## Facts

- Marjorie Colburn (wife) and James Colburn, Jr. (husband) owned four income-producing properties as tenants by the entireties while they were still married.
- James collected the rents and paid property expenses but did not share rental proceeds with Marjorie or provide her with a satisfactory accounting.
- One of the entireties properties was leased to James’s closely held company, which used the premises as office space; James controlled the rent stream from that lease.
- James undertook repairs and improvements to at least one rental property without consulting Marjorie, and the governing lease did not place landlord-repair obligations on him.
- About two months before Marjorie voluntarily moved out of the marital home, she filed an equity action seeking an accounting and the appointment of a receiver to protect her interests in the entireties properties and related assets.
- The circuit court appointed a special auditor and entered decrees addressing past rent collections, expenses, and directions for handling rents and carrying charges going forward.
- After an earlier appeal and remand, the parties stipulated to many accounting figures; the court entered a revised post-remand decree that (among other things) awarded Marjorie one-half of the rental income, addressed credits and debits for expenses such as taxes and insurance, and set directives for future rent handling and funds to cover carrying costs.
- The post-remand decree did not award Marjorie one-half of certain joint bank account balances as part of the accounting.
- James appealed again and, among other arguments, sought an offset based on amounts he claimed Marjorie had improperly withdrawn from joint accounts.

## Issues

1. Whether a spouse is entitled to one-half of rents from entireties property when the tenant is the other spouse’s closely held company.
2. Whether taxes and insurance on entireties property may be treated as shared carrying charges in an accounting between spouses.
3. Whether the managing spouse is entitled to credit for repairs and improvements made to entireties rental property without the other spouse’s knowledge or authorization.
4. Whether an offset based on alleged wrongful withdrawals from joint accounts can be raised on appeal when it was not properly presented and litigated in the trial court after remand.

## Decision

- The Court of Appeals of Maryland affirmed the post-remand decree.
- Marjorie was entitled to one-half of the rental income from the entireties properties, including rent attributable to the premises used by James’s company.
- The court approved charging Marjorie with her share of taxes and insurance paid on entireties property as expenses necessary to protect both spouses’ ownership interests.
- The court upheld the trial court’s treatment of James’s claimed repair/improvement expenditures, including the refusal to require Marjorie to share costs incurred unilaterally without her authorization.
- The court declined to consider James’s requested offset for Marjorie’s alleged withdrawals from joint accounts because the contention was not properly raised and developed in the post-remand trial proceedings.

## Legal Principles

- Income produced by property held as tenants by the entireties belongs to both spouses, and absent agreement or other lawful basis, one spouse may not retain all rents to the exclusion of the other.
- A lease to a spouse-controlled corporation does not eliminate the other spouse’s right to an equal share of rent derived from entireties property.
- In an equitable accounting involving entireties property, necessary carrying charges such as real estate taxes and insurance may be allocated between the spouses because those payments preserve and protect the jointly held interest.
- A spouse who unilaterally undertakes repairs or improvements to entireties property, without the other spouse’s consent or consultation and without a legal obligation requiring the work, may be denied reimbursement or credit in the accounting.
- Appellate review generally does not reach factual or accounting offsets that were not timely raised, supported, and ruled upon in the trial court; such claims are waived.

## Conclusion

Colburn affirmed an equitable accounting that required equal sharing of rents from entireties rental properties (including property leased to the husband’s company), permitted allocation of protective expenses like taxes and insurance, declined to shift the cost of unapproved repairs and improvements to the nonconsenting spouse, and refused to entertain an offset theory concerning joint-account withdrawals that was not properly preserved below.


Colburn v. Colburn, 290 A.2d 480 (Md. 1972)