans’ Court for Baltimore City dismissed Emma’s petition for judicial probate, and estate administration in Baltimore County proceeded.

The Orphans’ Court for Baltimore County subsequently approved a contract for the sale of the Beales Trail property *291 for $86,000. Although settlement was scheduled to take place in 2007, the sale was never consummated, for reasons described in a Memorandum Opinion and Order issued by the Orphans’ Court, after the Personal Representative had asked for guidance regarding a lien filed by Emma against the Beales Trail property:

Counsel for Emma Elder filed a claim against the Estate on May 9, 2006. On May 16, 2006, Emma Elder obtained a Judgment from the Circuit Court for Baltimore City reducing her various marital awards to a judgment against Colonel Percy Elder in the amount of $81,500 (“Judgment”). On September 13, 2006, the Circuit Court for Baltimore City issued an Order of Substitution substituting Cherry Elder Smith, as the Personal Representative of the Estate of Colonel Percy Elder, as the Judgment Debtor in the place of Colonel Percy Elder. On December 29, 2006, Emma Elder recorded the Judgment in Anne Arundel County, intending to thereby attach a lien against the Beales Trail property.
In 2007, the Personal Representative and Emma Elder accepted a contract for sale of the Beales Trail Property. The Orphans’ Court for Baltimore County approved the contract by Order dated July 7, 2007. The settlement on the Beales Trail property was scheduled for November 11, 2007. At settlement, the Personal Representative anticipated distribution of one-half of the net proceeds to Emma Elder as the joint property owner with the second half of the net proceeds distributed to Mr. Elder’s Estate. Prior to settlement, the Personal Representative discovered Emma Elder’s lien against the property in the amount of $31,500. The title company handling the settlement indicated that it was bound, without further Court Order, to distribute $31,500 to Emma Elder from the Estate’s share of the proceeds. Without Mr. Elder’s one-half share of the Beales Trail proceeds, the Estate will be insolvent.

The Orphans’ Court ultimately ordered Emma to release her lien against Beales Trail, thereby enabling the retention of one-half of the proceeds from the sale in the Estate. The *292 Orphans’ Court emphasized that, “[a] marital award does not carry with it a legal interest in another party’s property,” and therefore, the “marital awards granted to Emma Elder in 2003 did not constitute judgments,” citing Herget v. Herget, 319 Md. 466, 471, 573 A.2d 798, 800 (1990). Because Emma’s monetary award was reduced to judgment and recorded as a lien after Mr. Elder’s death, the court reasoned, it was “not entitled to priority within the context of estate administration.”

The Court of Special Appeals affirmed in a reported opinion, Elder v. Smith, 183 Md.App. 647, 962 A.2d 1069 (2008), holding that the statutory scheme embodied in the Estates and Trusts Article governing creditors’ claims, does not permit “a creditor with a pre-death claim to enhance the priority of its claim after the debtor dies,” relying, in part, on a finding that a majority of states adhere to the rule that the priority of claims against a decedent’s estate “is determined as of the date of death.” Id. at 652-54, 962 A.2d at 1072-73. Emma Elder then petitioned this Court for certiorari, which we granted, Elder v. Elder Smith, 408 Md. 148, 968 A.2d 1064 (2009), to address the following questions, which we have rephrased and reordered: 1

*293 I. Whether a monetary award entered against a decedent during his lifetime, though reduced to judgment and recorded as a lien against real property pursuant to Section 11—402(c) of the Courts and Judicial Proceedings Article, Maryland Code (1974, 2006 Repl.Vol.), after the decedent’s death, entitles the claimant to priority under Sections 8-10S(d) and 8-114(b) of the Estates and Trusts Article, Maryland Code (1974, 2001 RephVol.)?
II. Whether an Orphans’ Court lacks jurisdiction to order the release of a lien recorded pursuant to a money judgment?

We shall hold that a monetary award reduced to a judgment and recorded as a lien against real property after the decedent’s death is not entitled to priority under the statutory scheme for estate administration. We shall further hold that an Orphans’ Court cannot affect a lien recorded against real property either directly or by ordering a creditor to release such a lien.

I. Introduction

A personal representative has the authority to allow or disallow a claim filed against an estate. Maryland Code (1974, 2001 RephVol.), Section 8-107 of the Estates and Trusts Article. 2 If a claim is allowed, Section 8-105(a) of the Estates *294 and Trusts Article provides the order of priority of payment, with the exception of secured claims:

(1) Fees due to the register;
(2) Costs and expenses of administration;
(3) Funeral expenses as provided in § 8-106 of this subtitle;

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Bluebook (online)
987 A.2d 36, 412 Md. 288, 2010 Md. LEXIS 5, Counsel Stack Legal Research, https://law.counselstack.com/opinion/elder-v-smith-md-2010.