Opinion
No. FA 98-0114819S
October 4, 2005
On July 2, 1999, this court (Solomon, J.) entered a decree dissolving the marriage of the parties, and entered orders incidental thereto including orders directing the defendant to pay periodic alimony and child support to the plaintiff. Throughout much of the day on September 7, 2005, this court heard the parties on the motions listed above. By prior agreement, all orders entered at this time are to be retroactive to July 25, 2005.
I. Child Support Issues A. Contempt Issue
At the time of the original decree, the three children born to the parties were all under the age of eighteen. The eldest of them, however, was one month shy of her eighteenth birthday. The decree ordered that the defendant pay child support in the amount of $400 weekly. Anticipating the imminent emancipation of the eldest daughter, however, the court directed that the child support would reduce to $300 a week for the remaining two children upon the eldest's attaining age eighteen.
On February 1, 2001, the second child attained age eighteen. On that occasion, defendant began making reduced child support payments in the amount of $200 weekly. He has continued to make payments at that amount until the present. Until the filing of the motions now under determination, neither party sought either to enforce nor to modify the decree with respect to child support payments. Plaintiff has moved that defendant be held in contempt for his failure to make the child support payments as ordered by the court, and the parties have stipulated that the amount of the arrearage is $24,000. Defendant argues that the plaintiff should now be equitably estopped from seeking to collect this amount, given her acquiescence in the reduced payments for such a long period of time. Alternatively, he contends that his failure to make the payments resulted not from a willful contempt of the court's order, but from a mutual misunderstanding on the part of the parties as to the effect of the middle child's reaching the age of majority.
Equitable estoppel has been defined as the effect of the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity, from asserting rights which might perhaps have otherwise existed, as against another person, who has in good faith relied upon such conduct, and has been led thereby to change his position for the worse. Emerick v. Emerick, 28 Conn.App. 794 (1992); Sablosky v. Sablosky, 72 Conn.App. 408 (2002). Defendant offered no persuasive evidence that the plaintiff said or did anything to induce him to reduce the weekly support payments in 2001. At best, his evidence indicated that she suffered the reduction in silence. In addition, Judge Solomon explained at the time of the original judgment that in providing for the first step-down upon the eldest daughter's attaining age eighteen, he was not providing for an equivalent reduction to take effect in 2001. To the contrary, at page 35 of the transcript of his orders entered on July 2, he specifically stated:
I have not built in any provision for a change in the child support order once the middle child attains the age of eighteen, which is a couple years off. I could have done that. I don't know what the parties' financial circumstances will be at that time. And rather than speculate that the current guideline — in fact, there was a second reason why I didn't do that and that is because there are new guidelines which are taking effect not too far down the road — I believe in the next month or so, so those new guidelines could well present a different result . . . so, the parties will have to come back to court, or submit a stipulation to deal with the new child support order that applies when only one minor child remains.
In addition, this court notes that the guidelines Judge Solomon anticipated did in fact go into effect August 1, 1999, and that the income of the parties did change substantially between then and 2001. Plaintiff's Exhibit 1, which details the defendant's income for each calendar year from 1999 to the present, makes clear that application of the 1999 guidelines to the plaintiff's income for 2001 would have yielded an effective child support order of approximately $300 a week at that time, and possibly a higher amount in more recent years. Thus, defendant can show no prejudice as a result of the delay in bringing his non-payment of the $100 weekly to the attention of the court. His defense of equitable estoppel has no basis in fact.
This court finds that the defendant, having intentionally failed to make the full payment of support as ordered, is in contempt of the court's prior order. He owes the plaintiff $24,000. If he purges himself of that contempt by making that payment to her within twenty days of this order, he may avoid further sanctions. Should he fail to make the payment by that date, however, the court will consider appropriate additional relief
B. Modification of Child Support
Plaintiff also moves for a modification of child support with respect to the youngest daughter. Although she will attain the age of majority on February 19, 2006, it appears that she will then still be a full-time high school student residing with the plaintiff and thus the subject of parental maintenance in the form of child support until her graduation from high school in June of that year. This court finds that the emancipation of the middle daughter, and the substantial increase in the wages of the parties, particularly of the defendant, are independently sufficient substantial changes of circumstances to warrant a modification at this time.
Plaintiff presented this court with a child support guideline worksheet (utilizing the version of the guidelines effective August 1, 2005) indicating that the presumptive child support obligation on the part of the defendant at this time would be $350 a week for the single remaining child. Defendant argues that: a) the difference between the existing support order and the new proposed order is less than 15%, and hence an insubstantial difference under Section 46b-86(a); and b) a deviation from the guidelines is warranted.
The first argument fails because $350 is more than 15% greater than $300. The second argument is a bit more complicated. In announcing the 1999 orders, Judge Solomon commented that: ". . . the amount that I'm ordering is a slight deviation downward from what the guidelines are, because . . . the support orders that I'm entering constitute part of an overall support order which I have not completely finished at this point and time." (Page 29 of July 2 order.) Moments later, he added a provision that each child receive a share of the defendant's annual bonus, which in the year preceding the dissolution had been approximately $30,000. Aside from routine provisions for health insurance, medical expenses of the children, and life insurance, the decree included no other provisions in the nature of support for the children.
Section 46b-86(a) provides that in determining whether to modify a child support order based on a substantial deviation from child support guidelines, the court shall consider division of real and personal property between the parties set forth in the final decree and the benefits accruing to the child as the result of such division. Upon entering the initial decree, Judge Solomon apparently did deviate downward to some degree because of what he described as the overall support order entered in 1999. The total family income has more than doubled since the date of the decree, with most of the increase accruing to the benefit of the defendant. Whatever degree of deviation was implicit in the 1999 order, the basis for the original deviation no longer exists. Child support shall be modified to $350 weekly.
II Alimony
Judge Solomon's decision provided that the defendant pay periodic alimony to the plaintiff in the amount of $300 weekly, for a period terminating in the event of her death, remarriage or July 2, 2008, whichever first occurs. Each party now seeks to modify that order. Plaintiff seeks to increase it, in light of the substantially higher income of the defendant. He, on the other hand, seeks to reduce it, in light of his allegation that she is now living in a state of cohabitation.
A. Motion for Modification on Ground of Cohabitation
Judge Solomon did not provide for an automatic termination of alimony in the event that the plaintiff should cohabit with an unrelated male. Nevertheless, Section 46b-86(b) remains an available means by which defendant might show that the plaintiff is in fact so cohabiting, and that the circumstances warrant the court, in its discretion, to modify, suspend, reduce or terminate alimony because the new living arrangements cause such a change of circumstances in the life of the plaintiff as to alter her financial needs. In DeMaria v. DeMaria, 247 Conn. 715 (1999), the court recognized the necessity for a trial court to also consider the financial impacts of cohabitation when this issue is raised as a grounds for modification.
In the first place, this court does not find by a preponderance of the evidence that plaintiff is in fact cohabiting with anyone. She admitted that she is in a relationship with another person, and that he spends up to four nights a week at her home. There was also credible and undisputed testimony that he maintains his own residence. There was no indication that he had moved his furnishings to the plaintiff's home, or taken any other steps such as would denote a change of residence on his part. Moreover, the only financial benefit shown to the plaintiff from this relationship was that he apparently repairs the used cars which she and her daughters have been driving. Since it was established that she gave him $5,000 at some time within the last few years to build a garage on his property so that this work could be done in the winter, it is not clear that this relationship has any effect upon her overall financial needs. This court finds that the defendant has not met his burden of showing that there is a basis for a downward modification of alimony on the ground of cohabitation.
B. Plaintiff's Motion for Modification
Before considering the plaintiff's motion for modification of alimony, the court must deal with an interesting and unusual procedural issue. This controversy had been scheduled for a hearing on September 7 for some time. In a brief meeting in chambers prior to the opening of court on that date, the court was advised that a discrepancy exists between the text of the judgment file prepared by plaintiff's 1999 counsel in response to the court's order, and the text of the decree itself reflected in a transcript of Judge Solomon's oral statement of his decision. The discrepancy concerns the modifiability of periodic alimony as to amount.
Specifically, the judgment file recites that the defendant shall pay alimony to the plaintiff in the amount of $300 per week; that the term of the alimony shall be non-modifiable; and ". . . the amount of the alimony shall be modifiable only in the event of the plaintiff's cohabitation, . . ." (Emphasis added.) In light of the transcript of Judge Solomon's remarks, it is clear that the emphasized language is a mistake. At page 32 of the transcript, he stated, "[t]he term of the alimony will be non-modifiable, but the alimony will — will be modifiable as to amount, including by reason of the application of C.G.S. 46b-86b . . ." Moments later, discussing the impact of the middle child's reaching age eighteen, as previously noted, he observed that "the parties will have to come back to court, or submit a stipulation to deal with the new child support order that applies when only one minor child remains. And my order here obviously does not preclude at that time either any motion to increase alimony because of the drop off of child support should that otherwise be appropriate." (Emphasis added.) (Page 36 of transcript.) Following the rendering of the decision by Judge Solomon, then counsel for the plaintiff questioned him ". . . did your Honor indicate that it was your intention that as the children drop off in terms of attaining age eighteen, that the modifiability of the alimony was appropriate?" Judge Solomon responded "they're going to have to come in and deal with the issue of child support at that time. They can also deal with the issue of what their respective financial circumstances are after that fact, it may impact what the alimony order may be. I'm not — I'm certainly not precluding it . . ." (page 45 of transcript).
Defendant contends that only a motion to clarify can rectify the discrepancy between the judgment file and the obvious intent of the court as expressed in the oral decree, and further, that only Judge Solomon can grant such a motion. It has long been the rule that while a judgment file is presumed to be correct, the presumption may be overcome if there is evidence that the judgment file does not accurately reflect the court's intentions. Costa v. Costa, 11 Conn.App. 74 (1987). Here, the defect in the judgment file is patent and obvious, whereas the decree is free of any ambiguity with respect to the modifiability of the alimony amount. A judgment file is merely a clerical document. Lucisano v. Lucisano, 200 Conn. 202 (1986). As the Appellate Court noted, "it is a simple matter to correct the judgment file to conform to the judgment," Costa v. Costa, 11 Conn.App. 74, 77 (1987); this court will sua sponte direct that the judgment file be corrected to reflect the actual order of the court on July 2, 1999 with respect to this issue. Because plaintiff's present counsel is new to the matter, whereas counsel for the defendant has represented him since prior to the dissolution decree, this court directs that defendant's counsel prepare a corrected judgment file.
Turning to the merits of the plaintiff's motion, the evidence before the court is that her income has increased from the 1999 level of $350 weekly gross to a 2005 level of $588.40 gross. Defendant's income in 1999 was approximately $1,850 weekly, whereas in 2005 it is $4,134 weekly, gross. In 1999, he earned five times what the plaintiff earned; by 2005, he is earning seven times what she is earning.
As to assets, on the other hand, plaintiff now appears to be in a better position than defendant. On her concededly lower income, she is able to direct $150 weekly into a 403b Plan for her retirement. The court has studied the financial affidavits of both parties carefully. Notwithstanding the higher income of the defendant, it is apparent that he is incurring higher costs of living to rebuild his personal estate. In light of the increased weekly payment that he will be making to plaintiff as a result of the child support modification discussed above, and the lump sum payment he will be making to her as a result of the bonus payment discussed below, this court believes that the weekly alimony payment should, for the time being, remain as is, at $300 per week.
III Bonus Payments
At all times relevant hereto, defendant has been an executive employee of CR Klewin Company, a construction firm. In 1999, the court found that he had a base salary of $93,000 inclusive of a car allowance; in 1997, however, he had also received a bonus in excess of $30,000, bringing his compensation for that year to approximately $128,000. (Transcript, page 12.) Not knowing whether such substantial bonuses would be paid to Mr. Kabeary in the future, the court ordered that he share such as might be paid to him with the plaintiff, at the rate of 15% of the gross bonus as additional alimony, and an additional 10% of the net amount of such bonus as additional child support for each of the then minor children.
The parties are now in dispute as to whether the compensation which Mr. Kabeary has received since 1999 triggers these bonus provisions. Plaintiff's Exhibit 1 is a seven-page document outlining the earnings of the defendant from January 1, 1999 through July 8, 2005. For the years 2001 through 2004, she directs the court's attention to the last item or items noted as paid to him in each of those calendar years. The records reveal that on December 17, 2001, his gross pay included the sum of $2,173.52; on December 16, 2002, the figure of $3,059.84; on December 16, 2003, the figure of $3,796.71; and on December 27, 2004, two line items totaling $19,295.95. Significantly, no "hours worked" are attributed to any of these payments. Plaintiff claims that they reflect annual bonuses, and that she is entitled not only to the 15% of gross as alimony plus 10% of net as child support directed by the decree, but that each amount should be doubled because of the defendant's failure to pay them within thirty days of receipt (see page 34 of Transcript).
Defendant testified, without any effective rebuttal by plaintiff, that these annual amounts reflected the value of housing and a car provided to him by his employer for each of the given years. As such, these items fall within the definition of "employment perquisites" as defined by Section 46b-215a-1(11)(A)(vi) Connecticut Child Support Guideline Regulations, which includes "any basic maintenance or special needs such as food, shelter or transportation provided on a recurrent basis in lieu of or in addition to salary or wages." (Emphasis added.) While these could have been included as part of the guideline calculations to determine applicable support for each of the years in question, to do so now would result in an impermissible retrospective modification of child support.
Defendant's testimony, however, also disclosed a different item which this court believes does constitute a bonus. Specifically, he indicated that he moved from Connecticut to upstate New York in 2003 to accommodate the needs of his employer. The employer purchased a home for $240,000, and provided use of the home to the defendant without cost over the ensuing two years. Fair rental value of the home during that period is included within the figures plaintiff pointed to as the annual bonus, and which has already been determined not to be such. Some few days before the hearing in this matter, the company sold the home to the defendant at a price of $180,000.
A bonus is generally perceived to be compensation that is over and above the base salary of an employee, and payable on an irregular, perhaps annual basis. When a child support or alimony obligor has prospects of receiving annual bonuses, a court entering a prospective order is faced with a difficult calibration. If the court assumes that the future bonuses will be in accordance with the amounts as received historically, it may incorporate that expected income into its calculations and base child support and alimony awards upon the assumption that the bonus will continue. If the bonus is not in fact paid, which is usually a decision within the prerogatives of the employer, the obligor may be substantially prejudiced. On the other hand, if the court ignores the bonus, doing so both violates the guidelines and prejudices the obligee. In this case, Judge Solomon's order requires a second look whereby a percentage of any annual bonus actually provided to defendant would be paid over to the plaintiff for her own use and that of her children. What his decision did not anticipate is that the bonus might be paid in a form other than cash.
It is undisputed that defendant's employer sold him a fairly new home for $60,000 less than the company paid for it, within two years of its purchase. The court has seen a photograph of the premises (Plaintiff's Exhibit 6) and it is obvious that the home is an upscale, modem, large, well-landscaped single family residence. Defendant testified that the lower price paid reflected the depreciation which the employer had taken through the two years of renting the property to the defendant. For several reasons, this theory is not acceptable. First, only the value of the improvements, and not the land, may be depreciated, and no permissible formula for depreciation applied to even the entire value of the parcel could yield a 25% depreciation in such a short period of time. Secondly, depreciation is not equivalent to a reduction in fair market value; real property, in particular, may substantially increase in fair market value while an investor is depreciating it for tax purposes. Thirdly, the defendant gave no reason to permit this court to find that the much noted national boom in real estate prices throughout the last several years has passed over the residence which he purchased.
Defendant is a high level executive of his employer. But for this employment relationship between him and his employer, this court presumes that he would not have been able to purchase this $240,000 home from the employer at a price of $180,000. The $60,000 differential is found to be a bonus to him, and hence subject to the formula set forth in the July 2, 1999 decree.
As to the alimony component of the bonus, which is 15% of the gross amount, defendant owes plaintiff $9,000. The child support component is based on net income. The court observes that the defendant nets approximately 70% of his marginal earnings as disclosed by the weekly deductions for federal and state taxes shown on his financial affidavit of September 7th. Ten percent of the net on a gross receipt of $60,000 is $4,200. Should either party desire to be heard on the accuracy of the calculation, he or she may request the court to conduct a hearing to that end prior to the expiration of twenty days following the filing of this judgment.
IV Summary of Orders
1. Defendant is to pay plaintiff the sum of $24,000 as past due child support.
2. Child support is modified to $350 weekly for the benefit of the remaining minor child.
3. Alimony shall remain $300 per week.
4. Defendant is to pay plaintiff the amount of $9,000 as additional alimony, and $4,200 as additional child support, in consideration of his 2005 bonus income.
5. The case is continued to October 28, 2005 at 9:00 a.m. to monitor compliance with the terms of this order, and to consider any sanctions that might be appropriate in the event of non-compliance before that date.
6. Counsel for defendant is ordered to prepare a corrected judgment file.
Boland, J.