Opinion
File No.: CN19-04414 Petition 20-10564
07-14-2020
RE: M---- L---- v. B------ C-----
Kara Swasey, Esq.
Bayard, PA
600 N. King Street
Suite 400
Wilmington, Delaware 19801 David C. Gagne, Esq.
Giordano Delcollo Werb & Gagne
5315 Limestone Road
Wilmington, Delaware 19808
LETTER DECISION AND ORDER
Petition for Partition
Dear Counsel:
This is the Court's decision regarding a Counterclaim for Declaratory Relief pursuant to 10 Del. C. §6501, filed by B------ C-----, represented by David Gagne, Esq., against M---- L----, represented by Kara Swasey, Esq. Matters ancillary to the parties' divorce are pending before the Court, as well as a Petition for Partition of Property filed by Ms. L----. The parties agreed at a case management conference that a decision regarding the treatment of jointly-owned property by the parties would be necessary to assist them in preparing to address matters ancillary to their divorce. Each of the parties submitted a Memorandum of Law supporting their respective positions regarding the property in dispute.
The property at issue is located at 2202 S------ R---, W--------- ("S------ R---- Property"), and it has been owned by the parties as joint tenants with rights of survivorship since 2010. The parties were married in May 2014, and they dispute whether the property may now be disposed of in the ancillary property division proceedings as asserted by Ms. C-----, or via a Petition for Partition as asserted by Ms. L----.
The S------ R--- Property was owned by Ms. C----- and another individual prior to 2010. Ms. L---- moved in with Ms. C----- in 2009, and in 2010, the individual who co-owned the property with Ms. C----- sold her interest. Ms. L---- then paid approximately $50,000 and became a co-borrower with Ms. C----- on a mortgage of approximately $200,000. Ms. L---- avers that between 2010 and the parties' marriage in 2014, she made over $140,000 in improvements to the home.
In 2016, the Delaware Divorce and Annulment Act was amended to add Subsection (2) to 13 Del. C. §1513(b) ("Section 1513(b)(2)"), expanding the definition of marital property to include jointly titled property acquired by the parties before they were married. As such, on its face, Section 1513(b)(2) applies to the S------ R--- Property, such that it would be divided along with the remaining marital property after consideration of the factors found in 13 Del. C. §1513(a) ("Section 1513(a)") and any other factors found relevant by the Court.
Ms. L---- asserts, however, that Section 1513(b)(2) does not apply to the S------ R--- Property, because that subsection did not exist at the time the property was purchased or at the time the parties were married. As such, she asserts that the S------ R--- Property can only be divided via her pending Petition for Partition and that the property should not be considered by the Court when disposing of the remaining marital estate pursuant to Section 1513(a).
Ms. C----- disagrees, asserting that Section 1513(b)(2) has retroactive applicability and, therefore, the S------ R--- Property should be divided along with the other marital property pursuant to Section 1513(a).
LEGAL ARGUMENTS AND ANALYSIS
The parties agree that generally, absent an express legislative intent otherwise, statutes have prospective application. The parties also agree, however, that even absent a stated intent, statutes may be applied retrospectively if they are remedial in nature. "[A] statutory amendment is remedial, and may apply retroactively, when it relates to practice, procedure or remedies and does not affect substantive or vested rights." "One consideration is whether the new statute, if applied retrospectively, would interfere with, impair, or divest vested rights."
Hubbard v. Hibbard Brown & Co., 633 A.2d 345, 354 (Del. 1993).
Id.
Id. at 354 (citing 2 Norman J. Singer, Sutherland Stat. Const. § 41.09, at 399 (5th ed. 1993)).
Mergenthaler v. Asbestos Corp. of Am, Inc., 534 A.2d 272, 276 (Del. Super. Ct. 1987).
The question based on that shared understanding of Delaware law, then, is whether Section 1513(b)(2) impacts Ms. L----'s vested rights or is remedial. Ms. L---- avers that retrospective application of the statute would impair her vested right in the S------ R--- Property, as a partition action would likely lead to a sale of the property and a more narrow focus on compensation for the funds invested, whereas application of Section 1513(a) would introduce consideration of numerous factors beyond the parties' financial investments. Ms. L---- asserts, "If those §1513 considerations are capable of changing the outcome of the financial division of the Home, then it clearly follows that the application of those §1513 factors affects the substantive, vested, rights of the parties."
The Court cannot agree that the determination that application of a statute would lead to a different legal outcome leads ipso facto to the determination that the statute impacts vested rights. Under such an analysis, the only scenario under which a statute could be applied retroactively is one in which the statute would do nothing to change the outcome for the impacted parties - a fairly simple analysis that is not supported by the case law regarding or the policies permitting retroactivity. The question is not whether the outcome would be changed, but whether any change that may result would impact vested rights.
The distinction between impacts on rights and remedies was recognized in DCSE-Jennings v. DeBussy, when the Family Court considered whether the Full Faith and Credit for Child Support Order Act ("FFCCSOA") applied retroactively. That determination governed whether the differing child support laws of Delaware or Massachusetts would apply, which in turn determined whether the obligor was required to pay post-majority support. In holding that the statute was remedial such that Massachusetts law applied, Family Court noted, "Certainly the outcome may differ depending on the choice of law applied, but the rights created and possessed by the parties are found in provisions separate and apart from choice of law sections. ... The FFCCSOA provision does not alter these obligations .... [it] merely instructs a court which obligation to enforce when a conflict exists."
DCSE-Jennings v. DeBussy, 707 A.2d 44 (Del. Fam. Ct. 1997).
Id.
Id. at, 48.
As numerous states have revamped and reconstructed their divorce statutes over the last several decades, those states have similarly examined whether changes to their property division statutes impacted vested rights. The North Carolina Supreme Court well-described the issue when it determined that its property division statute was remedial and therefore would apply retrospectively:
Contrary to the defendant's arguments, the fact that he acquired property during marriage but prior to the effective date of the Act does not mean that he also acquired a vested right in the law governing the disposition of property upon divorce which was in effect either at the time the property was acquired or at the time of his marriage. There is no such thing as a vested right in the continuation of an existing law...
[T]he defendant may have expected that upon their divorce he would receive his full pension payments. His expectation of a continuance of existing law, however, did not amount to a vested property right...
A vested right, entitled to protection from legislation, must be something more than a mere expectation based upon an anticipated continuance of the existing law; it must have become a title, legal or equitable, to the present or future enjoyment of property, a demand, or legal exemption from a
demand by another.
Armstrong v. Armstrong, 368 S.E.2d 595, 598 (N.C. 1988).
Armstrong v. Armstrong, 368 S.E.2d 595, 598 (N.C. 1988).
The distinction between an impact on vested rights and an impact on remedies was also described by the Supreme Judicial Court of Maine in Fournier v. Fournier. In that case, the Court noted that the legislature's purpose in amending its law regarding the distribution of marital property was not to impact property titles, but to more equitably distribute property.
Fournier v. Fournier, 376 A.2d 100 (Me. 1977)
Id.
The Act does not prevent married persons from owning property separately during marriage and disposing of it in any fashion either of them may choose, assuming neither a separation nor a divorce intervenes. ... [S]imply because defendant acquired property during marriage ... does not mean that she also acquired a vested right in a particular statutory procedure governing the disposition of property upon divorce.
Id. at 101-02; see also Valladares v. Valladares, 438 N.Y.S.2d 810, 816 (N.Y. App. Div. 1981) ("[T]he enactment ... significantly expanded the relief which may be granted upon divorce or dissolution of a marriage, but did not directly affect vested property rights.").
Id. at 101-02; see also Valladares v. Valladares, 438 N.Y.S.2d 810, 816 (N.Y. App. Div. 1981) ("[T]he enactment ... significantly expanded the relief which may be granted upon divorce or dissolution of a marriage, but did not directly affect vested property rights.").
In the present case, Ms. L---- has a vested right in ownership of the S------ R--- Property. She does not, however, have a vested right to the treatment of that property as a result of her subsequent marriage and divorce. If she sought to ensure certain treatment of her investment in the property, she could have entered into a pre-nuptial agreement. By not doing so, she subjected her ownership interest, which is not removed by Section 1513(b)(2), to a different remedy than the one she now seeks. As was stated by the Superior Court in Mergenthaler, "Statutes which retrospectively make reasonable change in remedy are not impermissible."
Mergenthaler, 534 A.2d at 276-77.
Ms. C- argues that the history of the earlier-adopted provisions of 13 Del. C. §1513 ("Section 1513") also indicates that it is a remedial statute that is to be applied retrospectively and that, as a later added part of that scheme, Section 1513(b)(2) would apply retrospectively as well.
The majority of the current language in Section 1513 was adopted as part of the Delaware Divorce and Annulment Act in 1974, making a wholesale change to Delaware's approach to divorce and its ancillaries and leading to the equitable scheme for property division that remains largely in place today. Section 2 of House Bill 610, which created the Delaware Divorce and Annulment Act, provided that the Act would take effect 30 days after enactment and further states, "Actions commenced prior to the effective date of this act shall be governed by the provisions of Chapter 15, Title 13, operative prior to such effective date and those provisions shall remain in effect as to those actions as if this act were not in effect." This language therefore infers, without explicitly stating, that the law was to be applied retrospectively except for cases that commenced prior to its effective date. Whether such language reflects a "clear legislative intent" for retroactivity is not a question before the Court, since the portion of Section 1513 at issue in the present matter was not passed until over 40 years after House Bill 610's passage. What is clear, however, is that despite that law's passage almost 50 years ago, with volumes of property division actions litigated since that time, no case law has been presented and the Court is aware of none in which it was determined that the law could not apply retrospectively. It appears that from the time of its passage, Section 1513 was applied retrospectively as part of an equitable scheme to address the remedies available when a marriage ends.
House Bill No. 610 (Jun. 4, 1974).
In addition, while Delaware case law does not indicate a significant history of decisions addressing the retrospective application of our divorce ancillary statutes, numerous other states have considered the issue and found their property division laws remedial. As noted elsewhere, the North Carolina Supreme Court so held, stating, "Statutes providing for the division of property upon divorce are remedial in nature. The legislature may amend them, at least to the extent they apply to claims brought after the effective date of such amendments, without infringing constitutional principles." And in Fournier, the Supreme Judicial Court of Maine held, "Statutes providing procedures for the division of property upon divorce are remedial in nature, and the legislature may change those procedures without offending constitutional principles.". The New Jersey Supreme Court held the same, concluding, "It is well-settled that certain inchoate rights, and rights which depend upon the existence of the marital status, may be abridged by retroactive legislation." The Valladares Court further recognized the common conclusions being reached among states on this issue, stating, "Such determination is consistent with a plethora of judicial authority from other states which have upheld the retroactivity of equitable distribution laws for reasons of public policy."
Armstrong, 368 S.E.2d at 598.
Fournier, 376 A.2d at 102.
Valladares, 438 N.Y.S.2d at 816.
Id.
Finally, Delaware courts have recognized that the analysis as to whether a statute may be applied retroactively rests in part on considerations of policy and general welfare. The Court finds that considerations of general welfare weigh in favor of retrospective application of Section 1503(b)(2).
See, e.g., Mergenthaler, 534 A.2d at 276-77 ("The question of validity of such a statute rests on 'subtle judgments concerning the fairness of applying the new statute.' ... One consideration is whether the new statute, if applied retrospectively, would interfere with, impair, or divest vested rights ... These considerations may be moderated or overcome if the statute is in furtherance of the general police power for concerns of public, health, morals, safety, or general welfare.").
As is reflected in the above discussion, Section 1503(b)(2) is a subsection within the Delaware Divorce and Annulment Act. The Act was passed with the express goals of "promot[ing] the amicable settlement of disputes that have arisen between parties to a marriage" and "mitigat[ing] the potential harm to spouses and their children caused by the process of legal dissolution of marriage." The Act established ten factors, now increased to eleven, that the Court must consider when deciding how to divide marital property. Those factors further the stated goals of the Act by considering issues beyond the parties' financial investments when dividing marital property, including the parties' contributions as homemakers, the parties' health, and the parties' expected opportunity for future asset acquisition. Viewing Section 1503(b)(2) as applicable only to property obtained after its effective date would be contrary to the goals of the Act, as it would exclude portions of property owned by divorcing couples from the equitable scheme that was created with the express purpose of helping ensure a less harmful and more amicable way to settle such disputes.
See, e.g., J.D.P. v. F.J.H., 399 A.2d 207, 210 (Del. 1979). ("The [Divorce and Annulment] Act states that it must be 'liberally construed' to promote its purposes... One explicit purpose is to 'mitigate the potential harm to spouses... caused by the process of legal dissolution of marriage' ... The major statutory vehicle by which that purpose is to be accomplished is § 1513, which vests broad power in the Family Court to 'equitably divide . . . the marital property . . . in such proportions as the Court deems just after considering all relevant factors.' Construction of §1513, therefore, must be undertaken with a view toward mitigating the potential harm to each party after the divorce.")
This result was recognized by the New Jersey Supreme Court in Rothman, in which that Court stated, "Thus the division of property upon divorce is responsive to the concept that marriage is a shared enterprise, a joint undertaking, that in many ways it is akin to a partnership. Only if it is clearly understood that far more than economic factors are involved, will the resulting distribution be equitable within the true intent and meaning of the statute..."
Rothman v. Rothman, 320 A.2d 496, 502 (N.J. 1974).
In addition, treating property owned prior to the enactment of Section 1503(b)(2) differently from other property owned by the parties to a divorce would require the Court to engage in parallel analyses, analyzing when the property was obtained and applying different statutes and principals based thereon.
The Pennsylvania Supreme Court recognized both of these concerns in Bacchetta v. Bachetta as follows:
[I]t would be unreasonable to interpret the Divorce Code as providing for equitable distribution of only that property acquired after the Code's effective date. Such an interpretation would impose the unmanageable burden on courts and litigants of determining which properties were acquired before, and which after, the effective date of the Code. Such an interpretation would also substantially deny the benefits of the Divorce Code to spouses in marriages in existence at the time of the Code's enactment, thereby prolonging for at least a generation the very inequity the Legislature sought to remedy.
Bacchetta v. Bacchetta, 445 A.2d 1194, 1195-96 (Pa. 1982). --------
Bacchetta v. Bacchetta, 445 A.2d 1194, 1195-96 (Pa. 1982). --------
CONCLUSION
The Petition for Declaratory Judgment is granted and the Court concludes that the provisions of Section 1503(b)(2) apply retrospectively. As such, the S------ R--- Property is marital property and will be distributed in accordance with the provisions of Chapter 15 of Title 13, which will by its terms consider Ms. L----'s investment in the property as part of that analysis.
The Petition for Partition is hereby DISMISSED.
IT IS SO ORDERED.
/s/ _________
JENNIFER B. RANJI
Family Court Judge JBR/ccs
cc: Parties, File
emailed/mailed: 7-14-2020