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REPORTED IN THE COURT OF SPECIAL APPEALS OF MARYLAND No. 288 SEPTEMBER TERM, 1996 ___________________________________

STEPHEN TEDESCO v. NANCY TEDESCO

___________________________________

Cathell, Harrell, Bloom, Theodore G. (retired, specially assigned), JJ. ___________________________________ Opinion by Cathell, J. ___________________________________

Filed:

October 30, 1996

The parties' marital union was ended by a Judgment of Divorce entered in the Circuit Court for Anne Arundel County. Appellant,

Stephen Tedesco, appeals from that part of the court's order granting custody of two minor children, Bailey Farnham and Brent Tedesco, to appellee, Nancy Tedesco,1 and ordering the imposition of a constructive trust upon certain property owned by the parties during the marriage. Appellant alleges, inter alia, that exceptional

circumstances exist sufficient to justify granting custody of the two children to him. He also claims that the trial court erred in

finding that he had abused a confidential relationship with his former wife and, thereafter, in failing to undertake the three-step inquiry necessary to resolving contested property matters in

divorce proceedings, as set forth in the Family Law Article (FL) of the Maryland Code (1984, 1991 Repl. Vol., 1995 Supp.). the following questions on appeal: 1. Where two spouses have, in all respects, acted as a minor child's parents virtually from the child's birth, but where only one is the child's biological parent, is the fact that only one spouse is a biological parent so determinative of the issue of custoHe raises

Appellee was granted a name change to reflect her former married name of Nancy Lowell Farnham. She, however, continues to plead as Nancy Tedesco.

1

- 2 dy of that child that the biological parent is the only "rational" candidate for custody? 2. Where one child in a family unit is the biological child of only one of the spouses and the only other child in the household is biologically the child of both spouses, may a trial court treat biological parenthood as a virtually absolute reason for deciding custody of the first child, and then ignore the biological parentage of the second child and treat that child's half-sister as a "sibling" for purposes of applying the presumption against dividing custody of siblings? 3. May a trial judge properly exclude testimony by a child's teacher as to the likely effect on the child if the child's relationship with the person she has long regarded as her father were to be terminated? 4. May a trial court use the device of a constructive trust to avoid the application of the Maryland Marital Property Act to a family home, titled to the parties to a divorce as tenants by the entirety, that was acquired in part with funds that were the parties' marital property, and/or to avoid the prohibition in that Act on the court transferring title to stock from one spouse to the other? 5. Where one spouse owned a business before the parties' marriage, both spouses have worked extensively in it during their marriage, and the spouse who did not have prior ownership did so for little or no salary during the marriage, may a trial judge treat the business as entirely non-marital? 6. In a suit for an absolute divorce, may a trial court decline to grant a monetary award without following the three-step analysis mandated by the Maryland Marital Property Act? THE PRELIMINARY FACTS

- 3 In 1989, while appellee was eight months pregnant with Bailey, she and her first husband, Carl Farnham, Bailey's biological Carl Farnham was Six weeks later,

father, were involved in a serious car accident. killed, and appellee sustained numerous injuries. on November 13, 1989, Bailey was born.

Shortly thereafter, the

parties to the instant action began dating, and, on March 3, 1991, they married. Their child, Brent, was born on January 31, 1992.

While the parties were married, appellant began working at Lallie, Inc., a printing firm that appellee had established prior to her first marriage. Appellant acquired increasingly important duties

over time to the point that he handled much of the business affairs; appellee continued to focus upon the creative aspects of the company. In March of 1992, appellee transferred title to a home she had owned since 1983 to herself and appellant as tenants by the entirety. She also transferred five hundred shares of stock in the

printing company, half of the outstanding shares available, to appellant. Several months later, the parties separated, and, on June 11, 1993, appellee filed a Complaint for Limited Divorce, Immediate Custody and Use and Possession and Other Relief. In an Opinion and

Order dated September 28, 1993, the trial court found that the parties' relationship had not been characterized by physical

violence or allegations of unfitness.

The court also believed that

appellee should have custody of the children at the family home.

- 4 Thus, the court granted appellee use and possession of the family home and sole custody of Bailey. Joint custody of Brent was Thereafter, on

awarded, and a visitation schedule was established.

October 24, 1994, appellee filed a Complaint for Absolute Divorce. In it, she alleged, inter alia, that the parties operated within a confidential relationship and that appellant had abused that

relationship in obtaining an interest in her assets. sought sole permanent custody of Brent. Following a four-day trial on the merits of

She also

appellee's

Complaint, the trial court, on July 3, 1995, rendered an opinion from the bench granting the divorce and awarding custody of both children to appellee. The court also found that appellant had

exerted undue influence upon appellee and imposed a constructive trust upon appellant's ownership interest in the home and the printing company. Appellant's Motion to Alter or Amend was denied,

and, on November 14, 1995, the Judgment of Absolute Divorce became final. Appellant filed a timely appeal therefrom. I. Custody Issues Judge Orth summarized the jurisdiction of Maryland courts in respect to child custody cases in Ross v. Hoffman, 280 Md. 172, 174-75 (1977): In Maryland, resolving child custody questions is a function of the equity courts . . . [which] may direct who shall have the

- 5 custody of a child . . . . This jurisdiction is a continuing one, and the court may from time to time set aside or modify its decree or order concerning the child. In exercising its jurisdiction over the custody of a child, the equity court performs two different but related functions: child protection and private-dispute settlement. . . . In performing [these functions,] . . . the court is governed by what is in the best interests of the particular child and most conducive to his welfare. This best interest standard is firmly entrenched in Maryland and is deemed to be of transcendent importance. [Citations and footnote omitted.] See also Montgomery County Dep't of Social Servs. v. Sanders, 38 Md. App. 406, 417-18 (1978); Mullinix v. Mullinix, 12 Md. App. 402, 409 (1971). Within the comprehensive framework of authority governing custody awards, the appellate courts of this State practice a limited review of a trial court's custody determinations. As

outlined in Davis v. Davis, 280 Md. 119, 125-26, cert. denied, 434 U.S. 939, 98 S. Ct. 430 (1977), [w]hen the appellate court scrutinizes factual findings, the clearly erroneous standard of Rule[] . . . 1086 applies. If it appears that the chancellor erred as to matters of law, further proceedings in the trial court will ordinarily be required unless the error is determined to be harmless. Finally, when the appellate court views the ultimate conclusion of the chancellor founded upon sound legal principles and based upon factual findings that are not clearly erroneous, the chancellor's decision should be disturbed only if there has been a clear abuse of discretion. [Footnote omitted.]

- 6 See also Robinson v. Robinson, 328 Md. 507, 513 (1992); Elza v. Elza, 300 Md. 51, 55-56 (1984); Hoffman, 280 Md. at 186; Wagner v. Wagner, 109 Md. App. 1, 40 (1996); Burrows v. Sanders, 99 Md. App. 69, 75-76 (1993), cert. denied, 335 Md. 228 (1995); Levitt v. Levitt, 79 Md. App. 394, 398-400, cert. denied, 316 Md. 549 (1989); Scott v. Department of Social Servs., 76 Md. App. 357, 382-83, cert. denied, 314 Md. 193 (1988); Sanders, 38 Md. App. at 419. Indeed, the chancellor's decision is unlikely to be overDomingues v. Johnson, 323 Md. 486, 492 n.2 (1991) ("A

turned on appeal.

chancellor's decision founded upon sound legal principles and based upon factual findings that are not clearly erroneous will not be disturbed in the absence of a showing of a clear abuse of discretion." (citations omitted)); see also Newkirk v. Newkirk, 73 Md. App. 588,

591 (1988) (custody decision is not a matter for the best judgment of the reviewing court). Additionally, the trial court's opportu-

nity to observe the demeanor and credibility of the parties and witnesses is of particular importance. Petrini v. Petrini, 336 Md. 453,

470 (1994); see also Wagner, 109 Md. App. at 40. While the right of a natural parent to rear his or her child has been deemed to be "essential," Meyer v. Nebraska, 262 U.S. 390, 399, 43 S. Ct. 625, 626 (1923), and of constitutional dimension, see Santosky v. Kramer, 455 U.S. 745, 753, 102 S. Ct. 1388, 1394 (1982) (natural parents have fundamental liberty interest in the care,

- 7 custody, and management of their child); Skinner v. Oklahoma, 316 U.S. 535, 541, 62 S. Ct. 1110, 1113 (1942), a court must proceed with singular circumspection and deliberate solicitude in determining to whom the custody of a child will be awarded. App. at 37. See Wagner, 109 Md.

"[T]he well-being of the child, both present and

future, is usually profoundly affected by the court's resolution of the private dispute over who shall be entrusted with its care." Hoffman, 280 Md. at 174. This holds true whether the dispute is

between the child's two parents or between a parent and a third party. In the case sub judice, we have the unique circumstance of We shall address each in turn. A. Bailey Maryland courts presume that a child's welfare is "best served in the care and custody of its natural parents rather than a third party." Newkirk, 73 Md. App. at 593. "`[A] court[, however,] has

considering both situations.

the power, if the best interests of the child require it, to . . . commit the custody to a third person.'" Dietrich v. Anderson, 185 Md.

103, 118 (1945) (citation omitted); see also Kartman v. Kartman, 163 Md. 19, 22 (1932). Indeed, the best interest standard has been

espoused by Maryland's appellate courts as the dispositive factor upon which to base custody awards. See Wagner, 109 Md. App. at 38

- 8 and cases cited therein. As the Court of Appeals noted in Hoffman,

however, in parent-third party disputes "there is a twist to the application of the best interest standard." Court explained: Where parents claim the custody of a child, there is a prima facie presumption[2] that the child's welfare will be best []served in the care and custody of its parents rather than in the custody of others, and the burden is then cast upon the parties opposing them to show the contrary. Id. at 178 (quoting Ross v. Pick, 199 Md. 341, 351 (1952) (footnote omitted)); see also Sanders, 38 Md. App. at 417 ("The burden is cast upon those opposing the natural parents to prove that remaining with the biological family would be deleterious to the child's best 280 Md. at 176. The

interest.").

The presumption is a rebuttable one and can be

overcome by evidence that the parent is unfit to have custody, or that there are such exceptional circumstances making custody

detrimental to the best interest of the child.

Hoffman, 280 Md. at

The rationale underlying this presumption has been thus described: Normally a parent is to be preferred to others in determining custody, largely because the affection of a parent for a child is as strong and potent as any that springs from human relations and leads to desire and efforts to care properly for and raise the child, which are greater than another would be likely to display. Melton v. Connolly, 219 Md. 184, 188 (1959).

2

- 9 178-79; see also Trenton v. Christ, 216 Md. 418, 420 (1958); Pick, 199 Md. at 351. It follows, therefore, that, in parent-third party custody

disputes, an inquiry into the best interest of a child will only be conducted when evidence attesting to a parent's lack of fitness or to exceptional circumstances injurious to the child has been Hoffman, 280 Md. at 179.

presented.

Turning to the case sub judice, appellant, as a third party, was required to produce evidence of exceptional circumstances in order to trigger a best interest proffered inquiry.3 those In facts closing that he argument, believed

appellant's

counsel

exhibited the exceptional circumstances of the case, including the fact that Bailey had been given appellant's surname and had been told that he was her "daddy." He then argued that the relevant

case law instructed that, where a child would be detrimentally affected by the termination of the relationship with a

nonbiological parent, custody is proper in that parent. In addressing to whom Bailey's custody would be awarded, the court stated: As to the most important aspect of this case, the custody question, there is never a clear cut answer in custody cases, but I think this one is perhaps a little more clear cut than some. I think certainly . . . [appellee] is the natural parent of Ba[i]ley. There is no question that [appellant] has been there since her birth as the psychological father, if you want to call him that. I think he has
3

No allegations of unfitness surfaced.

- 10 certainly become involved with Ba[i]ley, and been a part of her life that's been very important. But I don't think there's any . . . rational expectation that he could become the sole custodian of Ba[i]ley. [Appellee] has certainly proven herself to be a good mother, albeit one who has to work. That's part of life today. . . . . . . . I think that Dr. [Susan] Toler has indicated that [appellant] should have contact with Ba[i]ley in her best interest, because I think Ba[i]ley has become attached to him, but I think it should be recognized that he is not her biological father, that it is a relationship that should be encouraged, but it should be at a pace that Ba[i]ley sets as she gets older. . . . [B]ut I think certainly she needs some contact with him at this time to further that relationship that's been going on for five years . . . or almost five years. I think that [appellee] should be the sole custodian of Ba[i]ley, and think that [appellant] should have visitation on one weekend per month at a minimum . . . . The trial court, thus, was not persuaded that the facts overcame the presumption that custody in the natural parent, i.e., appellee, would best serve Bailey. Appellant takes great issue with the trial court's statement that it was not "rational" for him to expect to become Bailey's custodial parent and states that the court, in so finding,

"departed from the law" and "abused its discretion," necessitating a remand of the case. While he concedes that Maryland courts act

upon the presumption that it is in a child's best interest to be

- 11 placed with a natural parent, he claims that the singular fact that he is not Bailey's biological parent should not mandate that appellee be awarded custody of the child. He states:

In the "unique" circumstances of this case, where [he] acted as Bailey's father throughout her conscious life and is as close to being Bailey's natural father as she can ever have, there is no logical reason to treat him as a "third party" and, thus, no reason why there should be any presumption in favor of [his former wife]. What appellant fails to realize is that the court did not base its decision upon biology alone. It was the lack of persuasive

weight of his evidence to demonstrate those exceptional circumstances necessary to rebut the presumption. Moreover, appellant is,

in fact, a "third party" in relation to Bailey's custody, and he cannot avoid being so characterized merely by virtue of his close relationship with the child. Maryland recognizes a presumption of While

custody in favor of natural parents over all third parties.

appellant seems to urge us to hold that his relationship with Bailey provides an advantage over those third parties not similarly situated, we shall not so hold. among those who are There is no distinction in the law "third parties" for custody Third

considered

purposes, and we shall not create such a distinction.

parties must prove that a natural parent is unfit to care for the child or demonstrate exceptional circumstances sufficient to rebut the presumption before a court will even begin to undertake a best interest analysis.

- 12 This does not mean, however, that a natural parent will always be awarded custody of a child over a third party, and past cases have proven that third parties have, in fact, been granted custody when circumstances warranted such awards. See, e.g., Pick, 199 Md. at

351-52 (Court of Appeals reversed award of custody to natural mother of eleven-year-old who had resided with third party for ten years after mother abandoned child); Dietrich, 185 Md. at 116 (custody to foster parents upheld upon father's concession of his inability to raise and care for child at time of his or her birth and left child in care of foster couple for five years); Boothe v. Boothe, 56 Md. App. 1, 6-7 (1983) (grandparents awarded custody over natural mother when custodial father was killed). What it does mean, as we

have indicated, is that those third parties must adduce evidence that demonstrates that the child will be affected detrimentally by an award of custody to the natural parent and the relationship between the child and the third party may be introduced as a consideration. Consequently, while there may be "[n]o logical reason to treat [appellant] as a `third party'" (emphasis added) in determining custody of Bailey, there is clearly no legal reason why he should not be treated thusly. legal parent. Appellee is Bailey's only living natural or

Although plans were underway for appellant to adopt

Bailey, those plans were never finalized, and the law does not

- 13 acknowledge the rights of parents other than those who obtain that status by adoption or by nature. We find support for our position in Lipiano v. Lipiano, 89 Md. App. 571 (1991), cert. denied, 325 Md. 620 (1992), a case bearing close factual similarity to the case sub judice. There, this Court upheld

the trial court's finding that sufficient exceptional circumstances had not been proven to rebut the presumption in favor of the natural parents. The facts revealed that the child's mother had The

become pregnant as the result of an extramarital affair.

mother remained married following revelation of the affair and birth of the child; the biological father had no contact with, and provided no support for, the child. When the child was three, the

mother and biological father absconded with her, but later returned to Maryland, whereupon the mother counterclaimed for custody of her daughter in response to her husband's complaint for divorce and custody. Although the trial court found that the child's interests

were presumed to be best served in the custody of her natural parents, the court found that the mother's husband could prevail in the proceeding upon a showing that the mother was unfit or that exceptional circumstances existed such that custody in the natural parents would be detrimental to the child. It went on to state

that the husband had failed to make either showing and awarded custody to the child's natural parents, with visitation to the husband.

- 14 On appeal to this Court, the husband asserted, inter alia, that he should not have been deemed an "inferior candidate for custody," 89 Md. App. at 575, simply because he was not the child's biological father, in effect proffering an argument that equitable parents should be considered on equal footing with biological, or natural, parents. Following clarification of the appropriate standard of

review, we stated: The language used by the [Hoffman] Court is clear and precise. It does not envisage there being degrees of third parties . . . . Certainly, the closeness of the relationship between the child and the non-biological parent is of considerable importance, but that importance relates to whether there are exceptional circumstances which would make an award of custody to the biological parent detrimental to the best interest of the child. It does not . . . elevate the third party to initial parity with the biological parent. . . . [The husband] must, to the trial court's satisfaction, overcome the presumption . . . . Id. at 577-78 (emphasis added). Lipiano, therefore, provides

appellant with no solace.

Moreover, contrary to his assertions, in

that case we did not state that the existence of a close and loving relationship between the child and the third party will be

"sufficient to justify an award of custody to the third party." Rather, we were saying, among other things, that, in attempting to rebut the presumption, the third party may present evidence of the relationship with the child in demonstrating that custody with the natural parent would be detrimental to the child. A close

- 15 relationship itself does not, however, create in the third party an advantage over other third parties or over the natural parent. Appellant's argument that his relationship with Bailey should, in some way, negate the presumption in favor of appellee altogether and place them on equal footing in resolving Bailey's custody fails. For all his arguments as to the exceptional circumstances extant in the case sub judice, the record fails to demonstrate that quantum of evidence necessary to hold that the trial court erred in its decision that an award of Bailey's custody to appellee was proper. We, thus, shall affirm its order as to that child. We

further explain. Appellant relies upon several cases in support of his

position, one being In re Adoption/Guardianship No. A91-71A, 334 Md. 538 (1994). That case, however, is inapposite and does not "provide The case involved an

[the] guidance" appellant ascribes to it.

independent adoption proceeding and the termination of the rights of a natural parent contesting the adoption. not an adoption case. The case sub judice is

Furthermore, although an adoption case does

involve an inquiry into the best interest of the child, as the Court of Appeals pointed out, it "carries with it a finality not present in a custody decision." 334 Md. at 560. Appellant also

gleans from the Court of Appeals's language a "limitation[]" upon the presumption. The Court stated:

- 16 We have recognized that in a custody dispute between a natural parent and a third party there exists a general presumption that the child's interests are best served by granting custody to the natural parent. . . . . . . . But we have also made clear that the controlling factor, or guiding principle, in adoption and custody cases is not the natural parent's interest in raising the child, but rather what best serves the interests of the child. Id. at 560-61. This statement, however, does not reflect a

limitation upon the presumption, but rather an acknowledgement that the natural parents' rights are not absolute and must be tempered by the best interest of the child -- whether that be placement with a natural parent or a third party. Appellant also avers that, because "there is absolutely no indication that the trial judge considered any of th[e] factors" listed in Sanders, 38 Md. App. 406 supra, the trial court abused its discretion in awarding custody of Bailey to appellee. The short

answer to this claim is that the court found that that presumption had not been overcome. producing evidence Appellant had not met his burden of to rebut the presumption that

sufficient

Bailey's welfare would be best served by an award of custody to her natural mother. The court, therefore, need not detail its findings We perceive no error in the court's

as to the Sanders criteria.

award of custody of Bailey to appellee and shall affirm.

- 17 B. Brent In addressing Brent's custody, the trial court stated: As to Brent, I think that there certainly . . . that's a different situation. Both parties are the natural parents. Both have an interest in seeing him develop and grow into maturity in a good way. I think he needs contact with both his parents, but I don't think in view of the history of this case and the constant conflict and lack of communication between the parties that joint custody would be appropriate. And I don't think that it would be in either child's best interest to have one child in one household and the other in the other, because I do think they respond well as siblings. So I think sole custody of Brent should be with [appellee] with a much wider visitation schedule for Brent with his father. Appellant claims that, by its award, the trial court, in awarding custody of Brent to appellee, "created a . . . paradox;" that is, the court treat[ed] biological parenthood as far more important than any other aspect of being a parent, including psychological or emotional parenthood . . . [and], having created that situation by focusing so singularly on biological, versus psychological relationships, . . . then apparently chose to mitigate that approach by preserving the psychological relationship between Brent and Bailey through placing both of them in the Appellee's custody. In so doing, the trial court abused its discretion. First of all, as we have stated, the trial court's award of custody of Bailey was based upon a failure of evidence on

appellant's

part

to

demonstrate

that

an

award

of

custody

to

appellee would be detrimental to the child or that exceptional circumstances existed. Having failed below to rebut the presump-

tion, and failing to demonstrate on appeal that the trial court erred in not finding exceptional circumstances, appellant cannot now claim that he should be awarded custody of Bailey. Secondly,

appellant's status as a third party in reference to Bailey renders untenable his position that the court's apparent focus upon the children's psychological relationship in awarding custody of Brent to appellee represents an inversion of sorts. In both custody

cases, the best interest of each child was the ultimate factor upon which the awards were based, not appellant's rights, and not appellee's rights. In respect to Bailey, the best interest inquiry

rested upon the unrebutted presumption that the welfare of a child is best served in its natural parent's custody. Regarding Brent,

the trial court determined that his best interests lay in a continued relationship with his half sister, a relationship that the court believed could not exist as comfortably were custody to have been divided, in light of the acrimonious relationship between the parties. Mindful of our role as an appellate court in such matters, we note, as the Court of Appeals did in Davis, that "an appellate court cannot set aside factual findings unless they are clearly erroneous." 280 Md. at 124. We may not substitute our judgment for that We may only determine

of the trial court on the findings of fact.

- 19 if those findings were clearly erroneous in light of all the evidence. Colburn v. Colburn, 15 Md. App. 503, 513 (1972). "To rule

that a chancellor's findings were clearly erroneous, we must first assume the truth of all the evidence and of all the favorable inferences fairly deducible therefrom tending to support the

factual conclusion reached by the chancellor."

McClellan v. McClellan,

52 Md. App. 525, 530 (1982), cert. denied, 295 Md. 283, and cert. denied, 462 U.S. 1135, 103 S. Ct. 3119 (1983). The trial court found that It also

appellee was an appropriate custodial parent for Brent.

found that appellee was a good mother who loved her children and that Bailey and Brent would do well to remain together. evidence was presented to support these conclusions. Adequate

Therefore, we

shall affirm the court's award of custody of Brent to appellee. II. Admissibility of Evidence Appellant avers that the trial court committed reversible error when it did not permit him to present opinion evidence from two of Bailey's school teachers concerning the effect that

termination of her relationship with appellant would have upon the child. We perceive no error in the trial court's ruling.

The following discussion ensued when the first of Bailey's teachers was being questioned: [APPELLANT'S COUNSEL] Q Okay. Based on [your] observations, have you formed an opin-

- 20 ion as to whether there would be any [e]ffect on Bailey if her relationship with [appellant] was terminated? [APPELLEE'S COUNSEL]: Objection. THE COURT: Sustained. [APPELLANT'S COUNSEL]: . . . May I know the basis for that? It seems to me that this is an educator, and who's observed this child. . . THE COURT: She's not a professional in this respect. [APPELLANT'S COUNSEL]: Okay. Since the court also sustained an objection to a similar question posed by appellant's counsel to another of Bailey's teachers, it appears that the exclusion of their testimony was based upon their qualifications, or lack thereof. Appellant states that, in Maryland, non-expert witnesses may express an opinion where all of the transient conditions the witness observed, and that led to that opinion, cannot be reproduced with such fullness and precision as to permit the fact finder to draw its own inference, and proving the possible effect on a child of terminating such a relationship presents precisely such a scenario. While a lay witness may indeed testify and give an opinion on matters as to which he has first-hand knowledge, Lynn McLain, Maryland Evidence

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