Ronald F. LALIME v. Adelaide T. LALIME.
Supreme Judicial Court of Maine.
August 19, 1993.
629 A.2d 59
Argued May 10, 1993.
It is likewise clear that this agreement violates the common law rule against unreasonable restraints on alienation. Not all restraints are unreasonable. One court has held that some of the factors to be considered in deciding whether a restraint is improper are 1) the purpose for which the restraint is imposed; 2) the duration of the restraint; and 3) the method of determining the price. Hartnett v. Jones, 629 P.2d 1357, 1363 (Wyo.1981). Here it is clear that the duration of the restraint is perpetual and the agreement sets a fixed price. The purpose of the restraint is less clear. There is no evidence, however, that the Gradys sold the property for less than they paid for it or for less than the market value at the time of sale.
In the absence of a purpose justifying restraint, the other two factors make a strong case for concluding that this agreement creates an unreasonable restraint on alienation. A fixed price has a tendency to impose a serious restraint. It has been said that:
If the pre-emptive right requires that the property be offered at much less than its value at the time of the proposed sale, there is an obvious check upon alienation, since the owner will retain the property rather than sell it at a great sacrifice. Any pre-emption exercisable at a fixed price is likely to involve sacrifice to the person bound to offer it, since a fixed price is usually based upon the value of the property when the pre-emptive provision is executed. It might be held, therefore, that any pre-emption fixing a price without reference to future increase in value is void as a restraint upon alienation in substance.
The Spellmans, however, rely on a recent Vermont case to support their proposition that this particular restraint is not unreasonable. That case dealt with a right of first refusal at a fixed price of $500 for property with a market value of $90,000. Colby v. Colby, 596 A.2d 901 (Vt.1990). The court held that the restraint was reasonable under the circumstances because it was doubtful that the original transaction would have occurred but for the restraint. Thus the provision initially encouraged alienation. Id. at 904. The Spellmans’ contention that the instant transaction would not have occurred but for the preemptive right retained, however, is mere speculation. There is no evidence that the Gradys preconditioned their purchase and resale of the property on the retention of the right. It is clear only that for whatever reason, the right of first refusal was a part of their agreement. That is not enough to take the provision out of the category of an unreasonable restraints on alienation.
The entry is:
Judgment affirmed.
All concurring.
M. Michaela Murphy (orally), Robert J. Daviau, Daviau, Jabar & Batten, Waterville, for plaintiff.
Peter B. Bickerman (orally), Lipman & Katz, P.A., Augusta, for defendant.
Before WATHEN, C.J., and ROBERTS, GLASSMAN, CLIFFORD, COLLINS, RUDMAN and DANA, JJ.
DANA, Justice.
The District Court‘s determination in a divorce action of which property is marital and which is nonmarital is reviewed for clear error and will not be disturbed on appeal if there is competent evidence in the record to support it. See Gray v. Gray, 609 A.2d 694, 697 (Me.1992). In Carter v. Carter, 419 A.2d 1018 (Me.1980), we held that a transfer during marriage from one spouse to both spouses jointly, “in the absence of clear and convincing evidence to the contrary, must be understood as evidencing an intention to transfer the property to the marital estate,” rather than to the donee separately. Id. at 1022. This presumption in favor of the marital estate “permits the court to make a more equitable division of the property” and “is consistent with the fundamental conception of marriage ... as a partnership or shared enterprise.” Id. at 1022-23. The parties are agreed that in 1979 Ronald transferred ownership of a cottage on Long Pond and a house in Vassalboro from his sole ownership to himself and Adelaide jointly, thereby creating the presumption of a gift to the marital estate. The issue, therefore, is whether Ronald‘s later assertion that he conveyed the property to Adelaide for the sole purpose of securing a loan constitutes evidence that he did not intend to transfer the property to joint ownership, thereby rebutting the presumption of a gift to the marital estate. We hold that it does not.
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In Carter we held that property that had been acquired by the husband before marriage and conveyed by joint tenancy deed to both husband and wife after marriage was marital property despite the husband‘s assertion that the joint tenancy was created for the purpose of avoiding probate and inheritance taxes. In so holding we noted
Because our disposition of this case requires the District Court to divide the marital estate, including the Long Pond cottage and the Vassalboro residence, we need not address Adelaide‘s additional contention that the court inequitably divided the marital property.
The entry is:
Judgment vacated. Remanded to the District Court for further proceedings consistent with the opinion herein.
WATHEN, C.J., and ROBERTS, and GLASSMAN, JJ., concurring.
RUDMAN, Justice, with whom CLIFFORD and COLLINS, JJ. join, dissenting.
I respectfully dissent.
In Carter v. Carter, 419 A.2d 1018 (Me.1980), we held that a transfer of property during marriage from one spouse to both spouses jointly is presumed to be a transfer to the marital estate. Id. at 1022. This presumption, however, may be overcome by clear and convincing evidence to the contrary. Id. “Clear and convincing evidence is that which ‘place[s] in the ultimate factfinder an abiding conviction that the truth of [the] factual contentions are highly probable‘” McCracken v. McCracken, 617 A.2d 1034, 1035-36 n. 3 (Me.1992) (quoting Taylor v. Comm‘r of Mental Health, 481 A.2d 139, 153 (Me.1984)). The District Court concluded that Ronald sufficiently demonstrated such clear and convincing evidence to the contrary. The court found that the transfer of the Long Pond and Vassalboro properties was made for the sole purpose of securing the loan and was not intended as a gift to the marital estate.
The following evidence supports the court‘s findings: the parties went to the Kennebec Federal Savings and Loan to borrow money for their pharmacy business in March of 1979. Ronald testified that the bank wanted the Long Pond and Vassalboro properties to be used as collateral and requested that the property be transferred to himself and his wife in order to facilitate the transaction. Ronald testified that he thought “this was part of banking principles.” Accordingly, the deed transferring the property, the mortgage deed, and the mortgage note were all dated and acknowledged on the same date. Adelaide testified that prior to the bank‘s request she and Ronald never discussed transferring the Long Pond and Vassalboro properties into a joint tenancy.
The District Court‘s determination of what is marital property and what is not