Court Tosses Suit Claiming Beveridge & Diamond Partner Squandered Marital Money

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A Maryland appeals court has handed a victory to a partner and former managing principal of Beveridge & Diamond embroiled in a battle with his ex-wife over alleged financial malfeasance during their marriage.

The ruling (PDF) affirms the dismissal of Nancy Lasater’s tort suit against her former husband, Beveridge & Diamond partner John Guttmann Jr. Lasater had claimed that Guttman ran up large debts during their marriage, spending money on ill-advised real estate projects, exotic merchandise, personal adventures and a huge collection of compact discs. Her suit, filed after 25 years of marriage, had claimed conversion, intentional infliction of emotional distress, breach of fiduciary duty and fraud, according to the ruling by the Maryland Court of Special Appeals.

The Legal Profession Blog broke the news on the ruling, which held that husbands and wives are not true fiduciaries. Guttmann filed for divorce soon after Lasater filed the 2005 tort suit, and it was granted in 2007.

“We decline to open the door to tort suits arising from disagreements over allocation of marital resources when these grievances properly can be remedied in the divorce setting,” the appeals court said an opinion issued on Monday.

Lasater had claimed that Guttmann blamed their dire financial situation on her decision to stop working to stay at home with the kids and that he lied about his status at the law firm, claiming he had become of-counsel. Lasater had worked for 20 years as a lawyer before she left law practice.

The appeals court said the alleged behavior, even if true, does not rise to the level of extreme or outrageous conduct justifying the count of intentional infliction of emotional distress. And a husband and wife are not true fiduciaries, the court said, absent an agreement establishing that relationship.

The court said it had found only one other state, Wisconsin, that allows a broad cause of action for mismanagement of marital property. The cause of action is based on statutory language from the Uniform Marital Property Act; Wisconsin is the only state to have adopted the uniform law.

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